2022
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE REPORT
China Tourism Group Duty Free Corporation LimitedStock Abbreviation：CTG DUTY-FREEA Share Stock Code：601888H Share Stock Code：01180
Contents
02About this Report03Messages from Stakeholders04Letter from the General Manager06Social Responsibility Performance
Overview08Statement of the Board of Directors09About the Company94Appendix
94Glossary of Terms96Environmental, Social and
Governance Reporting Guidelines
Content Index99Index
Feedback from Readers
20Passing on the Warmth and Safeguarding Our Employees’Health21Stable Development and Unity to Overcome Difficulties22Embracing Digitalisation to Upgrade the Consumer
Experience
16Pursuing an Innovative Approach to Brand Strategy toBoost Hainan’s Economy16Improving Customer Service and Offering an Innovative
Shopping and Leisure Experience17An Immersive Experience that Represents a New Model inRetail ServicesTopic 02: Adapting to Changes and Demonstrating Our Operational
Resilience
Topic 01: The Grand Opening of Haikou International Duty-Free Shopping
Complex Marks a New Milestone in the Development of Hainan’sOffshore Duty-Free Industry
26Corporate Governance and
Interactive Communication28Effective Management with a
Clear Focus
33Trusted and Ethical Business
Operations
60Employment Compliance and
Rights Protection
63Talent Growth and Retention66Operations Safety and Health
Protection
40Excellent Service, High
Satisfaction
43Comfortable Shopping and
Quality Guarantee45Supply Chain Management
with Intelligence47Devotion to Charity and Society54Leading Development as a
Sector Benchmark
72Green and Low Carbon
Operations82Green Building – Creating a
Green Future88Innovative Green Marketing
Principles ofGovernance
People
ProsperityPlanet
About this ReportIntroductionThis report is the second Environmental, Social and Governance Report (hereinafter “ESG Report”, “this Report” or “the Report”) issued byChina Tourism Group Duty Free Corporation Limited (hereinafter “CTG DUTY-FREE”, “the company”, or “We”) and its affiliated companies.
Reporting ScopeUnless otherwise stated, the scope of content disclosed in the ESG Report is consistent with that of the company’s Annual Report.Reporting PeriodThe period of the CTG DUTY-FREE ESG report is from 1 January to 31 December 2022. To enhance the readability of the Report, somecontents or data refer to previous years or extend to the date of disclosure of the Report.Source of Information
The information and data provided in the Report have been obtained from our internal documents, statistical reports and ESG-relatedperformance summaries.
Reporting Principles
This Report is prepared with reference to the following rules. Unless otherwise specified, the currencies involved in the Report are allmeasured in CNY.?The Guidelines for State-owned Enterprises Directly under the Central Government on Fulfilling Corporate Social Responsibilitiesissued by SASAC? The Guidelines No. 1 for Application of Self-regulation Rules for Listed Companies – Standardised Operation issued by SSE?The Environmental, Social and Governance Reporting Guide (“ESG Guide”) Appendix 27 to the Rules Governing the Listing ofSecurities on the Main Board of The Stock Exchange of Hong Kong Limited (“Hong Kong Stock Exchange”)? The Guidelines on Corporate Social Responsibility Reporting in China released by Chinese Academy of Social Sciences (“CASS-ESG 5.0”)? The “core” options of Global Reporting Initiative’s Sustainability Reporting Standards (“GRI Standards”)? The Ten Principles of the United Nations Global Compact? United Nations Sustainable Development Goals (SDGs)
Release Form of the ReportThe electronic version of this Report can be downloaded from the company’s official website or obtainedby following the WeChat official account of “CTG DUTY-FREE Investor Relations”. This Report is publishedin Simplified Chinese, Traditional Chinese and English. In the event of any discrepancy between the threeversions, the Simplified Chinese version shall prevail.
2022 Environmental, Social and Governance ReportAbout this Report
Messages from Stakeholders
CTG DUTY-FREE helped revive the traditional culture of ethnic minorities in our village with its advantages and resources in theindustry. In 2022, Yongqian Laozhai Village in Menglian County was successfully designated as a AAA Tourist Attraction of China,marking a new chapter in the rural revitalisation of Menglian County. We are grateful for CTG DUTY-FREE’s support and help. Now,we are more confident that we can pass down and promote our traditional culture as Hani ethnic minorities, pursue our economicgoals, and make our dreams come true.
We appreciate the company’s effort in giving us carepackages, as well as its diligent implementation ofdaily health monitoring and mobility control measures.We feel safe doing our job as the company has beendoing its best to safeguard our health.
We have established a long-term, stable, mutually beneficial and win-win partnership with CTG DUTY-FREE, forging a path tocommon prosperity. We are leveraging our respective strengths to expand the depth and breadth of our cooperation, jointlydriving the continued growth of travel retail market in China and working together to provide consumers with better productsand services.
Over the eight years I have been working here, I have witnessed theboom of the offshore duty-free industry in Hainan and discovereda stage where I can realise my value. I am proud to serve as adelegate to the 20th Communist Party of China (CPC) NationalCongress am determined to act as a model CPC member. Iwill serve each customer to a high standard and contribute todeveloping of the Hainan Free Trade Port.
We are paying growing attention to the sustainabledevelopment planning and ESG targets and achievements ofenterprises, which not only outline their social responsibilitiesbut also empower them to develop in the long run. We lookforward to the smooth and steady progress in the ESG journeyof China Tourism Group Duty Free, as a benchmark for thetravel retail industry in China, to create sustainable value forinvestors and the broader society.
The working environment here is very collaborative and mutuallyrespectful. We all share a common goal and work hard to reach ittogether. I am pregnant now and have thoroughly enjoyed the company’scare for mothers-to-be, such as setting up a separate card-punchingmachine, a particular dining area for pregnant women, and a separateroom for breastfeeding. These measures all made me feel very warm.
I’m impressed by Haikou International Duty-FreeShopping Complex’s overall design, diversified productofferings, and professional and convenient servicesthat make my shopping experience enjoyable andcomfortable.
As a cdf member for years, cdf offers quality products,lower prices, and increasingly convenient andcustomised services; I hope your company will improveand provide better goods and services.
She Yifeng, Vice President of Retail in Greater China, ARC’TERYX
Han Weixiaozi, cdf Member
Nicholas Yeo, Fund Manager, abrdn
Wan Ziqian, Haikou International Duty-Free Shopping Complex customer
Liu Zhili, delegate of the 20th National Congress, and ayoung employee of the Sanya Downtown Duty-Free Store
Yang Jipeng, employee at thecompany’s headquarter
Ye Feng, sales from Sanya International Duty-FreeShopping Complex
Li Xinjie, villager in Yongqian Laozhai Village in Menglian County
Wang Xuan
China Tourism Group Duty Free Corporation LimitedGeneral Manager
Letter from the Management
2022 Environmental, Social and Governance ReportLetter from the Management
Sincerely caring for employees to promote mutualdevelopment.We protect the rights of our employees and implement ademocratic management system that is based on the trade unionand the staff representative assembly. The company steadily strivesto improve its work environment and is committed to listening toemployees’ concerns. In 2022, the company’s trade union stagedan online activity to collect and sort out recommendations fromstaff members on employee benefits, disclosure of corporateaffairs, office improvements, and personal development, and eachsuggestion was implemented after being approved and classified.In addition, we have established a sound mechanism for talentdevelopment and training. To this end, the company regularlyorganises training campaigns and designs promotion paths for itspersonnel to facilitate the mutual development of employees andthe company.Commitment to social responsibility and our localcommunities.As a responsible central state-owned enterprise, we arecommitted to corporate social responsibility. We are concernedabout people’s livelihood, and we strive to promote the prosperityand well-being of the regions in which we operate. For this reason,we take measures to support local economic development andsocial welfare, with a particular focus on student assistance,community investment, and rural revitalisation, among otherfields. As the largest travel retail operator in the world, we aimto set the benchmark for the industry, and we are keen to shareour successful experience with our industry peers to guide thedevelopment of the travel retail industry.Green cdf promotes sustainable development.We are actively taking green and low-carbon measures, includingthe implementation of green office concepts, energy and emissionsmanagement, climate change responses and food conservation.As part of the company’s development, we also adopt greenbuilding concepts to maximise social, economic and environmentalbenefits, and we have achieved impressive results in this regard.We connect upstream brands and downstream customersto convey the “green cdf” message and promote innovativeenvironmentally friendly activities.2023 marks the first year in which the spirit of the 20th CPCNational Congress will be fully implemented. At the starting pointof a new era, a new future awaits those who are brave enoughto seise opportunities and pursue their dreams. With high-qualitydevelopment as our core direction, we have implemented the fivedevelopment concepts of “innovation, coordination, going green,openness and sharing”. As a central state-owned enterprise, CTGDUTY-FREE actively strives to meet its social responsibility, and weare preparing for a new stage of development under the directionand goals described in the 14th Five-Year Plan (14th FYP) and arestriving to achieve these goals.China Tourism Group Duty Free Corporation Limited General
ManagerWang Xuan30 March 2023
The successful convening of the 20th CPC National Congressin 2022 showcased the Chinese path to modernisation and thedream of the great rejuvenation of the Chinese nation. Along thispath, Hainan Free Trade Port has been a milestone highlightingChina’s rapid development. Haikou International Duty-FreeShopping Complex started construction during the same yearin which the Plan for the Hainan Free Trade Port Start-up (Pilot)Zone Park was passed, and it was ready to open in 2022. Thecompany could still progress, maintain stability, pursue high-qualitydevelopment and strengthen its commitment to meetingcustomers’ desire for a better life.The grand opening of the Haikou International Duty-Free Shopping Complex marks another milestone forHainan’s offshore duty-free industry.On 28 October 2022, Haikou International Duty-Free ShoppingComplex – the largest single duty-free store in the world – openedfor business. The Complex is an integrated tourism retailer witha dual focus on “duty-free retail and cultural tourism”. Fromtheir positions in northern and southern Hainan Island, HaikouInternational Duty-Free Shopping Complex and Sanya InternationalDuty-Free Shopping Complex are leading the development of thetravel retail industry in China and around the world, and they arealso supporting the Hainan Free Trade Port’s development into aninternational hub for tourism and shopping.
Adapting to changes and fully demonstrating ourbusiness resilience.
We are people-orientedand keep up with current events,consumption trends, and employees’ health. We took measuresto safeguard our employees’ mental and physical health. We haveembraced digitalisation and innovation to adapt to customers’shopping habits, and we have more closely integrated our onlineand offline businesses to improve our service quality and shoppingexperience.
Better customer service for a better experience.
The company adheres to “customer-centric” business philosophyand strives to create a first-class service experience. In 2022, webegan offering a new duty-free shopping experience that is digitallyempowered, and we undertook a campaign specifically to improvethe quality of the company’s customer service across multipledimensions. The newly opened Haikou International Duty-FreeShopping Complex is a digitally advanced shopping centre thatprovides an innovative, immersive shopping experience andgrants customers access to an array of “debut” and “exclusive”businesses. In this way, we have launched a new model for retailservices that marks a new chapter in the development of China’stravel retail industry.
Dear stakeholders:
Economic
Ranked firstRetained No. 1 travel retail operator in the world for theconsecutive three years
Top twoWe operate the two largest duty-free shops in the world—— Haikou International Duty-Free Shopping Complex andSanya International Duty-Free Shopping ComplexMost comprehensiveWith full coverage on on-board aircrafts, borders, foreignships, passenger stations, railway stations, diplomatists,cruises and downtown channels, we are the travel retailoperator with the complete types of duty-free shops and thelargest number of retail outlets in a single country worldwideCNY54.433 billionOperating income reaches CNY54.433 billionCNY5.03 billionNet profit attributable to shareholders of listed companyreaches CNY5.03 billion
CNY8.574 billionVarious taxes and fees paid in 2022 reach CNY8.574 billion316,000Selling over 316,000 SKUs of products
SocialResponsibility
Performance
Overview
2022 Environmental, Social and Governance ReportSocial Responsibility Performance Overview
* All the above are data as of the end of 2022 or for the
year 2022.
LEED or Leadership in Energy and Environmental Designis a rating system devised by the United States GreenBuilding Council (USGBC) to evaluate the environmentalperformance of a building.
EnvironmentalLEED GoldHaikou International Duty-Free Shopping Complexhas obtained LEED Gold pre-certification
Sanya International Duty-Free Shopping ComplexPhase 1 Plot 2 Project has obtained LEED Gold pre-certificationHaikou International Duty-Free Shopping Complex(Block No.1) has obtained 2-star Green Buildingpre-certification
24.13 million shopping bags
In Hainan province, more than 24.13 millionshopping bags that meet environmental protectionrequirements have been provided, effectivelyreducing the generation of non-degradable plasticwaste
7 stores/counters in Sanya International Duty-FreeShopping Complex, have received LEED Goldcertifications
0.16 MWh/m
Electricity usage per square meter is 0.16MWh.
0.09 tonnes of carbon
dioxide equivalentGreenhouse gas emissions per square metre are
0.09 tonnes of carbon dioxide equivalent
Social
1,300+ well-known brands
More than 1,300 well-known brands in the world are inour duty-free shops16,808 employeesThere are 16,808 total employees as at the end of 2022
100% training coverage, morethan 330,000 training hoursThe employee training coverage reaches 100%, withmore than 330,000 training hours in total.
45:55
The ratio of male and female employees is 45:55, andfemales in the Board of Directors and the SupervisoryCommittee account for 30%, females in the seniormanagerial roles account for 28.57% and in generalmanagerial roles account for 36.13%
CNY35.54 million
We invested CNY35.54 million in operation safety,organised 667 safety training sessions
CNY12.10 million
We invested CNY12.10 million in rural vitalisation,implemented 10 assistance projects and attracted CNY4.848million to poverty alleviation projects
26 million
26 million registered cdf members
China Tourism Group Duty Free Corporation LimitedStatement of the Board of Directors
Statement of the Board of Directors
In order to standardise the ESG management mechanism and enhance the quality of ESG management, CTG DUTY-FREE has establishedan ESG governance structure with the Board of Directors having the highest responsibility and decision-making authority for ESGmatters, bearing full responsibilities for the company’s ESG strategy, target management and information disclosure, and approving ESGimprovement proposals. As the committee assuming the primary responsibility, the Strategy Committee of the Board of Directors takeson the work of studying the sustainable development strategy, supervising the formulation and implementation of the ESG policies, andconducting the identification, assessment and management of important ESG issues, and the risks and opportunities associated withgreen, safe and sustainable development. The Strategy Committee is also responsible for reviewing and approving ESG managementobjectives, approving and publishing reports, and assisting the Board of Directors in performing ESG governance functions in departments.The company has established the ESG Leadership Group, and its members include the managers in charge of relevant departments. TheLeadership Group is responsible for managing and coordinating the company’s ESG-related work. The company establishes and improvesthe company’s management system and operating mechanism for ESG-related work, and it also formulates ESG work plans and organicallyintegrates the company’s development strategy, image, branding and operations with ESG concepts.Based on the external environment and the development strategy of the company, CTG DUTY-FREE has identified 17 key ESG agendasthrough the investigation of stakeholders during the reporting period and thus clarified its critical tasks, including excellent service experience,customer satisfaction, health and safety of products employee welfare and satisfaction, health and safety of employees, employee careerdevelopment and skill upgrading, employee diversity and equal employment, the integrity of operations, green logistics and supply chainmanagement, customer privacy protection and information security, promoting the economic development of the operation region,collaborating with brand partners to promote environmental protection, corporate ESG strategy, ESG governance, responsible suppliers,green building, green offices. The above issues have been examined and the performance has been improved in routine work, and target-oriented management has been carried out accordingly. In the future, we will continue to regulate our sustainable development managementstrategy and promotion methods according to the expectations of stakeholders and the actual operation of the company, in an effort tocontinuously improve the level of sustainable development.The Report provides detailed information on the progress and effectiveness regarding CTG DUTY-FREE’s ESG efforts in 2022 and hasobtained approval from the Board of Directors on 30 March 2023. The Board of Directors and all directors of the company hereby guaranteethat the information presented in this Report is free from any false records, misleading statements or material omissions, and undertake jointand several liabilities for the authenticity, accuracy and completeness of the information.
2022 Environmental, Social and Governance ReportAbout the Company
Company Overview
China Tourism Group Duty Free Corporation Limited (stock abbreviation:
CTG DUTY-FREE; stock code: 601888.SH/01880.HK) was listed on theShanghai Stock Exchange on 15 October 2009 (previously known as“China International Travel Service Co., Ltd.”, the stock abbreviation “ChinaCITS”),and was listed on the Main Board of the Hong Kong Stock Exchangein August 2022. Our company mainly engages in duty-free business, includingthe wholesale and retail of duty-free commodities such as fragrance, luxury,jewellery, watch, etc. Moreover, the company is also involved in investing anddeveloping commercial complexes with duty-free business as the core.Our company has established long-term and stable cooperative relations withmore than 1,300 renowned brands worldwide. It also has set up over 200duty-free shops in more than 30 provinces, cities, autonomous regions andspecial administrative regions in China, and also Cambodia, covering airports,on-board aircrafts, borders, passenger stations, railway stations, foreigncruise supply, diplomatists, cruises and downtowns (offshore, departures)in these regions. Its seven customs-supervised logistics centres in Dalian,Qingdao, Shanghai, Shenzhen, Sanya, Hong Kong SAR and Beijing cover theentire country. Its main sales channels cover large domestic hub airports inBeijing, Shanghai, Guangzhou Chengdu and Hangzhou, international airportsin Hong Kong SAR and Macau SAR in the Asia Pacific region, and SanyaInternational Duty-Free Shopping Complex, Haikou International Duty-FreeShopping Complex. China Duty Free Group has developed into a travel retailoperator with the most complete types of duty-free shops and the largestnumber of retail outlets in a single country in the world, providing duty-freecommodity services to nearly 200 million domestic and foreign tourists everyyear.The “courageous, professional, teamwork, innovative” corporate culturehas been fostered during the company’s development over the years,and it is with this culture that we face challenges bravely and overcomedifficulties. In recent years, the company’s core functions and capabilitiessuch as procurement, operations, channel expansion, digitalisation andmarketing have been continuously enhanced. Our business has been steadilytransformed and upgraded, achieving leapfrog development.In the future, our organisation will maintain the continuous, stable andhealthy growth of the duty-free business, adhering to the concept of“customer-centered, market-oriented”, with “duty-free business” as the coreto upgrade the value chain, and “tourism retail” as the extension to upgradethe industrial chain to build a more globally competitive world-class travelretail operator.
About the Company
Corporate Culture
Corporate Mission
Share the joy ofshopping and extend
the enjoyment of
travel
Core Values
Courageous,professional, teamwork,innovative
Brand Positioning
The world’s leadingtravel retail operator
Operation Concept
Customer-centered, market-
oriented
Our Milestones
After nearly 40 years of rapid development, we have developed
into the world’s leading travel retail operator.
Our Sanya International Duty-FreeComplex commenced its business
operation as the Chinese first travel retailcomplex. It was the largest standaloneduty-free shop in the world in terms ofsales area at that time.Our first overseas duty-free storecommenced its business operation indowntown Angkor, Cambodia.
Acquired Hainan Duty-free Co., Ltd.We became the world’s largest travelretail operator; the membership systemof cdf was officially launched, markinga historic breakthrough in online andoffline interconnection, domestic andoverseas interconnection.
We remained the No.1
travel retail operator inthe world.
The PRC State Council officiallyauthorised the establishment ofChina Duty Free Company.1984
Our Sanya Downtown Duty Free Store commenced itsbusiness operation as the first offshore duty-free shopin Hainan province.2011
2014
2018
Acquired Sunrise Duty Free
(China) Co. Ltd.2017
2020
2021
Listing on the Hong Kong Stock
Exchange
Grand opening of Hiakou International
Duty-Free Shopping Complex, the
largest single duty-free shop worldwide
Ranked as the world’s largest travel
retail operator for the three consecutive
years
2022
A bidding agency of ChinaDuty Free Corporate wasestablished in Hong KongSAR to strengthen theoverseas procurementand distribution capabilityof duty-free merchandise.
1989
Our Beijing Downtown Duty FreeShop, the first downtown duty-
free shop in China, commencedits business operation.
We began to sell domesticallyproduced goods in dutyfree shops, showcasing theChinese domestic brands andproducts to the world.
1990
1997
Our Heihe BorderDuty Free Store, thefirst duty-free shopon the border ofAsian countries wasestablished.
1996
We are selectedas one of thefranchised retailersfor the 2008 Beijing
Olympic Games.
2004
We entered the international marketand established its first salesterminal in the overseas market.
2006
We successfully listed on theShanghai Stock Exchange.
2009
Acquired Sunrise Duty Free(Shanghai) Co., Ltd.The first independent cruiseduty-free shop in Chinacommenced its businessoperation.
2022 Environmental, Social and Governance ReportAbout the Company
Selected as one of the 500 Most Valuable Brands in China
Awards and Honours
Selected as one of the 500 Most Valuable Brands in China, ranking
first in the travel and hospitality industry
Selected into the “Grade A (Excellent)Companies” in the 2021-2022Information Disclosure Evaluation ofthe Shanghai Stock Exchange
Selected into the “Grade A (Excellent)Companies” in the Information Disclosure
Evaluation of the Shanghai StockExchange for seven consecutive years
Selected into the “List of Chinese Listed Companies with the Best Annual PerformanceBriefing Practices”, the “2021 List of A-Share Listed Companies with Excellent CashDividend Returns” and the “2022 List of Chinese Listed Companies with the BestDirectors’ Office Practices” by the China Association for Public Companies
2021 List of A-ShareListed Companies withExcellent Cash DividendReturns
2022 List of ChineseListed Companies withthe Best Directors’Office Practices2021 List of ChineseListed Companies with theBest Annual PerformanceBriefing Practices
Recognised as the top in “New Stocks with theBest Financing Abilities” and “New Stocks MostPopular with Cornerstone Investors” in the 2022H-share lists included in the 2022 HKEX WhitePaper on the IPO Market and Secondary Market
Ranked first on the “New Stocks with the BestFinancing Abilities” and “New Stocks Most Popularwith Cornerstone Investors” lists
2021 Profitability Index –Top 100 Chinese ListedCompanies
Top 100 Value List of ChineseMainboard Listed Companies
Selected into the “2021 Profitability Index– Top 100 Chinese Listed Companies”
Selected into the Top 100 Value List ofChinese Mainboard Listed Companies in
the “16th Chinese Listed Companies ValueSelection” (Organised by Securities Times)
Selected into the “ESG & Governance Pioneers
50 Index of Central State-owned Companies”
ESG & Governance Pioneers 50 Index ofCentral State-owned Companies
Selected into the “2022 Top 100 Listof Chinese Listed Companies” at the22nd China Summit Forum for the Top100 Listed Companies. The companywon two awards: the “China Top 100Enterprise Award” and the “China Top100 High Growth Enterprise Award”
China Top 100 Enterprise Award
China Top 100 High GrowthEnterprise Award
The “2022 Golden Hong Kong StockAward” in the 7th Listed CompaniesSelection by ZhiTong Financial
2022 Golden Hong Kong Stock Award
Received the “Best ESG Award”,“Best Information DisclosureAward”, and “Best InvestorRelations Award” at Excellence
in IR’s 6th Awards Ceremony
Best Information Disclosure Award,Best Investor Relations Award, andBest ESG Award,
2022 Environmental, Social and Governance ReportAbout the Company
Recognised as the “Most Valuable IPO of the Year”in Guruclub’s 2022 Greater China Outstanding ListedCompanies Selection
The “Most Valuable IPOof the Year” in Guruclub’sGreater China OutstandingListed Companies Selection
Outstanding IR TeamAward
Received the “Outstanding IR Team Award”at the 11th Financial Leadership SummitForum in China
Digital PioneerEnterprise
Received the “Digital PioneerEnterprise” award at the 2022 WeChat
Open Class Pro conference
China Big Data Gold Sand Award – Best InnovativeApplication in 2022
Received the “China Big Data Gold Sand
Award – Best Innovative Application in 2022”
All-Data Smart Enterprise of the Year
Recognised as the “All-Data Smart
Enterprise of the Year” in the Dingge Awards’2022 Digital Transformation Pioneers list basedon the company’s big data programme
The GBA 9+2Development Forum’sMost Valuable BrandAward
CDF International received the “Most Valuable
Brand Award” at the 3rd session of the GreaterBay Area (GBA) 9+2 Development Forum
Received Trip.com Group’s “2022Global Partner Award – Outstanding
Marketing Platform in the TourismRetail Industry” for the company’smembership applet
OutstandingMarketingPlatform inthe TourismRetail Industry
After its grand opening on 28 October2022, Haikou International Duty-FreeShopping Complex, which covers atotal area of about 285,000 squaremetres, became the world’s largestsingle duty-free shop. While SanyaInternational Duty-Free ShoppingComplex is positioned at the southerntip of the island, the new store islocated at the sub-centre of Haikou’swestern coast, close to the mostimportant transportation hub in thecity, the Xinhai Port. From its positionat the northern end of the island, itserves as an additional strongholdin our Hainan network and act as anintegrated tourism retailer with a dualfocus on “duty-free retail and culturaltourism”, with duty-free business asits foundation.The facade of Haikou International Duty-Free Shopping Complex
Haikou International Duty-Free Shopping Complex
The project as a whole covers an areaof about 930,000 square metres. Itcomprises six blocks of land, whichhosts various industries, includingduty-free commercial retail, taxablecommercial retail, high-grade offices,high-end hotels and talent communities.The project has been designed to meetmultiple functions, including businesstrips, leisure travel and vacations, dailylife, offices, and art exhibitions, servesas a benchmark for the developmentof the travel retail industry in Chinaand around the world, and it supportsHainan Free Trade Port’s developmentinto an international hub for tourism andshopping.
The Grand Opening of Haikou InternationalDuty-Free Shopping Complex Marks a NewMilestone in the Development of Hainan’sOffshore Duty-Free Industry
Topic
2022 Environmental, Social and Governance ReportTopic 01
Awards and Recognition
Since construction commenced three years ago, Haikou International Duty-Free Shopping Complex has won wide recognition for its first-class services.
Best Visual Effects at the 2022 Transform Awards
“Best use of a visual property – Silver” at the 2022 Transform Awards
Special Mention Award at the Architizer A+ Awards
The “Best use of avisual property – Silver”and “Best strategic orcreative developmentof a new brand – Highlycommended” at the 2022Transform Awards
“Non-Airport Retailer of theYear”, “Best Visual Design”
and “Best Sustainable
Initiative” at the Trinity Awards
The “7th REARDGlobal DesignAward – Silver”
2nd place winner at the“2nd Contest on HighPromotion Value Patents inthe Engineering ConstructionIndustry” held by the ChinaAssociation of ConstructionEnterprise Management“Advanced Organisationin Key ProjectCompetition in theHainan ConstructionIndustry”Special Mention Award atthe Architizer A+ Awards
DOMUS, a prominent
global magazine, selectedHaikou InternationalDuty-Free ShoppingComplex as a cover story
and published a uniquereport
Pursuing an InnovativeApproach to Brand Strategy toBoost Hainan’s Economy
Haikou International Duty-Free Shopping Complex
A Select Collection of Duty-Free Luxury BrandsThe Haikou International Duty-free Shopping Complex offers a select collection of international luxury and high fashion brands. The grandmall’s leading stores, which cover 4,000 square metres, operate and serve customers.
Perfumes and cosmetics are popular among consumers. For thisreason, we have designated a special area at Haikou InternationalDuty-free Shopping Complex exclusively for collections ofperfumes and cosmetics. Covering a single floor of 30,000 squaremetres, the site is the largest in the global tourism retail sector.In this area, customers can try make-up virtually, enjoy exclusivecustomised products, attend perfume and cosmetics lectures,and interact with celebrities.
Several world-famous wine and liquor brands have opened new stores at cdf Haikou International Duty-free Shopping Complex.
More than 50 first-class global watch and jewellery brands haveopened stores at cdf Haikou International Duty-free ShoppingComplex, 10 of which have no other stores in Hainan.The Haikou International Duty-free ShoppingComplex also provides consumers with customisedservices exclusive to certain brands. For example,SK-II is offering the AI non-contact skin test,which represents an all-round exclusive beautyservice featuring a luxurious experience, personalcustomisation and technology-enabled interaction.
Improving Customer Service and Offering an Innovative Shopping and Leisure Experience
Based on the company’s strong branding, operational expertise,and market reputation, cdf Haikou International Duty-freeShopping Complex is partnering with over 800 renownedinternational and local brands to collaboratively open a selectionof “debut” and “exclusive” duty-free stores in China.
Haikou International Duty-Free Shopping Complex
The Haikou International Duty-free Shopping Complex has harnessed thepower of digital services by adopting “Scan & Go” capabilities and otherdigital methods for perfume and cosmetics sales. These services savesignificant waiting time for customers, raise shopping efficiency, and offercustomers a more immersive duty-free shopping experience.The Haikou International Duty-free Shopping Complex has also broadenedits marketing activities to offer customers various innovative services andentertaining IP-themed activities. Customers are always excited to enjoythe customised and innovative experiences brought by these themes andnovelties.
25 debut duty-free stores and 78 cdf exclusiveoffshore duty-free stores in Hainan province havebeen opened in the Haikou International Duty-freeShopping Complex, offering consumers a trulyunique shopping experience.
“Debut” and “exclusive” brands:
Exclusive customised services:
Brands with novelty designs:
Complete collections of perfumes and cosmetics:
Luxury jewellery and watches:
2022 Environmental, Social and Governance ReportTopic 01
Immersive food and art space
Hainan’s first IP experience hall featuring blockbuster movies
Cosy, comfortable and well-equipped nursing room
Based on our customer-oriented approach, we have continued to providehigh-quality services that integrate online and offline platforms. HaikouInternational Duty-Free Shopping Complex offers over 1,000 square metresof exclusive VIP social space for travel retail customers. Within the space, wecollaborated with SHANG XIA to provide an exclusive area for specific VIPsand showcased a variety of customised themes to meet the different tastesand needs of VIP customers.Leveraging brands, services and creativity, Haikou International Duty-FreeShopping Complex provides an innovative shopping experience that offers“debut” and “exclusive” duty-free stores, marking a new chapter in China’stravel retail and duty-free shopping industries. Haikou International Duty-FreeShopping Complex offers the following facilities to shoppers:
In terms of dining options, approximately 20 leading flagship catering
brands in Hainan and Haikou, five Michelin, Black Pearl, and Chinatime-honoured brands, and other flagship and customised concept storesare operating at cdf Haikou International Duty-Free Shopping Complex.This group of restaurants constitutes the first indoor culture and foodmarket experience of its kind in Hainan;The flying dome theatre offers an entertainment experience with its world’s
most abundant film sources, bringing consumers a stunning, immersiveflying experience;Working with a professional team from Hollywood, we built Hainan’s
first IP experience hall featuring blockbuster movies in order to cater tocustomers’ interests;We introduced the “Meet you Museum” series to present well-known
art exhibitions from across China and the world and incorporate art intothe shopping experience. This activity allows consumers to connect withthe arts while shopping and appreciate art exhibitions that feature theintegration of technology and art, light and shadow, authentic art, etc.;Based on the atrium’s AURA Skyrim Forest theme, we have created a
brand-customised catering concept flagship store that incorporates theretail theme of each floor;We provide thoughtful, convenient services and warm, clean,
well-equipped nursing rooms.
An Immersive Experience that Represents a New Model in Retail Services
Haikou International Duty-Free Shopping Complex has developed a new retail service model that provides consumers with an excitingshopping experience featuring immersive experiences and delectable food.AURA Skyrim Forest: An Immersive Visual Feast Designed by Weta WorkshopHaikou International Duty-Free Shopping Complex collaboratedwith Weta Workshop, the winner of six Academy Awards forBest Visual Effects, to design an exclusive themed atrium forHaikou International Duty-Free Shopping Complex: AURA SkyrimForest. The atrium provides an immersive shopping space thatcombines artistic lighting, art installations, creative displays andother techniques while drawing inspiration from Hainan culture. Itcreates a fantasy version of Hainan that mirrors the visual effectsof a movie, transforming consumers’ duty-free shopping tripsinto a cultural experience.
The design of the eight fantasy scenes of AURA Skyrim Forest draws inspiration from Hainan’s distinct and unique culture. The designerstranslated Hainan folklore into creative scenes to enable shoppers to experience Hainan culture in-person. For example, one of thethemed scenes, “Deer Valley”, features a deer strolling in a valley, which is inspired by the well-known Hainan folktale of “a deer offeringan elixir to save islanders”.
Rocky bayTree top canopy
Beach peninsula
Misty peakAutumn forest
Deer valleyCliff waterfallJungle river
Upgrading the Visual Experience toImprove Duty-Free Shopping
The company pays close attention to customers’ aesthetic needsand spiritual and cultural imagination. The AURA Skyrim Forest-themed atrium is loaded with cultural connotations and vibrantvisuals. It was important to the company that the atrium deliver arobust interactive experience. The AURA Skyrim Forest derives itstheme from stories and uses giant screens, projections, and large-scale artistic sculpture installations for the scenery. Tourists interactwith the installations in real-time as the story develops, creatingan immersive and exclusive shopping space that redefines theshopping experience and represents a benchmark for interactivecultural tourism.Collaborating with Brand Partners to Create an Immersive Shopping ExperienceHaikou International Duty-Free Shopping Complex collaborated with brand partners to build a bridge spanning brand culture and brandperception. For example, we opened the Moutai tasting shop, the first of our initiatives to combine retail cultural creative goods, productcollections and rare product displays through a travel retail channel. Another example is the immersive “Whisky tasting centre”, whichis the first immersive whisky museum in China. The whisky “tasting and retail” centre integrates whiskey history, culture, craftsmanship,products and consumer interaction. As part of their museum visit, customers can discover the historical origins and development ofvarious liquor brands and understand of their brewing process.
The Skyrim Forest transforms into the poetic and romantic “Fantasy on
Hainan Island” scene
2022 Environmental, Social and Governance ReportTopic 01
In December 2022, the third Watches & Wonders luxury watch exhibition was held at cdf Haikou International Duty-FreeShopping Complex and cdf Sanya International Duty-Free Shopping Complex. The company and the Foundation High Horology(FHH) jointly organised the exhibition. The luxury watch exhibition showcased classic watch collections to watch lovers worldwideand illuminated the long history of fine watchmaking, highlighting luxury watches’ sophisticated functions and designs. Thisimmersive and interactive event offered an experiential feast to watch enthusiasts.
The Third “Watches & Wonders” Luxury Watch Exhibition in HainanCase
New watch collections were showcased to watch lovers from aroundthe worldThe third “Watches & Wonders” luxury watch exhibition was held in Hainan
To promote Chinese culture, Haikou International Duty-Free Shopping Complex is building on the “China chic” trend. As part of this effort,it has set up a Moutai tasting shop to give customers a chance to experience the craftsmanship of Moutai and taste the country’s nationalliquor. In addition, Haikou International Duty-Free Shopping Complex has established the first global travel retail store that is dedicated to“China chic” beauty products, offering an array of Chinese beauty brands. Meanwhile, our travel retail channels have been collaboratingwith Huawei to introduce automotive products and create a cutting-edge smart living pavilion that incorporates the latest high technology.In this way, customers can feel the charm of “China chic” through innovative promotional activities covering a range of merchandise.
The first global travel retail store focusing on “China chic” beauty products
The company is actively seising opportunities in the domestic market, and it is consolidating its competitive advantages to reinforce its leadingposition in China’s duty-free industry and its influence around the world. As an essential participant in Hainan’s offshore duty-free industry, cdfHaikou International Duty-Free Shopping Complex showcases the Hainan Free Trade Port and attracts massive inflows of tourists to Hainan’stravel retail industry. We are proud to play a role in Hainan’s development into an international hub for tourism and shopping.
Moutai tasting shopThe first global travel retail store focusing on “China chic” beauty product
Adapting to Changes and DemonstratingOur Operational Resilience
Online shopping has become tendency to consumers’ shopping habits in recent years. In theface of this trend, we have taken various measures to ensure and improve our service qualityand shopping experience.
Passing on the warmth and safeguarding our employees’ health
The company continued to implement policies issued by governments, and we vigorously carried out robust measures to safeguardemployees’ health. We provide our employees with necessary medical and health supplies, prompt health monitoring, and publishemergency responses, which specify the procedures and measures that should be used for various emergencies in operating locations,accelerating the construction of the company’s resilience and protecting front-line employees’ health.
We care for our people and regard our people’s safety and health as our top concern. To this end, we introduced a series of measures toprotect our employees. We purchased, stored and distributed care packages and medical kits and provided psychological counselling foremployees. In addition, we offered lunch boxes at the staff canteen and allowed employees to work from home, among other measures. Inthis way, the company was able to take care of its people while also maintaining orderly operations.
Care packages prepared by the companyCare packages postcard prepared by the companyMedical kits prepared by the company
Topic
2022 Environmental, Social and Governance ReportTopic 02
Stable Development and Unity to Overcome Difficulties
We work as one and act responsibly as a central state-owned enterprise. The company shouldered its responsibility, organised donations offunds and supplies, and arranged for employees to participate in volunteer services.
In Hainan, the company donated CNY 2 million to the Sanya Red Cross Society, offered vehicles to assist intransporting donation supplies, and took other measures to support local community work. Hundreds of CPCmembers and cadres and Communist Youth League members from the Sanya Downtown Duty-Free Store andHainan DF participated in local community work. In an effort to act as a responsible central state-owned enterprise,the company dispatched 133 people to support the construction of the project in Hainan, and Sanya InternationalDuty-Free Shopping Complex organised a volunteer team to deliver meals. In total, 214 employees spent 4,440hours delivering 2,243 meals to ensure employees received food in a safe and timely manner. In 2022, SanyaInternational Duty-Free Shopping Complex organised 791 CPC and Communist Youth League members to providemore than 17,000 hours of volunteer services.In Shanghai, 99 employees from Sunrise Shanghai took the initiative to volunteer in communities. In this effort, theydevoted a total of 1,471 hours to assisting the communities.In Hong Kong SAR, CDF International actively participated in “CTS Community Services” activities and suppliesdonation drive.In Beijing, we participated in community activities, and guaranteed supplies. In recognition of their efforts, dozens ofCPC members and other employees have been recognised as “Outstanding Volunteers”.
Volunteers from the Sanya Downtown Duty-Free StoreThe first group of 23 volunteers from the Sanya Downtown Duty-Free Store
successfully completed their volunteer work and returned homeIn addition to taking care of its people’s mental and physical health, we introduced a series of operational and management policies thattook into account local conditions and requirements to ensure stable and orderly business operations.
Embracing Digitalisation to Upgrade the Consumer ExperienceIn recent years, the company has been actively developing new business and consumption models, broadening offline retail space,diversifying online e-shops, and expanding its online business to integrate online and offline channels and break through the traditionalboundaries of travel retail. We aim to provide comprehensive shopping services “before, during and after travel” and created “DigitalCTG DUTY-FREE” to diversify our service model and offer a new duty-free shopping experience that is digitally empowered. In 2022, thecompany expands its online customer service channels: create online service entrances for WeChat official account and applet, reachescustomers through multiple channels, solves customers’ pre-shopping, shopping and post-shopping problems on the platform, and thetotal online services during 2022 has been doubled compared to 2021.The “cdf Membership” WeChat Applet BoostsComprehensive Services Capabilities
The “cdf Membership” WeChat applet
One of our competitive advantages is our ability to provide high-quality services to walk-in customers at offline malls. Sanya InternationalDuty-Free Shopping Complex, Haikou International Duty-Free Shopping Complex and other stores have been actively optimising thecustomer service experience. To this end, they have been sorting out and refining processes covering customer services, store cashiers,online order delivery, and public opinion monitoring, with the goal of providing high-quality, professional and thoughtful services to walk-incustomers.
Based on O2O marketing models, we have developed the “cdf Membership” WeChatapplet. This viewership integration platform, which serves over 26 million members as thecompany’s new digital value centre, adopts an innovative business model that is revitalisingthe travel retail industry. Following several stages of development, the “cdf Membership”WeChat applet combines various functions such as tools, content, marketing, ande-commerce. It also provides an online service port for our offline stores and strengthensthe company’s comprehensive service capabilities.
cdf Macau Flagship Store
More ‘Smart Stores’ for New Consumer Experience TrendsThe company has vigorously developed ‘Smart Stores’ to support consumption thatintegrates online and offline capabilities. Relying on technologies such as passengerflow statistics and analysis programs, in-store virtual reality (VR) monitoring, andelectronic price tags, we continuously innovate our services to keep up with the latestconsumer experience trends. The array of automated and digital tools digitises the entireconsumption chain and effectively improves stores’ operational efficiency.
In 2022, Sunrise Shanghai embarked on a business transformation campaign to move its operations online. The companyquickly changed its business model and encouraged certain employees who were willing and able to transfer to onlineposts, such as positions related to logistics warehouses, online operations, online customer service, and network promotionplatform maintenance. Mentors were assigned to help newly transferred employees adapt to their new roles and acquire newknowledge and skills. In this way, employees were able to continuously improve their professional skills and operate as highperformers in their new positions.Each store has put in place a safety operation leading group to devise emergency plans pertaining to people, goods andvenues, with a view to ensuring that safety work is carried out in an orderly manner. We ensure a safe shopping environmentand a comfortable shopping experience for our customers.
Upgrading Skills to Adapt to ChangesCase
2022 Environmental, Social and Governance ReportTopic 02
Recently, the company launched an array of intelligent retail tools at the cdf Macau Flagship Store to integrate the real-life store withan online business. With the virtual reality (VR) store and augmented reality (AR) try-on tools, customers can enjoy a full-path retailexperience in the company’s online mall, marking a new milestone in developing of smart retail.Using the cdf Macau Flagship Store’s VR application, customers can view the entirety of the store anytime, anywhere, andexperience the brand history and product features as introduced by the sales staff. Customers can browse their favourite brandsin the store and go directly to the boutique with the designated brand with one click. Choosing from among a display of popularavailable products, customers can quickly complete their purchases.The cdf Macau Flagship Store’s cross-brand AR makeup tool provides a one-stop makeup trial experience featuring a range ofoptions. Customers can conveniently choose single products or full makeup cosmetics, add their favourite styles to their shoppingcart, and check out. The company has already partnered with Estee Lauder and NARS to offer their products on the tool.In addition to trying on makeup, customers can also use the AR tool to try on watches and see how they look on their wrists.Customers can view the watch in detail, and if they like a model, they can add it to their shopping cart and order it in advance,which increases the efficiency of their shopping experience.The company is digitally empowering the new retail landscape. In 2022, we successfully launched a digitalised system to supportprocurement and replenishment, merchandise management and freight information, with the goal of enhancing the company’sinformation system and providing effective support for business and consumer services.
Customers can use the VRapplication to view the entire store
The tool provides a one-stop makeup trialexperience that offers a range of available
options
Customers can use the AR tool to
try on watchesCapabilities and Brand Building Upgrade the Duty-free Shopping Experience
The company continues to enhance procurement, operations, and channels, as well as its digital andmarketing capabilities, in an effort to strengthen its leading position in the global duty-free industry,accelerate innovation, and provide an impetus for its stores to expand their brand portfolios.The company has established long-term, stable partnerships with more than 1,300 renowned brandsworldwide, and with over 316,000 single units of merchandise. In 2022, the company successfullyintroduced Blancpain, Breguet and other well-known brands into its offerings. We have also beenholding more events to collaboratively release new products around the world and launch newproducts through cdf channels, with the aim of diversifying the products available to customers. Inaddition, the company has collaborated with other Hainan stores to host a number of intellectualproperty (IP) activities, including the Duty-free Festival, the Wine Festival and the Year-end Carnival.In this way, we are working to provide customers with exciting activities and a brand-new shoppingexperience throughout the year.The company is actively responding to the consumer market, and we are preparing to tap its potentialas it grows larger in the future. Going forward, we will strive to steadily expand our share of newbusiness in the offshore duty-free industry, and continue to pursue innovation, upgrade the onlineand offline experience, and act as a leader in the industry. We will bear in mind our customer-centricprinciples, continue to strengthen our partnerships with brands, and empower the travel retail industrythrough digital transformation and continuous innovation.
stable partnerships with morethan1,300
renownedbrands worldwide
The cdf Macau Flagship Store Launches Diversified Smart Retail ToolsCase
over
316,000single units of merchandise
Principles ofGovernance
Corporate Governance andInteractive Communication
Effective Management witha Clear Focus
Trusted and Ethical BusinessOperations
Corporate Governance and Interactive CommunicationCorporate GovernanceRobust Governance SystemThe company has established a governance system consisting of the Party Committee, General Meeting of Shareholders, the Board of Directors, theSupervisory Committee and the Management with a clear division of authority, responsibilities and regular operations. The Party Committee plays aleading role in “setting the direction, managing the overall picture and ensuring implementation”, and implements the decisions and plans made by theCPC Central Committee and national development strategies. The General Meeting of Shareholders represents the highest decision-making authorityand plays an overall guiding role in the company’s operation and development. The Board of Directors is accountable to the General Meeting ofShareholders. It plays the role of “setting strategy, making decisions and preventing risks”, exercising decision-making power on major issues of thecompany in accordance with legal procedures and the “Articles of Association”. and carrying out its work strictly with the “Articles of Association”and the “Rules of Procedure of the Board of Directors”. Four special committees, namely the Strategy Committee, the Audit and Risk ManagementCommittee, the Remuneration and Evaluation Committee and the Nomination Committee, have been set up under the Board of Directors to provideconsultation and advice to the Board on significant decisions. The Supervisory Committee, as the supervisory body, is responsible for overseeingthe performance of the Board and management. The management level is responsible for the operation, implementation and administration, and issubject to the management of the Board of Directors and the supervision of the Supervisory Committee.
Information Disclosure
The company has formulated the “Information Disclosure Management System” to strengthen its management of information disclosures andprotect investors’ legitimate rights and interests. In 2022, the company disclosed information truthfully, accurately, completely, promptly and fairly,in strict compliance with the Company Law, the Securities Law and other laws and regulations, as well as the relevant regulations of the CSRCand the Shanghai Stock Exchange (SSE). We continue to regard “error-free” information disclosure as its basic goal, and we are steadily improvingour information disclosure system accordingly to effectively protect shareholders’ right to know and enhance the effectiveness of our informationdisclosures. The company has been awarded an A-grade evaluation for information disclosures by the SSE for the past seven consecutive years.Since its A-share listing in 2009, CTG DUTY-FREE has steadily improved the quality of its information disclosure to maintain a harmonious andconstructive relationship with investors and become a high-quality, compliant listed company. On 25 August 2022, the company was successfullylisted on the Stock Exchange of Hong Kong, ushering in a new era with a dual-listing in Chinese Mainland (A shares) and Hong Kong SAR (H shares).As an A+H listed company, CTG DUTY-FREE strictly abides by the information disclosure requirements in both regions, ensures the consistency andsynchronisation of both information disclosures, and strives to convey its values through high-quality information disclosure. In 2022, the companycontinued to improve the readability and presentation of its disclosure documents. During the year, we released the first designed annual report, aswell as an English version of the annual report summary, in an effort to fully meet investors’ personalised information needs.
CTG DUTY-FREE has formed a corporate governance system based on the “Articles of Association” and concerning the “Rules of Procedure of theGeneral Meeting of Shareholders”, the “Rules of Procedure of the Board of Directors”, the “Rules of Procedure of the Supervisory Board” and the “Rulesof Work of the General Manager” in accordance with the requirements of the Company Law and the Code of Governance for Listed Companies.Under this system, the company ensures standardised and effective corporate governance and operation. Following the latest regulatory requirementsand the company’s actual situation, the company revised the “Rules of Procedure of the General Meeting of Shareholders”, the “Rules of Procedureof the Board of Directors”, the “Information Disclosure Management System” and several other documents in 2022 to raise the standardised andefficient work of the Party Committee, the General Meeting of Shareholders, the Board of Directors, the Supervisory Committee and the Management.Our company attaches importance to the diversity of Board members, including but not limited to gender, age, race, language, cultural andeducational background and industry and professional experience, to further enhance the effective functioning of the Board and maintain a highstandard of corporate governance.
General Meetingof Shareholders(Authority)Board of Directors(Decision-makingBody)
SupervisoryCommittee(Supervisory Body)Board of DirectorsAudit and RiskManagement Committee
Board of DirectorsNominationCommittee
Board of DirectorsStrategy Committee
Board of DirectorsRemuneration andAppraisal CommitteeManagement
2022 Environmental, Social and Governance ReportPrinciples of Governance
The investor hotline
Strategy sessionswith brokersThe company’sofficial website
Online and offiline investorresearch meetingsThe SSE e-interactiveplatform
Investor reception dayInvestor relations emailsRoadshowpresentationsInvestor Relations
WeChat officialaccount and applet
Field researchactivitiesPreformancepresentationsGeneral Meetingsof Shareholders
「「
」
Investor RelationsThe company strictly complies with the Company Law, the Securities Law, the Listed Company Investor Relations Management Guidanceand other laws and regulations and established the “Investor Relations Management System” to implement investor relations management.Guided by the needs of investors, the company continuously enrich and improve the smooth investor communication channels to enhancepertinence and effectiveness. We also improve the quality of investor relationship management and convey corporate investment value tothe market precisely and timely to promote high-quality development of the company.Diversified Communication Mechanism
We explore and manage investorrelationships in an innovative mannerand provide convenient channels forinvestors to understand the company.In 2022, we deliver the latestinformation and news to investorsthrough our official account on Xueqiuand a public investor relations accountand applet on WeChat. In addition, wekeep developing the Investor Relationspage on the company’s officialwebsite.
In March 2022, “CTG DUTY-FREE Investor Relations” official account and platform launched on
WeChat in both Chinese and English version simultaneously
2829China Tourism Group Duty Free Corporation Limited2022 Environmental, Social and Governance ReportPrinciples of Governance
Effective Management with a Clear FocusESG Focus
We frequently arrange diversified sessions to deliver information about performance, share the company’s businesses, and conductexchanges, and we have hosted a number of one-to-one/one-to-many roadshows and reverse roadshows. At these roadshows, thecompany has received more than 6,600 investors in total, and we have provided our visitors with briefings on watches and jewellery, winetastings and skincare trials. We also conduct interviews with investors’ representatives, listen to their recommendations and opinions on thecompany’s business development, and convey their messages to management and business departments.We have launched a new promotional IPO video, an official WeChat account and an IR applet in both Chinese and English, and our postsdelivering the company’s latest news have garnered more than 300,000 views. In 2022, the company organised a themed “media day”event and invited media representatives to visit and hold exchanges with cdf experience officers. Financial media both in China and overseashave closely monitored cdf, and they have published a wide range of reports across various media platforms.
2022 Investor relations event
ESGTargets
Planning for Sustainability
To build a central state-owned enterprise that upholds the principles ofintegrity, safety, environmental awareness, and harmony.
With high-quality development as ourcore direction, we have implementedthe five development concepts of“innovation, coordination, goinggreen, openness and sharing”. CTGDUTY-FREE actively fulfils its socialresponsibilities as a central state-owned enterprise, and we are preparingfor a new stage of development underthe direction and goals described in the14th Five-Year Plan (14th FYP) and arestriving to achieve these goals.
Adhere to greendevelopmentprinciples andadvocate for thepeak emissionsand carbonneutrality goalsTake actions thatpromote shareddevelopmentstrategiesand commonprosperityActivelyparticipate inpublic service
CTG DUTY-FREE’s 2023 ESG Targets
ESG Management FrameworkThe Board of Directors is the highest decision-making authority for the company’s ESG work.The Strategy Committee of the Board is responsible for offering suggestions to the Board on ESG-related decisions and sustainabilitystrategies based on research.The company established the ESG Leadership Group, which is responsible for managing and coordinating the ESG-related work. TheLeadership Group establishes and improves the company’s management system and operating mechanism for ESG-related work. It alsoformulates the ESG work plans and organically integrates the development strategy, image, brand and operations with ESG concepts. Thehead of the Leadership Group includes the Chairman of the company, and the members include the department heads in charge of thecompany’s relevant departments.The company incorporates ESG work into daily management to reinforce ESG awareness and continuously improves the standardisationand systematism of work. The departments and affiliated companies allocate the ESG-related tasks to the frontline employees; and they areresponsible for supervising and implementing ESG-related work. For details regarding our work focuses, please see the “Statement of theBoard of Directors” of this Report.
? Continue to advocate energy
conservation and emissions reductionto implement “Green and Low CarbonInitiative”
? Follow green building standards in new
construction projects? Continue to promote energy-efficient
transformation of existing facilities? Actively explore the use of new energy
sources? Facilitate partnering brands to obtain
LEED gold certification? 100% coverage of operational safety responsibility (for leads in charge)? 100% coverage of operational safety inspections (for all places)? 100% coverage of operational safety training (for all staff)? Achieve 100% signatures for the responsibility pledge regarding
operational safety targets? No safety accidents and no work-related fatalities throughout the year? Continue to enhance automation and smart operations to empower
operational safety? Guarantee investments in operational safety
CTG DUTY-
FREE's2023 ESG
Targets
Green office
Target
? Guarantee investments in employee training? Guarantee investments in launching training
activities? Continue to diversify training courses to
increase learning hours per person
Training
Green building? Achieve a 95% answer rate at the call centre? Answer customer complaints within 30 minutes
and resolve them within 72 hours? Regularly conduct customer satisfaction
surveys to make continuous improvements
Customer satisfaction
? Conduct onboarding integrity training for 100%
of new leaders and cadres? Conduct onboarding integrity training for 100%
of new joiners? Achieve a 100% coverage rate in annual anti-
corruption training
Anti-corruption advocacy
? Closely monitor and respond to community and
societal needs
Public services
Operational safety
Strengthening green building capabilities and implementing“four savings and one conservation”Improving green logistics capabilities to reduce shipping costsEnhancing green warehousing capabilities to makewarehousing more intelligentBuilding green duty-free complexesPromoting green consumption and facilitating the greentransformation of consumptionStepping up rural vitalisationBoosting regional economic developmentImproving of income distribution and sharing the fruits ofcompany developmentImprovement of social welfareDevelopment of public service projects
Sector
Communication with Stakeholders
Stakeholder Communication Mechanisms
The company attaches great importance to communication with stakeholders and actively builds a robust internal and externalcommunication platform. We pay attention to important issues of concern to our stakeholders and continuously reinforces our managementto better respond to their expectations and create value for them.
StakeholdersStakeholder expectationsCommunication and participation mechanismCorporate response
Investors
Improvement of marketcapitalisation and profitabilityProtecting shareholders’ rightsand interestsStandardisation corporategovernanceAccurate information disclosureSmooth investor communicationImprovement of ESGperformance
Periodic reports and interim announcementsCommunication via SSE e-interactive platformOfficial website, new media platforms, telephone, fax and emailsGeneral Meeting of Shareholders, performance presentations,roadshows, analyst meetings, investor reception day, investorseminars
Provision of truthful and adequateinformation disclosureImprovement performance and generateprofitsDiversified investor communicationchannelsImprovement of ESG practices
Consumers
Product quality guaranteeImprovement of shoppingexperienceProtecting customers’ legitimaterights and interests
Communication during service processDiversified after-sales channelsCustomer satisfaction surveys
Meeting product qualityGood service qualityImprovement of the professionalism ofafter-sales serviceInnovative service practice
Employees
Guaranteed remunerationGood working environmentImprovement of communicationmechanismsEmployee development andcareer paths
Employment contractsTrade union, General meetings of employee representativesSeminars and condolence visits
Enhancement of the remuneration andwelfare systemImprovement of the system for generalmeetings of employee representativesProvision of a strong career developmentladderDiversified staff trainingsVarious staff activitiesEstablishment of healthy and safeworking environment
Business partners
Honest, fair, and provision ofmutual benefitsMaintenance of long-termcooperationComplying with business ethicsPromotion of supply chain’ssustainable development
Daily business exchangesBusiness meetings and negotiationsDocument correspondenceProcurement activitiesIndustry forums
Legal perform of contracts andagreementsArrangement for open and fair tenderingOpen and transparent businessprinciplesCollaborations on environmental projects
Communities
Community engagement anddevelopmentPublic services supportSocial development concerns
Research via site visitPublic service activitiesTargeted assistanceVolunteer services
Actively participation in public servicesTargeted assistance projectsCommunity development supportAdvocation of green development
Government and
regulators
Law-abiding compliantoperationsUndertaking social responsibilityPromotion of economicdevelopment
Participation in relevant trainings, and conferencesDaily communication and information reportingDocument notificationsCooperation between government and enterprise
Abiding by laws and policy requirementsRequired information disclosurePromoting regional economicdevelopmentIncrease of local employment
Industry associations
Promotion of industrydevelopment
Daily communicationDocument notificationsParticipation in associations’ conferences and activities
Performing duties as an associationmemberParticipating in conferences andactivities held by industry associationsSharing our experiences with a wideaudience
2022 Environmental, Social and Governance ReportPrinciples of Governance
Materiality Assessment for ESG IssuesMateriality Assessment Process
Based on the Global Reporting Initiative (“GRI”) procedures on materiality assessment, the company collects issues of concern to criticalstakeholders through questionnaires and interviews. Then, we perform the materiality assessment and rank the results to identify thecompany’s material environmental, social and governance issues, which are disclosed in the Report.The materiality assessment process is mainly divided into four steps:
Materiality Assessment Matrix
CTG DUTY-FREE determines the importanceof sustainability issues from two dimensions:
the company and stakeholders. Based on aneffective selection from the issues database andsufficient stakeholder research, the companyhas depicted a materiality assessment matrixand finally identified 17 highly important issues,4 important issues and 5 related issues.
Identify relevant
ESG issues
Review
Ranking of issues
Verification
Sources include domestic and international reporting guidance recommendations, issues disclosed bydomestic and international peers, and the company’s actual operations.
After the end of the reporting period, the company will organise stakeholders to give feedback on thecontents of the Report and prepare for the following Report.
The main factors to be considered in the materiality assessment include the impact on the company’sstrategy, policies, processes, and commitments; the impact on the company’s competitive advantageand management excellence; the current and future financial impact on the company. Main factorsto be considered by stakeholders in the materiality assessment include the impact on the company’sevaluation and decision-making and the impact on stakeholders’ interest.In combination with the company’s strategy and business policy, the company’s management reviewsthe preliminary evaluation results of material issues. It comprehensively analyses the material issues andpriorities that are important to the company and stakeholders.
Importance to stakeholders
Importance to the company
GovernanceSocial issuesEnvironmental issues
No.ImportanceIssuesResponse in the Report1highly importantExcellent service experience
Improving Customer Service and Offering an Innovative Shopping andLeisure ExperienceAn Immersive Experience that Represents a New Model in Retail ServicesEmbracing Digitalisation to Upgrade the Consumer ExperienceTrusted and Ethical Business OperationsExcellent Service, High SatisfactionComfortable Shopping and Quality GuaranteeSupply Chain Management with IntelligenceInnovative Green Marketing2highly importantCustomer satisfactionExcellent Service, High Satisfaction3highly importantHealth and safety of products
Pursuing an Innovative Approach to Brand Strategy to Boost Hainan’sEconomyComfortable Shopping and Quality GuaranteeSupply Chain Management with Intelligence4highly importantEmployee welfare and satisfactionEmployment Compliance and Rights Protection5highly importantHealth and safety of employeesOperations Safety and Health Protection6highly important
Employee career development andskill upgrading
Talent Growth and Retention7highly important
Employee diversity and equalemployment
Employment Compliance and Rights Protection8highly importantIntegrity of operationsTrusted and Ethical Business Operations9highly important
Green logistics and supply chainmanagement
Supply Chain Management with Intelligence10highly important
Customer privacy protection andinformation security
Trusted and Ethical Business Operations11highly important
Promoting the economic developmentof the operation region
Pursuing an Innovative Approach to Brand Strategy to Boost Hainan’s
Economy
Leading Development as a Sector Benchmark12highly important
Collaborating with brand partners topromote environmental protection
Innovative Green Marketing13highly importantCorporate ESG StrategyEffective Management with a Clear Focus14highly importantESG governanceEffective Management with a Clear Focus15highly importantResponsible supplier
Comfortable Shopping and Quality Guarantee
Supply Chain Management with Intelligence16highly importantGreen buildingGreen Building – Creating a Green Future17highly importantGreen officeGreen and Low Carbon Operations18ImportantAdvertising and responsible marketingComfortable Shopping and Quality Guarantee19ImportantPublic welfare activitiesDevotion to Charity and Society20Important
Environmental management systemsand management systems/policies
Green and Low Carbon Operations21ImportantIntellectual property protectionTrusted and Ethical Business Operations22RelatedClimate risk managementGreen and Low Carbon Operations23RelatedPackaging material managementInnovative Green Marketing24RelatedEnergy managementGreen and Low Carbon Operations25RelatedCarbon footprint reductionGreen and Low Carbon Operations26RelatedWaste managementGreen and Low Carbon Operations
2022 Environmental, Social and Governance ReportPrinciples of Governance
Trusted and Ethical Business Operations
Business Ethics
The company strictly abides by the Law of the People’s Republic of China Against Unfair Competition and other laws and regulations. Weparticipate in fair market competition according to business ethics and market rules and forbid commercial bribery, and we continuouslyoptimise the company’s anti-bribery mechanism to ensure its effectiveness. We are earnest in conducting self-examinations and self-rectifications, and we do not violate any laws, regulations, business ethics or market rules in business activities or engage in any unfairtrading practices that undermine fair competition. The company continues to attract consumers by engaging in trusted business operationsand providing excellent services, and we continue to promote anti-corruption, anti-monopoly, and human rights protection initiatives inrelation to our suppliers.Anti-corruption
The company accepts letters, visits, and telephone reports, and announces telephone numbers, e-mail addresses and physical mailboxesfor reporting. Our staff must strictly comply with the confidentiality and avoidance mechanism, precisely control the information scope andthe clues of problems, and strictly prohibit any disclosures regarding the case information and disposal solution. As a protection measurefor whistleblowers, the company’s Disciplinary Inspection Committee enforces the “Rules on the Handling of Whistleblowers’ Reports byDisciplinary Inspection and Supervision Organs” and other regulations, strictly prohibits the revealing of whistleblowers’ information andgiving priority to handling the accusations with a real name; for anonymous reports and reporting materials, unauthorised checks of thewhistleblowers’ information are strictly forbidden.
The company continues cultivating an integrity-based culture to create a stable and law-abiding operating environment. In 2022, thecompany issued the “Detailed Work Arrangements of the Company’s CPC Committee in Implementing the Opinions on Strengtheningthe Development of an Integrity Culture in the New Era”, with the aim of establishing a robust education mechanism that prevents thecompany’s people from engaging in any corrupt activities. The company provides onboarding training for new leaders and cadres of affiliatedenterprises, as well as for new joiners, and we regularly carry out educational activities through the “cdf e-Party” application. In addition, in2022, the company convened an educational seminar for all CTG DUTY-FREE employees to warn against corruption. The seminar explainedParty discipline, state laws, and the company’s rules and regulations, and provided examples to remind our people to keep away fromcorruption and stay committed to acting with integrity and in compliance with the law.In 2022, the company carried out five anti-corruption trainings for all employees, covering 100% of employees. We carried out three anti-corruption trainings for directors and supervisors, including independent directors, with a training coverage rate of 100%.
The company regularly implements special supervisory inspection, including monitoring and reviews before festival and holidays. Theseapproaches cover persons who are in leadership positions, examine their performance of duties and scrutinise their business expenditures.Special supervisory inspections are also conducted for compliance operations.
System and Mechanisms
Reporting Mechanisms
The company has formulated a supervisory and management system covering its headquarter and affiliated companies and establisheda leading group and a coordinating group for upholding anti-corruption. The anti-corruption leading group convenes twice each year toanalyse and determine how the company has maintained its anti-corruption stance and corporate political ecosystem, and to put forwardfuture work arrangements. The coordinating group comprises Disciplinary Inspection, Audit, Inspection, the Party Office, the General Office,Human Resources, Finance, and Legal, among other departments, convening twice each year and member departments present their workproposals and plans during the meetings. They coordinate the supervision of all parties to enhance supervisory effectiveness in accordancewith the working rules.
Advocacy against Corruption
Dedicated Supervision
Compliance and Risk Management
The company formulated the “Measures on Comprehensive Risk Management” and the “Management Regulations on the Reporting ofSignificant Operational Risk Events”, to establish an effective and comprehensive risk management system and mechanism; improve riskprevention and management; clarify the collection, collation and reporting of significant operational risk events; and safeguard the company’sstable operations and sustainable development. The company performs an annual assessment of material risks based on two dimensions:
the possibility of risk and the magnitude of impacts. CTG DUTY-FREE trained the compliance risk topics to all staff quarterly to enhance theirawareness.
Anti-money Laundering (AML)We strictly comply with the Anti-money Laundering Law and other laws and regulations in the local regions of our operation. We havedeveloped our AML policies and procedures accordingly, such as “Know Your Customer” procedures, transaction monitoring, suspicioustransaction reporting and record-keeping. Our company is constantly looking for ways to further improve our anti-money launderingmeasures. We provide AML training to our employees to ensure that they are kept abreast of laws, regulations and updates to our AMLpolicies and procedures.Intellectual Property Right (IPR) ProtectionWe attach great importance to works related to IPR and has formulated the “Brand Management Measures” and “Trademark UseManagement System”, which regulates the management and use of IPRs, including the standardised management of the Brand VisualIdentity (VI) system and the use of trademarks.We established a comprehensive retail terminal VI system, which conveys the corporate philosophy, culture, and norms to the public andeventually shapes a unique corporate image.For trademarks with more comprehensive applications, the company has a team of professional lawyers to monitor trademark infringementboth at the time of registration and use; we will defend our rights vigorously in the event of a violation.
Risk ManagementIn terms of risk governance, the company has specified the top-level personnel responsible for operational risk management, the top-levelpersonnel responsible for monitoring and auditing risk management performance, and their relevant reporting lines.
The Board of Directorsis the leadership groupresponsible for thecompany’s overallrisk management,and for ensuringthe effectiveness ofcomprehensive riskmanagement.
The company’s leads in chargeof risk management preside overthe daily work of comprehensiverisk management. They areaccountable to the generalmanager, and they exercisetheir risk management dutiessubject to the general manager’sauthorisation.
The company’s general manageris responsible for guidingthe company’s overall riskmanagement, approving riskmanagement matters subject toits authorisation, and authorisingthe company’s leads in charge tobe responsible for organising andpromoting risk management.
The departments in charge ofcomprehensive risk management arethe Legal and Risk Control Department.They are responsible for constructingand operating the comprehensiverisk management system; organising,coordinating, supervising and inspectingrisk management; and evaluatingthe effectiveness of subsidiaries’ riskmanagement. They provide professionaladvice for the company’s major riskdecisions.
Board ofDirectors
Departments in charge ofcomprehensive risk managementGeneral manager
Leads in charge of risk
management
The company organises a company-wide risk assessment every year to study and determine the risk situation in the coming year. In thisregard, the first objective is to establish the risk classification of each business, fully apply the results of risk loss event analysis, internalcontrol supervision and inspection, quantify the relevant criteria for risk analysis, and form a panoramic risk list for each business throughbottom-up aggregation of risks. The second objective is to further deepen and expand the study of risk early warning indicators, the keybusiness areas are selected, and the selection of industry indicators and the design of early warning thresholds are studied from bothquantitative and qualitative aspects to form a holistic risk early warning indicator applicable to the company. The third objective is to evaluatethe probability and impact of each risk according to specific risks in the risk database. The evaluation team comprises the company’smanagement, various departments and key subsidiaries. Ultimately, the team determines the risk priorities for the coming year based on thecomprehensive assessment, and response plans are devised for the top 10 risks. The company monitors and tracks its risk response on aquarterly basis to improve its risk response capabilities.
2022 Environmental, Social and Governance ReportPrinciples of Governance
We are steadily working to improve the company’s compliance management, enhance employees’ legal knowledge and mitigatecriminal compliance risks such as job-related crimes. To this end, on the afternoon of 24 November 2022, the company invitedProfessor Wang Zhiyuan from the China University of Political Science and Law to conduct a special training on “CorporateCompliance and Job-related Crime Prevention”. More than 3,000 people participated in the training.
Safeguarding the Law to Mitigate Compliance Risk – Special Training on “CorporateCompliance and Job-related Crime Prevention”
Case
Internal Control Management
In accordance with the “Basic Standards for Enterprise Internal Control”, the “Application Guidelines for Enterprise Internal Control, theGuidelines for Corporate Internal Control Assessment” and other regulations, the company has formulated the “Management Measureson Internal Control” to establish a robust and comprehensive internal control system. The company has established a management andorganisational system for internal control comprising the Board of Directors, Board of Supervisors, Operating Department, Internal ControlConstruction Department, Internal Control Operations Department, and Internal Control Supervision Department. For internal controlmanagement, the company adopts a system of “centralised leadership and hierarchical responsibilities,” which combines the comprehensivemanagement of internal control supervision and management departments with the professional management of functional departments. In2022, the company convened meetings of the Audit and Risk Management Committee and Board of Supervisors to deliberate on key issuessuch as related-party transactions, major investments, regular financial reports, etc.The company implements the internal control evaluations and prepares the “Internal Control Evaluation Report” annually, which is disclosedon the SSE website concurrently as the Annual Report. In 2022, the company revised two sets of internal audit regulations – the “InternalAudit Management Measures” and the “Economic Liability Audit Regulations”—to update and regulate internal audit processes.The company carry out various internal evaluations for affiliated companies to ensure the full coverage of corporate top-down internalmanagement. Annual internal self-assessment covers all affiliated companies, the evaluated areas including social responsibility, safety andhealth, environmental protection, etc. Core entities perform semi-annual internal self-assessment regarding focused areas. On-site internalsupervisory assessment is implemented irregularly. External auditors carry out the auditing task of annual internal control.To enhance digital supervision of its stores, the company continuously supervises the system and mechanism improvements in key areasand across key links. We have conducted special on-site inspections of operational compliance in 138 stores, and we dispatch disciplinaryinspection cadres to supervise projects in areas where corruption is prone to occur. Disciplinary committees from the company and at storeswork together to conduct joint inspections.
We have taken the following actions to create an effective risk culture within the company:
According to the requirements of the company’s “14th Five-Year” strategic plan to comprehensively improve risk management and control,we comprehensively organise and implement special tasks related to the risk management and control system and tasks related to the “yearfor strengthening compliance management”. The company plans to establish a long-term management mechanism to enhance its overallmanagement and risk prevention capabilities.To this end, we have initiated the systematic construction of an internal control system, conducted risk analysis and diagnosis of businessprocesses throughout the system, urged relevant units to implement rectifications according to the risk diagnosis report, and put forwardoptimisation suggestions for key issues, such as the company’s digital transformation, to support management decision-making andenhance the company’s overall operations and management.Second, the company embeds its own requirements on risk management and control into specific control points and maps specificresponsibilities to information in the risk database. In this way, we ensure that the company’s internal control lists and programmes andinternal control system are vertically linked and horizontally consistent. Using the system, we are able to generate useful management tools,such as a practical internal control manual that reflects the company’s business reality, as well as risk control blacklists and whitelists.Third, we are continuously improving the company’s internal control and compliance management system, and we incorporate risk, internalcontrol and compliance responsibilities into the duties of the Audit and Risk Management Committee under the Board of Directors. Inaddition, we are steadily improving the organisational system for risk, internal control and compliance to strengthen responsibility for themanagement of these areas at the corporate governance level.
To thoroughly live up to the spirit of the important speech delivered by President Xi Jinping in Hainan on creating a sound marketand legal environment, and to attract consumers by engaging in honest operations and providing high-quality services, thecompany decided to conduct integrity and legal compliance training for frontline employees in Hainan. To this end, the companyheld a large-scale training programme on rule of law with the theme of “Operational Integrity and Compliance”. The company inviteda senior lawyer from a law firm to host the training. The main venue for the training was Sanya International Duty-Free ShoppingComplex, and it was also held at Hainan DF, Phoenix Airport Duty-Free Shop and Haikou International Duty-Free ShoppingComplex through online and offline channels. Cadres and frontline employees of all affiliated enterprises in Hainan participated inthe training.
Training on rule of law for frontline staff in Hainan
Information Security and Privacy ProtectionThe company respects and protects customer privacy and assists safeguard network and information security in strict compliance withlaws and regulations such as the Cybersecurity Law, the Personal Information Protection Law, and the Information Security Technology– Personal Information Security Specification. The company develops its information security systems under these laws, regulations, andprinciples.
Information Security System ConstructionThe company and affiliated companies have established and improved various information management systems and standards to suit thecompany’s digitalisation needs. CTG DUTY-FREE formulated information security management systems that cover information securitymanagement, network security management, data management, information encryption rules, information security emergency plans andother aspects of information security management. In this way, we have developed comprehensive information security managementsystems that feature well-defined responsibilities, a clear division of labour and a combination of technology and management.Client Privacy Protection
In July 2022, the company updated its customer privacy policy, which is available to consumers and other stakeholders on its website(http://www.ctgdutyfree.com.cn/p/yinsizhengce.html). In accordance with the Personal Information Protection Law and our customer privacyprotection policy, we take the following measures to protect customers’ information:
Desensitise key
information
Store the data inTencent Cloud
Membershipinformation cannotbe exported
Establish completesystem log
Membershipsystem hascertified as Level IIIInformation Security
Protection
Promoting Rule of Law and Integrity Awareness – Rule of Law Training forFrontline Staff in HainanCase
2022 Environmental, Social and Governance ReportPrinciples of Governance
A customer can register cdf memberships at the system of member terminal (cdfmembership applet, cdf membership App, cdf Membership Club and other channels) in aself-service manner. Once the information is entered, the key parts of the personal data aredesensitised; and the customer has the right to access, adjust and delete his/her personalinformation at any time. The company obtains personal information from the self-input ofcustomers and does not collect personal data from third parties (except when required bylaw). The company undertakes to delete customer data within the time limit required by lawand does not provide personal data to any third parties (except when required by law).
Corporate Information Security
The company cooperates with leading domestic security server providers and adopts a variety of security protection means to guarantee thesecurity of key information systems. The data centre is designed with active-active architecture and a stable and reliable data backup plan toprovide double protection to ensure the information security of our company.The company inspects its information system regularly for all types of operating and maintenance events and performs checks to safeguardthe system’s health. Daily automatic or manual inspections are carried out for key information system to ensure that the information systemoperates in a routine and stable manner 24 hours per day.The company guarantees sound operations and maintenance for vital activities and events and has formed a working mechanism toefficiently resolve problems and rapidly rectify them afterwards. To improve the safety of employee work habits, raise awareness of safetyprecautions, protect the company’s data assets, and ensure that security threats are reported in a timely manner, the company conductedan online “Safety Awareness Training” for all employees.
In 2022, the company provided
three
training courses related to informationsecurity and privacy protection.To effectively enhance employees’ understanding of operational compliance andstrengthen the compliance of data security and the protection of consumers’personal information in business activities, the company invited lawyers withexpertise in the field of data and personal information to hold an online speciallecture on the “Impact of Data Security Compliance on Corporate BrandProtection”. More than 500 employees from the company’s headquarter andaffiliated companies participated in this training, including employees responsiblefor membership system management, store and e-commerce platform data,customer information management and other relevant positions.
Special Training on the “Impact of Data SecurityCompliance on Corporate Brand Protection”Case
To raise our employees’ awarenessregarding customer privacy issues, thecompany conducts specific trainingsessions for all employees at least
twice
a year
Protecting Cybersecurity during the 20th CPC National CongressCaseTo protect cybersecurity during the 20th CPC National Congress, the company heads lead to set up a cybersecurity working groupand developed a detailed work plan and emergency system for cybersecurity. The company carried out drills for key informationsystems of the company’s headquarters and key subordinate enterprises, and quickly arranged personnel to rectify security issuesidentified in the drills. We also formed a tracking mechanism to quantify the progress of rectification. During the 20th CPC NationalCongress, the company deployed resources in advance and fully enabled cybersecurity monitoring across multiple dimensionsof the company’s operations. If a major cybersecurity incident occurs, the company will handle, study and report the incidentaccording to the prepared cybersecurity emergency plan. Under the company’s management, we excelled in securing the 20thCPC National Congress.
Prosperity
Excellent Service, High Satisfaction
Comfortable Shopping and QualityGuarantee
Supply Chain Management withIntelligence
Devotion to Charity and Society
Leading Development as a SectorBenchmark
Excellent Service, High SatisfactionWe adhere to the “customer-centric” business philosophy, intending to create a first-class service benchmark. We provide a full range ofservices for consumers in the “pre-shopping, shopping, post-shopping” and “pre-travel, on-travel, post-travel” stages to give them a “happyshopping” experience.Service Management System and Training SystemThe company continues to improve the standard of its service and implement various related tasks in an organised, structured, and effectivemanner. We have developed the “Code of Conduct for Sales Staff” to clarify requirements on customer services, the dress code andwelcome etiquette. Our company also formulated the “Operating Standards for 400 Customer Service Posts” and the “Operating Standardsfor After-sales Services” to specify after-sales service standards.We also constantly improve our talent management and staff training system. The company continuously carries out various training,including leadership training, professional skills training for front-line staff, and general knowledge training, to ensure that employees at alllevels possess professional service capabilities. The ultimate goal of the training is to accurately grasp customers’ core demands.Enhancing Service Quality? Taking multiple measures to steadily improve service quality? Optimising the store environment: We changed the music in the store, considering factors such as time of day, festivals, and
seasons, and constructed the fragrance in the store.
? Improving service facilities to enhance the mall’s overall environment: We provide customers with electric shuttle bus servicesto transport visitors from the parking lot to the store, temporary rest benches, complimentary bottled water at the front desk,and drinking fountains at various locations in the mall, among other amenities.? Enhancing comprehensive support capacity: We formulated the “Emergency Plan for High Traffic” and refined support workduring high traffic hours. We also enlarged the nursing team in the customer service centre to improve capacity when handlingunexpected events.? Convenient offshore duty-free services in Hainan province: We provide postal and back-to-island pick-up services to offer moreoptions for offshore duty-free pick-up. At the end of the reporting period, we provided 11 pick-up locations across HainanIsland, and the total number of pick-up windows increased to 135.? Priority services for special visitors: We provide priority services such as priority entry, priority settlement, priority pickup andother services for pregnant females and members of the armed forces.
? Convenient storage services: the Meilan store at Hainan DF provides storage services for passengers who need to leave thequarantine area due to flight cancellations or delays, and it pushes SMS alerts for customers who have purchased goods toremind them not to take duty-free goods out of the quarantine area illegally.? We provide multiple in-store services tailored to customer needs and send holiday-greeting and birthday-greeting textmessages to members and specific VIPs to strengthen its connection with customers.? We also host exclusive activities in a manner welcomed by consumers with prominent brands from time to time. In 2022, weinvited customers to participate in activities such as luxury watches and wine party, Watches & Wonders high-end watchesexhibition.
2022 Environmental, Social and Governance ReportProsperity
Case
On the morning of 11 April 2022, President Xi Jinping visited Sanya International Duty-Free Shopping Complex to inspect theimplementation of offshore duty-free policies. He stressed leveraging the advantages of China’s huge market size, fostering afavourable market environment with the rule of law, and attracting customers with trusted business operations and quality services,and make a greater contribution to the development of a free trade port with Chinese characteristics. In response, the companyorganised the “trusted business operations and excellent services” project to refine its customer services, comprehensively enhanceservice quality, and consolidate CTG DUTY-FREE’s status as a world-class travel retail operator.
Sanya International Duty-Free Shopping Complex Phase 2 Organises a SpecialWork Project to Improve Service Quality
A quote from the speech delivered by PresidentXi Jinping during his visit to Sanya InternationalDuty-Free Shopping Complex on 11 April 2022
Aerial photo of Sanya International Duty-Free
Shopping Complex
Citizens and tourists shopping at SanyaInternational Duty-Free Shopping Complex? Clear objectives and responsibilities
Since May 2022, Sanya International Duty-FreeShopping Complex Phase 2 has been steadily identifyingand analysing shortcomings in its project operationand management processes. Based on this analysis, ithas compiled more than 30 work improvement targetsacross seven categories, including property services,merchant services, customer services, member servicesand logistics support, and it has devised detailed workplans for various departments to ensure that servicesare improved in a comprehensive and orderly manner.
Sorting out the shortcomings of project operations and devising
detailed work plans for all departments
Team members who attended the service improvement training organisedby Sanya International Duty-Free Shopping Complex Phase 2
? Enhancing skills and strengthening capabilities
To improve the skills of service personnel, enhance thecompany’s projects, and provide consumers with abetter leisure shopping experience, Sanya InternationalDuty-Free Shopping Complex Phase 2 organised aspecial training activity on service etiquette at the Partyand the Masses Service Centre in Haitang district from21 to 23 June 2022. The training programme focusedon service awareness, language etiquette and serviceetiquette, and more than 140 employees from all of thecompany’s departments and brand stores attended thetraining.
Different aspects of the service improvement project organised by Sanya
International Duty-Free Shopping Complex Phase 2
Streamlining the process for handling after-sales issues to raise efficiency.
Establishing and improving after-sales service channels and listening to and responding to consumer demands.
? To safeguard customer rights and interests, our company has unified related standards under the “Management Regulations onAfter-sales Return and Complaint Approval Authority” in Hainan region.? We have launched a circulation mechanism for customer complaints, which dispatches customer service tickets and tracks thecomplaint completion rate to improve processes for handling customer complaints and raise the efficiency of the process forresponding and handling complaints.? We implement the “Detailed Implementation Rules for the Classification of Customer Complaints”, so that serious complaints arehandled and responded to quickly. A consultation group will be set up to formulate and carry out solutions for common and urgentissues (if any).? For external customer complaints, we strictly implement the 12315 policies of “handling complaints immediately upon receipt”, andwe have established effective communication channels with the Beijing Dongcheng District Market Supervision Administration. In2022, the company received a total of 38 complaints from related authorities, and we ensured that we responded to complaintswithin 30 minutes and resolved them within 72 hours.
? The Customer Service Department has set up a feedback group to promptly respond to customer enquiries and complaintsthrough multiple channels.? The Company has set up four call centres in Beijing, Hainan, Shanghai and Shenzhen, with a customer service team of nearly 500
people. Consumers can make enquires and business consulting by calling customer service call centres and customer servicecentres on online platforms. The call centres are responsible for the overall management of customer calls, and for supervisingthe distribution of customer service tickets to the various sales platforms. The online customer service centres also apply artificialintelligence (AI) capabilities to respond quickly to customers’ basic business enquiries in a timely and efficient manner. In 2022,services were provided to consumers 7.4 million times via telephone and online.
Improving Service Coverage
? Learning from experience, standardising management andstrengthening our imageSince the service quality improvement project was launched,Sanya International Duty-Free Shopping Complex Phase 2has implemented various service initiatives, including settingup a Party member pioneer post, serving walk-in customersa glass of water, one greeting from one post, and efficientsettlement with merchants. In addition, it has put in place the“four any’s” requirement where customers walk through willbe Business premises ; what customer’s contact representsa good image. What customers buy will be of good quality.What customers experience will be a good service andthe “four understandings” customer service managementconcept (understanding customers’ needs, faults, gripes, andcomplaints). These approaches have further strengthened thedaily operational management of Sanya International Duty-Free Shopping Complex Phase 2 and effectively enhancedcustomer experience and satisfaction.
2022 Environmental, Social and Governance ReportProsperity
In 2022, the Sanya Downtown Duty-Free Store engaged a third party to carry out a customer satisfaction survey. The third partyconducted multi-dimensional research on online and offline shopping experiences from the perspective of consumers, completing2,000 online + offline questionnaires with a decent overall satisfaction rate. The company was able to make rectifications based onthe feedback received from customers in the survey, and specifically, we have been providing additional professional guidance oncustomer service to employees to improve service satisfaction.In the future, the company will continue to strengthen the service consciousness of all staff, optimise the service management system anddevelop a package of solutions to address service-related issues and improve service quality.
Conducting customer satisfaction surveys and optimising service processes.
Comfortable Shopping and Quality Guarantee
Guarding the “Entrance Gate”
The company strictly selects and approves suppliers in accordance with relevant systems and procedures. We conduct research andstudies on the supplier market, steadily strengthen supplier development, and require that domestic suppliers be certified through astate-certified supervisory and management information platform. The company reviews suppliers’ certification information and businessinformation, runs checks to determine whether suppliers have any record of legal or regulatory violations, and strictly implements supplieraudit and selection processes.The company has formulated the “Procurement Management Measures” and the “Supplier Management Regulations”, and it strictlyimplements the procurement approval process. The measures specify provisions on supplier selection methods, selection procedures,assessment methods and tender procurement practices, and we supervise and review the supplier admittance process to control thecompany’s “Entrance Gate”. In the tender process for construction projects, we have set up checkpoints to review suppliers’ environmentalsystem certifications, health system certifications, and quality system certifications, as well as their practices in respect of qualitymanagement, safety management and civilised construction management.The company has also established a list of qualified suppliers and incorporated compliance performance requirements into the evaluationprocess for suppliers. We conduct annual performance evaluations of suppliers in accordance with the “Supplier Management Regulations”,and we dynamically adjust the qualified suppliers list by promptly removing any suppliers involved in irregularities.
Case
Sanya Downtown Duty-Free Store Carries Out a Customer Satisfaction Survey toIdentify Gaps and Improve Services
? Every year, our company conducts a consumer satisfaction survey. Before we implement phone interviews, we seek customers’permission regarding their willingness to accept the survey through SMS.
? To protect consumer rights and improve customer satisfaction, we completed the sorting and integration of online business andrealised 7-day no-reason return.
? We are planning to conduct monthly surveys on consumer satisfaction to timely and comprehensively collect feedback fromconsumers. Using this feedback, we will sort out and summarise problems and work with various business departments tocontinuously optimise service processes.? In 2022, the Company’s Marketing Department conducted a customer satisfaction survey covering the five membership levelsof CTG DUTY-FREE: Ordinary Members, Silver Members, Gold Members, Platinum VIP and Diamond VIP. The company used acombination of qualitative hotline interviews and online questionnaires to comprehensively analyse customers’ consumption habitsand motivations, gain an in-depth understanding of their needs, and make targeted improvements.
During the reporting period, the company performed risk assessments of suppliers in relation to environmental and social factors. Statisticsregarding these assessments are as follows:
Supplier categoriesNew supplier admissionExisting suppliers
Performed assessment(Number of suppliers assessed)
Performed assessment(Number of suppliers assessed)Construction contractors4656Suppliers of bulk materials4796Service providers8967In order to reduce accidents, property loss and safety risks during commodity storage, distribution and transportation, the companyhas formulated the “Distribution Centre Safety Operation Management Regulations”, the “Distribution Centre Emergency Plan” and the“Distribution Centre Fire Safety Management Regulations”. These policies, which are based on the principle of “safety first and preventionfirst”, aim to strengthen the management of distribution centre safety operations and emergencies and enhance the distribution centres’emergency plans and fire safety management regulations.Product Quality GuaranteeTo ensure product quality, the company has issued the “Regulations on Safety Management, Quality-Risk Early Warnings, Inspectionand Testing for Imported Commodities (Trial)”, which standardises and institutionalises quality and safety management for our importedcommodities. We have strengthened safety and quality control for imported commodities to ensure that the company meets itsresponsibilities and protects consumers’ rights and interests. Since 2022, in accordance with the Law on Product Quality, the requirementsof the commodity quality standards issued by the State Administration for Market Regulation and the Standardisation Administration, andother laws and regulations, the company has re-signed agreements with domestic liquor producers and suppliers, and the new agreementsinclude the “Liquor Quality Assurance Agreement”, which helps the company ensure the quality of its products, protect the rights andinterests of consumers, strengthen its corporate image and meet its social responsibility.Regarding food safety, the company has made every effort to build and improve its comprehensive management systems, including thoserelated to food management rules, supervision and monitoring, traceability cooperation, inspection, and testing, to ensure the food safetyof our pre-packaged goods. We adhere to standardised online and offline management standards with respect to food safety and exercisewhole-process control in this area. For goods with special storage requirements, such as chocolate that needs to be stored below 20degrees, our stores strictly enforce the storage and transportation standards provided by suppliers and maintain daily temperature andhumidity measurement records.In respect of the management of goods close to expiration, the company disposes of them by means of return shipments, returns tosuppliers for exchange, selling them at a discount, offering special promotions, and destroying them under the supervision of customs inaccordance with the product categories and actual circumstances. The company strives to reduce goods close to expiration by forecastingmarket demand, flexibly deploying goods and improving procurement efficiency, with the goal of enhancing resource use efficiency andoperating effectiveness.We also require suppliers to establish information transmission mechanisms with the company so that we can take prompt actions toprotect the rights and interests of customers if product or service quality issues arise, including in cases when the supplier needs to initiate aproduct recall or reconstruct products due to quality issues.
Responsible Marketing and Sustainable BrandsWe attach great importance to the management of advertisements and new media marketing. In accordance with the Advertising Lawand other laws and regulations, the company has formulated relevant documents such as the “Regulations on the Management of PressRelease” and the “Marketing Activities Management Measures” to strengthen management and control over marketing activities. Thecompany’s affiliated companies also formulate detailed management regulations following their respective business conditions, includingthe “Regulations on the Management of Promotional Videos and Brochures”, “Regulations on Advertising and Publicity Management”,“Regulations on the Management of Marketing Activities” and “Regulations on the Management of External Publicity Information”, etc. toregulate all aspects of marketing management.To explore sustainable development strategies for its brands, the company has accelerated its transition towards digital management withthe aim of becoming a global leader in this area. In 2022, the company comprehensively improved its data capabilities and developeda membership system called OneID with more than 300 self-built digital tags based on the characteristics of duty-free industry. OurMarketing Department also performed an in-depth interaction analysis of membership data from six perspectives, focusing on the twocategories of member portraits and consumption preferences. The analysis has flexible selection of target groups and therefore formedCTG DUTY-FREE’s own member tracking system. Based on the results, the Company has been able to empower its brand; enhancecollaboration, consumer services and marketing activities; and optimise tourism retail operations. Through this analysis work, the companywas able to effectively mine the commercial value of its membership data and devise plans for how to more effectively use this data in thefuture.
2022 Environmental, Social and Governance ReportProsperity
Supply Chain Management with Intelligence
The company aims to establish a green supply chain to align its operations with the nation’s goal to construct an ecological civilisation. Sucha supply chain requires strong capabilities in warehouse and transportation management, as well as the intelligent management of the entireprocess.Supply Chain ManagementThe company has established good partnerships with suppliers, standardised its supplier management system, and established a secureand stable pool of suppliers.
In 2022, CTG DUTY-FREE sorted out its supply chain process, including procurement, customs declaration, inbound and outboundproduct processes, claims and other links. The company was able to enhance the plans and administrative measures coveringits supply chain process, clarify the accountability and claim compensation system, and lay a foundation for the formulation of afull-category supply chain flow chart that is visualised, transparent and monitorable.
The distribution of its brand partners by region is as follows:
in total
overseas.which includes
in the ChineseMainland
in the regions of Hong KongSAR, Macau SAR and Taiwan
Intelligent Supply Chain
With recent advances in research and development, innovation and the application of digital technology, China has become a new enginedriving the growth of the global digital economy. Supply chain intelligence has always been the company’s development focus. We haveestablished an industry-leading supply chain management system, and actively applied visual and digital support systems to create anintelligent supply chain, promoting industrial digitisation and the development of the digital economy.
Box-Type E-Commerce RobotIn 2022, the company launched its first box-type e-commerce robot project on a trial basis in the Shenzhen Qianhai e-commerce warehouseof cdf Membership Club. In contrast to the commonly seen palletising robots, which transport the entire shelf, the box-type robot canpinpoint and transport goods with specific SKUs, enabling higher sorting precision. The official launch of the box-type robot has significantlyimproved the overall operating capacity of the Qianhai e-commerce warehouse and doubled its order picking capacity – all while recordingan error rate of less than 1/10,000. Moreover, the box-type robot has also helped the warehouse surpass the previous height limits imposedby manual order picking. As a result, the warehouse has been able to expand the number of shelf layers from 4 to 7, which has doubled itscargo box storage capacity from 4,500 to 9,000. In addition, the box-type robot operates in a paperless manner by skipping order printing.
CaseCTG DUTY-FREE Improves its Supply Chain Process
Intelligent robots automatically pick and transport
goods in warehousesDigital supply chains represent the future. Our company has built a digital supply chain system to assist suppliers, manufacturers, anddistributors achieve data exchange and supply chain integration. We promote digital management throughout the processes of onlineprocurement, online tracking, and online acceptance in order to provide standardised digital commodity information to upstream anddownstream enterprises in the supply chain, comprehensively improve the operational efficiency of enterprises and supply chain partnersand engage in win-win cooperation.
Visualisation Platform
The company has established a supply chain visualisation platform that provides a 360-degree visualised model that can be describedas “warehouse under closed supervision + electronic information fence + video surveillance”. As part of this platform, the company usesa video surveillance system to monitor the “purchase, sale, and storage” of duty-free commodities. Using the platform, the company canperform real-time monitoring of goods delivery and ensure that products are delivered in a safe, timely and accurate manner, thereby raisingcustomer satisfaction. The platform also assists logistics personnel in obtaining optimal solutions to problems such as logistics routes anddelivery priorities, effectively improving the efficiency of the logistics chain and eliminating excess carbon emissions caused by route planningproblems in freight transport and delivery.
Robotic SortingThe company has promoted robotic sorting in the Sanya E-Commerce warehouse,Sunrise Shanghai e-Commerce warehouse and other sites. After receiving an order,the intelligent robot performs a series of built-in logical analyses of inventory locationto accurately and quickly locate and deliver products to warehouse employees, whothen scan the product code and complete the picking process according to the tipsprovided by the human-computer interaction workstation panel. The intelligent consoleintelligently monitors the entire process, which greatly improves picking accuracy andsorting efficiency.
Green Supply Chain
Climate change is a common issue worldwide, and the increasingly severe impact has brought new challenges to logistics management. Wecomprehensively promote green warehousing and transportation. In doing so, we are creating more environmentally friendly and sustainablesupply chains, effectively reducing our carbon footprint, and actively responding to environmental challenges.
Green Storage
Green warehousing is a core component of green supply chains and a critical step in the company’s effort toconserve energy and reduce emissions. In December 2021, the State Council released the ComprehensiveWork Plan for Energy Conservation and Emission Reduction for the “14th Five-Year Plan” Period, whichintroduced the concept of “energy conservation and emission reduction projects”, called on organisations to“accelerate the construction of green warehousing and encouraged the construction of green logistics parks”.In response to national policies, the company has fully promoted green warehousing to reduce transportationcosts, improve warehousing efficiency and conserve energy.
Advanced andRational Warehousing
The company combined several previously scattered warehouses to form an integrated warehousedistribution centre and achieve “integrated warehousing”, “integrated distribution” and “integrated warehousemanagement”. This integration project has made its warehousing and logistics transportation more effective,allowed for a larger number of goods to be loaded onto each batch of carriers, and optimised the utilisation ofcarrier capacity. The integrated warehousing and distribution assist the company in avoiding under-utilisationof capacity, improving the efficiency of the logistics chain and reducing emissions. Going forward, we alsoplan to locate new warehouses closer to sales locations to further reduce logistics costs and energy use.
2022 Environmental, Social and Governance ReportProsperity
With the support of big data and intelligent route optimisation algorithmtechnology, the company has rationally arranged transportation routes by sea,land and air to improve logistics efficiency. CTG DUTY-FREE maximises unitcarrying capacity, thereby reducing the number of trips, energy consumption, andcarbon emission during the transportation process.
For short-distanceland transportationFor long-distancetransportation
Our company strictly regulates the use of vehicles to ensure that they meet the standards for emissionsin their operation regions.
Our company opts to ship by sea with relatively low carbon emissions per unit where possible. In 2022,the Supply Chain Department of CDF International continued to increase marine transportation as a shareof overall logistics, with the proportion reaching around 30% at the end of 2022.
Efficient and
AdvancedOperating Model
In its daily operations, the company’s warehouse distribution centre considers the characteristics of itsproducts and strictly follows relevant requirements around storage, loading and unloading, and handlingto reduce damage caused during the storage and handling process and effectively reduce inventory loss.In terms of storage, we strictly abide by the principle of placing similar products near each other, to unifiedcontrol over storage conditions, energy conservation and efficiency improvement.
Energy-efficient andEnvironmental-FriendlyEquipment and
Facilities
The company’s warehouse distribution centre prioritises using energy-efficient, environmentally friendly,and recyclable logistics equipment and facilities. For instance, LED lights are used in indoor lighting to saveenergy; clean energy tools are vigorously promoted, by replacing traditional fuel forklifts with electric forklifts,to reduce carbon emissions and environmental pollution.
Green Transportation
The Development Plan for Comprehensive Transport Services during the 14th Five-year Plan Period issuedby the Ministry of Transport specifies that construction of the green transportation system should beaccelerated; corporate use of integrated, efficient, green, and low-carbon freight and logistics systems shouldbe encouraged; and a clean and low-carbon green transportation system should be created to reducecarbon emissions. To act as a role model in this area, the company steadily strives to raise transportationefficiency and reduce the energy consumed in its transportation processes to facilitate the construction of agreen transportation system, and we have obtained the TAPA
and WCA
certifications.
Certificate of Membership byTransported Asset ProtectionAssociation (TAPA)
Certificate ofMembership by WorldCargo Alliance (WCA)
Devotion to Charity and Society
Actively Participating in Public Welfare and Charity Initiatives
CTG DUTY-FREE has always upheld our original beliefs and mission: to serve society with our actions, promote public well-being and act asa responsible central state-owned enterprise.During the reporting period, the company actively participated in a range of public welfare and charity initiatives. Details regarding theseactivities are as follows:
public welfare andcharity activities
Public welfare donations totallingCNY2 million
Volunteer services totalling
52,400
hoursTotal volunteer service attendance of
347,200 person-times
Total investment in rural revitalisationof CNY12.1 million
Total investment in public health ofCNY
12.0982 million
2 TAPA: Transported Asset Protection Association3 WCA: World Cargo Alliance
Educational Programmes
In 2022, the company joined hands with Guerlain to introduce the Bee School in the Chinese Mainland. The Bee School is an educationalprogramme on environmental protection for kids, and it is jointly carried out by United Nations Educational, Scientific and CulturalOrganisation (UNESCO), Observatoire fran?ais d’apidologie (OFA), ELYX Foundation (ELYX is the United Nations’ first “digital ambassador”)and Guerlain.
A group photo of the Bee School’s opening ceremonyPhotos of Bee School classesIn 2022, Sanya Downtown Duty-Free Store launched a public welfare initiative to accept book donations from employees. This effort hashelped improve awareness among employees about low carbon and environmental protection practices while also making a contribution tosociety. Statistics shows that more than 390 books were donated during the activity, and they were used to set up a charity reading cornerfor Qingtian Primary School of Haitang district to enrich the children’s reading resources.
Photos of the book donation activity, which was themed “Donating Books with Love”, organised by Sanya Downtown Duty-Free Store
Photos of the “Dream Class” activity organised by Sanya Downtown Duty-Free Store in Qingtian Primary School of Haitang district
In June 2022, the Trade Union of Sanya Downtown Duty-Free Store organised activities to provide schools with public welfare classes.During the activity, foreign employees from Kazakhstan were invited by the company to deliver a “Dream Class” for pupils in Qingtian PrimarySchool of Haitang district, which provided the students with an excellent English learning experience and inspired them to think boldly andexplore the wider world.
2022 Environmental, Social and Governance ReportProsperity
Community Activities
An old proverb says, “Used clothing still delivers warmth”. In 2022, we organised a used clothing donation drive with the theme of “DonatingClothing in Harsh Winters” for the 14th consecutive year. In November 2022, we collaborated with the White Whale Dream Isla ndProgramme to carry out our used clothing donation drive in a more professional, sustainable and innovative way. The clothes will be sent toassist mountainous areas or processed for secondary use. This programme represents part of the company’s effort to implement its greenphilosophy by promoting low carbon operations, environmental protection, resource conservation, and recycling.
Photos of the “Donating Clothing in Harsh Winters” activity organised by the companyTo promote our volunteer service spirit of “dedication, fraternity, assistance and progress” and take the lead in advocating civilised practices,on the day before China’s Youth Day, we paired with the Hujiayuan Community on Dongzhimen street in Dongcheng district to carry outvolunteer service activities with the theme of “Cleaning up Litter to Better Our Surroundings”.
Photo of volunteers busily cleaning up litter in the “Cleaning up Litter to
Better Our Surroundings” activityGroup photo of volunteers in the “Cleaning up Litter to Better Our
Surroundings” activityIn 2022, Guangzhou Xinmian provided rice, flour, oil, warm clothing and other daily necessities and supplies to needy people in Xilian Village,Qigong Town, Yangshan County in Guangdong province’s Qingyuan City, and handed funds to two families to support their children’seducation.
Photos of Guangzhou Xinmian’s employees assisting people in need
Enhancing Organisational Leadership
The company has implemented paired assistance model, and it adheres to the three-level aidsystem of Group leadership, implementation by 2nd-tier enterprises and assistance from assignedofficials. The company also takes measures to monitor the implementation of tasks that aim tohelp needy groups. For example, the company’s heads have led the visits to Menglian and Ximengcounties to conduct field surveys on assistance projects. We attach great importance to the residentassistance project and consider it to be one of our top priorities. In 2022, the company’s PartyCommittee held three meetings that focused on improving assistance projects.
Officials assigned to grassroots assisting the rural counties
In 2022, the companydirectly invested CNY
12.1
millionthe company attractedCNY
4.848
million inpoverty alleviation donationscompany also supportedvarious training activities for
grassroots countyofficialsTrained
bellwethers ofrural revitalisation and prosperityTrained1,266
professional technical personnel
Official Assistance for Poverty AlleviationThe company dispatched two high-performing grassroots officials to work in Menglian and Ximengcounties in Yunnan province. Under the leadership of the two counties’ Party Committees andgovernments, and under the supervision of the People’s Congresses and Chinese People’s PoliticalConsultative Conference (CPPCC) Committees at the county level, the commissioned officialshave diligently organised a series of assistance projects regarding industrial development, culturaltourism, residential environment, talent development, and livelihood security, among other areas,and they have made significant progress in promoting these projects.
Rural VitalisationIn 2022, the company continued to study and implement the spirit of President Xi Jinping’sspeeches, instructions and comments on consolidating achievements in property alleviationand accelerating comprehensive rural revitalisation, and we strived to actively meet our socialresponsibility as a central state-owned enterprise. Based on the new tasks put forward forsupporting rural revitalisation in Menglian and Ximeng counties in Yunnan province, the companystrived to overcome local complexities, and we made significant progress in providing targetedassistance to these communities.In 2022, the company directly invested CNY 12.1 million in poverty alleviation and implemented 10targeted assistance projects to promote the revitalisation of industry, talent, culture, ecosystemsand organisations. In addition, the company attracted CNY4.848 million in poverty alleviationdonations, among which CNY3.048 million was donated freely and CNY1.8 million was provided inthe form of an investment. The company also supported various training activities for 288 grassrootscounty officials, 28 bellwethers of rural revitalisation and prosperity, and 1,266 professional technicalpersonnel. In addition, the company’s trade unions invested CNY1.4861 million to procure specialagricultural products from Menglian and Ximeng counties.
the company’s trade unionsinvested CNY
1.4861
million to procure specialagricultural products fromMenglian and Ximeng counties
2022 Environmental, Social and Governance ReportProsperity
Assistance for the Cultural Sector
The company aims to empower grassroots social governance for minorities in border areas. To this end, we promote rural culturalrevitalisation in Menglian and Ximeng counties, and we are assisting these areas in maintaining their unique ethnic minority cultures. In 2022,the company carried out several cultural assistance projects, such as the ethnic cultural activity square project for the Dai ethnic group onthe East Island of Hui E Village in Menglian County, the National Reading campaign with the Taofen Foundation of China, and the upgradingand transformation of a civilisation practice centre (institute, station) and village history office construction project in Ximeng County. Duringthe reporting period, we also organised professional teams to shoot two promotional videos for Menglian and Ximeng counties, whichshowcased our relief efforts and achievements. In addition, we released 15 publicity reports on our assistance activities in the domesticmainstream media.
Photo of a rural tourism construction project in Yongqian old village,
Mangxin town, Menglian County
Photo of a rural leisure resort project in Likan,
Mengsuo town, Ximeng County
Assistance for Education
The company has continued supporting education in these areas by training grassroots officials and rural teachers to enhance their softskills. In 2022, we invested funds of CNY1.8029 million to continue operating the “Star of Hope” teachers programme in Menglian andXimeng counties. Furthermore, we strengthened the training of officials and technicians, consolidated and expanded the achievementsmade in poverty alleviation in coordination with the extensive drive for rural vitalisation, developing cultural tourism in ethnic minority villages,and boosting officials’ and technicians’ rural governance capabilities. We also organised the participation of the two counties’ 28 bellwethersof rural revitalisation and prosperity in the special training classes offered by the Group, with a view to improving their ability to grow theirincome and pursue a better life.
Assistance for Rural Business SectorsThe company is committed to exploring the development potential of assistance projects for rural business sectors, with a view to usingtourism to promote the integrated development of the three sectors of agriculture, industry and service in rural areas. For example, in 2022,the company made additional assistance investments in the Beautiful Village project in Likan in Ximeng County and two key rural tourismprojects in Yongqian old village in Menglian County that had been basically constructed. Furthermore, in 2022, the company helped improvetwo project development plans, equipped with more professionals to facilitate project operations, increased investment, and steadilyimproved the construction and operations of the two projects. In this way, we were able to actively assist the two counties in their journeytowards common prosperity and rural revitalisation.
Assistance for ConsumptionIn addition, our company is actively engaged in efforts to promote consumption.
Training on avocado cultivation fortechnical personnelAssistance project for the coffee industryAssistance for featured industries of nutsand avocado via hardware and infrastructure
improvement
In the future, Menglian County will continue to support nuts, avocado, coffee and other featured business sectors by leveraging localadvantages and adapting to local conditions, with a focus on the avocado industry under the instruction of “One Industry in One County”.We will explore the establishment of a new mode for consumption assistance to facilitate sustainable growth of the industry based on ourearlier efforts, such as skill improvement of employees, graded selection and sales of fruits, establishment of public brands and acquisition ofthe National Geographic logo and other agricultural product certification.
? Taking the advantages of the travel retail industryand rich customer sources, the company helped sellagricultural specialities through the “Star Travel withCloud Products” store in Sanya International Duty-FreeShopping Complex, Guangzhou cdf Membership Cluband other channels to solve the sales needs of localagricultural specialities and promoted local specialitiesto the national market. In October 2022, HaikouInternational Duty-Free Shopping Complex openedas scheduled, and became the largest single duty-free shop worldwide. Meanwhile, the special zone foragricultural assistance in the “Star Travel with CloudProducts” store in the Sanya International Duty-FreeShopping Complex was also established and put intooperation, enhancing our efforts to boost consumption.
? The company and its affiliated companies believe that“purchasing is a better alternative than donating”,and for this reason, we purchase local agriculturalspecialities from targeted cities and counties to helpalleviate poverty. The company has directly purchasedagricultural specialities totalling CNY1.49 million fromdisadvantaged area. Exploiting its advantages in thetravel retail industry, the company helped sell specialagricultural products to depressed areas, with totalsales of CNY3.911 million.
Assistance for Immediate Need2022 marked the 6th consecutive year in which the Company has carried out the “Together – ‘Rescue and Relief’ Actions by CentralState-Owned Enterprises” project in Menglian and Ximeng counties. This project is a special project that was jointly initiated by the Ministryof Civil Affairs and State-owned Assets Supervision and Administration Commission (SASAC) in 2015. It focuses on engaging with centralstate-owned enterprises to help needy families who face difficulties in paying the individual portion of their medical expenses, even aftergovernment relief, and to reduce the medical burden of poor families that have fallen victim to diseases. In 2022, assistance funds werereleased to a total of 84 families in the two counties, which helped enhance the two counties’ defences against sliding back into povertydue to illness and provided strong support for the consolidation of poverty alleviation achievements.
2022 Environmental, Social and Governance ReportProsperity
Fulfilment of Central State-Owned Enterprise Responsibilities for Hong Kong SAR, MacauSAR, and Overseas Communities
As the world’s leading travel retail operator, the company not only promotes the globalisation of its business but also fulfils its socialresponsibilities overseas as a central stated-owned enterprise. While actively participating in the construction of the Guangdong-HongKong-Macau Greater Bay Area (“Greater Bay Area”) and “the Belt & Road Initiative”, CDF International and CDFG (Cambodia) Limited, thecompany’s affiliated companies, are also bringing social responsibilities in every acre of soil.?CDF International Actively Participated in the “Chinese Enterprise Care” Public Welfare Campaign
In 2022, CDF International actively participated in the “Chinese Enterprise Serving the Community” and “Chinese Enterprise Caringfor the Community” activity series to practice the concept of “Chinese Enterprise Care on the Same Journey” and demonstrate careto primary-level communities in Hong Kong SAR. Representatives from CTG DUTY-FREE visited 23 families of grassroots citizensand elderly living alone to help tidy up their living surroundings and comfort the elderly with some daily necessities. In addition,representatives visited the Monument of Anti-Japanese Martyrs at Tsam Chuk Wan, Sai Kung to express their grief and cherish thememory of the revolutionary martyrs.
Ceremony for CTG DUTY-FREE’s donations of office supplies and other materials to grassroots Communities and Group
Office of Sham Shui Po in celebration of “the 25th anniversary of Hong Kong’s return to the motherland”.
?CTG DUTY-FREE implemented multiple measures in Hong Kong SAR to contribute to local communities
CTG DUTY-FREE played an active part in contributing to the communities’ development in Hong Kong SAR. During the period tocelebrate Hong Kong’s return to the motherland, the company hosted a ceremony & symposium for donations to communitiesin celebration of “the 25th anniversary of Hong Kong’s return to the motherland”. Office supplies and other materials worth nearlyHKD30,000 were donated to grassroots Communities and Group Office of Sham Shui Po. The company also released public serviceadvertisement on 247 public screens on Hong Kong’s rail network and delivered over 345,000 portions of living materials to assistgrassroots communities’ development in Hong Kong SAR.
Photos of employee representatives of CTG DUTY-FREE actively participating in the volunteer service of “Chinese Enterprise Caring for the Community” andthe flag-raising ceremony during the National Day holiday in Pingtian, delivering donation materials from CTS Holdings Foundation to citizens and helping build a
healthy community.
CTG DUTY-FREE helped Xiangjiang community.
Public service advertisement in Hong Kong SAR’s rail network released by CTG DUTY-FREE.Leading Development as a Sector Benchmark
Keeping Abreast of the Times to Promote Sector GrowthAs the world’s largest travel retail operator, the company never ceases to expand its market share, enhancing its service quality andenriching its duty-free collections and brands to make it more appealing to consumers. It is willing to share its exceptional experience andleading practices with partners and calls for enhanced cooperation between all stakeholders to embrace a bright future for the sector.
2022 Environmental, Social and Governance ReportProsperity
Attending Hainan Expo with Global Brands to Promote the Construction of Hainan Free Trade Port
With the theme of “Share Open Opportunities, Co-Create a Better Life”, the 2nd China International Consumer Products Expo (hereinafterreferred to as “Hainan Expo”) was held in Haikou city of Hainan in July 2022, one of the driving forces behind Hainan’s further opening-upand construction of an international tourism consumption centre. As an active force in promoting the construction of the Hainan Free TradePort, the company attended Hainan Expo with many premium consumption products, which enriched the consumer shopping experienceduring the Expo. The company also represented the emerging powers in the Chinese market by sharing with the world its new ideas on thegrowth in China’s travel retail sector.
The framework of the company’s booth in Hall No. 5 at the Hainan Expocompromises the exterior architectural appearance of the Sanya InternationalDuty-Free Shopping Complex and the Haikou International Duty-Free
Shopping Complex.
The 2nd CDF Watch Festival was jointly held by five cdf stores in Hainan duringthe Hainan Expo.During the Hainan Expo, the company supported and co-sponsored the “2nd Global Consumption Innovation & Duty Free and Travel RetailConference”, and co-sponsored the “2nd Sustainable Consumption Summit Forum” and other supporting activities to continue its innovationefforts for high-quality services:
Panel Discussion of the 2nd Global Consumption Innovation
& Duty Free and Travel Retail Conference
In-depth discussion on, and sharing of, leading practices insustainable consumption and production were carried out
at the “2nd Sustainable Consumption Summit Forum”.
By co-sponsoring the “2nd Sustainable Consumption Summit Forum”, thecompany benefited from the integration of sector resources and offered itsadvice and suggestions on how to transform business models to promote thesustainable development of the fashion life industry, how the fulfil corporate socialresponsibilities and, and how to refresh the consumption concept and quality.It also led the industry’s change in production practices via issuance of industryguidelines and the launch of environmental protection projects.
? Providing vigorous support for Hainan’s further opening-up and theconstruction of an international tourism consumption centre by organisingthe attendance of professional procurement groups at the conference andfacilitating negotiations and exchanges among global brands;
? Providing attendees with exclusive privileges for senior members in
designated cdf stores, free bus transfers from Riyue Plaza to the venue ofHainan Expo, priority delivery from all cdf pick-up locations in Hainan, andexclusive check-in, security and other exclusive services.
Duty-Free Tycoons Gather and Cooperate to Co-Createa New Pattern for Sector Growth
The Dedicated Working Committee for the Duty-Free Industry(“Dedicated Working Committee”) of the China Tourism Associationheld a special meeting in Haikou and invited member entities andguest entities and organisations to attend for in-depth discussions andexchanges on the growth and prospects of the travel retail industry.At the meeting, the company, as a direct entity, made a detailedintroduction on the background to the establishment of the DedicatedWorking Committee and the progress it had made so far. Memberentities and guest entities delivered their speeches to advise on theDedicated Working Committee’s purpose, working mechanism, internaland external exchanges, and other aspects. They also gave suggestionson how to enlarge and improve the China’s duty-free industry marketwith a broader view of the emerging opportunities, to co-create a newpattern for further sector growth.
Group photo of attendees of a special meeting held by Dedicated Working
Committee for Duty-Free Industry of China Tourism Association
? Attending the Trinity Forum 2022 to explore new prospects for global travel retailIn November 2022, the company attended the Trinity Forum2022 (the “Forum”) as a platinum partner. The Forum is awelcome in-person return of the largest international conferencein the global airport business sector after three years. During thetwo-day session, innovative solutions were put forward for majorissues in the global travel retail industry, and expectations weremade for the industry’s encouraging revival. On the first day ofthe Forum session, Mr. Chen Guoqiang, one of the company’sexecutive directors, was invited to deliver a keynote speech on“Change, resilience, potentials – for a better future with improvedsustainability and enhanced collaboration”.
? The company is selected as one of the “High Quality Enterprises in Tourism Brand Value Transmission 2022” byXinhuanet for its “duty free+” transmission demonstrating diversified consumption patternsIn 2022, a ceremony to launch the event “Thumbs Up ? TypicalCases of New Growth Patterns in the Culture and TourismSector” was held at the 9th Culture and Tourism Integration andInnovation Forum. During the event, the company was selectedas one of the “High Quality Enterprises in Tourism Brand ValueTransmission 2022” in recognition of its continuous efforts inadopting a brand transmission strategy focusing on “duty free+”and leveraging diversified innovative media to forge an all-mediadissemination matrix of articles, videos, drawings, and graph-textsand other content types.
The company was selectedas one of the “2022 HighQuality Tourism BrandValue CommunicationEnterprises”.
Mr. Chen Guoqiang, one of the company’s executive directors, delivering a
keynote speech
Sound Industrial Layout for Business Take-Off
As a leading enterprise in the global duty-free industry, the company makes investments in development projects to expand its businesscomplexes, with a focus on duty-free business, and it has been deeply engaged in the cruise industry for many years. We aim to maintainour leadership in the exploration of new growth patterns in various fields to enable a brighter future for the travel retail industry.? The company works with Swire Properties to develop Phase 3 of the Sanya International Duty-Free Shopping Complex infacilitating the construction of the Hainan Free Trade PortIn October 2022, the joint venture established by CDF Investment Development and Swire Properties Limited won the usage rights of a plotalong the “National Coast” in the Haitang Bay of Sanya for a co-development of the Phase 3 of the Sanya International Duty-Free ShoppingComplex. The project is forged as a world-class resort featuring premium cultural, commercial and tourism services, pilot areas for domesticleading practices in low-carbon lifestyle, and a commercial shopping complex brimming with ocean civilisation features. The project adoptsthe global new retail design concept to perfectly incorporate the island experience and natural resources into commercial architecture,so as to present a new landmark integrating high-end retail, coastal culture and tourism elements, and cutting-edge cultural and artisticscenarios. This project is also an overall and in-depth layout of our business in the Hainan tourism market, which plays an important part inthe construction of the Hainan Free Trade Port with Chinese characteristics.
2022 Environmental, Social and Governance ReportProsperity
The liner Costa Mediterranea of Carnival ChinaInterior scene of Costa Mediterranea of Carnival China
? The launch of the Duty-Free Shopping Policy for Cambodian Nationals spells a boom for our overseas business
In 2022, the General Department of Customs and Excise and the General Department of Tax of Cambodia issued an announcementapproving CDFG (Cambodia) Limited’s sale of duty-free goods to Cambodian nationals, marking the official launch of a duty-freeshopping policy pilot in Cambodia. This innovative policy is a mirror of the good-neighbourliness and friendliness between China andCambodia in their pursuit of better co-development, and a reflection of the Cambodian government’s trust of us and recognition forthe company’s professional and compliant operations.CDFG (Cambodia) Limited owns three downtown duty-free stores in Cambodia. According to the Cambodian Policies on Duty FreeShopping, the target customers are Cambodian nationals (not leaving the country), and there are limits on prices, categories, brands,and quantity of items purchased daily for both on-site shopping in stores and purchases on e-commence platforms.
Launch Ceremony of the Duty-Free Shopping Policy for Cambodian NationalsMilestones
? Winning of the rights to operate the duty-free store onboard Costa Mediterranea of Carnival China, another boost to our
cruise businessIn 2022, China Duty Free Cruise Services Ltd. (CDFCS) won the exclusive rights to operate the duty-free shop onboard CostaMediterranea of CSSC Carnival Cruise Shipping Limited (“Carnival China”) for no less than 3 years, marking another victory forCDFCS internationally following its winning of the tender for Costa Atlantica of Carnival China and further expanding CDF Cruise’smarket share in the cruise business. Costa Mediterranea, a luxury liner which can accommodate up to 2,680 passengers, will debuton new cruise lines radiating from its home port in China in 2023 as scheduled, with an expanded duty-free shopping area up to 600square metres. This project enhances CDF Cruise’s cooperation with Carnival China and improves CDF Cruise’s competitiveness andprofessional operations on the global stage with an expanded market share. It also helps improve customer experience with premiumproducts and services and promotes the smooth and sustained growth of China’s cruise business and related services.
People
Employment Compliance and RightsProtection
Talent Growth and Retention63Operations Safety and HealthProtection
Employment Compliance and Rights Protection
Employment Compliance and Rights Protection
Employee Rights
We consistently uphold the “people-oriented” management philosophy regarding talent management and strictly comply with theLabour Law, the Labour Contract Law and other laws and regulations, as well as the international human rights and labour conventionsand protocols that China has signed, such as the Equal Remuneration Convention and the Elimination of Discrimination in Respect ofEmployment and Occupation. We adhere to the principles of honesty, trustworthiness, fairness and justice in our dealings with employees,and we fully guarantee their rights and interests.Recruitment ManagementThe company has developed a comprehensive employee recruitment system and has recruited our employees through on-campusrecruitment, job fairs, recruitment agencies, online recruitment platforms and internal recruitment. We sign labour contracts with employeesand fully protect their legitimate rights and interests. For high-end talents, we insist on a combination of external introductions and internaltrainings, attracting more talents on a selective basis, and selecting the best candidates to target for recruitment.We adhere to the recruitment principle of focusing both on integrity and ability. We also respect differences, encourage diversity, and prohibitany form of discrimination from upholding the principles of fairness, impartiality and openness. Our company has formulated hiring criteriaaccording to the actual needs of each position without imposing any restrictions related to age, gender, ethnicity, religious beliefs or othercharacteristics.Employment ManagementIn regards of prohibiting child labour, we strictly abide by labour laws and regulations and forbid the employment of child labour. In terms ofpreventing forced labour, we strictly prohibit restricting employees’ freedoms or forcing employees to work by collecting deposits, detainingdocuments, or engaging in threats. During the reporting year, our company did not have any violations of laws and regulations involving childlabour or forced labour.Resignations ManagementUnless exceptional circumstances arise, we generally do not voluntarily sever or terminate the labour relationship with employees. If it isnecessary to terminate or rescind an employee’s labour contract, we strictly implement the process in accordance with the requirementsand procedures of labour laws and regulations. Those who should be given economic compensation according to the law will receivecorresponding compensation according to the legal requirements. The company generally does not try to restrict employees’ choice of newjobs. For particular cases involving competition restrictions, such restrictions are handled according to the signed agreement. In 2022, ouremployee turnover rate was 8.48%, of which the turnover rate of headquarter employee was 3.6%.Holiday and Working Hours ManagementWe strictly observe regulatory requirements regarding national statutory holidays, employees are entitled to annual leave, maternity leave,marriage leave, parental leave and additional blood donation leave, parent-teacher conference leave, etc. According to the company’ssituation, we implement two working hour systems: standard and comprehensive working hours (for the frontline employees underparticular working conditions). We strictly enforce the monthly 174 working hour working system. As for excess working hours, we arrangecompensated leave or pay overtime according to labour laws and regulations to effectively protect employees’ rights to rest.Remuneration ManagementThe company adheres to market-oriented concepts and has established a performance and remuneration management system basedon the “double benchmarking” principle. This system, which aligns with our development and talent strategy, prioritises performance andfollows the principles of fairness, positive motivation and sustainable development. We determine appropriate salary levels according toour operations and market benchmarking analysis. We also set the basic and performance salary ratios based on market practices. In thisregard, the company determines the basic salary based on the rank of the position, and the performance salary is linked to the company’soverall performance, the department’s performance and the individual’s performance, resulting in a management mechanism that balancesincentives and restraints and enables reasonable remuneration adjustments. As for the long-term incentives, corporate managers at all levelsof the company are contractually managed on a tenure basis. By the end of 2022, 166 corporate managers at all levels had access to thelong-term incentive programmes.In accordance with national and local policies, we have established and implemented a welfare system in order to make timely and completepayments of social insurance and housing provident funds for employees; and we also offer annuities, supplementary medical care, canteendining and other welfare programmes to our staff. In this way, we have built a multi-level welfare guarantee system based mainly on socialinsurance, with corporate welfare programmes acting as a supplement.
2022 Environmental, Social and Governance ReportProsperity
On 24 November 2022, the company’s trade unions launched an online workshop for practical suggestions for all staff atheadquarters, with at least 3 to 6 representatives from each of the 11 trade union groups in two sessions and four meetings.During the workshop, everyone actively shared suggestions and ideas for the new stage of development based on their needs,expectations, thoughts and feelings of daily work life.Twenty suggestions in total were collected in four categories covering staff welfare, transparency of factory affairs, optimisationof office facilities, and effectiveness. After the meeting, the company’s trade unions sorted through the suggestions and ideas toimplement them one by one in accordance with the Trade Union Law. These actions effectively safeguard the legitimate rights andinterests of employees in accordance with the law, highlight the political, advanced, and mass features of our trade union work, andcontribute to the high-quality development of the company.
The Company’s Trade Union Actively Carries Out an Online Workshop forWorkers’ Practical Suggestions
Case
Democratic Management
We continue to improve its democratic management system, which is based on the trade union and the staff representative assembly. Thecompany’s trade union is committed to safeguarding collective bargaining rights of employees; and it carries out its work following the TradeUnion Law, the Constitution of the Chinese Trade Union and other laws and plays a vital role in public affairs. The trade union effectivelypromotes the participation of employees in the company’s democratic management and deliberations involving major issues concerning thevital interests of employees.When formulating, revising and deciding rules, regulations and material issues that are directly related to the vital interests of our employees,such as labour remuneration, working hours, rest and leave, labour safety and health management, insurance and welfare, employeetraining, labour discipline, headcount management, etc., we collect opinions from general meetings of employee representatives to ensurethat decisions are made through consultation and on an equal basis. We then make public announcements to all employees or notifythe relevant departments or individuals after decisions are made. Employees may also appeal to the trade union through email, WeChat,in-person talks and other channels.
Staff Profile
Total number of employeesis
16,808
The numberof physicallychallengedemployees is
.
The number of ethnicminority employees is
1,282
accounting for
7.6%
accounting for
2.93%
The number of foreign
employees is
The number of femaleemployees is
9,271
accounting for
55.16%
The number ofmale employees is
7,537
accounting for
44.84%
The percentage of ethnic
minority employees inthe management is
13.30%
Females in the Board of Directorsand the Supervisory Committeeaccount for 30%. Females in thesenior managerial roles account for
28.57%
and in middle managerialroles account for
36.13%.
The number of employees from
Hong Kong SAR, Macau SAR,
and Taiwan region is
,accounting for
3.30%
of the
total
The number of employees by ageThe number of employees bycategory
Management rolesGeneral Employees
2.4%
8.9%
54.0%
34.4%
16,690
The number of employees by region
North ChinaEast China
South China
Central ChinaNorthwest China
Southwest China
OverseasNortheast China
Hong Kong SAR, Macau
SAR and Taiwan region
50-60
30-39Below 29
Over 60
40-49
64.7%
13.0%
0.3%
3.8%
1.3%
2.2%
0.2%
0.3%
3.0%
11.5%
Employee Care
Based on the principle of “understanding our people, meeting their needs and addressingtheir difficulties”, we continuously strive to care for our employees’ needs. Our companyalso improves employees’ working conditions, enhances and ensures their quality of life,increases their happiness and satisfaction, and generally creates conditions that makeemployees “proud to work at CTG DUTY-FREE”.
Employee Library Corner
In terms ofemployeebenefitsIn terms ofemployeeactivities
We have formulated the “Administrative Regulations on Assistance for SickEmployees and the Collective Welfare of Trade Unions”. The company’strade union conducts complete investigations to collect employees’opinions. It sends warm and considerate blessings to employees on holidaysand birthdays based on their age, tastes and living habits. The companydemonstrates care for various groups, such as employees with difficultiesand female employees. We always express our care and bless employeeswho get married or have babies.We organise various cultural and sports activities as appropriate, and westage a number of festival activities. Furthermore, we have set up staffreading corners and formed various cultural and sports interest groups toenrich the spiritual lives of employees.
To provide better service support for the staff and implement the staff’s practicalsuggestions effectively, the company’s trade unions held the staff online AI fitnesscompetition from 8 December 2022 to 6 January 2023, enriched the cultural andentertainment life of the staff and strengthened their physical health.
The Company Holds the “Staff Online AI Fitness” CompetitionCase
To build a high-quality youthcommunication platform and enhancethe sense of belonging and happinessof young talents, the companyorganised a staff social and datingevent “Enjoying Youth – EncounteringRomance” in Beijing World FlowerWonderland Park in 2022.
The Company Organised “Enjoying Youth andEncountering Romance” Staff Social and Dating Event
Case
Staff social and dating event “Enjoying
Youth – Encountering Romance”
“Staff Online AI Fitness” Competition Poster
2022 Environmental, Social and Governance ReportProsperity
QR code for“Spark Hero”
QR code for“The Present”
“Spark Hero”, a micro-video made by our staff, was selected for the SubjectFilm Exhibition of the Third Micro-film and Micro-video Collection Activity forthe Core Socialist Values of Central Enterprises held by State-owned AssetsSupervision and Administration Commission. It won second prize in thenational Federation of Trade Unions Positive Energy Micro-video CollectionActivity. “The Present”, the corporate story micro-film won first prize in theMicro-film Contest of the 10th National Brand Story Contest.
In termsof Partyconstructionactivities
Staff centre with 247square metre workerhome
Employee recreational andsports centre: equipped withcentral air conditioning, dancemirrors, soft seating, fittingrooms and other necessary
equipment and facilities
Starbucks coffee machines in office areaEmployee calligraphy activitiesEmployee calligraphy, drawing and photography
exhibition
Food FestivalCompany managements appreciation activity forthe frontline staff who stayed at their posts during
the Spring Festival
“Dumpling Making and Warmth Delivery” activity
held by the Sanya Haitang Bay Party branch
We have made various efforts to improve office facilities, provide convenientservices, and ensure that employees are satisfied with the companycanteen. Our company is fully committed to creating a convenient andcomfortable working environment. In addition, we provide comfortablenursing rooms in order to protect the privacy and rights of breastfeedingmothers and generally show respect for female employees.In terms ofthe workenvironment
Talent Growth and Retention
We have established talent-specific training systems that align with operations and international standards to build smooth career paths forour employees and provided them with a robust platform for their career development.Staff TrainingWe regard strategic development as the core goal of the training, and we are committed to establishing a sound talent development andtraining mechanism, promoting talent development, and creating and developing a youth talent pool to enhance our core competitiveness.To this end, our company has formulated “Training Management”, and we enhanced training under the management principle of “gradingand classification, and training for all employees”. Under this principle, we provide various types of training for employees across differentpositions and levels, carry out new hire training for new joiners, organise training courses for middle and senior management, and takevarious other measures to strengthen the company’s professional talent pool.In 2022, to broaden the horizons of our middle and senior managers and enhance their strategic thinking and innovation awareness, wecooperated with the State-owned Assets Supervision and Administration Commission and the China Business Executives Academy, Dalian(CBEAD) to organise 27 training sessions with total 80 hours. Topics covered included the international and domestic political and economicsituation, innovative business thinking and leadership development, as well as lectures on “Analysis of the International and DomesticPolitical and Economic Situation and Economic Development Trends” and CBEAD International “World-class Lectures” Series.
The company held a series oflectures to broaden the horizons ofour middle and senior managements
In August 2022, we organised the annual new employee orientation and invited the heads andrepresentatives of 11 departments, including the Strategic Investment Department, the DisciplineCommittee Office, the Procurement Centre, the Supply Chain Centre and the Operations and MarketingCentre, to conduct live courses for new joiners. We recorded and updated the employee trainingcourseware and created particular learning programs for new joiners on the “China Duty-Free Academy”online learning platform for employees to study at any time. This training programme provides an in-depth introduction to the duty-free industry and the company’s development history, as well as anoverview of our fundamental businesses that assist new joiners in quickly integrating into the company.
The company invited the heads andrepresentatives of 11 departments,including the Strategic InvestmentDepartment, to conduct onlinetraining for new joinersIn 2019, we launched the online training platform, “China Duty-FreeAcademy”, to provide employees an abundance of online training courses. Byintegrating online and offline training, we are developing a culture of learningand a healthy learning ecosystem. In 2022, 17 course topics were introducedand 17 live training sessions were held, with a total of more than 710,000person-times.
“China Duty-Free Academy” offers various courses
course topicswere introduced
live trainingsessions wereheld
a total of more than710,000person-times
In 2022, we cooperated with a third-partyorganisation to launch the “Course SystemConstruction and Course Development” projectto build an internal course system based on thecompany’s actual business. We have completedour first batch of learning maps in conjunctionwith core business departments such as theProcurement Centre, the Supply Chain Centre,and the Operations and Marketing Centre, usinginterviews and workshops to clarify the trainingpath for key business talent and organise 16internal courses to be developed. Our internalbusiness experts and internal instructors held acourse development work team, and by the endof 2022, produced 13 core business courses,giving full play to the advantages of internalprofessionals, summing up experience fromcases of key positions, and fully concluding andpassing on the organisation’s experience.
In 2022, the company launched a “Course System Construction and Course Development”programme in collaboration with a third-party organisation
2022 Environmental, Social and Governance ReportProsperity
To improve training quality and personnel training levels, we have also formulated the “Internal Instructor Management Regulations (Trial)”, involving processesfor the selection, certification, and delivery of courses, as well as the responsibilities and incentive criteria for internal instructors. So far, we have appointed 30internal instructors. Through the “Good Instructors, Good Courses” live event series, our internal instructors conducted more than ten live sessions on topicssuch as “Structured Thinking”, “Wine Expertise and Frequently Asked Questions Analysis”, “Cigar Basic Knowledge Analysis” and “Duty-Free Sales CapabilityEnhancement” throughout the year to improve internal instructors’ comprehension ability and teaching ability through practice instead of training, helping ourinternal instructors grow and promoting the sharing of business knowledge.
We have held more than ten live sessions with internal instructors, such as “Five steps to becoming an executive master”,
“Wine Expertise and Frequently Asked Questions Analysis”, etc.In 2022, we conducted trainings as follows:
Employee Training Performance SummaryIndicatorSub-indicatorUnit2022Percentage of employees trained/%100Percentage of employees trained by gender
Male%100Female%100
Percentage of employees trained by employee category
Senior management employee%100Middle management employee%100
General employee%100
Total training hours/10,000 hours33.0Average training hours completed per employee/hour19.6Average training hours completed per employee by gender
Malehour19.3Femalehour19.9
Average training hours completed per employee by employee
category
Senior management employee
hour162Middle management employeehour22.6
General employeehour19.5
Average training hours completed per employee by region
Chinese Mainlandhour19.6Hong Kong SAR, Macau SAR
and Taiwan region
hour16.1Overseashour26
Employee Development
Based on employees’ career development needs, we continuously improve the talent management system and consolidates the foundation of talent management to offersmooth career development channels to assist employees in achieving their dreams and living up to their full potential.According to the actual circumstances of the company, to carry out job value assessments, we have established a ranking system covering all grades and types ofpositions to better reflect the value of different job positions, personal abilities and qualities, with the goal of better supporting talent management. The company’s rankingsystem features three divisions: management functions, professional functions and support functions. Promotions at our company can be divided into annual rankpromotions and promotions based on professional reviews, which are undertaken according to the hierarchical management system and job qualification criteria. Thecompany determines the function, level and rank of employees according to their abilities, performance and qualifications. We allow two-way movement within differentpositions to establish a smooth career path. We adopted the Management by Objectives (MBO), Key Performance Indicators (KPI) and 360°Feedback for integratedemployee performance management. The assessment includes both work performance and professional capability, and the performance assessment results aredetermined through the ranking of the overall scores of employees responsible for the same tasks, covering 100% of the employees.In 2022, we comprehensively encouraged the professional capabilities for our cadres and staff through professional talent assessment and vocational skill levelidentification. With regard to vocational skill level identification, the company took sales staff as the target to carry out the application of vocational skill levelidentification for the first time, achieving a “0 to 1” breakthrough in this area. For the professional title review, the company actively explored and selected seniorprofessional talent with extensive experience in relevant fields, recommended them as judges for the China Tourism Group engineering professional titles, andassisted the Group in obtaining independent review qualifications for professional titles of engineering and accounting. In 2022, the company had nearly 100employees obtained new professional titles, skill levels, and job qualifications. Going further, based on the actual needs of development, the company will adhereto the talent-driven principle, comprehensively improve the quality of our internal talent development, and focus on cultivating a number of experts in tourismretail. We will also consistently improve the long-term mechanisms of talent evaluation and development, and thoroughly and efficiently promote the professionaltalent review and vocational skill level identification.4 As far as the training courses organised by the company are concerned, there is no significant difference for employees at different levels; however, the senior managementemployees participate in more intense trainings subject to the provisions of the Regulations on the Education and Training of Cadres issued by the CPC Central Committee.
Operations Safety and Health Protection
Operations Safety
We vigorously carry out the establishment of a safety culture, cultivate and refine the safety culture system with the characteristics of CTGDUTY-FREE, firmly establish the safety concept of “people-oriented, service first, and safety first”, focusing on five major pillars of safety,including Party construction, law, mechanism, science and technology, and employee awareness, in order to achieve the goal of “zeroaccidents” in operations safety.In 2022, the establishment of the company’s safety culture system was rewarded Third in the Top Ten Practice Cases of Safety Culture ofthe Ministry of Emergency Management of the People’s Republic of China. It is the only corporation from the trade industry and also the firstbusiness group in the China Tourism Group to win this award.Safety ComplianceThe company strictly abides by laws and regulations such as the Work Safety Law, the Law on the Prevention and Control of OccupationalDiseases, and we have formulated the “Operation Safety Responsibility System for Staff”, the “Operation Safety Management Measures”,the “Safety Training Management Measures”, and the “Emergency Management Measures”. The company and each affiliated company fullyimplement the main responsibilities of operations safety, strengthening operations safety responsibility at all levels for staff, establishing aduty list and a sound safety system, and strictly carrying out safety measures.Party ConstructionThe company adheres to President Xi Jinping’s important statement on operations safety to arm ourselves intellectually and to guideour practice. Party organisations at all levels give full play to their leading role, improving the system of “equal responsibilities for CPCcommittees and government, dual responsibilities, and joint management”. All Party members should play an exemplary role in performingtheir duties, and ensure the implementation from the five aspects of safety regulations publicity, safety deployment implementation, safetyfunds investment, safety performance supervision, and safety awareness enhancement.In 2022, the company organised seven meetings on operation safety to implement the work requirements of state ministries andcommissions and the Group and re-deploy and re-implement relevant work based on the actual situation. Party committees at all levels ofthe company carefully conveyed the spirit of the President’s instructions on operations safety, organised the viewing of a film named “Life isof paramount importance” many times and repeatedly played it on the public area display screen, aiming to place the concept of “Life first,People first” in the hearts of everyone.Safety Mechanism
The company has clarified the composition and responsibilities of the Safety Committee. All large-scalestores and projects under construction are equipped with full-time safety management personnelas required, ensuring the smooth implementation of all safety work. Meanwhile, based on the actualsituation of the warehouse, the company formulated the “Warehouse Management Code” and othernormative documents to strengthen warehouse safety management and ensure the regular operationof the warehouse. In 2022, the company signed 126 copies of the relevant “Letter of Commitment”with each affiliated company and department to clarify the management, assessment requirements andreward and punishment standards, and guide and supervise the company at all levels to implement it indetail, so as to achieve 100% coverage of operations safety responsibilities.
100%
coverage ofoperations safety responsibilitiesthe company organised
different types of emergency drills
18,500
participants
In terms of emergency management in respect of safety risk
In terms of operations safety management
The company has formulated the “Contingency Plan for Operation Safety Accidents”. All unitscontinuously adjust and optimise emergency command systems and coordination and linkagemechanisms based on strengthening on-site emergency rescue and improving emergency responsecapabilities, and ensuring the preparation of materials, equipment and personnel to carry out variousemergency drills. In 2022, the company organised 326 different types of emergency drills, includingfirefighting, emergency evacuations of office and production areas, typhoons, and flood prevention, with18,500 participants.
2022 Environmental, Social and Governance ReportProsperity
The company distributed fire protection publicity
materials to employees
The logistics centre carried out firefighting
emergency drillsThe company carried out fire evacuation drills and
training
The logistics centre carried out firefighting
emergency drills
The logistics centre carried out firefighting
emergency drillsIn 2022, each affiliated company also actively carried out emergency drills according to their actual situation. During the Safety Month,Sanya Downtown Duty-Free Stores held large-scale comprehensive emergency response drills to test their joint operational rapid responsecapabilities, coordination and scientific disposal to emergencies such as anti-terrorism response, evacuation and escape, and firefighting,with more than 2,000 participants.
The company distributed fire protection publicity
materials to employeesAnti-terrorism response drill in Sanya Downtown
Duty-Free StoresBefore the grand opening, the Haikou International Duty-Free Shopping Complex organised and carried out comprehensive emergencydrills, including anti-terrorism response, firefighting, evacuation, medical aid and more, with more than 1,500 people participating to ensure asafe opening.
Comprehensive emergency drill in the Haikou International Duty-Free Shopping
Complex before its opening
Evacuation drill in the Haikou International Duty-Free Shopping Complex
CDF Investment Development carried
out struck-by emergency drills for
projects under construction
CDF Investment Development carried
out firefighting emergency drills forprojects under constructionCDF Investment Development carried
out firefighting emergency drillsThe headquarters of the company has established a risk classification and control template, has organised its duty-free complexes,stores, projects under construction and warehouses to carry out comprehensive risk identification and evaluation, controlling the safetyrisk according to the classification, and has implemented the working mechanism of “one company one list, one store one list”. Theheadquarters of the company regularly checks the management and control of significant risks, serves, guides and supervises all units toimprove management and control measures in combination with safety inspections. In 2022, all hazards identified by each unit were rectified.During the reporting period, the company’s leaders also took the initiative in performing their duties, going to the frontline to take charge ofinspections. They led the team 11 times in carrying out operation safety inspections in critical businesses and key units such as the HaikouDuty-Free Complex project, Sanya Downtown Duty-Free Stores, Sunrise China, Sunrise Shanghai, the Shenzhen Qianhai warehouse, andthe Hainan logistics centre, during critical times such as Mid-Autumn Festival, National Day, and the 20th National Congress, ensuringcontinuous safety and stability.
公公公公公公公公公公公公公
The company management led a team
to conduct safety inspections in the
logistic centreThe company management led a team
to conduct gas safety inspection
The company management led ateam to visit Sunrise China to observeand exchange views in regards ofoperational safety
The company management led ateam to conduct safety inspectionsin the Haikou International Duty-FreeShopping Complex
CDF Investment Development organised each affiliated company prepared more than 20 particularemergency plans according to their actual situation, and organised 21 particular emergency drills, suchas flood and typhoon prevention, struck-by hazards prevention, etc., to effectively improve the safetyprevention and emergency response capacity.
more than
particularemergency plans according totheir actual situationorganised
particularemergency drills
The company carried out the “Operations Safety Publicity Year” initiative, further addressing problems at the source andcontinuously organising and carrying out hazard inspection and remediation. The company organised and carried out large-scale inspections and remediation, focusing on key areas and key parts, and all hazards were rectified. We insist on innovativesupervision, provide safety services for the frontline, appoint professional institutions to conduct hazard inspections on key unitsand key projects, urge remediation of found hazards, and conduct on-site education and training. We strictly investigate seasonalrisks, industrial hazards and recurrent problems, actively organise and carry out safety and hazard inspection of the overall system,elements and coverage, and pay close attention to remediation as required.
The Company Carries Out the “Operations Safety Promotion Year” Initiative,Deepens Special Rectification Actions and Strengthens Hazard Inspections
Case
Appointed professional institutions carry out hazardinspection on key units
Appointed professional institutions conduct on-siteinspection and training for key projects
In terms of operations safety inspections and prevention and control
2022 Environmental, Social and Governance ReportProsperity
Science and Technology
The company attaches importance to using safe, reliable, efficient and practical safety management technology to improve safetymanagement. For instance, we use facial recognition devices in various projects to achieve real-name people management, and usedrones to inspect construction sites, improving the level of intelligent construction and automated operations, and further improving safetytechnology support abilities and operation safety guarantee abilities.Safety PublicityAs our company culture attaches importance to staff awareness, we organise each unitto carry out activities such as Operations Safety Month, the Publicity Week of Law on thePrevention and Control of Occupational Diseases, Safety Consultation Day, and safetytraining for new joiners. We make full use of bulletin boards, banners, online training,knowledge competitions and other forms to popularise and publicise relevant lawsand regulations, and general knowledge about safe operations. In 2022, the companyorganised and carried out activities such as operations safety lectures, open classes,lectures, and more. The prominent leaders of each business at all levels took the leadin studying the important statements of President Xi on operations safety, giving safetyopen classes in person, publicising and implementing the Work Safety Law and the 15measures of the Work Safety Commission of the State Council, popularising cases of dualpunishment for failing to implement the main responsibilities of businesses, and promotingthe “first responsible person” to abide by the law and perform their duties.Affiliated companies also actively carried out safety knowledge popularisation trainingfor all employees. During Safety Month, Sanya Downtown Duty-Free Stores promotedoperations safety knowledge to employees in various forms of “online+offline”, distributedSafety Consultation Day publicity materials to employees and customers and promoted agood atmosphere in which everyone pays attention to safety, and everyone participatedin safety. Sunrise China invited local management departments to jointly carry outeducation and training activities on firefighting, gas safety, anti-terrorism, and other topics,and carried out an online assessment to further improve employees’ ability to deal withemergencies.In 2022, the company invested a total of RMB35.54 million in operations safety, and thissafety investment provided a strong guarantee for the safe development of the business.In 2022, the company organised and carried out 667 safety trainings, with 16,600participants. The company did not record any safety accidents and had no work-relatedinjuries or deaths in 2022.
Real-name secure access for employees
Using drones to inspect the construction site
Physical and Mental Health
The company implements a people-oriented concept and puts the safety and physical and mental health of employees first. In terms ofoccupational health management, the company has organised employees to conduct annual medical check-ups and held health-relatedseminars to enhance health awareness and protect the health of our employees. In addition, we have directed affiliated companies toimplement occupational hazard investigations based on actual business needs, focusing on hazards related to noise levels in stores andhigh temperatures in projects under construction.
The company has produced training materials topublicise and implement the Law on the Preventionand Control of Occupational Diseases, and we use acombination of online and offline methods to spreadawareness of occupational disease prevention andcontrol.
In 2022, the company formulated and issued the
“Occupational Health and Safety Management Measures”
to strengthen the primary responsibilities of occupational
disease prevention and control, improve the ability of
occupational disease risk prevention and control, and
protect the health and safety and legitimate rights and
interests of employees.Hainan DF partnered with the Haikou Red Cross Societyand Haikou 120 First Aid Centre to organise talks on firstaid topics and training sessions. These seminars assist inimproving employees’ ability to protect themselves and othersin emergencies and raise their awareness of occupationalhealth and safety.
A professional organisation conducted noise testing forareas that generate noise, such as air-conditioning roomsand diesel generator rooms at Phase 1 and Phase 2 ofSanya International Duty-Free Shopping Complex. Theresults indicated that the noise levels were below theprescribed limit.We have inspected construction companies working at Haikou International Duty-Free Shopping Complex, logistics bases and other under-construction projects to formulate high-temperature protection measures, including avoiding outdoor operations during high-temperatureweather and providing workers with heatstroke prevention and cooling materials and medicines.
Planet
Green and Low Carbon Operations72Green Building - Creating a GreenFuture
Innovative Green Marketing88
Green and Low Carbon Operations
CTG DUTY-FREE has always been committed to the concept of green development. We strictly comply with Environmental ProtectionLaw and related laws and regulations, uphold the spirit of government documents on ecological civilisation and environmental protection,and adhere to the requirements of the regions in which we operate. We are actively taking energy ef?cient measures, safeguarding naturalenvironment and building a more beautiful China.In 2022, no major incidents involving energy conservation or environmental protection violations occurred at CTG DUTY-FREE, and thecompany received no penalties or noti?cations from environmental protection authorities.Green Offices and Low Carbon LifestyleWe focus on the implementation of the “carbon peaking and carbon neutrality” goals to promote our all-round energy-saving andenvironmental protection initiatives, and the advocation of a green of?ce philosophy to reduce resource consumption, lower of?ce costs, andpromote thrift practices. We also encourage recycling and sustainable development by creating a favourable atmosphere so “anyone cancarry out thrift practices, in any scenario, anytime”.Below are some actions taken by us to ful?l our green of?ce initiative:
Paperless of?ce: Use the of?ce automation (OA) platform to send and receive business documents andreduce the printing of paper documents;
Organise subsidiaries to learn and implement the spirit of President Xi Jinping’s important speechesand instructions and comments on carbon peaking and carbon neutrality, as part of our continuousefforts to further promote the transformation to green and low carbon development;Release the “Green and Low Carbon Proposal” to encourage employees to take the lead in carryingout low carbon and energy saving practices and conveying green messages;Post signs around of?ces to remind employees to turn off the lights and save water, and organise publicitycampaigns and training sessions on energy conservation and environmental protection as planned;Conduct Energy Efficiency Publicity Week and Low Carbon Day activities and organise a series ofenergy-saving and low-carbon ?lms for employees to watch, with a total attendance of 8,530 people.In 2022, Sunrise China introduced energy-saving and low-carbon promotional ?lms into restaurants,certi?cation of?ces, and other public places in each district, for employees to watch and learn.
Implementinggreen awareness
Taking green actions
Of?ce supplies procurement management: In January 2021, the of?ce supplies procurement system was putinto operation to realise online integrated procurement. This system can help to centrally control procurementquantities and amounts, so as to improve procurement ef?ciency, cut expenses, and reduce waste;Promote waste classi?cation: All types of waste generated during business operations are disposed of byprofessional waste management companies to reduce environmental pollution;Strictly implement the requirements of the Measures on Administration of Fuel Cards and Vehicles in theuse of vehicles and fuel cards by linking each card to a certain vehicle and prohibiting use of companyvehicles for private purposes other than business travels. The Measures also require keeping record of eachrefuelling and the vehicle’s mileage and retaining of receipts of payment for refuelling to facilitate supervision.Misuse of company vehicles and excessive refuelling are resolutely prohibited.
2022 Environmental, Social and Governance ReportPlanet
Electricity ef?ciency management: Establish sound electricity conservation management systems and equipmentoperation procedures to reduce unnecessary of?ce electricity equipment and non-of?ce electricity consumption;promote energy-saving improvements to major energy-consuming equipment to gradually eliminate inef?cientequipment; regularly clean air-conditioning systems to improve the energy ef?ciency of air-conditioners.
Energy and Emission ManagementThe company vigorously implements the Measures for the Supervision and Administration of Energy Conservation and EcologicalEnvironmental Protection at Chinese central State-Owned Enterprises and other national regulations related to energy conservation andemissions reduction. We continued with our efforts to promote high quality sustainable growth and prepare for a new stage of developmentvia a series of methods such as daily control enhancement, process optimisation, technology improvement, and resources integration.The company makes continuous efforts to enhance the formation of the management structure for energy conservation and environmentalprotection. Subsidiaries are arranged to set up dedicated management functions and assign full-time and part-time personnel to manageenergy conservation and environmental protection affairs, so as to ensure the ful?lment of their corresponding responsibilities.The company also pays attention to enhancing responsibility awareness and implementing supervision and management measures. Allsubsidiaries signed the “Letter of Responsibilities for Environmental Protection Goals” with the company, to specify the major responsibilities,performance indicators, as well as reward and punishment standards for energy conservation and environmental protection management,in order to ensure the ful?lment of environmental responsibilities of each subsidiary, invest in environmental protection, control environmentalrisks, and prevent pollution.As part of its publicity efforts, the company continues to organise all subsidiaries to learn about the guidelines and policies on carbonpeaking and carbon neutrality, as well as the major take-aways, paths for implementation and relevant requirements, so as to master theemerging and leading ideas, philosophies and practices regarding the promotion of green and low carbon development, transformation ofindustrial structures, optimisation of energy structures, ef?ciency improvement in energy and resources consumption, and enhancement ofthe promotion and application of green and low carbon technologies, etc.Energy Consumption and Greenhouse Gas Emission Overview
The company mainly consumes electricity, natural gas, diesel, gasoline, and water during its daily operations. Our energy consumption,resource usage, greenhouse gas emission and intensity
in 2022 are shown in the table below:
In 2022, the natural gas consumption statistics are limited to the company’s headquarter building, and the electricity, diesel, gasoline and water consumption
statistics are limited to the company’s headquarter building and Sanya International Duty-Free Shopping Complex. Before the grand opening of HaikouInternational Duty-Free Shopping Complex in October 2022, Sanya International Duty-Free Shopping Complex was the company’s largest operating locationand contributes a high proportion of sales revenue and is suf?ciently representative. We will gradually expand the scope of our statistics in the coming years.
Reducing resourcesconsumption
Conveying green
messages
Fuel consumption reduction: We regulate the use of official vehicles, assign vehicle based on theheadcounts of passengers, and strive to reduce vehicle fuel consumption. We also encourage onlinemeetings and take measures to reduce energy consumption on business trips.Reduce water consumption: Install induction water faucets in restrooms for water saving purposes.Cut down the use of plastics: Plastic reduction actions were taken by the company and its subsidiaries,such as broadcasting relevant promotional films and distribution of relevant materials. In 2022, CDFInternational provided employees with ceramic and metal dinnerware as a replacement to one-use plasticones, so as to reduce the consumption of one-off plastic products.Our Employee Handbook clearly speci?es that employees should go easy on the use of water, electricity,and other resources during their service and accommodation periods. Air-conditioners should be turnedoff and power should be off when leaving work or leaving the dormitories. No use of personal high-powerelectrical appliances is allowed, and waste of water and electricity is prohibited.Actions have been taken by each store to reduce the use of plastic products, such as announcing plasticprohibitions and restrictions to customers, and guiding them on how to implement plastic reduction andwaste classification, so as to enhance their green consumption awareness. In 2022, the company’sstores in Hainan replaced all plastics shopping bags with green ones made of environment friendlymaterials. A total of over 24,130,000 green shopping bags were provided in 2022.
Energy Efficiency MeasuresThe company adheres to a business philosophy that promotes energy conservation, emissions reduction, and green protection. Whilecontinuously expanding our business and pursuing development, we also use a variety of methods to emphasise and encourage energyconservation during our operations. In 2022, the company and its duty-free stores enhanced publicity regarding energy conservation andconsumption reduction and took measures to raise energy conservation awareness of employees and visitors. In addition, during theyear, we formulated targeted measures to reduce energy consumption and optimised the company’s energy system by strengtheningthe monitoring of water and electricity use, and gasoline consumption in daily operations, and by arranging dedicated personnel for patrolinspections to turn off running equipment left unattended.
Increased investment in energy-efficientequipment and facilities and engaged insystematic and scienti?c management of greeningand lighting by paving green irrigation channelsand installing intelligent time-control equipment.Reduced the number of lighting fixtures,decreased the area and time of lighting at night,and reduced large areas of night-time lighting asmuch as possible to reduce power consumption.We renovated the lighting of logistics warehouses,unloading platforms, equipment rooms and otherfunctional facilities. Existing lamps were replacedwith LED lamps, and new stores are required touse LED lamps.
Sanya Downtown Duty-Free Store actively implement energy conservation andconsumption reductionCase
Type2022UnitElectricity24,113.09kWhNatural Gas14,835.24m
Diesel151,219.00LitreGasoline35,709.00LitreComprehensive energy consumption26,146.63MWhComprehensive energy intensity 0.17MWh/m
Direct greenhouse gas emissions (Scope 1 emissions)
524.25tCO
eIndirect greenhouse gas emissions (Scope 2 emissions)
13,985.59tCO
eTotal greenhouse gas emissions14,509.84tCO
eGreenhouse gas emissions intensity0.9tCO
e/m
;Water consumption156,564.16m
Water consumption intensity1.01m
/m
Direct GHG emissions: The company’s gasoline and natural gas consumption multiplied by the corresponding emission factors which are determined
with reference to①China Energy Statistical Yearbook
②IPCC 2006.
Indirect GHG emissions: The company’s purchased electricity consumption multiplied by the corresponding emission factor which are determined
with reference to the Ministry of Ecology and Environment’sNotice on Key Work Related to the Management of Enterprise Greenhouse Gas EmissionsReporting in 2022.
Adjusted the volumes ofwater equipment to reducewater stream volumes, spill,dripping and leakage.Regulated the use of vehiclesby strictly complying withthe “Vehicle ManagementRegulations”. Private use ofbusiness vehicles is strictlyprohibited. Each vehicle hasa designated fuel card forrefueling purposes.
Electricity Saving
WaterSaving
GasolineSaving
2022 Environmental, Social and Governance ReportPlanet
The temperature of air conditioners in offices anddormitories shall be no lower than 26 °c, shall be turned off20 minutes before leaving, and shall be powered off if leftunattended for a period of time.Printers, computers, fans, water heaters, lighting and otherpower supplies shall be turned off before leaving the place ofwork (and be shifted to standby mode during non-of?ce hours).Before store opening for sales, no lights more than thoserequired for work routines shall be switched on; electricityequipment to meet operating needs shall only be turnedon 10 minutes before opening; all electricity equipmentand lights shall be turned off after the closure.
Proposals for Energy Conservation and Consumption Reduction Issued by thecompanyCase
Emissions Management
The company complies with theEnvironmental Protection Law of the People’s Republic of China, Law of the People’s Republic of Chinaon the Prevention and Control of Environmental Pollution Caused by Solid Wastesand other related regulations, and strictly managedwastewater discharge, exhaust gases emission and waste discharge. We adhere to the philosophy of “clear waters and lush mountains areinvaluable assets” in our development to defend against pollution and facilitate ongoing environmental improvement.The company is strongly against dumping, stacking, and discharge of waste without permission, and performs its duties in terms of sourcereduction and classi?cation of solid waste as required by law. It has established compliant waste storage processes and works with quali?ed thirdparties for waste disposal under the laws and regulations to prevent environment contamination. As for pollutant emissions, it has establishedstandardised pre-treatment facilities such as sedimentation tanks, septic tanks and oil separators, which are subject to regular inspection andmaintenance to ensure the compliant emissions. The company also handles cartons and other recyclable waste on a regular basis.Addressing Climate Change with Energy Conservation and Emissions ReductionsClimate change is having a broad and far-reaching impact on the world. As a responsible company, we are acting quickly to analyse thepotential challenges and opportunities that climate change may bring, and we are working to respond effectively to the impact of climatechange on the company by continuously reducing the carbon footprint of our operations. This section describes our efforts and future plansfor addressing climate change with reference to TCFD (Task Force on Climate-Related Financial Disclosures) recommendations.
Governance
As for governance on climate-related risks and opportunities, we have established an ESG governance structure, which covers the all-roundgovernance on ESG related affairs, including the management of projects regarding addressing climate change.a. Supervision on climate-related risks and opportunities by Board of Directors: The company’s Board of Directors continues to
promote the governance of climate-related risks and opportunities. As the top decision-making body responsible for addressing climate-related risks, the Board of Directors complies with the company’s ESG governance structure, collaborates with its Strategy Committee tojointly manage the implementation of climate governance tasks and perform review and inspection on a regular basis.We have made it clear that the Board of Directors has to incorporate climate considerations into its review and instructions on strategies,important action plans, risk management policies, annual budgets and business plans, its formulation of performance goals for organisations,its monitoring on implementation, and its supervision on signi?cant capital expenditure, acquisitions and divestitures.
Develop good habits and turn off the faucet afterwater use to prevent water running to waste.Report spills, drips and leaks to the Engineeringand Property Management Department in a timelymanner for repair.
Electricity savingWater saving
CategoryDescription
Impactcycle
Actions
Policy and legal risks
National and local climate-related polices may betightened (such as the carbon price mechanism,stricter carbon emission compliance requirementsand information disclosure requirements), whichmay increase the company’s management inputsand costs, and may put the company underregulatory pressure without the timely improvedcompliance of management.
Medium andlong-term
The company is continuously monitoring the introductionand updating of relevant policies and regulations, and westudy implementation requirements as they are releasedand formulate relevant measures on time.The company is developing the “Work Plan forImplementing the Spirit of President Xi Jinping’s ImportantSpeech on the Construction of an Ecological Civilisationand ‘Carbon Peaking and Carbon Neutrality’”. In addition,we are steadfastly promoting the construction of anecological civilisation as we work to build a world-classgreen tourism retailer and pursue high-quality greendevelopment.
Technology risk
Given the synergistic effect of informationtechnology and energy technology, during ourtransition towards lower carbon and greeneroperations, the green, innovative and intelligentmanagement requirements in supply chain(including transportation and packaging links)and the operational maintenance requirementsof online business will increase our technologycosts.
Short,medium andlong-term
We continued to optimise our digitalisation andinformatisation, and actively built a green, low-carbonand digital smart logistics and supply chain
Market risk
As consumers become increasingly aware oflower-carbon alternatives and environmentalprotection, they will opt for more environmentallyfriendly products, which will reduce the demandfor traditional products and present relatedmarket risks for our partners and us.
Short,medium and
long-term
We have established a smooth mechanism forcommunication with consumers to understand theirdemands and preferences in a timely manner and meettheir needs for environmentally friendly products.
Reputation risk
Customer preference to spend on a greener andstable platform.
Short,medium and
long-term
We continued to convey a “Green CTG DUTY-FREE”message to the mass public through media channelsto boost customer con?dence.Stakeholders are increasingly concerned aboutclimate-related issues, and we may suffer fromreputation risk if we fail to meet stakeholderexpectations or if we engage in any behaviourthat violates relevant laws and regulations.
Short,medium and
long-term
We have established a smooth mechanism forcommunication with stakeholders and respond to theirconcerns in multiple ways.We have incorporated ESG considerations into ourbusiness operations via speci?c implementation tasks tocontinuously improve the quality of the company’s ESGdisclosure, while enhancing our communication withstakeholders via regular release of ESG reports and othermethods to disclose our efforts and achievements.
Strategy
a&b. The short, medium and long-term climate-related risks and opportunities identified and their impact on the company’sbusiness, strategy and ?nancial planning: We referred to the TCFD framework to identify risks related to CTG DUTY-FREE’s operationsand formulated responsive measures based on our analysis of their impact on the company’s supply chain, business operation, operatingcosts, and operating income, etc.Transition risks identified
b. Management’s responsibilities in assessing and managing climate-related risks and opportunities: We have established an ESGLeadership Group, led by Chairman of the company, and its members include heads of departments. The ESG Leadership Group, as anESG management and coordination organisation of the company, uniformly leads all ESG affairs, including daily supervision and reportingon the implementation of governance tasks regarding climate-related risks and opportunities, and coordination of the daily management ofclimate-related risks and opportunities.We steadily carry out the current status reviews, strategy formulation, risk management, and identi?cation and management of indicatorsand targets for risks and opportunities arising from climate change that the company may be exposed to or can embrace.
2022 Environmental, Social and Governance ReportPlanet
Physical risks identified
CategoryDescriptionImpact cycleActions
Acute
A series of risks arising from the suddenoccurrence of extreme climate orweather events, such as typhoons andheavy precipitations, that will result in adecrease in tourists, product transportationdisruptions, and closure of duty-free stores,ultimately causing business instability andcost increases.
Short, medium andlong-term
We have formulated emergency responseplans to improve the company’s adaption tothe acute physical risks, including: activelyimplementing the prevention and controlmeasures against extreme weather risks,monitoring and following typhoon warnings anddefence instructions issued by the government,formulating emergency plans, organisingemergency training and drills, procuringemergency supplies in advance, keeping alertto safety prevention and emergency duty,building a meteorological information exchangemechanism with third-party logistics companiesand closely collaborating with them to minimiselosses caused by extreme weather.Extreme climate or weather events arelikely to cause damage to the duty-freestore equipment, employee absences andemployee safety incidents, giving rise toadditional adverse impacts.
Short, medium and
long-term
Chronic
Increased probability of extremeprecipitation and ?ood disasters caused byincreased rainfall and sea levels rising.
Medium and long-term
We have fully considered the geographicalfactors in site selection for project developmentto prevent infrastructure from the materialimpact of disasters.Longer-term shifts in climate patternsmay increase the company’s operatingcosts. For example, sustained highertemperatures will raise the demand forwater supplies and cooling in the summer,which will increase energy consumptionand equipment maintenance and repairingcosts.
Short, medium and
long-term
By promoting energy conservation andemissions reduction such as continuouslypromoting energy efficiency and consumptionreduction projects during operations to reducecosts while saving energy, we have been ableto enhance the company’s resilience to chronicrisks.We continuously promote the development ofonline business. The company integrated itsonline and offline businesses to minimise thenegative impact that climate risks may have onof?ine business operations.
The Sales Department of Meilan store of Hainan DF performs real-time monitoring on ?ight cancellations during typhoons basedon weather broadcasts, and coordinates with the Airport Lounge and Administration Office to master partners’ operationsrequirements. Once there are mass ?ight cancellations, the Operations Security Department will launch an emergency responseplan, consisting of the below steps: (1.) Speed up the handling of depositary business, open interim handling sites and equip themwith extra staff; and (2.) Obtain the next day’s ?ight schedules during each shift and arrange store opening hours and on-duty staffaccordingly. In order to protect the normal operations of the company and employee safety, the Sales Department shall follow thefollowing practices: (1.) Give priority to employees staying at the airport and commuting by car when making shift schedules toensure the normal opening and operation of stores, and take measures to facilitate employee commutes; and (2.) Put typhoon and?ood prevention teams on duty to patrol and report their ?ndings every hour, to ensure timely handling of ?ight emergencies. At thesame time, the Operation Security Department pays attention to typhoon trends, issues typhoon warning, promptly arranges safetyrelated personnel to investigate potential typhoon and ?ood prevention hazards on the site, properly stores typhoon preventionmaterials, and issues typhoon safety alerts to remind staff travel safety, and effectively conducts typhoon and ?ood control duty andemergency work on site.
Meilan Store of Hainan DF Formulates an Emergency Response Plan to DefendAgainst Extreme Weather
Case
Emergency Response Plan formulated by Meilan store of Hainan DF
Area
Strategicopportunities
Our transformationImpact cycle
Businessoperations
Buildinfrastructurewith climateresilience
We have adopted a green design philosophy for the initial design of ourHaikou International Duty-Free Shopping Complex and Sanya InternationalDuty-Free Shopping Complex. For example, during the design processfor the Sanya International Duty-Free Shopping Complex, we haveadopted a number of green and energy-saving technologies to meet thestandards for fabricated buildings and the standards for fully furnisheddelivery. The smart and effective technical measures taken include theshape optimisation of the building envelope system, integrated design ofthe daylighting and shading system in the atrium, and adoption of energy-ef?cient HVAC equipment, temperature, humidity and air quality monitoringsystems, sponge cities, primary WSDs, irrigation with reclaimed municipalwastewater, soundproofing construction materials, and smart systemintegration management, etc.The construction of infrastructure with better climate resilience can helpdefend against climate disasters, make full use of natural resources andsave energy and reduce emissions with ef?ciency.
Short, medium andlong-term
Review and evaluate thepossible development of thesituation, make emergencydeployments according topotential hazard, alwayspay attention to the latestdevelopment and quickly makejudgements and decisions onthe emergency, and promptlyreport the emergency workto the company’s leadersand superior units. After theemergency is over and theincident is resolved, organisepersonnel to participate inthe incident investigation andanalysis.
Assist the Team Chief to conductemergency work, take over his/her work when the Team Chief isnot on site, propose emergencyplans and measures to preventthe situation from worsening,guide teams to implementemergency plans and measures,and correct any defects in theimplementation.After the emergency is over andthe incident is resolved, assistthe Team Chief in the incidentinvestigation and analysis.
Assist the Deputy Chief inemergency rescue, organiseand coordinate each team’semergency response, promptlysend early warnings to logisticspersonnel, and convey rainstormand typhoon precautions andself-rescue measures, andregularly report accidents andrescue situations to the TeamChief. Escalate emergencyresponse and apply for supportin line with the development.After the emergency is over, ?ndout the cause of the incident,collect relevant evidence and ?lea written summary.
Implement specific emergencymeasures, inspect thewarehouse to ensure thatdoors and windows are closed,reinforce or remove unfixedidle materials, use flood-proofsandbags to block leaks, usewaterproof cloth to covervaluable goods and equipment,and transfer them, if necessary,follow other emergency workarrangements from superiors.After the disaster is over, cleanup the scene and verify thedamage.
Rainstorm andTyphoon Forecast
Rainstorm and
Typhoon gone
1. Forecast from group companies and superior units
2. Warning information publicly released by the local
government through news media
3. Warning information issued by the local meteorological
administrationWhen a yellow or above typhoon warning signal or a yellow orabove rainstorm warning signal is issued, the Chief of EmergencyTeam will initiate a rainstorm and typhoon emergency plan
Deputy Chief of
Emergency Team
Emergency TeamCoordinator
Emergency Team
members
Meanwhile, the Logistics Department will launch an emergency response plan as below:
Chief ofEmergency Team
2022 Environmental, Social and Governance ReportPlanet
Area
Strategicopportunities
Our transformationImpact cycle
Products and
services
Launch co-brand greenproducts
As consumers prefer environmentally friendly green products, we havelaunched co-brand sustainable green products to meet their consumptiondemands.
Short and medium-
termIntegrate on-line and off-linebusinesses
To better cater to consumer shopping habits, we have continued toenhance the integration of on-line and off-line business, to provideconsumers with more convenient integrated services covering on-line andoff-line channels.
Short, medium and
long-term
Supply chain
Promote greenlogistics &packaging
We have adhered to the use of recyclable and degradable greenpackaging, proactively promoted the automatic and intelligent upgradingof packaging, and have been committed to applying single-sheet receiptsand slim tapes into the logistics chain.We have established a waste material recycling system to recyclepackaging, cartons, wastepaper, and other materials, which helps extendthe life cycle of packaging materials and improve the overall utilisationef?ciency of resources.
Short and medium-
term
Optimisefreighttransport
Compared with air transport, ocean transport is of lesser carbonemissions, and higher efficiency in energy conservation and emissionreduction. Therefore, we have worked with brands to gradually increasethe proportion of sea transportation during the procurement andtransportation process.
Medium and long-
termPromote theuse of newenergy tools
We have vigorously promoted the use of clean energy equipment andmade full use of electric powered forklift trucks to replace traditional fuelledones, so as to reduce carbon emission and environmental pollution.
Short, medium andlong-term
c. Consider various climate-related scenarios for better strategic resilience: We plan to perform scenario analysis based on ourbusiness operations at the right time in the future, including exploring the potential impacts of climate-related risks and opportunities onthe company’s strategy under the scenario of a 2?C warming and other, more extreme scenarios, and how to change our strategies tobetter respond to these potential risks and opportunities.
a. Identi?cation and assessment process for the company’s climate-related risks
We have identified the physical and transition risks related to climate change which exert substantial impact on our business, withreference to the possibility of risk occurrence and scope of impact as suggested by TCFD, and combined with the climate risks actuallyoccurred in our business scenarios or those that can be predicted.b. Management process for the company’s climate-related risks
We manage climate-related risks according to the company’s ESG governance structure. The Board of Directors, as the topdecision-making body, cooperates with its Strategy Committee to jointly manage and monitor climate-related risks and opportunities.Management coordinates the daily work to assess and manage climate-related risks and opportunities. We determine the materiality ofrisks by referring to the impact of climate-related risks on the company’s operations.
c. Integration of the company’s identi?cation, assessment and management process for climate-related riskswith the overall risk management systemWe incorporate climate-related risk management into our overall ESG management structure. Under the supervision andsupport of the Board of Directors and its Strategy Committee, the ESG Leadership Group is responsible for coordinatingthe implementation of climate-related risk management at the company and the subsidiary levels.
Risk Management
We attach importance to, and have clearly de?ned, the identi?cation, assessment and management processes for climate-related risks.
Indicators and Targets
To enable measurement of the climate change process and the effectiveness of the response actions, it is important to select appropriateparameters and indicators and formulate corresponding targets.
a. We assess the indicators used in measuring climate-related risks and opportunities by following the company’s strategy andrisk management process: We have determined and disclosed the climate-related risk indicators for the management of both direct
and indirect greenhouse gas (GHG) emissions according to the requirements of the ESG Reporting Guide of the HKEX, and based onour actual business situation, as an active response to the national call for “carbon peaking and carbon neutrality”.b. The company’s scope 1 and scope 2 GHG emissions and the relevant risks: we have implemented a series of energy-savingand consumption reduction measures to decrease GHG emissions. For details, please refer to Green and Low Carbon Operations.Meanwhile, the company actively promotes green buildings to reduce greenhouse gas emissions from its operations. For details, pleaserefer to Green Building – Creating a Green Future.c. Targets used by the company to manage climate-related risks and opportunities, and actions taken to achieve thosetargets: To mitigate and adapt to climate risks, we have established qualitative targets for a green of?ce: Continue to promote energyconservation and emissions reductions, and implement the company’s “Green and Low Carbon Proposal” in detailed tasks; and forgreen buildings: Follow green standards for the construction of new buildings, continue the energy-saving transformation of existingfacilities, actively explore the use of new energy, and cooperate with settled brands to obtain LEED gold certi?cation.We have taken actions to gradually achieve the above targets, such as releasing the “Green and Low Carbon proposal”, enhancing thetransformation of the existing energy-saving facilities.In light of the evolving conditions of the company’s operating location and the market dynamics, we will constantly review our practicalactivities and adjust our objectives and proposed measures in a timely manner. We will further improve our governance, strategy formulation,risk management, identi?cation, and management of indicators and targets, and work with all sectors of society to cope with climate changeand achieve common sustainable development.
2022 Environmental, Social and Governance ReportPlanet
Saving Food to Reduce Food Waste
The company complies with the Anti-Food Waste Law and implements the spirit of President Xi Jinping’s important instructions andcomments on “firmly combating extravagancy on foods”, as well as the important requirements of the 20th National Congress of theChinese Communist Party on “advocating frugality and thrift in the whole society”. We improve our employees’ awareness of saving food bytaking actions during daily meals in staff canteens.Detailed actions taken by us to save food include:
Sanya International Duty-Free Shopping Complex Refreshes Its Management onStaff Meal Servings with an Obvious EffectCaseIn 2022, the Sanya International Duty-Free Shopping Complex began its reform on staff meal management by introducing small-sized servings into its staff canteens, requiring employees to help themselves with staple food as needed, and installing monitoringequipment in the canteen to capture extravagant food behaviour. Those who go too far on wasting food are subject to ?nancialpenalties and announcement of their behaviour and punishment. With these two measures, the volume of food daily wasted incanteens was reduced to half of that under the previous serving mode.
Saving food posters in a canteen at
Sunrise Shanghai
Saving food slogans in a canteenat the company’s headquarter
Small-sized servings in the staffcanteen of the Sanya InternationalDuty-Free Shopping Complex
Saving food posters in the SanyaInternational Duty-Free Shopping
Complex
Sunrise Shanghai has established a dedicated team to save food and combat food wasting behaviour, as a supplementarymeasure to enhance the relevant systems and implement the relevant requirements. The dedicated team put forward various rulesand regulations from the Meals Supply and Management Department, before posting them on walls for publicity, improving andsupplementing Sunrise Shanghai’s internal regulations on anti-food wasting. The team also took actions to strictly control cateringcosts, standardise management of catering staff, and to eliminate extravagance and wasting of food. It also helped improve diners’food saving awareness by equipping canteens with dedicated staff to supervise behaviour and suggest them to “take no more thanneeded”, “guard against wasting food”, “cut down on food takeaways” and “go for leftover classi?cation”. With the team’s efforts,employees have developed no food wasting habits, and the canteens operate in good order with a pleasant dining atmosphere.
Sunrise Shanghai Establishes a Dedicated Team to Save Food and Combat FoodWasting Behaviour
Case
Meals prepared by the Meals Supplyand Management Department basedon actual needs and served in batches.Advance preparation of extensiveservings is not available; the utilisationrate of raw materials is improved, andsources of waste reduced.
Staff meals are served in theform of a buffet to encourageemployees to only take thenecessary amount of food.
The company and its subsidiariesput up posters advocating foodsaving such as “Clear Your Plate”in the eye-catching areas of theircanteens to convey our traditionalspirit of diligence and thrift.
Green Building – Creating a Green Future
CTG DUTY-FREE is committed to building a consumer space that integrates fashion and environmental protection. We are dedicatedto acting as a role model for environmental protection in the travel retail industry. Based on industry-leading green concepts, we haveformulated and implemented green solutions based on national and industry standards throughout the entire construction cycle of ourbuildings, and we have achieved impressive results in this regard.Green Building ManagementGreen Building ConceptsIn the spirit of President Xi Jinping’s instructions on ecological civilisation, we are committed to the implementation of the Green BuildingAction Plan. CTG DUTY-FREE actively promotes the development of green buildings with a focus on the conservation of energy, land, water,and material, leading to environmental protection. We follow the national green building standard system in China, LEED certi?cation systemand other certi?cation standards in our projects, while also considering local policies and the project’s speci?c characteristics. We aim tomaximise resource conservation, environmental protection and pollution reduction throughout the building’s life cycle, provide the public withhealthy and ef?cient spaces, and co-exist harmoniously with nature.Green Building RegimeCTG DUTY-FREE has developed a comprehensive green construction process and system for building construction. For constructionprojects of the company, when organising the preparation of project budgets and bidding documents, management is subject to clearrequirements to ensure that the construction of the project is undertaken in a green manner, including measures related to energy ef?ciencyand consumption reduction, dust control, green transportation, occupational health and operation safety, assigned with scoring weightsduring the evaluation process. In addition, the builder is required to provide guarantees related to the site, the environment, the constructionperiod and capital, among other areas. We require the construction company to compile a comprehensive particular green constructionprogramme, and we also require the construction company to establish an effective support system. Furthermore, a supervisory party isresponsible for reviewing the green construction programme and supervising the construction process to ensure that green measures areimplemented strictly with the relevant national, provincial, and municipal regulations. The supervisory party is required to perform robust andtimely inspections during the construction process to ensure that the green construction measures are fully implemented.Green Building OverviewThe company integrates the concept of sustainable development into all stages of design, construction, and operations to create qualitybuildings that adhere to green concepts and green building standards throughout their life cycle. At the end of 2022, the company isplanning to build green buildings covering an area of about 1,455,900 square metres. The design of the Haikou International Duty-FreeShopping Complex Plot 4 Project and the Sanya International Duty-Free Shopping Complex Phase 1 Plot 2 Commercial Project and Phase1 Plot 2 Hotel Project was started in 2022 under 2-star Green Building Label standards. The 2-star Green Building pre-certi?cations areexpected to be acquired in 2023. Some of the key projects are as follows:
Project NameAcquired Certi?cation/Planning CriteriaHaikou International Duty-Free Shopping Complex (Block No.5)Obtained LEED Gold pre-certi?cationHaikou International Duty-Free Shopping Complex (Block No.1)Obtained 2-star Green Building pre-certi?cation
Haikou International Duty-Free Shopping Complex
(Block No.4 and No.6)
Plan to apply for 2-star Green Building certi?cationSanya International Duty-Free Shopping Complex
Phase 1 Plot 2 Commercial Project
Obtained LEED Gold pre-certi?cation
Plan to apply for 2-star Green Building certi?cationSanya International Duty-Free Shopping Complex
Phase 1 Plot 2 Hotel Project
Plan to apply for 2-star Green Building certi?cation
2022 Environmental, Social and Governance ReportPlanet
Embracing Green Buildings to Facilitate Sustainable Development
Sanya International Duty-Free Shopping Complex Project
Project OverviewSanya International Duty-Free Shopping Complex Phase 1 wascompleted and commenced business operation in 2014, and Phase 2was completed and commenced business operation in 2020. Duringthe design stage, the project was reasonably planned and designed foreffective energy conservation and emissions reduction by consideringthe local weather, the geographical and topographical environment andthe surrounding transportation in Sanya.The Sanya International Duty-Free Shopping Complex Project haswon us many prizes and awards, including the “7th REARD GlobalReal Estate Design Awards (REARD) -Gold” and the “8th China RealEstate & Design Award (CREDAWARD) - Gold Award for ShoppingMall Landscape Design”. It also ranks among the “Top 10 Night-time Economy Landmarks in Sanya”.
The “8th China Real Estate & Design Award (CREDAWARD) –
Gold Award for Shopping Mall Landscape Design”
Green Design Standards
The Sanya International Duty-Free Shopping Complex Phase1 Plot 2 Commercial Project has adhered to the philosophy ofresources conservation and environmental protection since itsplanning and design stage and has focused on constructing high-quality green buildings supporting sustainable development withreference to domestic and international green building standards,so as to provide people with healthy and comfortable living spaces.During the Project’s design stage, a number of green and energy-saving technologies were adopted to meet the standards forfabricated buildings and the standards for fully furnished delivery.The smart and effective technical measures taken include the shapeoptimisation of the building envelope system, integrated design ofthe daylighting and shading system in the atrium, and adoption ofenergy-efficient HVAC equipment, temperature, humidity and airquality monitoring systems, sponge cities, primary WSDs, irrigationwith reclaimed municipal wastewater, soundproofed constructionmaterials, and smart system integration management, etc. All thesemeasures helped satisfy the 2-star green building standards in thefive aspects of safety and durability, health and comfortableness,convenient life, resources conservation, and friendly living places.Through the application of these technologies, the Project hasreached international standards related to sustainable site selection,indoor and outdoor water ef?ciency, energy consumption reduction,waste management, indoor environmental quality, and more. TheProject has ful?lled the requirements of LEED Gold and is expectedto acquire LEED Gold certi?cation in 2024.
Sanya International Duty-Free Shopping Complex Phase 1 Plot 2 Commercial
Project acquired the LEED Gold pre-certi?cation
Green and Energy-Saving Measures
The Sanya International Duty-Free Shopping Complex Project adopted energy-efficient processes during the construction stage, andassembled construction techniques were used to reduce particulate matter and waste disposal at the construction site. During theconstruction process, new and high-quality building materials that save energy and protect the environment were used, including sixtypes of light-transmitting insulating glass, expanded perlite concrete, environmentally friendly latex paint, low-loss transformers, frequencyconversion fans, and water pump equipment.Based on the operational data of Sanya International Duty-Free Shopping Complex Phase 1 and Phase 2, Phase 1 has reduced energy useby more than 15%, and Phase 2 has reduced energy use by more than 18%.
AspectLow Carbon & Environmental Protection Measures
Energy consumption
The building’s energy-efcient design complies with national standards. The design of the building’s shape, orientation,the distance between buildings, and window-to-wall ratio, among other aspects, were optimised to reduce overallenergy consumption.Double silver LOW-E coloured glazed hollow glass roong was adopted in Phase 1, and some glass facades have beentreated with reective lm. In Phase 2, the shading design covers about 70% of the entire site’s metal decorative roof,which prevents temperature increases from indoor sun exposure and reduces the energy consumed by air conditioners.Intelligent elevator management: The escalators’ intelligent speed monitoring capabilities and the elevator group controlsystem reduce power consumption.Intelligent fresh air control system: Fresh air is circulated into the buildings during transition seasons. Minimum freshair volumes are used to operate the system when the outdoor temperature is higher than the indoor temperature insummer.The building’s intelligent lighting considers the time of the day and scenarios to reduce electricity and energyconsumption. In 2022, we saved around 960,000 kWh of electricity compared with the previous year by means ofrenovation and the replacement of high energy consumption and low efciency lighting xtures, the installation of timeswitches, and the setting of running periods for lighting xtures, etc.The building has been outtted with a variety of intelligent control systems, including intelligent ofce capabilities, energyefficiency capabilities, intelligent lighting, intelligent monitoring, access control systems, and vehicle managementsystems.
Water and soilresources
Adopting rainwater storage system and permeable pavement in the building’s “sponge city”: We have set uprainwater storage tanks to collect rainwater for road ushing and green irrigation. The permeable pavement hasbeen used to efciently penetrate ground rainwater, which reduces pressure on the drainage system and maintainthe urban soil’s ecological balance.Sewage and wastewater classication treatment: Sewage is discharged into the municipal network after beingtreated by the outdoor septic tank, and kitchen sewage is discharged into the municipal network after being treatedby oil separators twice.Phase 2 also equipped with a river revetment and plant maintenance capabilities, which enable the building tomeet oodwater discharge requirements, thereby ensuring a stable riverside and preventing water and soil erosion.To save water consumed by fountains, we perform disinfection and algae-killing treatments on fountain water ona regular basis and remove and recycle sediment at the bottom of the pool by sewage suction pump to lower thefrequency of water change, helping us save over 8,000 tonnes of water compared to that of 2021.Clean air
The high-efciency oil fume purier has been designed to the highest emission standard of 1.0mg/m?, which isstricter than the national standard for environmental protection and emissions in China. These measures effectivelyimprove the park’s air quality.The building layout distance between buildings and ventilation placement have been optimised to improve on-siteair circulation.Phase 2 is equipped with an intelligent garage ventilation system. The induced ventilation system in theunderground garage automatically controls the operation of the garage fan according to the carbon monoxideconcentration, which improves air quality in the garage.Noise management
Noise and vibration control: Fans, pumps and other equipment emit low noise, and shock absorption devices havebeen deployed in relevant locations on the premises.Green Construction Management
We have formulated a green construction plan for the SanyaInternational Duty-Free Shopping Complex Phase 1 Plot 2Commercial Project, which includes site environmental protection,comprehensive utilisation of materials and resources, energyconservation and comprehensive utilisation of energy, waterconservation and comprehensive utilisation of water resources, landconservation and construction land protection, construction wastemanagement and other measures. Multiple green technologiesand measures have been adopted for the Project, such as theprimary use of local and recycled building materials, advancedconstruction techniques, tool stereotyping, bare soil coverage fordust suppression, water-sprinkling devices on the site to controldust, recovery and comprehensive utilisation of constructionwaste, reducing resource consumption and environmental pollutionthroughout all stages of construction process, to protect the naturalsurroundings to the largest extent.
2022 Environmental, Social and Governance ReportPlanet
Preserving Biodiversity
Sanya is located within a tropical marine and monsoon climate zone with high temperatures and a relatively high humidity all the year round.This makes it home to diversi?ed biological species, and helps with the shaping of its healthy, benign and sustainable ecosystem. Duringthe development and construction of the Sanya International Duty-Free Shopping Complex Phase 1 Plot 2 Commercial Project, we paidattention to the protection of the surrounding ecological environment and biodiversity, and adopted various green construction technicalmeasures to minimise the impact of the Project on the ecological environment and biodiversity:
Green Operations ManagementWe have formulated a commissioning plan for the Sanya International Duty-Free Shopping Complex Phase 1 Plot 2 Commercial Project,under which, we reviewed the relevant documents submitted by contractors for the lighting system, HVAC system and ?re-?ghting system,etc., prepared an electromechanical equipment mobilisation schedule and an electromechanical commissioning schedule, and kept recordsof the installation, start-up, and commissioning of electromechanical equipment, to ensure that the electromechanical system reaches theperformance target of green design and to realise the safe and ef?cient operation of electromechanical systems from design, construction,to operation.
The construction site was physically divided and isolated from the surrounding areas;
Enclosedconstruction
Measures were taken to avoid disturbance of biological habitat caused by construction noise (day and night);
Construction noisecontrol
Technical measures, such as on-site watering and the cleaning of vehicles before leaving the site, were takento reduce the impact of construction dust on the ecological environment;
Construction dustcontrol
Vegetation, sunshades and fog mist cooling systems were used to keep the temperature and humidity of theconstruction site in line with the surrounding environment and avoid the urban heat island effect;
Thermal comfortcontrol at theconstruction site
Sewage generated during the construction process was ?rst sent to a septic tank, and then regularly transportedout after biological fermentation and treatment to avoid polluting the land; wastewater from canteens wasdischarged into the municipal pipeline after entering the oil separator for puri?cation treatment;Construction sewageand wastewaterdischarge
During the early stage of construction, we accurately calculated the volume of earthwork excavation, reasonablyplanned the volume of back?ll and the amount of site landscaping to be used in the later stages and used back?llas much as possible to ensure the adaptability of ecosystem and biological community to the soil environment.Earthwork balanceand original soil ?lling
Haikou International Duty-Free Shopping ComplexProject
Project Overview
Guided by the “carbon peaking and carbon neutrality” goals,CTG DUTY-FREE strictly follows the development goals ofthe 14th Five-Year Plan and sticks to a green growth pathto boost Hainan’s economy and carry out the common andgreen development of the “Belt and Road Initiative”. TheHaikou International Duty-Free Shopping Complex Projectis built as a super-large, green and low carbon “internationaltourism consumption centre” with “port and city integration”,helping realise the maximisation of social, economic andenvironmental bene?ts.
The Haikou International Duty-Free Shopping Complex has established an outstanding reputation. In 2022, it won the “7th REARD GlobalReal Estate Design Silver Award”, the Gold Award of International Design Awards (IDA), the Outstanding Property Award London (The OPALAward) Winner, the Iconic Award 2022 (Iconic Design Award-Selection) of the German Design Council, the Architecture Master Prize (AMP)of the United States, and the Honourable Mention Award for Architectural Design.
Green and Low Carbon PlanningThe Haikou International Duty-Free Shopping Complex Project adheres to regional ecological harmony, combines domestic and overseasgreen and low-carbon development concepts, combines overall regional planning, and realises the calculation and control of carbonemissions during the whole life cycle by incorporating new technologies into the sustainable development concept. For the Project, wefocused on the ?ve key areas of source reduction, energy saving and ef?ciency enhancement, energy substitution, smart management, andcarbon ?xation of landscapes. We have adopted multiple low carbon and energy-saving technologies, such as comprehensive application ofprefabricated buildings, roof greening, reclaimed water system, sponge cities, charge piles for electric vehicles, passive energy saving andef?cient cold source, and more.For the 6 plots of the Project, the company prepared the “White Paper on Low-Carbon Planning of Haikou International Duty-Free ShoppingComplex”. As calculated, the carbon emissions from Plot 1 and Plot 4 are approaching standards for low-carbon buildings. With thecompletion of all plots, the Project will rank as a pioneer among low carbon buildings.We will continue to explore the Project’s potential for low carbon growth by forging it as the company’s low-carbon project benchmark. Wewill also expand the Project’s low carbon practices to other projects, as a means to convey our green philosophy and continuously explorenew measures of low-carbon development.Green Design Standards
Based on the international and domestic green standards, Haikou InternationalDuty-Free Shopping Complex has integrated environmental protection, energyef?ciency and green concepts into its planning and design; and the concept ofsustainability will be conveyed by the complex both visually and practically. BIM
has been adopted in the design and construction process, and the project willfeature prefabricated buildings and fine decorations. Various intelligent, high-ef?ciency and energy-saving capabilities, such as building shape optimisation,building space utilisation, building insulation materials, natural lighting design,“sponge cities”, rainwater recycling, garbage classi?cation, charging piles, solarenergy, smart lighting, convenient automated payment, and smart parking will beadopted to reduce the buildings’ energy consumption and ensure compliancewith low-carbon standards. Haikou International Duty-Free Shopping Complexwill meet leading international standards related to energy consumption, indoorair quality, and ecosystem and environmental protection and has fulfilled therequirements of LEED Gold. Plot 1 of Haikou International Duty-Free ShoppingComplex acquired 2-star Green Building pre-certi?cation.
BIM: Building Information Modelling
2022 Environmental, Social and Governance ReportPlanet
Reducing the heat island effectThe project reduces ground parking spaces, uses light-coloured paving materials, and uses light-coloured materials or highlyreective coatings for roong materials as much as possible.High ef?ciency water-saving appliancesThe project uses all Grade I sanitary ware to achieve high-efciency water savings, and the cooling tower’s water ow rate meetsLEED requirements.Rainwater recyclingAll on-site rainwater will be collected, treated, and reused for greening irrigation and road washing to save fresh water.
Energy ef?ciency optimisation
A comprehensive energy consumption simulation has been conducted based on the design of the project envelope and the HVACsystem, the equipment’s energy efciency and the indoor lighting power density. According to the simulation’s calculations, thedesigned building will reduce costs by 16.5% annually compared to the ASHRAE benchmark building.
High ef?ciency air treatmentThe project adopts G4+F7 medium – and high-efciency ltration devices to guarantee indoor air quality. In addition to basicventilation, the volume of fresh air will be increased by 30% to avoid insufcient fresh air when there are many people in thebuilding.
Enhanced commissioning
In addition to basic commissioning, the project will also ensure that an efcient operational strategy is maintained for the energyconsumption system and that timely support is provided for operations through functional testing and problem documentation ofHVAC, the HVAC control system and the lighting system.Full life cycle assessment
The project has conducted a full life cycle assessment (LCA) of the new building to calculate the percentage reduction in variousenvironmental impact indicators of the new building compared to the benchmark building.
Green and Energy-Saving Measures
Green Construction ManagementA complete scheme for green building construction has been prepared for this project, including environmental protection, water treatmentand recycling control, noise pollution control, light pollution control, indoor air quality management, chemicals and other toxic and hazardouswaste treatment control, water and electricity conservation, resource and material conservation, green building materials construction andother measures. In this project, the developers are using various technologies to protect the surrounding environment, such as bare soilcoverage for dust prevention, automatic spraying device for dusk reduction, washing construction vehicles with intelligent car wash tanksbefore leaving the site. We also equipped the construction site with a dust monitoring system to observe the dust level of the Project at anytime to ensure that the dust removal meets relevant standards. Reusable protective facilities and building materials are widely used to reduceresource consumption and energy losses. Regarding disposal, waste generated during the construction process is classi?ed and recycledas required and then shipped to enterprises with processing quali?cations to be recast and used for producing new building materials tosave natural resources.Green Operations Management
When it commences operations, Haikou International Duty-Free Shopping Complex will be able to leverage preliminary and enhancedcommissioning to comprehensively verify its performance, including its building data, HVAC system, lighting and natural lighting systems,internal domestic water and electricity system and renewable energy system. In this way, the complex will be able to ensure that itsoperations achieve their targets. In addition, the project will ensure safe and efficient operations at all times and meet green buildingoperating standards through intelligent property service measures such as centralised control of building information, building equipmentand regular maintenance.
Building a Low-carbon Eco-tourism Destination
The Haikou International Duty-Free Shopping Complex project follows the concepts of innovative, coordinated, green, open and inclusivedevelopment that was described in the 14th Five-Year Plan. To this end, the project aims to actively respond to national and global carbon-neutral targets, focuses on the four core functions of tourism, culture, social life and daily living, and emphasises low-carbon and ecologicalconstruction principles. By steadily engaging in scene innovation, technology innovation and content innovation, we aim to build a low-carbon ecological tourism destination that integrates intelligent experiences with technology-empowered living, designed scenarios, andcultural and tourist activities.
The cdf Global, a cross-border E store at the Haikou International Duty-Free Shopping Complex, is innovative in terms of concept andbusiness model. It leverages emerging shopping fashion and concepts such as “online and of?ine integration” and “self-serving selectionby consumers” and enables direct communication between consumers and global brands through electronic media such as QR codesto minimise intermediate links and reduce energy consumption. Materials used in the store are all green, such as water-based paint, withno wooden boards on the ?oor. Prefabricated construction takes up more than 85% of the overall construction. All lamps in the store areenergy-saving ones that meet the requirements of energy conservation and environmental protection.Meanwhile, the novel interior design of the store focuses on the themes of “reducing intermediate link reduction” and “makingcustomers at home” by equipping the store with large and comfortable lounge areas for customers and differently colouredcollection areas to facilitate the consumer’s self-serving selection.
Haikou International Duty-Free Shopping Complex Launches an Innovative andGreen Cross-Border E Store – cdf GlobalCase
Photos of cdf Global at Haikou International Duty-Free Shopping Complex
Innovative Green Marketing
As a world-renowned travel retail operator, the company has been unswervingly advancing down the path of sustainable development. Itmakes a due contribution to the construction of the prosperous future of China by taking the lead in supporting the realisation of carbonneutrality goals and committing to conveying the environmental protection message to upstream brands and downstream consumers.Creative Activities to Boost ConsumptionWe are continuously delivering a “Green CTG DUTY-FREE” message to the mass public by carrying out various green creative activities tofurther enhance consumer engagement and provide them with premium services and a superb duty-free shopping experience. We will tryour best to promote the transformation to a better consumption ecosystem.
2022 Environmental, Social and Governance ReportPlanet
In the Haikou International Duty-Free Shopping Complex, we carried out some activities themed on coral reef conservation. Atthe site, common marine litter and marine balls were used to build models of coral reefs. Combined with the selected screenbackground, it presented an extraordinary visual experience to customers, and enhanced customer awareness of protecting oceanlife such as coral reefs. Meanwhile, customers also enjoyed themselves by joining the mini class on creating a DIY ocean pictureframe with shells. This “Ocean-protection shell painting DIY” experience also helped enhance their awareness of protecting oceans.
Public Welfare Activities on Coral Reef ConservationCase
Photo of “Ocean-protection shell painting DIY” activityPicture frames made during the “Ocean-protection shell painting DIY” activity
Photo of public welfare activities on coral reef conservationPhoto of public welfare activities on coral reef conservation
Cooperation with Brands for Common DevelopmentAs a leader in the travel retail industry, we actively respond to changes in the new era. In this context, we consider the construction of anational ecological civilisation to be a fundamental aspect of sustainable development. We are committed to the sustainable developmentof our operations. To this end, we actively take responsibility for environmental protection and collaborate with brand partners to protect theenvironment and conserve energy.Green Counters to Promote “Green” OperationsOur company continuously deepens our “green” cooperation with brand partners. Also, we have introduced green designs andenvironmentally friendly materials in counters and booths to provide consumers with a comfortable shopping space and a high-qualityconsumer experience.
At the end of the reporting period, the new stores or counters of Armani Beauty, Balenciaga, Cartier, De Beers, Kiehl’s, Lanc?me, and YSLBeauté
at Sanya International Duty-Free Shopping Complex, have all received LEED Gold certi?cations.
按品牌英文名称首字母排序。
The Balenciaga store at SanyaInternational Duty-Free ShoppingComplex.
HAS FULFILLED THE REQUIREMENTS OF THE LEED GREEN BUILDING RATING SYSTEM CERTIFICATION ESTABLISHEDBY THE U.S. GREEN BUILDING COUNCIL AND VERIFIED BY GREEN BUSINESS CERTIFICATION INC.
PETERTEMPLETON, PRESIDENT & CEOU.S. GREEN BUILDING COUNCIL & GREEN BUSINESS CERTIFICATION INC.
DE BEERS SANYA HTB PERM STORE SHOPSanya, ChinaLEED v4INTERIOR DESIGN AND CONSTRUCTION: RETAIL
September 2022
In addition, the stores of Cartier, De Beers and Van Cleef & Arpels at Haikou International Duty-Free Shopping Complexare applying for LEED Gold certication.
The Cartier store at Haikou InternationalDuty-Free Shopping Complex.
The De Beers store at Sanya International Duty-FreeShopping Complex has been certi?cated as LEED Gold.
The Van Cleef & Arpels store at Haikou InternationalDuty-Free Shopping Complex is in an application forLEED Gold certi?cation.
2022 Environmental, Social and Governance ReportPlanet
The company worked with L’OCCITANE Travel Retail Asia Paci?c to launch its ?rst sustainable concept store of L’Occitane at theSanya International Duty-Free Shopping Complex. 84% of the construction materials used for this green boutique were eco-certi?edand consistent with the philosophy of “Rethink, Recycle, Reduce”. The sustainability concept is well incorporated into the overalldesign of the store, running from the design concept to construction and even to scrap recycling, which marks a practical ful?lmentof environmental protection. The store used environmentally friendly materials to replace plastics, and light, natural and renewablebamboo materials to replace pine wood. All the materials used were transported by electric trucks, and all these practices are aimedat reducing the boutique’s carbon footprint.
The Company and L’Occitane Launch the Brand’s First Sustainable ConceptStore at the Sanya International Duty-Free Shopping ComplexCase
L’Occitane launched its ?rst sustainable concept store at Sanya InternationalDuty-Free Shopping Complex
The chandeliers in the store aremade of recycled glass bottles
Materials that are easy to disassemble and recycle were used to construct the Clarins store in the Haikou International Duty-FreeShopping Complex to maximise the use of locally purchased materials and reduce the carbon footprint. Material procurement wasfocused on sustainable materials such as wood, screens with environmental logos, and 100% LED lights.The pop-up store of Clarins in the Haikou International Duty-Free Shopping Complex is made of recyclable wood and acrylicmaterials and is therefore easy to disassemble and convenient for delivery, helping reduce the carbon footprint.
Clarins Builds an Environmentally Friendly Store in the Haikou International Duty-Free Shopping Complex
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Case
Clarins’s environmentally friendly boutique storeClarins’s environmentally friendly pop-up store
The company alsocooperated withTerraCycle to launchthe first bottle recyclinginitiative at the SanyaInternational Duty-FreeShopping Complex,aimed at encouragingall customers to playtheir part in promoting acircular economy throughrecycling of productpackaging materials.
Launching the M0A10680 watch using a sustainable conceptAs one of the exhibition halls of the 3rd “Watches & Wonders” Hainan Luxury Watch Trade Show,the Haikou International Duty-Free Shopping Complex introduced and showcased Baume &Mercier’s M0A10680 watch exclusive 2.0 and joined with the brand to promote the philosophy of“environmental protection, regeneration, innovation, and sustainability”.80% of the materials used for the casing of Baume & Mercier’s M0A10680 watch are recyclablematerials re?ned from premium plastic materials selected from marine recyclables by WFO, a non-governmental organisation and Baume & Mercier’s long-term partner. Meanwhile, the quick-releasestrap is made of recyclable woven PET fabric and natural black cork. “WFO-Waste Free Ocean” isengraved on the back of the watch. For each sale, the Swiss Headquarters of Baume & Mercier willdonate 2% of the sales amount to charity organisations.
The Company Cooperates with Baume & Mercier to Advocate the Philosophy of“Environmental Protection, Regeneration, Innovation, and Sustainability”Case
Baume & Mercier’s
M0A10680 watch
To appeal for donations of recyclable plastic bottles by the mass public andreduce the possible ?ow of plastic pollutants into rivers and seas, we supportedBaume & Mercier to launch seed vending machines in its stores in the HaikouInternational Duty-Free Shopping Complex and the Sanya International Duty-Free Shopping Complex during the period from 1 December 2022 to 28 February2023. This promotes the philosophy of “green operations, low carbon, plasticreduction, and ocean protection”. These seed vending machines are locatednext to the brand’s new wristwatch Riviera to provide consumers with a uniqueharvesting experience.
The Company Facilitates Baume & Mercier’s Launch of Seed Vending Machinesto Appeal for Donations of Recyclable Plastic BottlesCase
We assisted Baume & Mercier’s with thelaunch of seed vending machines
Calling for donations ofrecyclable plastic bottles
As one of the exhibition halls of the 3rd “Watches & Wonders” Hainan Luxury Watch Trade Show, Haikou International Duty-FreeShopping Complex introduced and showcased 4 types of Panerai wristwatches on the fourth ?oor, as a move to recognise thebrand’s relentless efforts to ful?l the philosophy of “regeneration, innovation, carbon reduction, and environmental protection”.Panerai uses recyclable PET materials for its fabric bands and watch straps and makes watches casings with 97% recyclablematerials. These practices are a part of Panerai’s efforts to reduce the demand for raw material extraction and adverseenvironmental impacts.
Introduction of Panerai Wristwatches to Support the Brand’s Philosophy of“Regeneration, Innovation, Carbon Reduction, and Environmental Protection”Case
1 November marks the debut of 44-Year-Old Talisker in our retail channel. Accordingto Diage, Talisker goes beyond experiential liquor with the mission to protect the globaloceans and forests. For each bottle of Talisker sold, a bottle of water will be purchasedfor the oceans via donations. Talisker also conveys Diage’s message to the world ofthe importance and beauty of ecosystems.
The Debut of Talisker, Diage’s “Green” Whisky, in Our Retail ChannelCase
2022 Environmental, Social and Governance ReportPlanet
Optimising Freight Shipping
CTG DUTY-FREE focuses on achieving green, efficient and safe operations ineach component of the supply chain. Ocean transportation results in fewer carbonemissions per unit than air transportation, effectively conserving energy and reducingemissions. Therefore, we work with our brand partners to optimise freight models andgradually increase the proportion of ocean transportation in the procurement process.Our company has also continued to strengthen communication and exchangeswith suppliers and relevant authorities in Hainan province, to expand the number ofcategories and products shipped by sea to reduce carbon emissions further. Ourefforts in this area have received massive attention and support from many brandssupplier groups in the industry.
Green Packaging to Deliver a Green Message
CTG DUTY-FREE has a large consumer base and understands that it is responsiblefor spreading green consumption among its customers. As a result, we are committedto deploying and expanding our influence to encourage more consumers to payattention to ecological and environmental protection.Managing “white waste” is a critical concern in China. In response to the national“plastic restriction” policies, CTG DUTY-FREE has implemented a series of alternativemeasures to reduce the use of plastic packaging materials and mitigate the threatposed by plastic waste to the environment. At the end of the reporting period, thecompany’s Haikou International Duty-Free Shopping Complex, Sanya InternationalDuty-Free Shopping Complex, Sanya Phoenix Airport Duty-Free Shop, Haikou Duty-Free Shop, Haikou Meilan Airport Duty-Free Shop, Boao Duty-Free Shop and othermajor duty-free shops at airports all provide free paper bags. Other packagingbags are made of biodegradable materials as required by environmental protectionregulations.Based on the principle of responsible packaging, we insist on using recyclable anddegradable environmentally friendly materials, promoting packaging automation andintelligent upgrades. We are committed to incorporating more green ideas such assingle-sheet receipts and slim tapes into the logistics chain. The company has alsoestablished a system to recycle waste materials such as packaging materials, cartons,cardboard, and other materials, extend the life cycle of packaging materials andimprove the utilisation of resources. For example, the company recycles cartons bysize and material during the logistics stage and reuses them as containers on storageshelves, alternative turnover boxes during transportation, and packing boxes fortransfer of outbound goods, with a view to reducing the quantity of newly purchasedcartons. Packaging bags used by the company’s stores in Hainan are all made ofbiodegradable and environmentally friendly materials.We actively explore the possibility of using environmentally friendly materials in all links of the supply chain, and packaging optimisationplans at various stages of the logistics chain in actual business scenarios. For example, cartons and gas columns used as ?lling materials fore-commerce operations by CDF International are all made from recyclable materials. To avoid unnecessary waste and packaging waste, werequire that suppliers deliver their goods directly to each destination to skip unnecessary unpacking.Considering that polyvinyl chloride, the primary material in traditional adhesive tape, takes nearly a hundred years to degrade in nature, wehave decided to focus on exploring the use of tape-free cartons during the logistics chain. Tape-free cartons are sealed entirely physically,and they also allow consumers to feel that they are participating in environmental protection initiatives during the unpacking process. Bymaking this change, we hope to spread green consumption among large numbers of consumers.We will incorporate the sustainability and ESG performance indicators into our selection of suppliers. For example, one of our suppliersof tobacco and alcohol, Diageo, continues to increase the proportion of recyclable packaging materials to 100% from 60%, and hassuccessfully reduced the weight of packaging materials by 10%. It is expected that the plastic packaging materials used by Diageo will be100% recyclable by 2030.
Glossary of Terms
TermDefinitionCTGDUTY-FREE,thecompany,ourcompany,we
refersto
ChinaTourismGroupDutyFreeCorporationLimitedtogetherwithitsaffiliatedcompaniesESGReport,theReportreferstoTheEnvironmental,SocialandGovernanceReportThereportingperiod,thecurrentyearreferstoFrom1January2022to31December2022ChinaTourismGroupreferstoChinaTourismGroupCo.,Ltd.CTSHoldingsreferstoChinaTravelService(Holdings)HongKongLimitedCDFInvestmentDevelopmentreferstoCDFInvestmentDevelopmentCo.,Ltd.SanyaDowntownDuty-FreeStorereferstoChinaDutyFreeGroupSanyaDowntownDutyFreeStoreCo.,Ltd.SunriseChinareferstoSunriseDutyFree(China)Co.,Ltd.SunriseShanghaireferstoSunriseDutyFree(Shanghai)Co.,Ltd.HainanDFreferstoHainanProvincialDutyFreeCo.,Ltd.CDFInternationalreferstoChinaDutyFreeInternationalLimitedCDFG(Cambodia)LimitedreferstoChinaDutyFreeGroup(Cambodia)Co.,Ltd.GuangzhouXinmianreferstoGuangzhouXinmianDutyFreeMerchandiseCo.,Ltd.CDFCSreferstoChinaDutyFreeCruiseServicesLimitedDuty-freemerchandiserefersto
Importedgoodsthatareexemptfromcustomsduties,valueaddedtax(VAT)andconsumptiontaxonimportsanddomesticallyproducedgoodsthataresubjecttotaxrebates(VATandconsumptiontax)thataresoldinduty-freeshopsDuty-freestorerefersto
WiththeapprovaloftheGeneralAdministrationofCustoms,businessunitssetupsalessitesandsupervisedwarehousesforstoringduty-freecommoditiesinplacesapprovedbytheStateCouncilofthepeople’sRepublicofChinaoritsauthoriseddepartmentstosellduty-freecommoditiestospecifiedsalestargetsOffshoreduty-freepolicyrefersto
Thetaxpreferencepolicyistoimplementimportduty-freeshoppingwithlimitedvalue,limitedquantityandlimitedvarietyforpassengersleavingtheislandbyplane,train,orship(excludingdepartures),makepaymentinduty-freeshopsorapprovedonlinesaleswindowswherethetax-freepolicyisimplemented,andpickupgoodsfromtheislandatdesignatedareasofairports,railwaystationsandports.Thetaxexemptionpoliciesfortheislandincludecustomsduty,importVATandconsumptiontax
Appendix
2022 Environmental, Social and Governance ReportProsperity
SASACrefersto
TheState-ownedAssetsSupervisionandAdministrationCommissionoftheStateCouncilCSRCreferstoChinaSecuritiesRegulatoryCommissionSSEreferstoShanghaiStockExchangeHKExreferstoTheStockExchangeofHongKongLimitedCompanyLawreferstoTheCompanyLawofthePeople’sRepublicofChinaSecuritiesLawreferstoTheSecuritiesLawofthePeople’sRepublicofChinaAnti-moneyLaunderingLawreferstoTheAnti-moneyLaunderingLawofthePeople’sRepublicofChinaAnti-UnfairCompetitionLawreferstoAnti-UnfairCompetitionLawofthePeople’sRepublicofChinaAdvertisingLawreferstoTheAdvertisingLawofthePeople’sRepublicofChinaCybersecurityLawreferstoTheCybersecurityLawofthePeople’sRepublicofChinaPersonalInformationProtectionLawreferstoThePersonalInformationProtectionLawofthePeople’sRepublicofChinaLabourLawreferstoTheLabourLawofthePeople’sRepublicofChinaLabourContractLawreferstoTheLabourContractLawofthePeople’sRepublicofChinaTradeUnionLawreferstoTheTradeUnionLawofthePeople’sRepublicofChinaWorkSafetyLawreferstoTheWorkSafetyLawofthePeople’sRepublicofChinaLawonthePrevention&ControlofOccupationalDiseases
refersto
TheLawofPeople’sRepublicofChinaonthePrevention&ControlofOccupationalDiseasesEnvironmentalProtectionLawreferstoTheEnvironmentalProtectionLawofthePeople’sRepublicofChinaAnti-foodWasteLawreferstoAnti-foodWasteLawofthePeople’sRepublicofChinaProductQualityLawreferstoProductQualityLawofthePeople’sRepublicofChina
TermDefinition
Environmental, Social and Governance Reporting Guidelines Content Index
Environmental, Social and Governance Reporting GuideReport ContentA. EnvironmentalAspect A1: EmissionsA1
General DisclosureInformation on:
(a) the policies; and(b) compliance with relevant laws and regulations that have a significant impact on the issuer relatingto air and greenhouse gas emissions, discharges into water and land, and generation of hazardousand non-hazardous waste.
Green and Low CarbonOperationsA1.1The types of emissions and respective emissions data.
Green and Low Carbon Op-erationsA1.2
Direct (Scope 1) and energy indirect (Scope 2) greenhouse gas emissions (in tonnes) and, whereappropriate, intensity (e.g. per unit of production volume, per facility).
Green and Low CarbonOperationsA1.3
Total hazardous waste produced (in tonnes) and, where appropriate, intensity (e.g. per unit of productionvolume, per facility).
Green and Low CarbonOperationsA1.4
Total non-hazardous waste produced (in tonnes) and, where appropriate, intensity (e.g. per unit ofproduction volume, per facility).
Green and Low CarbonOperationsA1.5Description of emission target(s) set and steps taken to achieve them.
Effective Management with aClear FocusGreen and Low CarbonOperationsA1.6
Description of how hazardous and non-hazardous wastes are handled, and a description of reductiontarget(s) set and steps taken to achieve them.
Green and Low CarbonOperationsAspect A2: Use of ResourcesA2
General DisclosurePolicies on the efficient use of resources, including energy, water and other raw materials.
Green and Low CarbonOperationsA2.1
Direct and/or indirect energy consumption by type (e.g. electricity, gas or oil) in total (kWh in ’000s) andintensity (e.g. per unit of production volume, per facility).
Green and Low CarbonOperationsA2.2Water consumption in total and intensity (e.g. per unit of production volume, per facility).
Green and Low CarbonOperationsA2.3Description of energy use efficiency target(s) set and steps taken to achieve them.
Effective Management with aClear FocusGreen and Low CarbonOperationsA2.4
Description of whether there is any issue in sourcing water that is fit for purpose, water efficiency target(s)set and steps taken to achieve them.
Effective Management with aClear FocusGreen and Low CarbonOperationsA2.5
Total packaging material used for finished products (in tonnes) and, if applicable, with reference to perunit produced.
Need further improvement.A3: The Environment and Natural ResourcesA3
General DisclosurePolicies on minimising the issuer’s significant impacts on the environment and natural resources.
Green and Low Carbon
Operations
Green Building – Creating a
Green FutureA3.1
Description of the significant impacts of activities on the environment and natural resources and theactions taken to manage them.
Green and Low Carbon
Operations
Green Building – Creating a
Green FutureA4
General DisclosurePolicies on identification and mitigation of significant climate-related issues which have impacted, andthose which may impact, the issuer.
Green and Low Carbon
OperationsA4.1
Description of the significant climate-related issues which have impacted, and those which may impact,the issuer, and the actions taken to manage them.
Green and Low Carbon
Operations
2022 Environmental, Social and Governance ReportProsperity
Environmental, Social and Governance Reporting GuideReport ContentB. SocialEmployment and Labour PracticesAspect B1: EmploymentB1
General Disclosure Information on:
(a) the policies; and(b) compliance with relevant laws and regulations that have a significant impact on the issuer
Employment Complianceand Rights ProtectionB1.1
Total workforce by gender, employment type (for example, full- or part-time), age group and geographicalregion.
Employment Complianceand Rights ProtectionB1.2Employee turnover rate by gender, age group and geographical region.Need further improvement.Aspect B2: Health and SafetyB2
General DisclosureInformation on:
(a) the policies; and(b) compliance with relevant laws and regulations that have a significant impact on the issuer
relating to providing a safe working environment and protecting employees from occupationalhazards.
Operations Safety and HealthProtectionB2.1
Number and rate of work-related fatalities occurred in each of the past three years including the reportingyear.
Operations Safety and HealthProtectionB2.2Lost days due to work injury.
Operations Safety and HealthProtectionB2.3
Description of occupational health and safety measures adopted, and how they are implemented andmonitored.
Operations Safety and HealthProtectionAspect B3: Development and TrainingB3
General DisclosurePolicies on improving employees’ knowledge and skills for discharging duties at work. Description oftraining activities.
Talent Growth and RetentionB3.1
The percentage of employees trained by gender and employee category (e.g. senior management,middle management).
Talent Growth and RetentionB3.2The average training hours completed per employee by gender and employee category.Talent Growth and RetentionAspect B4: Labour StandardsB4
General DisclosureInformation on:
(a) the policies; and(b) compliance with relevant laws and regulations that have a significant impact on the issuer
relating to preventing child and forced labour
Employment Compliance
and Rights ProtectionB4.1Description of measures to review employment practices to avoid child and forced labour.
Employment Compliance
and Rights ProtectionB4.2Description of steps taken to eliminate such practices when discovered.
Environmental, Social and Governance Reporting GuideReport Content
Operating PracticesAspect B5: Supply Chain ManagementB5
General DisclosurePolicies on managing environmental and social risks of the supply chain.
Comfortable Shopping andQuality GuaranteeSupply Chain Managementwith IntelligenceB5.1Number of suppliers by geographical region.
Supply Chain Managementwith IntelligenceB5.2
Description of practices relating to engaging suppliers, number of suppliers where the practices arebeing implemented, and how they are implemented and monitored.
Comfortable Shopping andQuality GuaranteeB5.3
Description of practices used to identify environmental and social risks along the supply chain, and howthey are implemented and monitored.
Comfortable Shopping andQuality GuaranteeB5.4
Description of practices used to promote environmentally preferable products and services whenselecting suppliers, and how they are implemented and monitored.
Comfortable Shopping andQuality GuaranteeSupply Chain Managementwith IntelligenceInnovative Green MarketingAspect B6: Product ResponsibilityB6
General DisclosureInformation on:
(a) the policies; and(b) compliance with relevant laws and regulations that have a significant impact on the issuer relatingto health and safety, advertising, labelling and privacy matters relating to products and servicesprovided and methods of redress.
Comfortable Shopping andQuality GuaranteeB6.1Percentage of total products sold or shipped subject to recalls for safety and health reasons.B6.2Number of products and service related complaints received and how they are dealt with.
Excellent Service, HighSatisfactionB6.3Description of practices relating to observing and protecting intellectual property rights.
Trusted and Ethical BusinessOperationsB6.4Description of quality assurance process and recall procedures.
Comfortable Shopping andQuality GuaranteeB6.5
Description of consumer data protection and privacy policies, and how they are implemented andmonitored.
Trusted and Ethical BusinessOperationsAspect B7: Anti-corruptionB7
General DisclosureInformation on:
(a) the policies; and(b) compliance with relevant laws and regulations that have a significant impact on the issuer relating
to bribery, extortion, fraud and money laundering.
Trusted and Ethical BusinessOperationsB7.1
Number of concluded legal cases regarding corrupt practices brought against the issuer or its employeesduring the reporting period and the outcomes of the cases.
Trusted and Ethical BusinessOperationsB7.2
Description of preventive measures and whistle-blowing procedures, and how they are implemented andmonitored.
Trusted and Ethical BusinessOperationsB7.3Description of anti-corruption training provided to directors and staff.
Trusted and Ethical BusinessOperationsCommunityAspect B8: Community InvestmentB8
General DisclosurePolicies on community engagement to understand the needs of the communities where the issueroperates and to ensure its activities take into consideration the communities’ interests.
Devotion to Charity andSocietyB8.1
Focus areas of contribution (e.g. education, environmental concerns, labour needs, health, culture,sport).
Devotion to Charity andSocietyB8.2Resources contributed (e.g. money or time) to the focus area.
Devotion to Charity andSociety
2022 Environmental, Social and Governance ReportProsperity
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GRI Stan-dards
Disclosures
Guidelinesof SSE
Guidanceof theStateCouncil
The TenPrinciplesof the UNGlobalCompact
UN SDGs
Relevant section/paragraph
Organizationalprofile
102-1Name of the organizationAbout this Report102-2Activities, brands, products, and servicesAbout the Company102-3Location of headquartersAbout this Report102-4Location of operationsAbout the Company102-5Ownership and legal formAbout the Company102-6Markets servedAbout the Company102-7Scale of the organizationAbout the Company102-8Information on employees and other workers
Employment Complianceand Rights Protection102-9Supply chain
Supply ChainManagement withIntelligence102-10
Significant changes to the organization andits supply chain
No significant changes102-11Precautionary Principle or approach
Trusted and Ethical
Business Operations102-12External initiatives
Trusted and Ethical
Business Operations102-13Membership of associations
Based on the materiality
assessment and is not
reflected in this ReportStrategy102-14Statement from senior decision-maker
Statement of the Board
of Directors Letter from
the ChairmanEthics andintegrity
102-16
Values, principles, standards, and norms ofbehavior
8.1, 8.3About the Company
Governance
102-18Governance structure
8.7
Corporate Governance
and Interactive
Communication Effective
Management with a Clear
Focus102-19Delegating authority
Corporate Governance
and Interactive
Communication Effective
Management with a Clear
Focus102-20
Executive-level responsibility for economic,environmental, and social topics
Statement of the Board
of Directors
Effective Management
with a Clear Focus102-28
Evaluating the highest governance body’sperformance
Social Responsibility
Performance OverviewStakeholderengagement
102-40List of stakeholder groups
Effective Management
with a Clear Focus102-41Collective bargaining agreements
Employment Compliance
and Rights Protection102-42Identifying and selecting stakeholders
Effective Management
with a Clear Focus102-43Approach to stakeholder engagement
Effective Management
with a Clear Focus102-44Key topics and concerns raised
Effective Management
with a Clear Focus
Issues
GRI Stan-dards
Disclosures
Guidelinesof SSE
Guidanceof theStateCouncil
The TenPrinciplesof the UNGlobalCompact
UN SDGs
Relevant section/paragraph
Reportingpractice
102-45
Entities included in the consolidated financialstatements
About this Report102-46Defining report content and topic boundariesAbout this Report102-47List of material topics
Effective Management
with a Clear Focus102-48Restatements of informationNot applicable102-49Changes in reportingNo changes102-50Reporting periodAbout this Report102-51Date of most recent report (If Applicable)About this Report102-52Reporting cycleAbout this Report102-53
Contact point for questions regarding thereport
About this Report102-54
Claims of reporting in accordance with theGRI Standards
About this Report102-55GRI content indexIndex102-56External assuranceContinuous improvementAnti-corruption
103-1
Explanation of the material topic and itsBoundary
8.2eightprinciple10
Effective Management
with a Clear Focus103-2
The management approach and itscomponents
Trusted and Ethical
Business Operations103-3Evaluation of the management approach
Trusted and Ethical
Business Operations205-3
Confirmed incidents of corruption andactions taken
Trusted and Ethical
Business OperationsAnti-competitiveBehavior
103-1
Explanation of the material topic and itsBoundary
Effective Management
with a Clear Focus103-2
The management approach and itscomponents
Trusted and Ethical
Business Operations103-3Evaluation of the management approach
Trusted and Ethical
Business Operations206-1
Legal actions for anti-competitive behavior,anti-trust, and monopoly practices
Trusted and Ethical
Business OperationsMaterials
103-1
Explanation of the material topic and itsBoundary
8.3, 8.6,
8.8, 8.9,
8.10, 8.11,
8.12
(Eleven)
Principle 7Principle 8Principle 9
Effective Management
with a Clear Focus103-2
The management approach and itscomponents
Innovative Green
Marketing103-3Evaluation of the management approach
Innovative Green
Marketing301-1Materials used by weight or volume
Innovative Green
Marketing
Energy
103-1
Explanation of the material topic and itsBoundary
SDG 7
Effective Management
with a Clear Focus103-2
The management approach and itscomponents
Green and Low Carbon
Operations103-3Evaluation of the management approach
Green and Low Carbon
Operations302-1Energy consumption within the organization
Green and Low Carbon
Operations302-4Reduction of energy consumption
Green and Low Carbon
OperationsWater andEffluents
103-1
Explanation of the material topic and itsBoundary
Effective Management
with a Clear Focus103-2
The management approach and itscomponents
Green and Low Carbon
Operations103-3Evaluation of the management approach
Green and Low Carbon
Operations303-2
Management of water discharge-relatedimpacts
Green and Low Carbon
Operations303-5Water consumption
Green and Low Carbon
Operations
2022 Environmental, Social and Governance ReportProsperity
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Disclosures
Guidelinesof SSE
Guidanceof theStateCouncil
The TenPrinciplesof the UNGlobalCompact
UN SDGs
Relevant section/paragraph
Emissions
103-1
Explanation of the material topic and itsBoundary
8.3, 8.6,
8.8, 8.9,
8.10, 8.11,
8.12
(Eleven)
Principle 7Principle 8Principle 9
SDG 13
Green and Low CarbonOperations103-2
The management approach and itscomponents
Green and Low CarbonOperations103-3Evaluation of the management approach
Green and Low CarbonOperations305-1Direct (Scope 1) GHG emissions
Green and Low CarbonOperations305-2Energy indirect (Scope 2) GHG emissions
Green and Low CarbonOperations305-4GHG emissions intensity
Green and Low CarbonOperations305-5Reduction of GHG emissions
Green and Low CarbonOperations
Waste
103-1
Explanation of the material topic and itsBoundary
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Green and Low CarbonOperations103-3Evaluation of the management approach
Green and Low CarbonOperations306-1
Waste generation and significant waste-related impacts
Green and Low CarbonOperations306-2
Management of significant waste-relatedimpacts
Green and Low CarbonOperationsEnvironmentalCompliance
103-1
Explanation of the material topic and itsBoundary
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Green and Low CarbonOperations103-3Evaluation of the management approach
Green and Low CarbonOperations307-1
Non-compliance with environmental lawsand regulations
Green and Low CarbonOperations
SupplierEnvironmentalAssessment
103-1
Explanation of the material topic and itsBoundary
SDG 17
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Comfortable Shoppingand Quality GuaranteeSupply ChainManagement withIntelligence103-3Evaluation of the management approach
Comfortable Shoppingand Quality GuaranteeSupply ChainManagement withIntelligence308-1
New suppliers that were screened usingenvironmental criteria
Comfortable Shoppingand Quality GuaranteeSupply ChainManagement withIntelligence
Issues
GRI Stan-dards
Disclosures
Guidelinesof SSE
Guidanceof theStateCouncil
The TenPrinciplesof the UNGlobalCompact
UN SDGs
Relevant section/paragraph
Employment
103-1
Explanation of the material topic and itsBoundary
8.3, 8.6,
8.13, 8.14,
8.15
(Fourteen)SDG 8
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Employment Complianceand Rights Protection103-3Evaluation of the management approach
Employment Complianceand Rights Protection401-2
Benefits provided to full-time employees thatare not provided to temporary or part-timeemployees
Employment Complianceand Rights Protection
OccupationalHealth andSafety
103-1
Explanation of the material topic and itsBoundary
SDG 3
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Operation Safety andHealth Protection103-3Evaluation of the management approach
Operation Safety andHealth Protection403-1
Occupational health and safety managementsystem
Operation Safety andHealth Protection403-2
Hazard identification, risk assessment, andincident investigation
Operation Safety andHealth Protection403-5
Worker training on occupational health andsafety
Operation Safety andHealth Protection403-6Promotion of worker health
Operation Safety andHealth Protection403-7
Prevention and mitigation of occupationalhealth and safety impacts directly linked bybusiness relationships
Operation Safety andHealth Protection403-9Work-related injuries
Operation Safety andHealth Protection403-10Work-related ill health
Operation Safety andHealth ProtectionTraining andEducation
103-1
Explanation of the material topic and itsBoundary
SDG 4
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Talent Growth andRetention103-3Evaluation of the management approach
Talent Growth andRetention404-1
Average hours of training per year peremployee
Talent Growth andRetentionDiversityand EqualOpportunity
103-1
Explanation of the material topic and itsBoundary
Principle 1Principle 2Principle 6
SDG 5SDG 10SDG 16
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Employment Complianceand Rights Protection103-3Evaluation of the management approach
Employment Complianceand Rights Protection405-1
Diversity of governance bodies andemployees
Employment Complianceand Rights ProtectionChild Labour
103-1
Explanation of the material topic and itsBoundary
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Employment Complianceand Rights Protection103-3Evaluation of the management approach
Employment Complianceand Rights Protection408-1
operations and suppliers at significant risk forincidents of child labour
Employment Complianceand Rights ProtectionForced orCompulsoryLabour
103-1
Explanation of the material topic and itsBoundary
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Employment Complianceand Rights Protection103-3Evaluation of the management approach
Employment Complianceand Rights Protection409-1
Operations and suppliers at significant riskfor incidents of forced or compulsory labour
Employment Complianceand Rights Protection
2022 Environmental, Social and Governance ReportProsperity
Issues
GRI Stan-dards
Disclosures
Guidelinesof SSE
Guidanceof theStateCouncil
The TenPrinciplesof the UNGlobalCompact
UN SDGs
Relevant section/paragraph
LocalCommunities
103-1
Explanation of the material topic and itsBoundary
8.4
SDG 1SDG 2SDG 11
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Devotion to Charity andSociety103-3Evaluation of the management approach
Devotion to Charity andSociety413-1
Operations with local communityengagement, impact assessments, anddevelopment programs
Devotion to Charity andSocietySupplier SocialAssessment
103-1
Explanation of the material topic and itsBoundary
SDG 17
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Comfortable Shoppingand Quality Guarantee103-3Evaluation of the management approach
Comfortable Shoppingand Quality Guarantee414-1
New suppliers that were screened usingsocial criteria
Comfortable Shoppingand Quality Guarantee
Customer Healthand Safety
103-1
Explanation of the material topic and itsBoundary
(Ten)SDG 12
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Excellent Service, HighSatisfactionOutstandingAchievements inService InnovationComfortable Shoppingand Quality Guarantee103-3Evaluation of the management approach
Excellent Service, HighSatisfactionOutstandingAchievements inService InnovationComfortable Shoppingand Quality Guarantee416-1
Assessment of the health and safety impactsof product and service categories
Excellent Service, HighSatisfactionOutstandingAchievements inService InnovationComfortable Shoppingand Quality Guarantee
Marketing andLabeling
103-1
Explanation of the material topic and itsBoundary
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Trusted and EthicalBusiness OperationsComfortable Shoppingand Quality Guarantee103-3Evaluation of the management approach
Trusted and EthicalBusiness OperationsComfortable Shoppingand Quality Guarantee417-1
Requirements for product and serviceinformation and labeling
Trusted and EthicalBusiness OperationsComfortable Shoppingand Quality GuaranteeCustomerPrivacy
103-1
Explanation of the material topic and itsBoundary
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Trusted and EthicalBusiness Operations103-3Evaluation of the management approach
Trusted and EthicalBusiness OperationsSocioeconomicCompliance
103-1
Explanation of the material topic and itsBoundary
Effective Managementwith a Clear Focus103-2
The management approach and itscomponents
Trusted and EthicalBusiness Operations103-3Evaluation of the management approach
Trusted and EthicalBusiness Operations
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□Principles of Governance □Prosperity □People □Planet□Topic 1 The Grand Opening of Haikou International Duty-Free Shopping Complex Marks a New Milestone in the Development of Hainan’sOffshore Duty-Free Industry□Topic 2 Adapting to Changes and Demonstrating Our Operational Resilience
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