2022Meihua Holding Group Co., Ltd.Environmental, Social and
Governance Report
SSE 180 Index Constituent
Contents
ESG Statement of the Board of DirectorsESG ManagementStakeholder EngagementBusiness Ethics and Anti-corruption
ESG Governance
About the ReportChairman’s Message
GRI IndexReader’s Feedback
Quality Management and ControlWork SafetyR&D and InnovationCustomer Service
Leading Product
About Us06
Signi?cant Recognitions in 2022Our Sustainable Development StrategyESG Performance in 2022
Human Rights ProtectionEmployee IncentivesDevelopment Training
Co-developmentwith Employees
Environmental ManagementWater Resources ManagementWaste ManagementRecycling of Packaging Materials
Green Factory
GovernanceStrategyRisk ManagementMetrics and Targets
AddressingClimate Change
Sustainable Supply Chain ManagementCommunity Engagement
Win-win Cooperation
This is the ?rst environmental, social and governance report released to the public by Meihua Holding Group Co., Ltd. It is afaithful description of the Company’s operational, social, and environmental practices and performance in 2022 underpinnedby the principles of objectivity, standardization, transparency, and comprehensiveness. It aims for e?ective communicationwith stakeholders and systematic responses to their expectations and requirements.
Boundary
Period Covered
Sources of Data
Cycle
Preparation Basis
Notes on ReferencesAccess
This report covers the headquarters and all subsidiariesof Meihua Holding Group Co., Ltd. unless otherwise speci-?edKey ?nancial data in this report are cited from the audit-ed Annual Report 2022 of Meihua Holding Group Co., Ltd.Other data are cited from the Company’s internal docu-ments and relevant statistics.
From January 1, 2022, to December 31, 2022. Part of thereport appropriately traces back to historical data.
This report is prepared in accordance with the Notice of theShanghai Stock Exchange on Strengthening Listed Com-panies’Assumption of Social Responsibility and Issuingthe Guidelines on Listed Companies’ Environmental Infor-mation Disclosure on the Shanghai Stock Exchange. It alsorefers to the IFRS S1 General Requirements for Disclosureof Sustainability-related Financial Information (ExposureDraft) and the IFRS S2 Climate-related Disclosures (ExposureDraft) published by the International Sustainability Stand-ards Board (ISSB). The information cited in this report’sindex was reported from January 1, 2022, to December 31,2022, in accordance with the Global Reporting Initiative (GRI)Standards.
In this report, for the convenience of expression and read-ing, Meihua Holding Group Co., Ltd. is referred to as“Mei-hua Group,”“Company,”and“we/us,”and its threesubsidiaries, Tongliao Meihua Biological Technology Co.,Ltd., Xinjiang Meihua Amino Acid Co., Ltd., and Jilin MeihuaAmino Acid Co., Ltd., as the“Tongliao Base,”the“XinjiangBase,”and the“Jilin Base,”respectively.“Yuan”is theunit of CNY unless otherwise speci?ed.
This report is an annual report.
The report is released in both print and online versions.The online version in Chinese and English is available tobe browsed and downloaded on the following websites:
The o?cial website of Meihua Group (www.meihuagrp.com);The website of the Shanghai Stock Exchange (www.sse.com.cn).For any questions or suggestions, please send an e-mailto mhzqb@meihuagrp.com or call +86 0316-2359652.
About the Report
Chairman's Message
Meihua Group has transformed from a start-up in the mon-osodium glutamate (MSG) industry with a base in Hebei to aglobal leader in amino acid nutrition and health solutions,from a single product structure to a comprehensive and di-versi?ed industrial presence. The spectacularly high-speeddevelopment has demonstrated the company's great pro-gress in the past twenty years. To respond to the changes inthe market pattern along the way, we have carried forwardthe spirit of "being indignant and innovative" and "makingtrailblazing efforts with perseverance" to stay committedto development and seek innovation and changes. We arededicated to our goal and original aspiration of building acentury-old brand.We hope to establish a clear and science-based path ofsustainable development with insight into the industry'strends. This was our original goal in publishing this ESGreport. Only by looking back can we see where we started,and only by looking forward can we know where the roadwill take us.We are focusing on biotechnology in order to create abetter future. Our path to sustainable development be-gins with synthetic biotechnology. We are pragmatic andalways driven by innovation in the face of increasing in-dustry competition. We are proactively looking for newgrowth drivers, such as expanding our footprint into thegeneral area of amino acids and pursuing leapfrog devel-opment in the area of new biotechnology. We invested829 million yuan in research and development (R&D)and maintained an R&D workforce of 304 people in 2022.Furthermore, we established a production technologyresearch institute to conduct in-depth research on pro-
cesses and technology for the entire industry chain, withthe goal of increasing energy efficiency and loweringresource consumption. We use innovation to advance thecircular economy, benefit China's agriculture, and blaze anew path to develop biotechnology.In order to pursue high-quality development, we bolster ourcomparative advantages. We are industry leaders in termsof product quality, operational support abilities, and man-ufacturing capabilities. We improved our quality manage-ment program in 2022 and actively encouraged the adop-tion of a multi-level quality management program. With thehelp of science-based management techniques, we haveenhanced each quality inspection stage and given speci?cpositions and quality responsibilities. Additionally, we haveincreased the supplier admission threshold, tightened theidentification of raw material risks, and accomplished themanagement objectives of fully traceable and controllablesources of materials.We have fully supported the state’s strategic goals of car-bon peaking and carbon neutrality over the last year. Weidentified and analyzed climate change-related risks andestablished medium- and long-term greenhouse gas (GHG)emission targets under a commitment to researching andpromoting low-carbon operations in our manufacturing andoperations. At the same time, we put the concept of greendevelopment into practice. We vigorously progressed wastemanagement, pollution prevention, and water and pack-aging material recycling. We fulfilled our environmentalresponsibilities as corporate citizens and created a greenbrand in every way.
Chairman of Meihua Holding Group Co., Ltd.
March 2023
I am fully aware that the Company's growth is dependenton the tireless struggle and hard work of all employees.They enable the company to excel in its social responsibil-ity. I always believe that only by providing employees witha broad development vision, a vast development platform,and a work-life balance will we be able to achieve a brighterfuture for both employees and the company. We believe in“associating by honesty; improving by attitude; thriving byintegrity; and lasting by unity and harmony.” We adequate-ly protect employees’rights and interests and address theirconcerns and problems with the utmost care, guided by theMeihua spirit.As a responsible business, Meihua Group is always mindfulof its mission to give back to society and assist the under-privileged while improving economic benefits. We careabout the people and give back to society. We have gath-ered internal and external resources to form the Tibet Mei-hua Public Welfare Foundation. We are constantly workingon rural revitalization, charity donations, community build-ing, and COVID-19 prevention. Meihua Group donated 4.32million yuan to public welfare in 2022, which people fromall walks of life acknowledged.I'd like to express my heartfelt appreciation to all of ourpartners, shareholders, managers, and employees fortheir faith, understanding, and support. Meihua Group willcontinue its e?orts in the great cause of amino acids in thefuture. We will work together with all stakeholders to ful?llsocial responsibility while adhering to the circular economyand sustainable development. We will rise to challengesand strive for success and accomplishments in the currenttrend.
In the future, Meihua Group will continue itse?orts in developing the great cause of aminoacids and join hands with stakeholders to ful-?ll social responsibility. We will adhere to thecircular economy and sustainable develop-ment, rise to challenges, and strive for successand more splendid glory in the trend of thetimes.
Wang Aijun
0405Environmental, Social and Governance Report 2022
Meihua Group is a full-chain synthetic biology company main-ly engaged in amino acid products. Its core competence coversall segments from strain design, construction, fermentation,separation, and extraction, to products. Through 20 years ofsurpass and innovation, the Company stands at the forefrontof the industry in the integration of research, production,and sales, and is one of the world’s largest amino acid man-ufacturers. It boasts the industry’s most advanced integratedproduction line for comprehensive utilization of resources.Meihua Group has three production bases in Inner Mongolia’sTongliao, Xinjiang’s Wujiaqu, and Jilin’s Baicheng, and twoR&D centers in Langfang and Shanghai.
We leverage synthetic biotechnology and give full play toour experience and advantages in industrialization. With acomprehensive array of research, production, supply, andsales services, we adaptably address the diverse needs ofworldwide customers and their pursuit of rapid innovation.We are committed to becoming a global leader in syntheticbiology. In 2022, our operating income reached 27.937 bil-lion yuan with a net pro?t of 4.406 billion yuan. Our featureproducts are as follows.
About Us
Our Persistence：
We insist on customer-centricityWe insist on integrityThe organic combination of corporatedevelopment and personal interests
Market-oriented service awareness and the awareness
of internal-external and upstream-downstream
Adhering to a holistic perspectivefor the long termWe insist on creating and sharing
Our Focus：
Pursue sustained pro?tability growth in-stead of blind capacity expansionAn industry leader with the strongest corecompetitiveness
Focus on the high-quality growth of themain business and become a leader insynthetic biology
Our Driving Forces：
Rely on the core competitiveness built withtechnology and management instead of alarge scale, single element, low costs, orindividual experience
Leading technology and leadingmanagement
Lysine, threonine,tryptophane, feed-grade valine, resi-due of MSG, starchbyproduct-basedfeed ?ber, corngerms, microbialprotein, etc.
Amino acidproducts foranimal nutrition
MSG, disodium 5'-ri-bonucleotide, glu-tamate acid, mono-sodium glutamate,disodium inosinate,food-grade xanthangum, trehalose, na-tamycin, etc.
Taste optimiza-tion productsafor food
Glutamine, proline,leucine, isoleucine,pharmaceutical-gradevaline, inosine,guanosine, adenosine,pullulan, Vitamin B2,etc.
Pharmaceuticalamino acids forhuman
Xanthan gum, tre-halose, pullulan, oildrilling grade xan-than gum, etc.
Colloidalpolysaccharide
Bioorganicfertilizers, etc.
Other products
Signi?cant Recognitions in 2022
China National LightIndustry Council
Top 100 Science ＆Technology Enter-prises in China LightIndustry
Top 200 Enterpris-es in China LightIndustryChina National LightIndustry Council
Top 10 Enterprisesin China Fermen-tation IndustryChina National LightIndustry Council
China National LightIndustry CouncilTop 50 Enterprises inChina Food Industry
Leading Enterprise in Energy Conser-vation and Environmental Protectionin the Chinese Biotech FermentationIndustryChina Biotech FermentationIndustry Association (CBFIA)
High and New Technol-ogy EnterpriseFollowing the Xinjiang Base and theTongliao Base, Jilin Meihua passed theHigh and New Technology Enterprisecerti?cation in December 2021
Become a globalleader in syntheticbiologyDevelop recycling economy, bene?t ChineseagricultureOur Mission
Associating by honesty; improving by attitude;thriving by integrity; lasting by unity and harmonyOur Core Values
Committed to becoming a leading enterprisein synthetic biology
Our Strategic Goal
Focusing on biotechnology, building and shar-ing better future
Our Vision
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Environmental, Social and Governance Report 2022
Our Sustainable Development Strategy
We have combined ESG into our vision of“focusing on biotechnology, building and sharing better future”. We analyze theexternal environment and context, sectoral needs, peer benchmarking, stakeholders’ appeals, and the Company’s strategicdevelopment needs to gain insight into four strategic aspects: the focus, the goals, the path, and the needs. Based on our ?nd-ings and the United Nations Sustainable Development Goals (SDGs), we have developed our ESG strategy of GROWTH.The GROWTH strategy aims for“developing synthetic biotechnology, nourishing people and the environment, and making aharmonious future” and relies on four pillars: Green, Responsible, Low-carbon, and Healthy. It is fully integrated with all sus-tainable development topics that the Company’s stakeholders and the society are concerned about.
Based on the sustainable development pillars of Green, Responsible, Low-carbon, and Healthy, we have developed a speci?csustainable development action plan. We will set measurable sustainable development goals and continue to steadily ad-vance the Company’s sustainable development undertakings under our ESG governance system.
We draw the resources we need from the nature. By developing synthetic biotechnology, we produce a varietyof amino acid products to ensure people’s healthy life and promote human’s sustainable development. Wehope that everyone will care more about the environment, improve the environment, and achieve harmoniousco-existence.
Our Sustainable Development Goal
Synthetic biotechnology is the starting point of Meihua Group and our sustainable development actions. Thecause of sustainable development requires the joint e?orts of stakeholders. In the process, we hope to conveythe concept of sustainable development to everyone.
On the road to a harmonious future between human beings and the environment, we need to carry out specif-ic and e?ective actions to ensure the realization of Meihua Group’s ultimate goal:
The Green action route is our principle, which ensures that we minimize our impact on the natural environ-ment and is the foundation of our development.The Responsible action route is our foundation, which ensures that the trust between us and stakeholderscontinues to go deeper and is the premise for us to work together.The Low-carbon action route is our direction, which ensures that we stay calm in the face of climate change,our most prominent risk, and is the guarantee for us to clear the obstacles in the future.The Healthy action route is our main battle?eld, which ensures that we can maximize the in?uence of the Mei-hua Group and is the core of our sustainable development for human.We take internal and external perspectives. Internally, we aim higher to the best of our ability. Externally, weextend the value chain and promote the sustainable development of the industry and society through collabo-ration to achieve the best action results.
Our Sustainable Development Pillars
Our Sustainable Development Foundation
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Environmental, Social and Governance Report 2022
Proportion of employees that receivedtraining
98.28
%
Total training hours of employee
1,969,451hours
Overall employee satisfaction score
3.5
Proportion of women amongsenior executives
%
Coverage of human rightsassessments for employees
75.5
%
Average training hours per employee
151.31
hours
Donated to public welfare4,320,323yuan
%
products made of rawmaterials that can be traced back tothe place of origin
suppliers having gone throughESG assessments
1,744
hoursspent in participating in communitycharity campaigns such as students’ aid and environ-mental protection
After two years of weight reduction e?orts, the weight ofpackaging materials was reduced by an average of
metric tons per year, and an average of
metric tons of materials were recycled every year
Achieving full coverage of the ISO14001 system certi?cation, with acerti?cation rate of
%
The closed-loop recycled utiliza-tion rate of some water resourcesbeing over
%The Tongliao Base achieved
%comprehensive utilization of amino acidactivated carbon
The MSG workshop and re?ning workshop of the TongliaoBase reduced water consumption per unit by
% and
% respectively
A development strategy set for addressingclimate change and reducing greenhousegas emissions from 2020 to 2025
Leading the setting of the organization standardRequire-ments for greenhouse gases emission accounting andreporting Biotech fermentation manufacturing enterprisesproposed by CBFIA
% of the production
Products’ ex-factory pass rate
%
Allhazardous chemicals havebeen ?led for managementR&D investment
million yuan
Work-related employeefatality
Customer satisfaction
94.27
%
Authorized invention patents
Newly-?led patent applications
bases have passed the ISO9001 quality managementsystem and ISO 22000 foodsafety management systemcerti?cations
ESG Governance
Leading Product
Co-development with Employees
Addressing Climate Change
Green Factories
Win-win Cooperation
Litigation case involving corruptionconcluded
suppliers engaged in climate actionRenewable energy consumption43,731,262
kWh
The total weight of packaging materials is expected tobe reduced by
metric tons by the end of 2023
ESG Performance in 2022
Human rights violation
Business ethics and anti-corruptionincident reported
1011Environmental, Social and Governance Report 2022
StakeholderEngagement
As part of our goal to become a world-leading amino acid enterprise, we proactively incorporateESG into the Company’s development strategy. We strive to achieve economic, social, and en-vironmental sustainability in growing our business. We continuously optimize and improve ourESG management system and pay attention to stakeholders’ opinions and needs. We are dedi-cated to mitigating the environmental and social impact of our bio-fermentation and bio-phar-maceutical business while advancing the long-term sustainable development of the Company.
ESG Statement of the Board of Directors
Board of Directors, Meihua Holding Group Co., Ltd.
As the highest decision-making body of ESG,the Strategic Development Committee ofthe Board of Directors bears the ultimate re-sponsibility for Meihua Group’s ESG strategiesand disclosure. The Strategic DevelopmentCommittee oversees and reviews the Com-pany’s sustainable development progress andoffers recommendations. To ensure the exe-cution and implementation of day-to-day ESGmanagement, the Company has establishedan ESG Leadership Group. Authorized by theStrategic Development Committee of theBoard of Directors, the ESG Leadership Groupprogresses the Company’s ESG undertakingsas a whole and regularly reports to the Boardof Directors. Moreover, the Company hasestablished a Sustainable Development Office.As a department dedicated to the managementof ESG a?airs, it communicates between and co-ordinates functional departments and facilitatesthe steady execution of ESG undertakings.We prioritize determining material ESG topicsand the communication and exchanges of ideaswith stakeholders. We regularly identify and as-sess material ESG topics, and discuss and review
the results at the Strategy Committee of theBoard of Directors to determine the ESG materi-ality matrix for the year.In 2022, we actively responded to the state’sgoals of carbon peaking and carbon neutralityby establishing a governance structure to ad-dress climate change and set a climate riskmanagement and control process. Based on oursituation, we identified and assessed the keyclimate-related risks of Meihua Group, and de-veloped corresponding management objectivesand countermeasures.This report discloses in detail and truthfully theprogress and effects of Meihua Group’s ESG ef-forts in 2022, and was deliberated and adoptedby the Board of Directors on March 6, 2023.
Meihua Group’s Board of Directors war-rants that the Company and its Boardof Directors continuously improves theCompany’s Environmental, Social andCorporate Governance (ESG) manage-ment system in accordance with the ChinaSecurities Regulatory Commission’s Codeof Corporate Governance of Listed Compa-nies and the SSE’s mandates. The Boardof Directors will devote greater attentionto overseeing and engaging in the Compa-ny’s ESG affairs and proactively integrateESG into the Company’s development strat-egy, major decisions, and production opera-tions.
1415Environmental, Social and Governance Report 2022ESG GovernanceLeading ProductCo-development
with Employees
AddressingClimate Change
Green FactoryWin-win Cooperation
ESG ManagementWe insist on corporate governance compliance and e?cien-cy, continuously raise the Company’s value and responsi-bility, and protect shareholders’interests and rights. Westrictly abide bythe Company Law of the People’s Republicof China,the Securities Law of the People’s Republic of Chi-na,the Code of Corporate Governance of Listed Companies,and other applicable laws and regulations. We have developedthe General Meeting of Stockholders Rules of Procedure,theBoard of Directors Rules of Procedure,the Board of Super-visors Rules of Procedure, andthe Independent DirectorWorking System. These internal systems define the roles,
responsibilities, and work procedures of the General Meet-ing of Shareholders, the Board of Directors, the Board ofSupervisors, and management members. They improve theoperational e?ciency of the Board of Directors and ensurethat investors have equal access to corporate information.During the reporting period, we held one General Meetingof Shareholders, eight meetings of the Board of Directors,and ?ve meetings of the Board of Supervisors.To further improve the Company’s ESG management effi-ciency and practically implement and progress the Com-Meihua Group’s ESG management structureBoard of DirectorsGovernance Layer
Audit Committee
NominationCommittee
Remunerationand AppraisalCommittee
StrategyCommittee
Management and Executive Level
ESG Leadership GroupAuthorizing
AuthorizingCoordinating
Reporting
Communicating
Sustainable Development O?ceBase Company’s ESGLeadership GroupHSEManage-mentDepart-ment
Produc-tion Tech-nologyResearchInstitute
HumanRe-sourcesDepart-mentSecuritiesDepart-ment
GeneralMan-ager’sO?ce
QualityDepart-
ment
Sales Compa-nies
Oper-ationDepart-mentProcure-mentDepart-ment
LogisticsDepartment
IT Man-agementDepart-ment
R&DCompa-
nies
Engi-neeringDepart-
ment
Admin-istrationDepart-ment
AuditDepart-ment
ManagementO?ce of theBusinessDepartment
FinanceDepart-ment
TongliaoCompany
JilinCompanyXinjiangCompany
Board of Supervisors
Headquarters’ESGLeadership Group
Levels of the ESG management structure
pany’s ESG strategies, we have developedthe Environmental,Social and Governance (ESG) Management Measures of Mei-hua Holding Group Co., Ltd. This policy is designed to build ane?cient ESG management system with a complete organiza-tional structure, a clear hierarchy, and well-de?ned rights andresponsibilities. To integrate ESG management into the Com-pany’s business management and improve ESG managementat the source, the Company’s ESG management structure isa two-tier management structure consisting of the StrategicCommittee of the Board of Directors and the ESG LeadershipGroup, including the ESG Leadership Group of the Compa-ny’s headquarters and production sites. Additionally, wehave established the Sustainable Development O?ce whichserves as a dedicated department for ESG management. Inthe same year, we releasedthe ESG Indicator ManagementSystem of Meihua Holding Group Co., Ltd., summarizing the
key details of the Company’s ESG management, supportingthe Company’s continued development of ESG manage-ment.The Company’s ESG management framework provides man-agement support to further improve our ESG e?ectiveness.Meanwhile, based on the Company’s ESG strategy, we havebroken down the Company’s ESG action goals and contentand developedthe Environmental, Social and Governance(ESG) Management Improvement Plan of Meihua HoldingGroup Co., Ltd. (2022-2025). The plan is designed to com-prehensively standardize the guiding philosophy, basicprinciples, and advancement approaches for the Compa-ny’s ESG purposes and facilitate system and process-basedmanagement of ESG matters.
It is the highest body and decision-maker for the Company’s ESG matters.Its main responsibilities include investigating and reviewing the Company’s en-vironmental, social and corporate governance work and raising suggestions andopinions.
It is the executive level for the Company’s ESG matters. It is led by the Company’s Gener-al Manager and composed of relevant departments’ heads and production bases’generalmanagers and ESG coordinators.Its main responsibilities include advancing the Company’s overall ESG a?airs; coordinat-ing the annual ESG work plan; guiding, overseeing, and coordinating internal and exter-nal ESG resources; and reporting regularly to the Board of Directors with suggestions.
It is a dedicated department for managing the Company’s ESG a?airs and a permanentliaison and coordination body for the Company’s ESG works.Its main responsibilities include organizing the Company’s day-to-day ESG managementtasks, communicating with and coordinating functional departments, and ensuring thesteady progress of ESG works.
Strategy Committee of the Board of Directors
ESG Leadership Group
Sustainable Development O?ce
1617Environmental, Social and Governance Report 2022ESG GovernanceLeading ProductCo-development
with Employees
AddressingClimate Change
Green FactoryWin-win Cooperation
Stakeholder Engagement
Through constructive stakeholder engagement, a company can ensure its ESG works meet the needs of the actual develop-ments. As a result of paying close attention to stakeholders’ needs and suggestions, improving the diversi?ed dialogue mech-anism, and accepting their supervision, we have been able to achieve sustainable, high-quality, and high-standard develop-ment. Through online and o?ine channels, we communicate with stakeholders and listen to their demands and expectationsto accurately assess the impact of our decisions and promptly adjust our strategic focus.
StakeholderExpectations and requirementsCommunication means and responses
Governments andregulators
Observing the law and paying taxes ac-
cording to the law Supporting social sustainability
Compliance management Paying taxes Proactively implementing national policies
Shareholders andinvestors
Returns and growth Risk control Corporate governance
Regular disclosure of business information General Meetings, reports, and announcements Proactively rewarding shareholders
Employees
Wages and bene?ts, security Health and safety Unblocked communicationEqual promotion and development
opportunities
Paying wages and social security on timeEstablishing an occupational health and safety
management system Improving career development channels Organizing employee training
Customers
High-quality products Satisfactory customer experience Protection of legal rights and interests
Need/satisfaction surveys Customer complaint handling Annual reviews and evaluation
Suppliers,contractors,and partners
Faithfulness in business Industry cooperation Open, fair, and impartial procurement
Performing contracts according to the law Open tendering Project-based collaboration Driving the healthy development of the industry
Media
Economic performance Pollutant discharge
Media inspection to projects
Communities andthe public
Support for social development Care for vulnerable groups Healthy cultureEnergy conservation and emission
reduction
Public welfare and charity Green production Green buildings and materials
In 2022, we carried out our ?rst systematic communication with stakeholders to betterunderstand their concerns, expectations, and demands for the Company’s sustainabledevelopment. Through peer benchmarking and media monitoring, we identi?ed severalmaterial topics and collected internal and external information through questionnairesurveys and stakeholder research. Based on the survey results and considering theimportance of each topic to business development, we comprehensively assessed andprioritized the topics and determined the focus of the Company’s internal and externalESG management in the future.In this survey, we collected 1,110 questionnaires. Based on stakeholders’ concerns, ex-pectations, and demands for the Company’s ESG works, we identi?ed and evaluated 29high-importance, 25 medium-importance, and 5 low-importance material topics of theyear. Based on the survey results, we will adjust our ESG focus promptly and continu-ously improve our ESG performance to meet stakeholders’expectations and respond topotential risks. This form of stakeholder engagement will also be held regularly.
1Work safety2Human rights protection
Employee promotion anddevelopment
Customer communicationand complaints
Business compliance andstability
Comprehensive risk man-agement7Waste management
Water conservation initia-tives
Talent attraction and mo-tivation
Dangerous goods/chemi-cal management11Employee satisfaction
Protection of intellectualproperty rights13Contractors’ work safety14Product quality training15Patent management
Occupational health andsafety17Product inspection18Employee training19R&D and innovation20Customer satisfaction21Customer privacy22Anti-corruption23Product quality and safety24Information security
Supplier quality manage-ment
Engaging in setting indus-try quality standards27Business ethics28Pollutant management
Sustainable raw materialprocurement
Topics of high importance
Meihua Group’s matrix of ESG materiality for 2022
Governance topicsEnvironmental topicsSocial topics
Importance to Meihua Group
Importance to stakeholders
High-importance material topicsMedium-importance material topics
Low-importance material topics
Work safetyTalent attractionand motivationOccupationalhealth and safetyProduct quality and safety
Customer communicationand complaintsContractors’work safetyCustomer satisfactionBusiness ethicsComprehensive riskmanagement
Product quality training
Pollutant managementCustomer privacyWaste managementSustainable raw material procurementSustainable supply chain managementWater resources risks
Water resourcesGreen packagingmaterialsSupplier quality trainingSupply chainESG risk managementStakeholders communication
Carbon emissionreduction targetsLow carbon-relatedexternal initiativeClimate changegovernanceClimate changegovernanceProduct carbonfootprintESG riskmanagement
Improvement of employees’ ESG awarenessBiodiversity conservationTransgenic productsDiversity of theBoard of DirectorsESG participation of theBoard of DirectorsEmployee volunteer managementCompliance disclosure
Construction ofenvironmentalmanagement systemSocial welfare
Supplier empowermentRenewableenergy useLow-carbon operationGreen procurementProduct recallWater conservation initiatives
Anti-corruptionPatentmanagementAnti-moneylaunderingFair competitionTransparentprocurement
Information securityHuman rightsprotectionProduct inspectionDangerousgoods/chemicalmanagementEmployeesatisfactionSupplier quality managementProtection of intellectual property rights
R&D and innovation
Employee trainingEngaging in setting industryquality standardsBusiness compliance and stability
Employeepromotion anddevelopment
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Environmental, Social and Governance Report 2022ESG GovernanceLeading ProductCo-development
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AddressingClimate Change
Green FactoryWin-win Cooperation
Business Ethics and Anti-corruption
The Business Ethics and Anti-corruption Management System
We are committed to creating a positive culture of honesty and integrity. With a philosophy that emphasizes virtue in corpo-rate governance and training. We have developed stringent codes of business ethics and internal supervision and handlingprocedures, improved our compliance performance, and steadily improved our corporate business ethics and anti-corruptionmanagement.
We protect our rights and interests in strict accordance with
the Criminal Law of the People’s Republic of China, the An-ti-Unfair Competition Law of the People’s Republic of China,theCompany Law of the People’s Republic of China, andother applicable laws and regulations. We have establisheda sound anti-corruption governance structure, with specialcommittees of the Board of Directors or the senior manage-ment supervising anti-corruption, the Audit Departmentmanaging anti-corruption a?airs, and business departmentsimplementing anti-corruption tasks. We have developedtheAnti-corruption Management Measures of Meihua HoldingGroup Co., Ltd. This policy de?nes integrity and law-abidingconducts for all employees of the headquarters, produc-tion bases, and subsidiaries, and sets out anti-corruptionmanagement measures, prevention mechanisms, whistle-blowing channels, and investigation procedures. As a result,business ethics and anti-corruption can be implemented inevery aspect.The terms“business ethics”and“anti-corruption”and their
manifestations, such as“bribing state functionaries,”“accept-ing property from third parties in violation of the law,”“usingpower to seek bene?ts for relatives or people with particularrelationships,”and“infringing upon or disclosing trade se-crets”are well de?ned. We have established a comprehensiveanti-corruption and internal control mechanism. At the busi-ness level, we identify and assess corruption risks and conductregular anti-corruption audits for high-risk businesses to re-duce the possibility of corruption incidents.Employees who violate anti-corruption rules and regulationswill be subjected to corresponding internal financial andadministrative disciplinary punishments, and those who aresuspected of violating the law will be turned over to the judi-cial authorities. In 2022, we prevented and controlled briberyand other unfair business practices, and the Company was notinvolved in any corruption-related lawsuits.
Whistleblower ProtectionWe have developedthe Whistleblowing and WhistleblowerProtection Management System of Meihua Holding GroupCo., Ltd. This policy sets out whistleblowing channels, han-dling procedures, and whistleblower protection measures,with the intention of protecting stakeholders’ whistleblow-ing rights. Whistleblowers may report any violation of thepolicy to the Audit Department with evidence in the formof written materials, emails, and telephone calls, but suchevidence must not be fabricated or framed. We have estab-lished a sound internal investigation mechanism. We willinitiate a comprehensive investigation of the reported mat-
ters, take corresponding punishment and control measures,and publicize the results.We uphold the legitimate rights and interests of whistleblow-ers and their family members by defending their personal,property, reputational, and other rights. In addition, we com-mend and reward those who submit valuable information.Those who violated a whistleblower’s rights and interests willbe held accountable or turned over to the judicial authorities.In 2022, the Company was not involved in any business ethicsor anti-corruption whistleblowing incidents.
2021Environmental, Social and Governance Report 2022ESG GovernanceLeading ProductCo-development
with Employees
AddressingClimate Change
Green FactoryWin-win Cooperation
Leading Product
As a global leader in providing amino acid nutrition and health solutions, we are
gnirahs dna gnidliub ,ygolonhcetoib no gnisucof"fo noisiv eht ot dettimmocbetter future" . We contribute to the global food health industry by providinghealth products and solutions in more than 100 countries and regions. We extendthroughout the industrial chain of the deep processing of agricultural productsand utilize biological fermentation technology. We continuously optimize ourindustrial structure and layout and improve our product lifecycle management.We strengthen the assurance of product quality and safety, enhance our productR&D and innovation capabilities, and put e?orts into providing high-quality prod-ucts for customers.
Quality Managementand Control
Customer Service24R&D and Innovation32Work Safety
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Quality Management and Control
The Quality Management System
One of the fundamental components of a business, a key factor in customer trust, and a necessity for a company’s survival isquality. We adhere to process management and control over quality, improve our comprehensive ability and performance ofquality management in every aspect, and promote a quality culture to make safer and more reliable high-quality products.
We have established a sound quality management system anda multi-level governance structure, with the Company’s GeneralManager responsible for reviews and oversight; the ProductionTechnology Research Institute responsible for coordination;the Quality Department responsible for e?cient collaboration;and the Technical Management O?ce of each production baseresponsible for implementation. We set precise and explicitproduct quality targets and revise them annually to meet theCompany’s commitment to product quality. In addition, wecontinuously carry out quality control and improvement.
We strictly abide by theProduct Quality Law of the People’sRepublic of China, the Food Safety Law of the People’s Repub-lic of China, the Regulation on the Administration of Feeds andFeed Additives, and other applicable laws and regulations.Based on national standards in relation to our products, theGB/T 19001 Quality Management Systems-Requirements, theISO 22000 Food Safety Management System, and the BRCGSGlobal Standard for Food Safety, we have developedthe Prod-uct Quality Standards, the Product Testing Guidelines, and theIntegrated Quality Management Manual. These internal sys-tems regulate the standardization of processes and the manage-ment of quality. We continuously work on quality certi?cation. Allof our production bases have passed the ISO 9001 Quality Man-agement System and the ISO 22000 Food Safety ManagementSystem certi?cations.
Product quality certi?cations obtained by Meihua Group:
Non-GMO Identity Preservation (IP)
The BRC Food Safety Management
System
The ISO 22000 Food Safety Manage-
ment SystemThe ISO 9001 Quality Management
System
The Feed Additive and PremixtureSystem (FAMI-QS) of the EUThe MUI Halal Certi?cate of IndonesiaHalal certi?cations of the U.S., Malay-
sia, and other countries
In addition to strict self-quality control, we aspire to be partof the industry’s quality improvement. With an open mind,we are prepared to collaborate and exchange cutting-edgeinformation and expertise with peer companies in order tocreate a positive industrial ecosystem. We are a member ofthe Technical Committee 64 on Food Industry of Standardi-zation Administration of China and the SC5 on FermentationIndustries, China Biotech Fermentation Industry Association(CBFIA), and other industry associations. We have partici-pated in setting many national standards and social organi-zation standards and contributed to the development of theamino acid industry.
The Quality Management and Control MechanismOur quality standards are stringent and we control productquality at every stage of the production and manufacturingprocess to ensure that it meets the standards. We have de-veloped theProduct Testing Instructions, a product-speci?cguideline which sets out testing items, pharmaceutical re-agents, analysis steps, presentation methods, and regulatetesting methods for di?erent products to ensure that theymeet the quality standards. We conduct internal inspec-tions on all products regularly. We also develop annualproduct inspection plans and submit product samples tonational authorities for inspection. As a result, the qualityand safety of our products in storage, out of the factory, andin delivery are ensured. In addition, we have developedtheUnqualified Product Control System. This policy defines
management roles and responsibilities and managementstandards and regulates the process control, cause analy-sis, and emergency treatment of unquali?ed products. It isdesigned to minimize risks associated with product qualityand determine the primary accountability of products. In2022, our products’ ex-factory pass rate was 100%.Quality management requires the participation of all em-ployees. We attach great importance to creating a qualityculture and hosting diversified training events on qualityto comprehensively improve employees’ skills and perfor-mance. In 2022, we delivered 21,420 hours of quality train-ing to 720 quality management employees of the Company.
In 2022, we worked with associations, enterprises, and universities in setting the social organization standards of ChinaFeed Industry Association and released and implemented the social organization standard for the feed additive L-isoleu-cine. The standard stipulates the technical requirements, sampling, test methods, and inspection rules of L-isoleucine,and speci?es its labeling, packaging, transportation, storage, and shelf life. It improves product safety and boosts thecontinuous quality improvement of China’s feed additives.
Setting the social organization standard for isoleucine
Our Product Quality TargetProducts’ex-factory passrate maintained at
%
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Product RecallWe have developed the
Product Recall Procedures and oth-er emergency rules and regulations. We have establisheda sound product recall mechanism with a clear classifica-tion of recalled products, the recall process, and correctivemeasures to ensure a rapid response to unsafe products. Inthe event of product quality defects and products with po-tential safety hazards, we will immediately carry out detec-tion and analysis, recall the products, and ensure that thoseproducts are identi?ed and traced. During a recall incident,we will investigate the cause of the defect and developcorrective and preventive measures, track the incident han-dling results, and prevent similar incidents from happeningagain. In 2022, the Company had two voluntary product
recalls, both of which were handled immediately and prop-erly, with all products concerned recalled.Moreover, we conduct regular product recall drills at ourproduction bases every year. By simulating recall incidentsand analyzing and checking products, we ensure that riskyproducts can be traced within the specified timeframe andevaluate whether the recall procedures are feasible and ra-tional. In 2022, we carried out recall simulation drills for MSG,trehalose, threonine, and small amino acids to strengthen em-ployees’ emergency recall awareness and capabilities.
In September 2022, to achieve the Company’s quality strategy and annual goals, we launched the Quality Month cam-paign with the theme of“reducing waste, improving management, creating and enjoying high quality”. All produc-tion bases responded to the call and carried out a variety of quality events around this theme to enhance employees’
quality awareness. The Xinjiang Base hosted an Appearance Competition, in which contestants selected samples withappearance defects, and a Foreign Object Inspection Drill, in which contesting teams searched scissors placed in ad-vance in the products. These entertaining events taught employees to avoid product quality problems and accidents.
The quality month
Meihua Group’s quality month
Supplier Quality Management
As an integral part of quality management, raw materialsand auxiliary materials have a direct impact on productquality, food safety, and customer satisfaction. We havedevelopedthe Supplier Quality Management Manualtoregulate the selection, classi?cation, supervision, and eval-uation of suppliers. This policy aims to steadily raise theproduct quality of our suppliers and maintain a long-lastingand stable strategic partnership.We continuously raise the threshold for supplier admission.We evaluate the credentials and certi?cates of our suppliersthrough on-site evaluations and questionnaires during theselection process. Suppliers of food-grade, pharmaceuti-cal-grade, and feed-grade materials must pass ISO 9001, ISO22000, GMP for pharmaceutical products, and other relevantcerti?cations. As a result, we have improved the quality of our
industrial chain. As of December 31, 2022, 17% of our sup-pliers had passed HACCP, ISO 22000, FSSC 22000, and ISO9001, among other product quality-related certi?cations.We identify and assess the product risks associated withraw and auxiliary materials. In addition to scoring the ma-terials’usage, applied procedures, food safety impact, andother factors, we perform class-based management basedon the results andthe Risk Rating Result Table. In addition,we have introduced risk-specific management measures.For example, Raw and auxiliary materials with significantimpact on product quality and food safety are monitoredintensively, while low-risk products are monitored regularly.As a result, product risks are controlled.
To improve quality assurance, we conduct unannounced inspections on suppliers. We score their workshops, processes, andraw materials, identify defects and formulate recti?cation plans. If a supplier fails to make recti?cations according to the plan,we will take punitive measures, such as warnings, reducing or even suspending the procurement until the recti?cation is com-plete. Moreover, we are committed to assisting suppliers to improve their quality capabilities. We deliver quality training andcommunication for suppliers and develop supplier assistance plans, joining hands with suppliers to address product qualityand safety related issues.
Classi?cation of Meihua Group’s main raw and auxiliary materials in use (part)
ClassRaw and axiliary materials
Class A (major risk)
Sulfuric acid, hydrochloric acid, liquid caustic soda, alcohol, defoamer, activatedcarbon, soybean powder, and ammonium sulfateClass B (high risk)
Fermentation ingredients, soy sauce auxiliary materials, sodium hypochlorite, acidhydrolyzed plant protein powder, corn steep powder, and liquid caustic soda
Class C (medium risk)
Sodium carbonate, betaine hydrochloride, disodium succinate, cellulase, perlite ?l-ter aid, and caustic sodaClass D (low risk)Water treatment agents, process aids, and disinfectants
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Safety Management
We deem work safety as the fundamental essence of our business operation. We have invested considerable e?ort in estab-lishing a safety management system, implementing various safety measures, and delivering work safety training and commu-nication. In addition, we manage hazardous chemicals systematically. As a result, we strive to keep the health and safety ofour employees at the highest level.
We abide bythe Work Safety Law of the People’s Republicof China,the Law of the People’s Republic of China on thePrevention and Control of Occupational Diseases,the Pro-visions on the Safety Training of Production and OperationEntities,the
Guideline of China Occupational Safety andHealth Management System, and other applicable laws andregulations. We adhere to the management philosophy that“work safety is everyone’s duty”. We have developedtheHealth, Safety and Environmental (HSE) Post Duty Systemfor All Employees of Meihua Holding Group Co., Ltd.andother internal management regulations to ensure that weare fulfilling our work safety responsibility. Additionally,we are continually improving the Company’s safety man-agement system and encouraging our production bases toobtain relevant certifications. All our bases have obtainedthe Level-3 work safety standardization certi?cate and theISO system certi?cation, respectively; the Jilin Base has ob-tained 100% safety management system certi?cation.We have set up an HSE Management Department at the
headquarters, which coordinates routine safety manage-ment and oversees, guides, and inspects work safety mat-ters of subordinate production bases. Safety managementtargets are set at the beginning of each year, and work-re-lated injuries are included in the monthly performance as-sessment of safety managers. This practice has stimulatedthe safety management team’s initiative and improved theCompany’s overall safety management performance.In addition, we attach great importance to regular protec-tion for production employees. Depending on the likelihoodof workplace injuries, we provide employees with personalprotective equipment such as safety footwear, uniforms, andsafety helmets. We have also set up work safety signs such asaccident noti?cation boards, warning signs, and occupationalhealth“formulas” in the production workshop to alert em-ployees. We are committed to minimizing occupational haz-ards and protecting the health and safety of our employees.Throughout 2022, zero work-related fatalities among employ-ees or contractors were reported at Meihua Group.
Meihua Group’s safety data for 2022
Number of work-related fatalitiesamong employees
person
Number of work-related fatalitiesamong contractors
person
0.31
Frequency of work-relatedinjuries among contractors
every 1,000,000hours worked
Safety TrainingPutting safety ?rst, focusing on prevention, and establish-ing a safety culture are our top priorities. We havethe HSEWork Safety Education and Training Management Regula-tions (for Trial Implementation)in place and develop an-nual safety training and education plans. We deliver worksafety provide information and regular work safety trainingfor employees and contractors to raise their awareness of
safe operations and safety management and prevent safetyaccidents by helping them develop good operating habits.Moreover, we insist on including contractors in our safetytraining. The Company’s safety managers deliver training tocontractors and require them to organize safety training toensure that everyone and all projects of the Company are inline with the Company’s work safety goals.Meihua Group’s safety training data for 2022
In June 2022, we launched the Work Safety Month campaign with the theme of“abiding by the work safety law and takingprimary responsibility”. During the Work Safety Month, we hosted various events to foster a safety culture, focusing on raisingemployees’ safety awareness and caliber, to ensure workplace safety for the Company in the long run.
IndicatorEmployee AttendanceContractor AttendanceTotal attendance at safety training434,95312,958
1.58
Frequency of work-related injuries among employees
every 1,000,000 hours worked
1.49
Total recordable injury frequencyrate (TFIFR) among employees
every 1,000,000hours worked
Meihua Group’s full sta? safety training
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In late June 2022, the Tongliao and Xinjiang Bases organ-ized fire emergency rescue drills, which simulated rootvalve leakage in a liquid ammonia spherical tank. The drillsshowed that the accident prevention awareness and rescueand disposal capabilities of employees at the Xinjiang Basewere greatly improved compared with previous years, andthe Tongliao Base’s employees had outstanding perfor-mance. The two bases’?re emergency response teams hadtheir capabilities enhanced in the drills.
Fire emergency response drills
During the Work Safety Month, production bases pro-duced banners, slogans, and painted posters and carriedout colorful and extensive safety communication events,emersed in a strong safety atmosphere.
Safety banners and posters
On July 1, 2022, the headquarters of Meihua Group or-ganized employees to watch a work safety promotionalvideo,Life is the Most Valuable. The employees earnestlystudied General Secretary Xi Jinping’s important state-ments on work safety and gained a deeper understand-ing of the concept of“putting the people and life ?rst”.
The event significantly enhanced employees’safetyawareness.
The scene of the ?re emergency response drill
Employees in the game of the Rooster Laying Eggs
A safety poster hand-drawled by employees
Chemical SafetyThe Company’s production and operations involve the use ofchemicals. For these chemicals, we require full-lifecycle safetymanagement for their procurement, storage, application, andthe disposal of discarded containers. We observe the Regula-tions onthe Safety Management of Hazardous Chemicals, theRegulations on the Safe Use of Chemicals in the Workplace,and other applicable laws and regulations. We have intro-duced internal policies such asthe Regulations on the Safety
Management of Hazardous Chemicals, which define eachdepartment’s functions and responsibilities and the man-agement requirements for hazardous chemicals. We assesschemicals for hazard, maneuverability, and environmental im-pact. Based on the assessment results, we rate the hazards ofchemicals and develop speci?c management objectives andoperational requirements, aiming to reduce the chemicals’
harms on human health and the environment.
In the future, we will conduct comprehensive assessment and identi?cation of chemicals based on the impacts throughout theproduct life cycle, take measures to replace high-risk chemical substances and phase out high-risk chemicals, and integrateenvironmental and health standards into the product design process. Our goal is to enhance harmony between economic de-velopment and the environment, and between human beings and nature.
For hazardous chemical emergencies, wehave developed emergency response plansand conducted regular drills to enhance ouremergency response capabilities.
We replace and properly dispose of some hazardouschemicals with process optimization and other miti-gation methods. For example, we use benzalkoniumchloride instead of formaldehyde for the disinfectionof fermentation workshops, and eliminate hazardouschemicals such as arsenic trioxide and phosphoric acid.
For all hazardous chemicals involved in the Company, such as liquid ammonia, liquid causticsoda, sulfuric acid, and hydrochloric acid, we have developed an internal list of hazardouschemicals for strict control and management. Our practices include the storage and publicity ofmaterial safety data sheets (MSDSs), the noti?cation of risk factors, and emergency handling.
Classifying andIdentifyingchemicalsDeveloping alist of hazardouschemicalsFiling chemicalsat the authorities
Assessingchemicals’ hazard level
Developing emergency response plansTaking measure to optimize processes
Watching a work safety promotional video
In mid-June 2022, the Tongliao Base held a Safety SkillContest, in which production workshop directors ledtheir shift heads to complete tasks within the time lim-it. The event was divided into the Rooster Laying Eggs,safety scenario simulation, on-site rescue, and otherstages. It combined fun games with safety knowledge,guided and raised employees’work safety awareness,and strengthened their teamwork.
Safety skill contest
Employees watching the Life is the Most Valuable pro-motional video
The D=LEC method: It is a semi-quantitative method for assessing hazard sources in potentially dangerous operatingenvironments. It is used to assess the danger and harm exposed to operators working in potentially dangerous environments.
We classify and identify hazardous chemicals such as explosives, ?ammable liquids, andcorrosive substances according tothe List of Dangerous Goods (GB 12268—2012).
All hazardous chemicals of Meihua Group had been ?led at the Chemical RegistrationCenter of the Ministry of Emergency Management for management.We regularly entrust quali?ed third parties to assess all hazardous chemicals involved inour production and operation activities and issue assessment reports to systematicallyclarify the chemicals’ hazard levels and particulars.The Jilin Base uses the D=LEC method
to assess the risk of hazardous chemicals in theirproduction and manufacturing processes. It assesses the risk level and develops manage-ment and mitigation measures accordingly.
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We attach great importance to the protection of intellectual propertyrights. We encourage independent innovation within the Company andrespect third parties’ intellectual property rights. An intellectual prop-erty management system has been developed to facilitate the creation,protection, and application of intellectual property across all aspects ofthe production and operation of the Company.As part of the patent application review and submission process, we
evaluate and analyze whether the invention is novel, creative, and prac-tical. We protect inventors’rights and interests to encourage inventionand creation and provide incentives for employees who publish articlesand obtain patents. To prevent potential patent disputes, we performthe Freedom to Operate (FTO) analysis in patent-related processes tocorrect and prevent infringement. In 2022, we ?led 12 patent applica-tions and obtained 27 patent authorizations, including 2 in Japan.
Protection of Intellectual Property Rights
●We cooperate with the Jiangnan University team, which isthe leader in functional sugar research and industrializationin China. We have obtained key technologies for preparingfunctional sugars by the one-step conversion method andimproved the conversion efficiency. The technologies areadvanced in China.●We cooperate with a biotechnology company in Shanghaito develop new strains for multiple products. We haveimproved the conversion rate of strains, improved productquality, and reduced production costs. We aim to reachthe world’s leading level.
Meihua Group’s Innovative and R&Dcooperation projects
R&D and Innovation
Innovation Layout
Driven by R&D and innovation, we are committed to becoming a leading enterprise in synthetic biology. In our pursuit of continuous advance-ment in synthetic biotechnology, we focus on building an advanced industrial platform for biological fermentation and biosynthesis. We contin-uously enhance our product innovation capabilities to provide better, more economical, and more accessible products.
We insist on creating value for customers with continuous innovation. Asa biosynthesis company that covers the whole chain from genome editingto product launch, we have reconstructed ourselves into a microbial cellfactory based on industrial production strains such asEscherichia coli,Corynebacterium glutamicum, and Bacillus, and optimized and upgradedthe production strains of the whole product portfolio.Our substantial investment in R&D and innovation has resulted in com-prehensive improvements in innovative technology, research capabil-ities, and our personnel pipeline. As a result of our scienti?c researchstrength, we have gained a leading position in the industry. We haveestablished a research and development center and have long beencommitted to developing and constructing biosynthetic technologyplatforms. We have also established several amino acid laboratoriesaround our core products, which have made breakthroughs in strainquality, amino acid conversion rate, and many other aspects. In 2022,
we invested 829 million yuan and a workforce of 304 in R&D.As a model of innovation in the industry, we participate in settingindustry standards, launch external cooperation, and continuouslyempower the innovation and upgrading of the industry. We havepassed the laboratory accreditation of China National AccreditationService for Conformity Assessment and established an amino acidanalysis and testing center qualified to issue test reports to boosttechnological advancement in the amino acid industry. Externally,we have established close relationships with many ?rst-class univer-sities and research institutes in China, including the Research Centerof Industrial Biotechnology (a body of Shanghai Institutes for Biolog-ical Sciences, Chinese Academy of Sciences), the Institute of Microbi-ology of the Chinese Academy of Sciences, and Jiangnan University.We work together to develop high-performance biosynthetic strains.
In 2022, we launched a new product, Vitamin B2, also knownas ribo?avin. It is an essential vitamin for body health andnormal development and is widely used in food, medicine,and feed. The product is based on Bacillus and madefrom innovatively designed and constructed Vitamin B2production strains. We have completed the patent layoutof riboflavin strains and created a favorable conditionfor the long-term healthy development of China’s bio-fermentation vitamin products.
Vitamin B2, our new product
Customer Service
Adhering to the core values of“thriving by integrity”, wehave built a sound customer service ecosystem to adapt tothe various needs of our global customers. It is our commit-ment to provide our customers with high-quality, e?cient,and professional services.We have developed internal management systems such as the
Sales Standardization Manual andthe Customer ComplaintHandling Process to regulate customer acquisition, commu-nication, and complaints service processes, and continuouslyimprove our service performance. At the same time, we put ef-
forts into developing and raising customer service personnel’scapabilities. We have introduced Ten Don’ts for Salespeople.We also deliver customer service training to improve employ-ees’ service awareness and ability.When we receive a customer complaint, we categorize it,begin an internal investigation, o?er solutions, and take cor-responding corrective actions. In addition, we continuouslyoptimize the way we give feedback on customer opinions.In 2022, we received 108 complaints, all of which have beenproperly resolved.Meihua Group’s complaint handling process
Receiving a customer
complaint
Classifying the complaint
Relevant departmentslaunching an investigation
Archiving the complaint
handling result
Issuing a complaint inves-tigation reportFeeding the handlingresult to the customer
To further strengthen our customer service system, our targetedcustomer satisfaction rate has been set at 90%. In addition, weconduct customer satisfaction surveys annually, which coverproduct quality, transportation and delivery, business services,and customer service. In 2022, our customer satisfaction surveyresult was 94.27%.Information security and consumer privacy are very impor-tant to us. To handle such concerns, we have formed an ITManagement Department and created a reliable informa-tion security management system. We strictly abide bytheLaw of the People’s Republic of China on the Protection ofConsumer Rights and Interests,the
Data Security Law of
the People’s Republic of China, and other applicable lawsand regulations. We have developed internal systems suchasthe Information Security Training Management System
andthe
Mobile Storage Media Management Regulationstosafeguard the Company’s network, data, and information.We treat customer information as confidential documentsand include confidentiality clauses in our contracts. Newemployees are required to signthe Non-disclosure Agree-ments. That way, we protect the privacy and security of ourcustomers’information. During 2022, no incidents relatingto the security and privacy of information occurred at thecompany.
Co-developmentwith Employees
Human Rights ProtectionEmployee IncentivesDevelopment Training
We always adhere to the people-centricity business philosophy. During the rapid progress of thecompany, our most valuable assets are the employees who have worked with us along the way, andour greatest strength will be the employees we hire in the future. We are committed to protectingthe rights and interests of our employees. We o?er a competitive compensation and incentive sys-tem, long-term incentive plans, and clear career development plans. By providing our employeeswith all-around care, we could achieve mutual bene?ts and win-win results.
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Human Rights Protection
We observethe Universal Declaration of Human Rights, the Convention on Human Rights,the United Nations Convention onthe Elimination of All Forms of Racial Discrimination, andthe International Labor Organization’s Declaration on FundamentalPrinciples and Rights at Work, among other international human rights norms and standards. In our operations, we are com-mitted to respecting and protecting human rights. With reference tothe SA8000 Standardfor social accountability, we havedevelopedthe Human Rights Protection and Anti-Violence and Con?ict Policy, which is applicable to all employees, contrac-tors, and suppliers of the company. It is designed to systematically prevent human rights violations including violence, humantra?cking, slavery, exploitation, and restrictions of personal freedom, and to safeguard every employee’s dignity. In 2022,there was no violation of human rights at the Company.
We put efforts into monitoring human rights issues.We have developed aHuman Rights Due DiligenceProcess. We continuously monitor the Company’shuman rights situation by directing production basesto conduct routine self-examination and cross-baseinspections to prevent human rights violations. In2022, we conducted a human rights assessment onour operations, covering 75.5% of our employees.
Human Rights Monitoring
We strictly abide bythe Labor Law of the People’sRepublic of China,the Labor Contract Law of thePeople’s Republic of China, and the Implementa-tion Regulations of the Labor Contract Law of thePeople’s Republic of China. 100% of our employeesare covered by the Company’s collective bargainingagreement. We always provide every employee withequal employment and development opportunitiesand encourage people from diverse backgroundsto join our team. We strongly oppose all forms ofdiscrimination based on gender, age, ethnicity, re-gion, and religion, as well as vicious competition.We undertake social responsibility and are com-mitted to providing employment opportunities tovulnerable groups such as people with disabilities.We employed 13,016 people overall as of the end ofthe reporting period, including over 80 people withdisabilities who made up 0.63% of the total.
Equal Employment
We abide bythe Law of the People’s Republic ofChina on the Protection of Minors, theProvisionson the Prohibition of Using Child Labor, and otherapplicable laws and regulations, as well astheUniversal Declaration of Human Rights. We havedeveloped Provisions onthe Prohibition of UsingChild LaborandProvisions on the Prohibition ofUsing Forced Laborwithin the Company. To preventchild labor, forced labor, and illegal employment atthe source, we review and record employee identityinformation rigorously and comprehensively duringemployee registration. Upon confirmation of aviolation, we will proceed with serious actions inaccordance with the Company’s regulations.
Prohibition of Child Labor
and Forced Labor
We adopt a zero-tolerance approach for discrimina-tion, bullying, humiliation, intimidation, and sexualharassment in the workplace. We have developedanAnti-Harassment and Anti-Abuse Policyand anAnti-Discrimination Policy. Any con?rmed violationswill be handled as per regulations by the HumanResources Department, including warnings, perfor-mance downgrades, demotions, suspensions, trans-fers, and terminations. We try our best to preventharassment and abuse and provide employees withan agreeable, fair, and secure working environment.
Anti-Discrimination andAnti-Harassment
Meihua Group’s workforce by di?erent categories in 2022
Number of employees by gender
MaleFemale
Number of employees by region
Chinese mainlandNon-Chinese mainland
13,015
Number of employees by age
Under 20
20-29
3,936
30-39
4,778
40-49
3,255
50-59
Number of employees by ethnic groupHanMongolManchuHuiOthers
9,6262,370
Over 60
8,1344,882
Total workforce
13,016
We devote great care to female employees’legitimate rightsand interests. We strictly abide bythe Law of the People’sRepublic of China on the Protection of Women’s Rightsand Interests,the Special Rules on the Labor Protection ofFemale Employees, and other applicable laws and regula-tions. Female employees are fully entitled to maternity andparental leave, and the di?culties caused by women’s phys-iological characteristics during labor are fully addressed. We
ensure that female employees have equal compensation,benefits, and career development opportunities and aretreated fairly when it comes to promotions, assessment ofprofessional and technical titles, and salary determination.In addition, we continuously increase the representation ofwomen in our management. As of the end of the reportingperiod, women accounted for 40% of our executives.
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Employee Incentives
In recognition of the importance of the employee incentive system, we have built a diversi?ed compensation and bene?t mecha-nism and launched supplementary employee support programs, thereby stimulating employees, raising their enthusiasm, and fur-ther enhancing their con?dence to grow together with the Company.
We have established a sound and competitive compensationand benefit system in accordance with relevant laws andregulations and the Compensation and Incentive System. Inaddition to equal statutory bene?ts, it ensures non-statutorybenefits introduced by the Company for all employees, whocan share development results with the Company.In 2022, we introduced an ESG incentive compensation mech-anism. We also set key performance indicators (KPIs) for the
managers of HSE management, human resources, finance,and other departments with respect to environmental pro-tection, health and safety, resource utilization, and personneltraining. These KPIs are linked to the compensation of the per-sonnel being assessed. Rewards and punishments are givenaccording to the completion of the objectives. This has moti-vated direct department managers’enthusiasm and helpedthe Company implement its ESG strategic plan.
Compensation and Bene?ts
In addition to the basic salary, we o?er generous bene?ts and bonuses to employees:
Statutorybene?ts
●Endowment insurance, unemployment insurance, employment injury insurance, medical andmaternity insurance, and housing provident fund paid by the Company for employees in accord-ance with national regulations;●Statutory leaves (including family leave, marriage leave, funeral leave, maternity inspectionleave, maternity leave, and sick leave).Physicalexaminationsfor employees
●We arrange physical examinations for employees. In 2022, 100% new employees went through thepre-employment physical examination, and 26.05% of the employees went through the periodic on-the-job physical examination.
Festival gifts
●On the eve of traditional festivals such as the Mid-Autumn Festival and the Chinese NewYear, we send employees daily necessities such as food, laundry detergent, and fruits.Festival bonus
●In 2022, Meihua Group gave 60 million yuan in Chinese New Year red envelopes to all employ-ees, with each employee receiving nearly 5,000 yuan.
Housing subsi-dy for remoteemployees
●We provide a monthly housing subsidy for employees relocated due to business assignments ortransfers and have increased the amount. A remote employee may apply for an additional one-o?subsidy of 50,000 yuan or 100,000 yuan with the local house purchase contract and invoice in theyear when the relocation subsidy expires. As of the end of the reporting period, we have grantedhome purchase subsidies to 68 employees and a total of 6.5 million yuan in the housing subsidy.
Home purchasesubsidy
●We provide a home purchase subsidy for managers and employees who are willing to develop togetherwith the Company. As of the end of the reporting period, we have granted home purchase subsidies to403 employees and a total of 52 million yuan in the housing subsidy.
Festival events
●We celebrate the International Women’s Day and send ?ower baskets, cakes, or small gifts tofemale employees;●We organize events such as ?ower arrangement salons for female employees.
We promote work-life balance and integrate care and supportfor our employees into our dailyday-to-day operations. Wecreate an agreeable working environment and provide em-ployees with comprehensive and practical protection throughcontinuous initiatives such as caring for female employeesand assistance for employees with di?culties. These initiativeshave greatly united and cheered up employees.
In 2022, we conducted an employee satisfaction survey.Our employee survey was designed to listen to employeesand understand their perspectives on the Company, exposeproblems in our employee service, and improve the Com-pany’s employee management system. In 2022, our overallemployee satisfaction score was 3.5 (out of 5).
Employee Support
In 2022, we proceeded with the Employee Stock Owner-ship Plan in accordance with the medium and long-termincentive plan. During the reporting period, the incentiveplan granted shares to 219 people, including 9 directors,supervisors, and executives.
In 2022, we established the Mommy’s Cabin for fe-
male employees’breastfeeding. It meets the needs
of lactating and expecting female employees and
ensures inclusiveness and dignity for every working
mother at the Company.
The employee stock ownership planMommy’s cabin
In August 2022, we provided employees with iced watermelon, sour plum juice,towels, ice cream, and medicine. They prevented heatstroke and employeesworking in high temperature environments such as logistics, warehouses,workshops, and outdoors for a long time felt cool and cared from the Companyin summer.
Heat relief supplies
Meihua Group’s trade union sendingheat relief supplies to employees
On May 10, 2022, the annualSing! Meihuaonline singingcontest concluded, and the scores and awards were an-nounced. The contest had ?rst, second, and third prizesand honorable mentions for 19 contestants. The contestprovided a stage for employees to show their talent andgreatly enriched their lives.
“The Voice of Meihua”online singing contest
The voting ranking on the online platform
In June 2022, the headquarters of Meihua Group held apower walking competition. More than 370 employeesfrom 22 departments took part in this 20-day event.During the event, employees walked nearly 100,000kilometers in total. This event encouraged employees toexercise and enhanced team cohesion, achieving posi-tive results.
Meihua Group’s headquarters holdsa power walking competition
The awarding ceremony of the event
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Development TrainingHigh-caliber employees are the foundation of the Company’s long-term success. We put efforts into creating unrestricted promotionchannels for employees and launching a variety of vocational train-ing programs. Our employees can improve their overall quality andgrow together with the Company.We have developed diversi?ed growth mechanisms for our employeesand are committed to creating reasonable and fair promotion paths.We have devised the“Small Wins”personnel training program. In theprogram, employees with potential will be selected and benchmarkedagainst their target positions and a phased improvement plan will bedeveloped. They will then be trained for to their target position. Theprogram su?ciently motivates employees for advancement. We havealso launched a Worker Ability Certi?cation Program. We evaluate all
positions to determine the optimal position allocation and de?ne theassessment dimensions, standards, certi?cation methods, and promo-tion paths for positions at all levels. With the mechanisms of job rota-tion and mentoring, we guide employees to continuously improve theircapabilities. In this way, we have established a Y-shaped promotionchannel for front-line production workers to be promoted to positionsin production management and production technology.In addition, we have designed employee training courses in variousforms. We have developed a special talent training mechanism, thatincludes providing onboarding training for new employees, leader-ship training sessions for managers and workshop directors, and atraining program for management trainees to support the capacitybuilding of employees at all levels.The“Set Sailing Onboarding”
training course for college graduates●We provide fresh graduates with a Set Sailing onboarding train-ing program, including lectures and physical training. In 2022,the Set Sailing training course trained 750 college graduates forthe Company.
Training courses for workshopdirectors and shift heads●In 2022, we launched training courses for workshop directors andshift heads. The training courses, which combine practical projectsand manager rotation training, improved trainees’ management abili-ty. They addressed the problem of insu?cient quali?ed product tech-nical directors, workshop directors, and production section chiefs. Atotal of 473 trainees attended the session.
Advanced course formanagers and department heads
●In August 2022, we held the third lesson of the advanced coursefor managers and department heads. The course combined train-ing and hands-on practice and was designed to improve in-servicemanagers’ability to ful?ll goals and lead the team. A total of 30trainees participated in this session.The Aim High Program●Our Aim High special training program for management traineesfocuses on training future middle and senior managers with com-pound capabilities. The selected management trainees will startwith cross-departmental rotation and fully understand the Com-pany’s value chain and business logic. They will be equipped withthe ability to lead a department, workshop, and area within threeyears and to concurrently serve at other departments or new de-partments within ?ve years.
●In 2022, 39 outstanding graduates were selected into the Aim Highprogram. They are in the job rotation stage.
A group photo of trainees at training courses for workshop directors and shift heads
The total hours of employee training were1,969,451
The per capita training hours were
151.31
During the reporting period,
Training percentage by level
Training percentage by gender
98.55%97.83%MaleFemale
100%
Middle-seniormanagement
98.83%
Primary-level employees
100%Senior management
and executives
97.69%
Middle management
of Meihua Group’s employeeswent through training
98.28
%
Addressing ClimateChange
GovernanceStrategy
Risk ManagementMetrics and Targets
Addressing ClimateChange
GovernanceStrategy
Risk ManagementMetrics and Targets
Climate change is one of the greatest challenges facing the world today. The increase inglobal temperatures since the Industrial Revolution is a result of greenhouse gas (GHG)emissions, which also contribute to other issues including melting glaciers and rising sealevels. The environment on which human beings depend is facing unprecedented threatsand challenges.Adhering to sustainable development, we observethe
United Nations Framework Conven-tion on Climate Changeandthe Paris Agreement, fully grasp China’s carbon peaking andcarbon neutrality goals and energy transition trends, and join in global e?orts to addressclimate change. Referring to the Task Force on Climate-related Financial Disclosures (TCFD),we have established a governance structure for addressing climate change. We have inte-grated climate change responses into the Company’s strategy and perform climate changerisk management. We have set climate-related metrics and targets and are committed toreducing GHG emissions. With the above actions, we are transitioning to a more green,low-carbon, and sustainable business model.
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GovernanceWe attach great importance to climate-related risk man-agement. We regularly analyze climate-related risks andopportunities against macro policies, corporate strategicplanning, production, and operations. We have developedthe Management Measures for Addressing Climate Changeand Sustainable Developmentandthe Energy ManagementSystem to de?ne the responsibilities of all levels of the Com-pany in addressing climate change. With the above actions,we integrate climate change responses into the Company’s
development strategy, major decisions, production, and op-erations.The Strategy Committee is responsible for the Company’sclimate change responses and holds regular meetings onrelevant matters. The Sustainable Development Office un-der the Strategy Committee communicates with the Boardof Directors on climate change in a timely manner.
Climate ChangeManagementStructure
Management BodiesResponsibilities
The governancelevel
Strategy Committee
●Supervises and approves the Company’s strategiesand plans for addressing climate change and overseesclimate-risk management;●Approves climate-related performance targets and in-centive mechanisms, and conducts regular reviews onthe progress of achieving the targets.
The managementand executivelevels
ESG Leadership Group
●Develops the Company’s medium to long-term energyconservation plan, energy development plan, and ener-gy conservation and emission reduction targets;
●Organizes the identi?cation and assessment of cli-mate-related risks and supervises the progress in ener-gy conservation and emission reduction at bases;
●Organizes and hosts training on climate change.
Relevant Departments
●Conduct identi?cation and assessment of climate-relat-ed risks;●Take climate-related risk management measures inbusiness activities and implement energy conservationand emission reduction plans.
StrategyIn 2020, in the background of China’s vigorous pursuit of car-bon neutrality, we responded to the state’s call and took theinitiatives to carry out various tasks to address climate-relatedrisks. We have developed a development strategy for address-ing climate change and reducing GHG emissions for 2020-2025, which de?nes the Company’s speci?c goals, tasks, andassessment and incentive measures, and ensures the progressof the work.
We progress and implement the climate change adaptationstrategy and take actions to address climate change. Wecontinuously improved our responses to climate-relatedrisks and reduced GHG emissions by improving manage-ment, upgrading equipment, adjusting techniques, opti-mizing processes, and substituting with clean energy, fromperspectives of energy supply, energy use, green finance,and carbon pricing and sink.
In 2021 and 2022, in addition to reducing carbon emissions through energy conservation and carbon capture, the TongliaoBase met the target to save 652,000 metric tons of carbon emissions. Moreover, we have adopted a carbon pricing mechanismto evaluate the cost of carbon emissions. In addition, we make investment decisions based on the carbon trading price on thenational carbon emissions market.To standardize GHG accounting for the bio-fermentation industry, we took the lead in settingRequirements for greenhousegases emission accounting and reporting Biotech fermentation manufacturing enterprises,an organization standard proposedby CBFIA. The document was released in December 2022 and will take e?ect on April 1, 2023.
Increasing the proportion of electricity in secondary en-ergy supply. We reduce direct coal burning and acceleratede-coalization. We speed up the electrification of energysupply for power stations and ammonia synthesis plants andresearch the use of green electricity and green hydrogen toreplace coal in hydrogen preparation.Improving energy e?ciency. We reduce energy consumptionper unit of product by improving technology and process, re-?ning production management, and upgrading equipment.As green finance is expected to grow exponentially, we willcontinue to monitor ?nancing channels such as green creditsand bonds related to carbon emission reduction.We will take into account carbon trading and carbon emis-sion reduction costs and plan carbon trading strategies inadvance.
Energy supply
Energy useGreen ?nance
Carbon pricingand carbon sink
Strategyof climatechangeresponses
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Risk ManagementBased on the analysis of China’s carbon peaking and carbon neutrality goals and policies on climate change, types of naturaldisasters in the country, and the Company’s actual condition, we have identi?ed and assessed risks and developed counter-measures to adapt to or mitigate the impact of climate change on business.
Meihua Group’s climate-related risk management in 2022
Risk TypeRisk Category Risk Description Countermeasures
Transitionrisks
Policy risk
Against the carbon peaking andcarbon neutrality goals, Chinahas tightened its controls on themanagement of greenhouse gasemissions. It increases our com-pliance risks and raises the ener-gy structure adjustment costs forour low-carbon transition.
●To promote the use of renewable energyand increase the use of solar and windenergy;●To launch technological transformationand energy recovery projects to reduceenergy waste in all operations and useenergy more e?ectively and rationally.
Technical risk
The increase in investment costis due to the low-carbon trans-formation of the productionprocess and the introduction ofenergy-saving and consump-tion-reducing equipment.
●To advance research and developmentof technologies that reduce consump-tion and energy use;
●To monitor the latest development andapplication of energy-saving technol-ogies in the bio-fermentation industry,conduct feasibility analyses of tech-nology replacement, and introduceadvanced energy-saving equipment.
Physicalrisks
Acute risk
Climate events such as heavyrainfall, high temperatures, andother extreme climate condi-tions can damage productionequipment and storage facilities,interrupt transportation, andcause other property losses, aswell as threaten the health andsafety of employees.
●To develop plans for ?ood control andemergency rescue under extreme heat;●To pay close attention to the informationreleased by the meteorological authori-ties, especially weather warnings;●To add extreme weather defense equip-ment and facilities.
Chronic risk
Long-term climate risks such aswater shortages may a?ect pro-duction and drive-up operatingcosts.
●To roll out water-related risk analysisand assessment and incorporate wa-ter-related risk management into theCompany’s overall risk management.
Chronic physical risks refer to longer-term shifts in climate patterns that may lead to sea level rise or long-lasting extremeheat, such as prolonged heat.
Including 715,389.66 metric tons of raw coal consumed.
Metrics and TargetsAs China aims to achieve carbon peaking and carbon neutrality,we insist on equal emphasis on both technology and manage-ment, and we continually reduce the energy consumption ofour products. Upholding the sustainable development conceptof green biosynthetic manufacturing, we encourage all employ-ees to submit rationalization proposals on energy efficiencyand carbon emission reduction. Rewards will be given to theproposers in accordance with the regulations for rationalization
plans that produce outstanding outcomes.Moreover, the Strategy Committee of the Company’s Boardof Directors monitors the progress of achieving climate-relat-ed targets and indicators and conducts regular performanceappraisals to ensure that relevant departments are workingtoward the set targets. During the reporting period, we met ourannual targets for carbon dioxide emission reduction.
Meihua Group’s energy use and carbon emissions in 2022IndicatorUnitData in 2022
Coal consumption
metric ton3,641,870.02Gasoline consumptionL25,402.37Diesel consumptionmetric ton1,121.50Purchased electricity consumptionkWh621,112,430.22Natural gas consumptionm
18,106,244.41Renewable energy usekWh43,731,262.80Comprehensive energy consump-tion intensity
GJ/revenue of 1 million yuan3,926.00Total Scope 1 GHG emissionsmetric ton of CO
e9,243,768.55Total Scope 2 GHG emissionsmetric ton of CO
e306,957.04Total GHG emissionsmetric ton of CO
e9,550,725.59GHG emissions intensitymetric ton of CO
e/revenue of 1 million yuan341.86
In 2022, the Scopes 1 and 2 absolute carbon emissionswill500,000 metric tonsand10,000metric tons,respectively, compared with 2021.
GHG emission reduction targets:
By 2025, the carbon dioxide emissions per 10,000yuan of output will be reduced by20%
based onthat in 2020.The coal-based energy structure will be improved. The proportion of renewable energy such as photovoltaics andwind power will be increased from 2020 to 2030. By 2030, the installed capacity of renewable electric energy willbe more than .
Clean energy use target:
20MW
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Reducing Energy ConsumptionTo improve energy efficiency, we put efforts into developingand applying waste heat recycling systems and related facilities,including heat and power cogeneration, steam turbine-drivencompressor units, multi-e?ect evaporators, evaporative cooling,power generation from waste heat of sulfuric acid synthetic am-monia, steam as the by-product of Ende gasi?ers’waste heat, andstarch waste heat evaporators. Prior to usage, we categorize heatenergy, which lowers environmental pollution and boosts energy
e?ciency. This practice saves energy, protects the environment,improves the quality of the heat supply, and increases the elec-tricity supply. During the production of synthetic ammonia, wecapture and compress carbon dioxide to produce food-grade dryice, reducing carbon dioxide emissions and enhancing the econo-my at the same time.
Suppliers’ Engagement in Climate ActionIn addition to addressing climate change, conserving en-ergy, and reducing emissions on our own, we value thepartnership with suppliers to reduce carbon emissions inthe supply chain. In 2022, we collaborated with 62 suppli-ers (about 18% of the total number of suppliers) to reduceemissions and conserve energy. We encourage suppliers to
set energy consumption targets and convert the use of coal togas, modify our techniques, improve processes, recycle steam,and use clean energy. These measures have decreased energyconsumption, improved energy efficiency, and reduced car-bon emissions in the upstream supply chain.
To enhance our employees’ ability to respond to climate-re-lated risks, conserve energy, and reduce carbon emissions,we have launched a comprehensive training program onenergy conservation strategies, policies, and standards.From June to September 2022, we delivered four trainingsessions on climate change, energy conservation, and emis-sion reduction strategies. They covered the interpretation of
China’s carbon-neutral trends, peer companies’ energy con-servation and emission reduction strategies, and the Com-pany’s energy consumption status and energy conservationand emission reduction planning and strategies. They weredelivered to a total audience of 120 with more than 240training hours.
In response to the national policy of assessing the total amount and intensity of energy consumption, we launchedthe Steam Energy-e?ciency Technical Transformation Project for the Fermentation Workshop in 2022 to improveheat e?ciency. Under the project, a set of material heat exchanger and a water material heat exchanger were addedin the fermentation workshop, which have signi?cantly improved acid production. The material inlet temperature ofthe fermenter has been reduced from 127°C to 40°C, thereby reducing the number of cooling devices, and the con-version rate and acid production have been improved. The products’steam consumption per metric ton has beenreduced by 0.16 metric ton, which saves 279.7 metric tons of steam per day and 14,000 metric tons of coal equivalent(TCE) per year and reduces 37,000 metric tons of carbon dioxide emissions.
The steam energy-e?ciency technical transformation project for the fermentation workshop
Green Factory
Environmental ManagementWater Resources ManagementWaste ManagementRecycling of Packaging Materials
We adhere to the scienti?c assertion that“lucid waters and lush mountains are invaluable as-sets”. While acquiring natural resources, we devote ourselves to environmental protection andresource conservation. Having a keen understanding of the importance of ecological conserva-tion, we continually seek to improve our environmental management system. We optimize watere?ciency, put great e?orts into waste management and pollution prevention, and improve therecycling of packaging materials. We aspire to be a pioneer in protecting the environment and acontributor to promoting harmony between mankind and the environment.
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IndicatorUnitData for 2022
Reuse of watermetric ton5,841,943Total water withdrawalmetric ton30,642,207Total water consumptionmetric ton36,484,150Water consumption intensitymetric ton/1,000 yuan of revenue1.31
Environmental ManagementWe, in the bio-fermentation industry, face increasing exter-nal demands regarding environmental protection, whichraises the standards of our environmental managementsystem. We regard environmental protection as an essentialpart of our business and strictly comply withthe Environ-mental Protection Law of the People’s Republic of China
and other applicable laws and regulations. Based on theCompany’s current progress in environmental protection,we have introduced anUp-to-standard Odor ManagementSystemand aStable Operation Management System forSewage Workshops. Our production bases strictly imple-ment the Headquarters’requirements. AnEnvironmentalProtection Management System, anEnvironmental Pro-tection Monitoring System, anEnvironmental ProtectionEducation and Training System, and anEnvironmental Pro-tection Inspection Systemhave been developed for internalmanagement. We continuously improve our environmentalmanagement performance and capabilities by advancingthe construction and certification of our environmentalmanagement system, ful?lling environmental managementresponsibilities, and establishing a sound environmentalaudit system.
For e?ective environmental management, we fully performthe primary responsibility of environmental protection.Each of our production bases has an environmental man-agement department and a senior executive in charge ofenvironmental management. We comprehensively manageproduction bases’ environmental protection work by hold-ing environmental brie?ngs and special meetings regularly,developing environmental protection plans, and reviewingenvironmental protection resources for development, reno-vation, and expansion projects.We place special emphasis on environmental training. Wedevelop annual environmental protection training plansand provide training to all employees. Moreover, we holdseveral special environmental protection training sessionsevery year for shift head employees and above, allowingenvironmental protection managers and executors to gain adeeper understanding of the Company’s environmental pro-tection progress and technology and environmental man-agement system. Furthermore, we require our productionbases to provide employees with training on environmentalprotection principles, policies, laws, and regulations as partof their regular departmental training.Environmental management
system certi?cation
●
We proceed with environmentalmanagement system certifica-tion. As of the end of the report-ing period, our three productionbases had achieved 100% cov-erage of the ISO 14001 systemcerti?cation.
Environmental inspection
●
The operation of sewage discharge and environmental protection facilitiesis regularly monitored.●Environmental protection commissioners are dispatched for ?eld inspec-tion on the Company’s environment from time to time.●Every month, a joint inspection led by the Environmental Protection De-partment is held, focusing on the operation of the Company’s environmen-tal protection system. The inspection results are taken as a field assess-ment item for the Environmental Protection Award.
●In 2022, each of our three production bases conducted four environmentalcompliance audits covering the entire operating area.Environmental emergency management
The Company’s environmental protection commissioners prepare an environmental emergency plan and organize drillsaccording tothe Interim Measures for the Administration of Environmental Emergency Response Plansandthe Measuresfor the Filing and Administration of the Environmental Emergency Response Plans of Enterprises and Public Institutions.In the case of an environmental pollution emergency, they will promptly report to the higher authorities.
Water Resources Management
According tothe Global Risks Report 2016of the World Eco-nomic Forum, water supply crises are one of the most sig-ni?cant risks facing human society in the next decade. Chi-na has 20% of the world’s population but only 7% of freshwater. According to the United Nations’releases, the globalavailable water supply is expected to decrease by 40% by2030, and China will have a shortage of water resources in adecade.Using the Aqueduct tools of the World Resources Insti-tute (WRI), we identified water risk levels in areas wherethe Company operates and found that 100% of our waterwithdrawals were drawn from high-risk areas in 2022. Inaddition, 80%-100% of our crops were sourced in areaswith high or very high baseline water stress. These resultshave become an inexhaustible driving force for us to con-tinuously improve our water efficiency. We aim to reducewater consumption throughout the Company, conduct reg-ular performance appraisals based on the progress of thetargets, and protect water resources with practical actions.We will e?ectively control water-related risks and conservewater by optimizing technological processes and recyclingwater resources. In 2023, we will conduct more water risk
impact analysis and develop countermeasures based on thesituation of areas where the Company operates.We make e?orts in improving water resources managementto meet the Company’s development and employees’livingneeds. We strictly abide by the Water Law of the People’sRepublic of Chinaand other applicable national regulationson water resources management. Based on our currentsituation, we have developed the Water Resources Manage-ment Measures of Meihua Holding Group Co., Ltd., set theStrategy Committee of the Board of Directors as the highestresponsible body for the Company’s water resources man-agement, and established a three-level water resourcesmanagement structure that comprises of the Company, pro-duction bases, and production entities. In our system, weprovide clear instructions on how to develop overall plansfor the Company’s water resources, improve water resourc-es conservation, protection, and scienti?c use, and increasethe reuse rate of water and the industrial use of non-tradi-tional water resources. We aim for a water-e?ciency model.In 2022, there were no water-related violations in the Com-pany.Meihua Group’s use of water in 2022
Taking sustainable development as our duty, we urge oursuppliers and partners to fulfill their environmental andsocial responsibilities. We plan to conduct water risk assess-ments for suppliers in areas of high or extremely high waterstress and field assessments for key suppliers every year.We will analyze the water risk assessment results togetherwith the suppliers and develop corresponding risk manage-ment plans. In addition, we will invite suppliers to discusswater risk issues every year, along with technical exchangesand cooperation in water conservation, use, treatment, andrecycling. We will carry out training and sharing of the bestpractices of corporate water risk management to achieve
sustainability of business chain coordination.As a leader in the industry, we are always committed to con-tributing to the development of the bio-fermentation indus-try. In 2015, we participated in setting the national standardWater Saving Enterprises: Monosodium L-glutamate Indus-try (GB/T 32165-2015). In 2022, we participated in revisingthe national standard Water Saving Enterprises: Fermenta-tion Industryto set more scienti?c and uni?ed standards forwater resources management and water conservation forthe fermentation industry.
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Waste ManagementIn waste management, we always discharge waste againststandards and address problems at the source. We arecommitted to minimizing all kinds of pollutants and wastegenerated in production and operation activities. We strictlyabide bythe Atmospheric Pollution Prevention and ControlLaw of the People’s Republic of China,the Law of the Peo-ple’s Republic of China on the Prevention and Control ofEnvironment Pollution Caused by Solid Wastes, and other
applicable laws and regulations. We have developed aPol-lutant Discharge Management System and the HazardousWaste Management Regulations of Meihua Holding GroupCo., Ltd. (for Trial Implementation). These systems are de-signed to ensure the stable operation of pollutant treatmentfacilities, the up-to-standard discharge of air pollutants ande?uents, and the proper disposal of waste.
Our waste gas emissions are mostly sulfur dioxide, nitrogen oxides, and other atmospheric pollutants generated during thepower generation process of the Company’s self-owned power plants. We have taken special treatment measures againstthem. In 2022, we launched recti?cation on odor pollutants and sulfur dioxide and adopted the following emission reductionmeasures:
Atmospheric Pollutant Management
For e?cient resource management, we vigorously promotethe comprehensive utilization of wastewater and waterrecycling projects. We have also made signi?cant progressin the conservation of water by upgrading our technologiesand improving our processes. The Tongliao Base investedhundreds of millions of yuan to introduce the world’s topwater treatment technology from the Netherlands-basedPaques and build reclaimed water reuse workshops foreffective treatment of low-concentration wastewater andreduction of e?uent discharge. In 2022, the Tongliao Base
consumed approximately 4 metric tons of water per metricton of MSG, which is signi?cantly lower than Level 1 indica-tor requirements ofCleaner Production Standard -Monoso-dium glutamate industry.In addition to the comprehensive utilization of wastewater,we have combined progressive utilization and recycling. Forsome water, the closed-circuit recycling rate is more than93%.
Meihua Group’s e?uent discharge in 2022IndicatorUnitData in 2022
Total e?uentsmetric ton22,107,489.15CODmetric ton2,149.37COD intensitymetric ton/100 million yuan of revenue7.69N-NH
metric ton262.27N-NH
intensitymetric ton/ 100 million yuan of revenue0.94
In 2022, the Tongliao Base upgraded the decolorization columnal activated carbon process for MSG and installed a con-tinuous resin decolorization system with related new processes. After the new system was put into operation, the MSGworkshop’s unit consumption of water intake and discharge was reduced by 67%, saving 175,200 metric tons of waterper year. In addition, the unit consumption of water discharge in the re?ning workshop has been reduced by 74%, sav-ing 642,400 metric tons of water per year.The Jilin Base’s ?ve sets of ion exchange water washing equipment for lysine extraction consumed a large amount ofdesalted water. In 2022, the secondary condensate from the batching workshop was reused to replace desalinatedwater, thereby reducing the unit consumption of desalted water in the workshop as well as the amount of e?uent dis-charged from the batching workshop. This practice has reduced the unit consumption of desalinated water by 63.5%,saving 685,000 m
water per year.
The water conservation technological upgrade project in the tongliao and jilin bases
In heating stations, SNCR denitri?cation and PSCR denitri?cation are used in combination with electrostatic-fabric integratedprecipitation, ammonia desulfurization, and ultrasonic desulfurization and dust removal integrated devices to treat ?ue gas.Treatment devices of cyclone dust collection, bag dust collection, water foam dust collection, low temperature plasma,ozone adsorption and oxidation are used to dry the tail gas.
Tongliao Base
An intensive stench and odor control project has been launched. The bases’malodorous gas treatment facilities adoptacid/alkali washing, low-temperature plasma, condensers, and photoelectric dust removal.After treatment, the concentration of lysine and threonine exhaust odor has reached the national standard.After treatment, the concentration of glutamate and nucleotide exhaust odor has been much lower than the cap set inthe nationalEmission Standards for Odor Pollutants.
Xinjiang Base
Odor control, electrostatic-fabric integrated precipitation, desulfurization and denitri?cation equipment, bag dustcollection, cyclone dust collection, washing towers, oxidation towers, electrostatic demisting, plasma, activated car-bon, photoelectric deodorization are adopted to treat non-fugitive waste gas.A fully-enclosed coal yard has been built to reduce the generation of fugitive dust.
Jilin Base
Use of E?uents
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We are meticulous in waste disposal management. We re-cycle the waste generated in production and o?ce work ina safe and environmentally friendly manner. This practicereuses waste while reducing the environmental pollution.Our non-hazardous waste mostly comes from o?ce waste,domestic waste, and general industrial waste produced dur-ing production and operations. The solid waste producedin the Company’s production and everyday life is classi?edand collected and disposed of in accordance withthe Solid
Waste Classi?cation and Disposal Principles.The Company’s hazardous waste primarily consists of wastechemical reagents, waste chemicals, and waste activatedcarbon. We have introducedthe Regulations on HazardousWaste Management (for Trial Implementation). We collect,store, and transfer hazardous waste, develop emergencyplans, and maintain special records in strict accordancewith the requirements. Our hazardous waste is disposed ofby quali?ed third parties under our contract.
Waste Disposal
The activated carbon is reused after being recycled and processed by the waste carbon workshop to realizezero emission of waste activated carbon.Non-hazardous metal-containing waste is collected at the recycling station or waste material station in the fac-tory to be converted into resources.Water-treatment sludge and waste mother liquor for amino acid production are sent to the incinerator in thefactory for incineration.
Xinjiang Base
Lysine and sodium glutamate tail liquids are used as raw materials for organic fertilizers.General solid waste such as ?y ash and slag generated in power plants are sold to third parties for comprehensiveutilization.
Jilin Base
Tongliao Base
Activated carbon is recycled. Activated carbon used to produced amino acid is recycled and reused in the waste car-bon workshop, realizing 100% comprehensive utilization.Incinerators have been built. Sewage treatment sludge, organic fertilizers, electrostatic defogging ?uids, and otherwastes are recycled by being sent to the incinerators in the plant for incineration to generate steam.O?ce waste and various metal wastes are centrally collected and recycled.
Meihua Group’s pollutant and waste discharge in 2022Type of PollutantIndicatorUnitData for 2022
Atmosphericpollutants
SO
emissionsmetric ton1,375.28NOx emissionsmetric ton1,790.65Dust emissionsmetric ton103.65Total waste air emissionsmetric ton3,269.58Waste air emissions intensity
metric ton/1 million yuanof revenue
0.12
Non-hazardous waste
Total general solid waste dischargemetric ton970,032.94General solid waste discharge intensity
metric ton/1 million yuanof revenue
34.72
Used batteries generatedpiece11,635Spent activated carbon generatedmetric ton155.02Spent zinc oxide catalysts generatedmetric ton10.36Spent engine oil generatedmetric ton162.39Spent detection solution generatedmetric ton2.51Used (empty) reagent bottles generatedmetric ton2.52Used paint buckets generatedmetric ton4.84Hazardous waste dischargemetric ton337.64Hazardous waste discharge intensity
metric ton/1 million ofrevenue
0.01
Hazardous waste
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Recycling of Packaging MaterialsAs a leading company in the Chinese bio-fermentation in-dustry, we have seen a steady increase in production andsales as well as the number and demand of customersworldwide. In this context, we have prioritized minimizingthe weight of product packaging materials, reducing theirenvironmental impact, and promoting packaging materialrecycling, which are all signi?cant ways we can protect theenvironment.In 2022, we developed theGreen Packaging Material Pro-curement Strategy and System of Meihua Holding Group
Co., Ltd.with multi-e?ect utilization and resource recyclingas the core. We implement standardized control over pack-aging materials and green packaging material management.We have set management targets for packaging materials,established a green packaging procurement system, andstandardized and optimized the paper, plastic, and metalpackaging processes. We also require that all packaging ma-terials used by the Company be reusable, recyclable, anddegradable, as well as promote the use of less, lighter, andrecycled packaging.
The majority of our packaging materials are plastic, paper, andwood. Besides ensuring the safety and reliability of packag-ing materials, we seek to minimize the number of packagingmaterials used and promote green packaging innovation. Welaunched a special campaign to reduce the weight of wovenbags. During the reporting period, we used recycled materialsto produce by-product woven packaging, and the woven bagfor amino acids was made using a lighter outer bag and a thin-ner inner lining. As a result, we reasonably reduced the con-
sumption of packaging materials and increased the amountof recycled packaging. During the weight reduction campaignin 2021 and 2022, the consumption of packaging materialswas reduced by an average of 716 metric tons per year, and anaverage of 981 metric tons of materials were recycled per year.In 2022, the Company’s revenue from products using greenpackaging materials accounted for 5% of its total revenue fromproducts.
We are committed to increasing the proportionof environmental labeling products; prioritizingthe use of renewable, reusable, and recyclablepackaging materials; and gradually eliminatingunnecessary packaging materials. Through opti-mization, we will achieve“reduction, reuse, andrecycling”.
By December 31, 2023, we will reduce the totalweight of packaging materials by 234 metric tons,including 180 metric tons of plastic packaging ma-terials for amino acid products, 53 metric tons ofplastic packaging materials for MSG products, and1 metric ton of paper drum packaging materials.
Meihua Group’s green packagingmaterial management philosophy
Meihua Group’s green packagingmaterial weight reduction targe
We will continue to pursue green packaging material management together with our packaging suppliers in the future. We willaccelerate the establishment and improvement of a green packaging system through packaging weight reduction and recy-cling and realize a green future.
Recycle and dispose of wastepackaging products and con-vert them into new substanc-es or energy;Use packaging waste or pro-cessing leftovers as raw ma-terials or ingredients to makerecycled packaging materialssuch as fiberboard and de-gradable plastics.
Meihua Group’s green packaging material campaign
Consumption of packaging materials
Minimize the total consump-tion of packaging materialswithout compromising func-tions for transportation, stor-age, and sales.
Dispose of used packagingmaterials and reuse them.
Paper18,225
metric tons
Wood3,372
metric tons
Plastic22,028
metric tons
ReductionReuseRecycling
Win-win Cooperation
Sustainable Supply Chain ManagementCommunity Engagement
Our sustainable development depends on the joint e?orts of our partners. We aspire to“developrecycling economy, bene?t chinese agriculture”. Besides comprehensively improving our respon-sible procurement practices, we work with high-caliber suppliers in the bio-fermentation andbio-pharmaceutical industries to boost sustainable development in the supply chain. Meanwhile,we perform corporate citizenship and participate in charitable activities to foster progress in socie-ty and build a better future for everyone.
6263Environmental, Social and Governance Report 2022ESG GovernanceLeading ProductCo-development
with Employees
AddressingClimate Change
Green FactoryWin-win Cooperation
Sustainable Supply Chain Management
To provide customers with high-quality green products, weintegrate sustainable development demands into the man-agement of the whole supply which extends from the procure-ment of raw materials, such as corn and coal, to the partner-ship with logistics companies and retailers at the end of thesupply chain. In 2022, we strictly observe guidelines and lawson human rights and anti-violent con?icts in the areas whereoperate. We developed an internal policy, which isthe Envi-ronmental and Labor Human Rights Sustainable ProcurementPolicy of Meihua Holding Group Co. Ltd. This policy containsregulations and agreements on human rights and anti-violentcon?icts with contractors, suppliers, and other business part-ners, aiming to build a fair, transparent, and sustainable sup-ply chain.
We uphold the vision and mission of purchasingwith value and realizing a procurement systemof excellence. With our supply chain capabilities,industry in?uence, and market expertise, we arecommitted to creating a more sustainable futurewith our suppliers and promoting our procure-ment system toward sustainability and respon-sibility.
In 2022, Meihua Group
Meihua Group’s sustainableprocurement strategy:
Meihua Group’s number of suppliers
Primary suppliersKey primary suppliersNon-primary suppliersKey non-primary suppliers
Direct procurement sup-pliers
Top 10 primary suppli-ers in the industry orregion with an annualprocurement value ofmore than 10 millionyuan
Non-direct procurementsuppliers with an annu-al procurement valueof more than 10 millionyuan and accounting forover 30% of total pro-curement amount (of asingle material)
Non-direct procurementsuppliers
383380538
saw
%of its products made from materials that were
traceable to the place of origin.
We strictly observe the Bidding Law of the People’s Republic of China. We have developedthe Suppliers’ Responsible Procure-ment Management Measures of Meihua Holding Group Co. Ltd.and established a supplier management mechanism coveringrisk management, admission, assessments, and terminations to improve the Company’s supply chain management.
Responsible Procurement
Supplier Risk ManagementEvery year, we identify and evaluate ESG risks among sup-pliers. Based on the industry and procurement volume, weidentify and assess suppliers’environmental, social andgovernance risk levels using our ESG risk evaluation matrix.The environmental dimension of the matrix includes sixindicators: carbon emissions, water grades, raw materialsources, pollutant discharge, biodiversity, and environmen-tal protection measures. The social dimension includesthree indicators: labor management, product responsibil-ity, and stakeholders. The governance dimension includesthree indicators: communication and feedback, corporategovernance, and corporate behaviors. That way, we are ableto comprehensively identify suppliers’ESG risks by grade,category, and discipline.
We grade suppliers based on the results of the ESG riskevaluation and divide them into high-risk, medium-risk,and low-risk suppliers. High-risk suppliers will be requestedto complete the Supplier ESG Questionnaire from time totime before we reassess and update their ESG risk level andprovide timely feedback. We control suppliers’ESG riskswith measures in the organization, systems, technology,and emergency response, and carry out ESG risk investiga-tions. We have made ESG risk management and control astandardized and regular practice and comprehensively im-proved our ESG risk identi?cation, prevention, and controlcapabilities. In 2022, we conducted ESG risk identi?cationand determination for our suppliers twice and identified123 high-risk suppliers, including 20 key primary suppliersand 0 key non-primary suppliers.
During supplier admission, we strictly observe relevant industry standards andthe ESG Management System of Meihua HoldingGroup Co., Ltd. for Suppliersand prioritize suppliers who are certi?ed in product quality and safety, employees’occupational healthand safety, environmental management, green products, data privacy, and information security. Obtaining ESG-related certi?ca-tions will be a necessary requirement for suppliers identi?ed as high-ESG-risk. For ESG medium-risk suppliers, we prioritize thosewho can provide ESG-related certi?cation documents during the admission process to select suppliers with strong advantages andgood intentions for partnership.
Supplier Admission
Rating criteria for suppliers’ risks
High-risk suppliers
The number of high-risk ESG indica-tors accounts for more than 30% (thedecisive factor for high ESG risk) andthe cumulative procurement value ofthe year is more than 10 million yuan.
Medium-risk suppliers
The proportion of high-risk ESG indi-cators is less than 30%, and the pro-portion of medium-risk ESG indicatorsis more than 40% (the decisive factorfor medium ESG risk) and the cumula-tive procurement value of the year isless than 10 million yuan.
Low-risk suppliers
Cases other than the above two are oflow ESG risk and the cumulative pro-curement value of the year is less than10 million yuan.
6465Environmental, Social and Governance Report 2022ESG GovernanceLeading ProductCo-development
with Employees
AddressingClimate Change
Green FactoryWin-win Cooperation
Criteria for supplier ESG assessments and rating
Type of suppliersDe?nitionRating criterionClass-A suppliersOutstanding suppliersSuppliers scoring 90 or above in the ESG assessmentClass-B suppliersQuali?ed suppliers
Suppliers scoring below 90 and above 75 or 75 in the ESGassessmentClass-C suppliers
Suppliers quali?ed afterrecti?cation
Suppliers scoring below 75 and above 60 or 60 in the ESGassessmentClass-D suppliersUnquali?ed suppliersSuppliers scoring below 60 in the ESG assessment
For admitted suppliers, we have developed Supplier ESGAssessment Criteria. Every year, we regularly conduct ESGassessments for suppliers through questionnaires, on-siteaudits, and video link. We put forward expectations andrequirements for suppliers’ social responsibility and envi-ronmental management and focus on the performance inlabor and human rights, health and safety, environmentalprotection, and business ethics when inspecting suppliers.
We have developed a Supplier ESG Assessment Form toscore admitted suppliers. Based on the ?nal total scores, weclassify suppliers into Classes A, B, C, and D. In addition, wewill give corresponding rewards or penalties to suppliersaccording to their ESG assessment results. In 2022, we con-ducted supplier ESG assessments and reviewed a total of763 suppliers, of which 57 were unquali?ed, accounting for7% of the total.
Suppliers who have received two Class C ratings must complete recti?cation and submit a recti?cation report within the pre-scribed time frame. If a supplier still fails to meet the standards after recti?cation, its products will be banned by the Company.Suppliers who have received D in an ESG assessment, provided false materials, had major ESG violations or violated the codeof conduct for suppliers will be banned in accordance with relevant disposal procedures to ensure the integrity and impartiali-ty of the supply chain.
Supplier Termination
As part of our commitment to establishing clean and healthy partnerships with suppliers, we emphasize compliance man-agement throughout the supply chain. We de?ne suppliers’ corruptive conduct in theAnti-Corruption Management Measuresof Meihua Holding Group Co., Ltd.We have formulated the Code of Conduct of Meihua Holding Group Co. Ltd. for Suppliers.A major focus of this policy is the prevention of child labor, the protection of basic human rights, equal treatment, businessintegrity, operational compliance, health, safety, and environmental protection. It covers labor and human rights, health andsafety, environmental protection, ethics, and corporate governance. With the above measures, we strictly regulate suppliers’
conduct and maintain a transparent procurement culture.
Compliance Management and Control Over Suppliers
We insist on transparency openness, cooperation, equality, and mutual bene?t. We have established e?ective communicationchannels for suppliers, including regular suppliers’conferences every year. We also encourage suppliers to participate in theexchange events regularly hosted by the Company to communicate, discuss, and share information regarding cost reduction,quality and service improvement, low-carbon technology, and human rights protection. In addition, we regularly deliver ESGtraining for suppliers to strengthen our partnerships and advance our mutual growth.
Communication with Suppliers
Supplier Assessments
Community Engagement
Despite our rapid growth and increased economic output,we have not forgotten our mission to give back to society andassist the disadvantaged. We make full use of our industryadvantages and support our public welfare undertakings. Wecontribute to rural revitalization, charitable donations, com-munity building, and the combat against COVID -19. Throughthese public welfare undertakings, we give back to societywith love and assist people in practical ways, fulfilling theCompany’s social responsibility. By the end of the reportingperiod, our employees spent 1,744 working hours in commu-
nity welfare activities such as student aid and environmentalprotection.We established the Tibet Meihua Public Welfare Foundation,and developed special management systems such astheDonation Management Measures of Tibet Meihua PublicWelfare Foundation. Our charity undertakings concentratein Hebei, Xinjiang, and Tibet. In 2022, we donated 4,320,323yuan to public welfare.
In 2022, Tibet Meihua Public Welfare Foundation held a variety of public welfare events, which were widely recognized by thewhole community.
We have carried out fertilizer donations for many years in a row. Through targetedassistance to farmers, we boost spring farming. Since 2020, we have donated 170,000metric tons of fertilizers, worth about 100.41 million yuan in total, bene?ting 140.67million hectares of farmland.In April 2022, the Tongliao Base donated fertilizers to farmers living nearby to ad-dress the rising prices of agricultural materials. The farmers expressed praise andthanks for the Company’s charitable deeds. In this campaign, 152,08 metric tonsof fertilizers were donated to farmers in 1,000 nearby villages and towns.
●Followed the initiative of the Tibet O?ce of the China Se-curities Regulatory Commission anad made poverty allevi-ation donation in Gulu Town, Naqu, Tibet, providing localresidents with daily necessities, rice, ?our, grain, oil, books,and other supplies.●Donated winter supplies to Guoke Village, Gulu Town,Seni District, Naqu, Tibet Autonomous Region.●Donated 5,010 sets of protective clothing to the Adminis-tration Committee of the Lhasa Economic DevelopmentZone.●Donated protective clothing, masks, and antiviral drugsto fight COVID-19 to Fukang Maternity and Children’sHospital in Chengguan District, Lhasa.
●Donated anti-epidemic supplies worth more than 360,000
yuan to help Jilin ?ght COVID-19.●Donated 5,000 sets of protective clothing and 30 boxes of
Lianhua Qingwen to aid COVID-19 prevention and control
in Xinjiang.●Contributed funds to the construction of the community
center of Sibao Village, Donggugang Town, Anci District,
Langfang, Hebei Province.●Visited the Linkong Checkpoint of the Langfang Public
Security Bureau.
Tibet Meihua Public Welfare Foundation’s public welfare events
Meihua Group’s fertilizer donation
A farmer bene?ted from the fertilizerdonation
GRI Index
Disclosure topic/Disclosure itemTitle of the disclosure itemChapter indexPageGRI 1: Foundation 2021GRI 2: General Disclosures 2021
2-1Organizational detailsAbout the Report022-2
Entities included in the organization’s sustaina-bility reporting
About the Report022-3Reporting period, frequency and contact pointAbout the Report022-4Restatements of information//2-5External assurance//2-6
Activities, value chain and other business rela-tionships
About Us062-7EmployeesAbout Us062-8Workers who are not employeesAbout Us062-22Statement on sustainable development strategy
Our Sustainable Development
Strategy
2-29Approach to stakeholder engagementStakeholder Engagement182-30Collective bargaining agreementsHuman Rights Protection36GRI 3：Material Topics 20213-1Process to determine material topicsStakeholder Engagement183-2List of material topicsStakeholder Engagement183-3Management of material topicsStakeholder Engagement18GRI 201：Economic Performance 2016201-2
Financial implications and other risks and oppor-tunities due to climate change
Risk Management46201-3
De?ned bene?t plan obligations and other retire-ment plans
Employee Incentives38GRI 204: Procurement Practices 2016204-1Proportion of spending on local suppliers
Sustainable Supply Chain Manage-
ment
GRI 205：Anti-corruption 2016205-1Operations assessed for risks related to corruptionBusiness Ethics and Anti-corruption20205-2
Communication and training about anti-corrup-tion policies and procedures
Business Ethics and Anti-corruption20205-3Con?rmed incidents of corruption and actions takenBusiness Ethics and Anti-corruption20
GRI 206: Anti-competitive Behavior 2016
206-1
Legal actions for anti-competitive behavior, anti-trust,and monopoly practices
Business Ethics and Anti-corrup-tion
GRI 301: Materials 2016301-1Materials used by weight or volumeRecycling of Packaging Materials58301-2Recycled input materials usedRecycling of Packaging Materials58301-3Reclaimed products and their packaging materialsRecycling of Packaging Materials58GRI 302: Energy 2016302-1Energy consumption within the organizationIndicators and Targets47302-2Energy consumption outside of the organizationIndicators and Targets47302-3Energy intensityIndicators and Targets47302-4Reduction of energy consumptionIndicators and Targets47302-5
Reductions in energy requirements of products andservices
Indicators and Targets47
GRI 303: Water and E?uents 2018
303-1Interactions with water as a shared resourceWater Resources Management53303-2Management of water discharge-related impactsWater Resources Management53303-3Water withdrawalWater Resources Management53303-4Water dischargeWater Resources Management53303-5Water consumptionWater Resources Management55GRI 305: Emissions 2016305-1Direct (Scope 1) GHG emissionsIndicators and Targets47305-2Energy indirect (Scope 2) GHG emissionsIndicators and Targets47305-3Other indirect (Scope 3) GHG emissions//305-4GHG emissions intensityIndicators and Targets47305-5Reduction of GHG emissionsIndicators and Targets47305-6Emissions of ozone-depleting substances (ODS)Waste Management54305-7
Nitrogen oxides (NOx), sulfur oxides (SOx), andother signi?cant air emissions
Waste Management54
Disclosure topic/Disclosure itemTitle of the disclosure itemChapter indexPage
Environmental, Social and Governance Report 2022
GRI Index
GRI 306: E?uents and Waste 2016
306-1Water discharge by quality and destinationWater Resources Management53306-2Waste by type and disposal methodWaste Management57306-3Signi?cant spillsWaste Management54306-4Transport of hazardous wasteWaste Management56306-5
Water bodies a?ected by water discharges and/orruno?
Water Resources Management53GRI 308: Supplier Environmental Assessment 2016308-1
New suppliers that were screened using environ-mental criteria
Responsible Procurement63308-2
Negative environmental impacts in the supplychain and actions taken
Responsible Procurement64GRI 401: Employment 2016401-1New employee hires and employee turnoverHuman Rights Protection37401-2
Benefits provided to full-time employees that arenot provided to temporary or part- time employees
Employee Incentives38401-3Parental leaveEmployee Incentives38GRI 403: Occupational Health and Safety 2018403-1Occupational health and safety management systemSafety Management28403-2
Hazard identi?cation, risk assessment, and inci-dent investigation
Safety Management28403-3Occupational health servicesSafety Management28403-4
Worker participation, consultation, and communica-tion on occupational health and safety
Safety Training29403-5Worker training on occupational health and safetySafety Training29403-6Promotion of worker healthSafety Management28403-7
Prevention and mitigation of occupational healthand safety impacts directly linked by businessrelationships
Safety Management28403-8
Workers covered by an occupational health andsafety management system
Safety Management28403-9Work-related injuriesSafety Management28403-10Work-related ill healthSafety Management28GRI 404: Training and Education 2016404-1Average hours of training per year per employeeDevelopment Training41404-2Programs for upgrading employee skills and transitionDevelopment Training41404-3
Percentage of employees receiving regular per-formance and career development reviews
Development Training41
Disclosure topic/Disclosure itemTitle of the disclosure itemChapter indexPage
GRI 405: Diversity and Equal Opportunity 2016
405-1Diversity of governance bodies and employeesHuman Rights Protection37405-2
Ratio of basic salary and remuneration of womento men
//GRI 406: Non-discrimination 2016406-1
Incidents of discrimination and correctiveactions taken
Human Rights Protection36GRI 407: Freedom of Association and Collective Bargaining 2016407-1
Operations and suppliers in which the right tofreedom of association and collective bargainingmay be at risk
Human Rights Protection36GRI 408: Child Labor 2016408-1
Operations and suppliers at signi?cant risk forincidents of child labor
Human Rights Protection36GRI 409: Forced or Compulsory Labor 2016409-1
Operations and suppliers at signi?cant risk forincidents of forced or compulsory labor
Human Rights Protection36GRI 413: Local Communities 2016413-1
Operations with local community engagement,impact assessments , and development programs
Community Engagement65413-2
Operations with signi?cant actual and potential nega-tive impacts on local communities
//GRI 414: Supplier Social Assessment 2016414-1
New suppliers that were screened using socialcriteria
Responsible Procurement63414-2
Negative social impacts in the supply chain andactions taken
Responsible Procurement64GRI 416: Customer Health and Safety 2016416-1
Assessment of the health and safety impacts ofproduct and service categories
Customer Service33416-2
Incidents of non-compliance concerning the healthand safety impacts of products and services
Customer Service33GRI 417: Marketing and Labeling 2016417-1
Requirements for product and service informationand labeling
Customer Service33417-2
Incidents of non-compliance concerning productand service information and labeling
Customer Service33417-3
Incidents of non-compliance concerning market-ing communications
//
GRI 418: Customer Privacy 2016
418-1
Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data
Customer Service33
Disclosure topic/Disclosure itemTitle of the disclosure itemChapter indexPage
6869
Environmental, Social and Governance Report 2022GRI Index
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Contact InformationAddress: No.66 Huaxiang Road, Economic and Technical Development Area, Langfang City, HebeiProvince, China, 065001Email: mhzqb@meihuagrp.comTelephone: +86 0316-2359652