海口国际免税城
三亚国际免税城
Environmental, Social and
Governance Report
2023
China Tourism Group Duty Free Corporation LimitedStock Abbreviation：CTG DUTY-FREEA Share Stock Code：601888.SHH Share Stock Code：01880.HK
China Tourism Group Duty Free Corporation Limited 2023 Environmental, Social and Governance Report
Environmental, Socialand Governance Report
Stock Abbreviation: CTG DUTY-FREEStock Code: 601888.SH 01880.HK
China Tourism Group DutyFree Corporation Limited2023
About this Report
IntroductionThis report is the third Environmental, Social and Governance Report (hereinafter “ESG Report”, “this Report” or “the Report”) issued byChina Tourism Group Duty Free Corporation Limited (hereinafter “CTG DUTY-FREE”, “the company”, or “we”) and its af?liated companies.Reporting ScopeUnless otherwise stated, the scope of content disclosed in the ESG Report is consistent with that of the company’s Annual Report.Reporting PeriodThe period of this Report is from 1 January to 31 December 2023. To enhance the readability of the Report, some contents or data refer toprevious years or extend to the date of disclosure of the Report.Source of InformationThe information and data provided in the Report have been obtained from our internal documents, statistical reports and ESG-relatedperformance summaries. Unless otherwise speci?ed, the currencies involved in the Report are all measured in.Reporting PrinciplesThis Report is prepared in accordance with theESG Metrics System for ESG Reports of Listed Companies Controlled by CentralState-owned Enterprisesissued by the State-owned Assets Supervision and Administration Commission of the State Council (the “SASAC”)and theEnvironmental, Social and Governance Reporting Guide(“ESG Guide”), Appendix C2 to theRules Governing the Listing of Securitieson the Main Board of The Stock Exchange of Hong Kong Limited (“Hong Kong Stock Exchange”), and with reference to the following rules:
?TheGuidelines for State-owned Enterprises Directly under the Central Government on Ful?lling Corporate Social Responsibilities
issued by the SASAC;?TheGuidelines No. 1 for Application of Self-regulation Rules for Listed Companies – Standardised Operationissued by the ShanghaiStock Exchanges (the “SSE”);?TheGuideline No. 14 for the Application of Self-regulation Rules for Listed Companies – Sustainability Reporting (Trial) (ExposureDraft) issued by the SSE;?TheGuidelines on Corporate Social Responsibility Reporting in China released by Chinese Academy of Social Sciences(“CASS-ESG
5.0”)
?
Global Reporting Initiative’s Sustainability Reporting Standards (“GRI Standards”)?TheTen Principles of the United Nations Global Compact? United Nations Sustainable Development Goals (SDGs)Reporting principlesMateriality: We identi?ed key ESG issues through materiality assessment, the process and results of which have been disclosed in this report.Quantitative: For those indicators need calculation, calculation sources have been disclosed in this Report.Consistency: We follow a consistent approach for disclosure statistics and maintain the same disclosure statistics for this report in respect ofinformation previously disclosed in the report for last year to the largest extent.
About this Report
Release Form of the Report
The electronic version of this Report can be downloaded from the company’s of?cial website or obtainedby following the WeChat of?cial account of “CTG DUTY-FREE Investor Relations”. This Report is publishedin Simpli?ed Chinese, Traditional Chinese and English. In the event of any discrepancy between the threeversions, the Simpli?ed Chinese version shall prevail.
CONTENTS
About this Report
Letter from the Management
Social ResponsibilityPerformance Overview
Statement of the Board ofDirectors
About the Company
Robust Governance System for Long-term Stable Operations
Exercising Stronger Governance toImplement ESG Concepts
Complying with Commercial Ethics toReinforce Internal Control Compliance
Delivering Excellent Services for People’sWell-being
54Creating a Comfortable Environment for
Consumption to Ensure Trusted BusinessOperations55Optimising Supply Chain Management
Driven by the Environment and Intelligence58Engaging in Charity Initiatives to Act as a
Responsible Corporate61Setting the Industry Benchmark for High-
quality Development
Principles ofGovernance
Prosperity0102
Appendix
Glossary of Terms
Index
ESG Metrics System for ESG Reports of Listed CompaniesControlled by Central State-owned Enterprises IndexHKEX Environmental, Social and Governance Reporting Guide IndexGRI Standards Index
Protecting Employee Rights andPromoting Their Interests
Diversified Training to Promote StaffDevelopment
Operational Safety and Physical andMental Health
Addressing Climate Change toProtect the Environment
Embracing Green Buildings to Fulfilthe Green Building Philosophy
Green and Low-Carbon Operationsfor a Better Life
Comprehensively Promoting RuralRevitalisation to Facilitate Common Prosperity
Supporting Local Economic Development andFacilitating the Construction of Hainan FreeTrade Port and the Guangdong-Hong Kong-Macau Greater Bay Area (GBA)
Cooperating Overseas to Improve theCompany’s Brand Image under the Belt andRoad Initiative
Taking Green Actions and Joining Hands withBrands to Deliver Green Value
Cooperating in Commercial Activities to Deliver aPositive Impact on Society
Assisting Brands in Implementing ESG Concepts
Topic 1:
Proactively Responding to NationalStrategies by Fulfilling our Mission as aCentral State-owned Enterprise
Topic 2:
Capitalising on Our Competitive Edgeto Jointly Uphold ESG Concepts withBrands
PeoplePlanet0304
Dear stakeholders:
2023 marked the first year in which the spirit of the 20th CPCNational Congress was fully implemented, and in response, CTGDUTY-FREE forged ahead and pursued concerted action. Duringthe year, the company won a number of awards, such as the titleof Model for World-class Specialised and Innovative Enterprisefrom SASAC. As a responsible central state-owned enterprise, thecompany has been working with stakeholders to actively embracethe world and lead the development of the global tourism retailindustry.Responding to National Strategies as a Central State-ownedEnterprise
The company actively supported national strategies, strived toful?l its duties as a committed central state-owned enterprise, andcontinued to uphold its original beliefs and mission. During theyear, we comprehensively promoted rural revitalisation and spentCNY13.37 million on assistance efforts to consolidate and expandachievements in assistance projects, strengthen assistance at alllevels, promote the development of rural industries, improve livingand working conditions in rural areas, and forge beautiful ruralareas. The company also supported local economic developmentand facilitated the construction of Hainan Free Trade Port.We focused on our major responsibilities and core business
Mr. WANG XuanChina Tourism Group Duty Free Corporation LimitedChairman and General Manager
Letter from the Management
Letter from the Management
Engaging in High-quality Development, Pursuing Long-termStable Operations
With high-quality development as our core direction, andfocussing on the goal of “building a central state-owned enterprisethat upholds the principles of integrity, safety, environmentalawareness, and harmony”, we have put in place a robustgovernance system to enable long-term stable operations, and weare exercising stronger governance to implement ESG concepts.While steadily upholding the concept of “trusted businessoperations and excellent services”, the company is expanding itsofferings of high-quality goods and services, and encouraging thevigorous development of China’s duty-free market. We protect therights and interests of employees, care about their development,and continuously optimise our career platform to promote thedevelopment of both employees and the company. We care forthe planet, protect the environment, and engage in green andlow-carbon operations. The company is acting quickly to analysethe potential challenges that climate change may bring, deploymitigation and adaption measures, and explore opportunities.Over the past year, CTG DUTY-FREE has been strengthening itscapabilities, actively embracing the world and acting as a leaderin the duty-free tourism retail industry. The company is usinginternational events such as the China International ConsumerProducts Expo (CICPE) and the Asian Games to tell a new storyabout the tourism retail industry in China, and it is calling forenhanced cooperation among all stakeholders to embrace a brightfuture for the industry. We are looking forward to a prosperousfuture alongside all our stakeholders. During this new developmentstage, we aim to help create a new development landscape andpursue win-win results for the environment, society and economy,and we are fully committed to delivering results that meet societalexpectations.
China Tourism Group Duty Free Corporation Limited
Chairman and General Manager
Mr. WANG Xuan
March 2024
and strived to seize favourable opportunities, which includedsuccessfully competing with overseas destinations to attracttourists and consumer spending. The company adheres to thestrategy of “laying deep roots in Hainan” and makes great effortsto explore investment and development opportunities on theisland. To this end, we have opened six offshore duty-free stores inHaikou, Sanya and Boao, fully covering visitors leaving Hainan by“plane, ship or train”. At the same time, the company has seizeddevelopment opportunities in the GBA by opening duty-free storesin Guangdong, Hong Kong, and Macau with a view to facilitatingthe construction of the GBA. The company is actively respondingto the Report to the 20th National Congress of the CPC, takingaction in line with the Belt and Road Initiative, actively exploringoverseas markets, and promoting tourism retail business in orderto “Go Global”. In recent years, the company has steadily pursuedtourism retail opportunities in Cambodia, Singapore and otherSoutheast Asian countries.Collaborating in Pursuit of Innovation and SustainableDevelopmentWe fully leveraged our influence in the supply chain andcooperated with multiple partners – from brand partners toconsumers – to jointly explore innovative paths to green andsustainable development, and we cooperated with upstreambrand partners and downstream consumers to carry out greenenvironmental protection activities. In this way, we are conveyingthe “green cdf” message to our customers. The companycontinued to engage in in-depth cooperation with brands tojointly explore social bene?ts in the ?elds of art and culture, whilealso encouraging partners to implement ESG concepts andassisting brands in developing ESG products. The company is fullycommitted to meeting customers’ desire for a better life. We offer awide variety of merchandise to meet consumers’ shopping needs,while also promoting the coordinated and sustainable developmentof the environment, society and economy.
三亚国际免税城
First classFirst-class travel retail operator in the worldRanked No. 1 among tourism retail playersin the “Top 500 Most Valuable Brands inChina” rankings for the 20th consecutiveyear
Ranked first
Ranked No.1 in China in terms of numberof duty-free brandsWith the wildest product range and themost diversified portfolioTop twoWe operate the two largest duty-freeshops in the world – Haikou InternationalDuty-Free Shopping Complex and SanyaInternational Duty-Free Shopping ComplexMost comprehensiveWith full coverage on on-board aircrafts,borders, foreign ships, passenger stations,railway stations, diplomatists, cruises anddowntown channels, we are the travelretail operator with the complete types ofduty-free shops and the largest number ofretail stores in a single country worldwide
1,455 well-known brands
About 1,455 well-known brands in the world arein our duty-free shops16,789 employeesThere are 16,789 total employees as at the endof 2023100% training coverage,
more than 547,000training hours
The employee training coverage reaches 100%,with more than 547,000 training hours in total.
45:55The ratio of male and female employees is 45:55,and females in the Board of Directors and theSupervisory Committee account for 37.5%,females in the senior managerial roles account for20% and in middle managerial roles account for35%.
EconomicSocial
CNY675 billionOperating income reaches CNY675 billionCNY67 billionNet profit attributable to shareholders oflisted company reaches CNY67 billion
CNY64 billionVarious taxes and fees paid in 2023 reachCNY64 billion
350,000Selling over 46 types of goods, and over350,000 SKUs of goods
Social Responsibility Performance Overview
* All the above are data as of the end of 2023 or for the year 2023. Please refer to the 2023 Annual Reportfor details of ?nancial data.
China Tourism Group Duty Free Corporation Limited ? 2023 Environmental, Social and Governance Report
三亚国际免税城
Green building certification
Both Haikou International Duty-Free Shopping Complex and Sanya International Duty-FreeShopping Complex Zone C have obtained LEED Gold certification
;Both Sanya International Duty-Free Shopping Complex Phase 1 Plot 2 Commercial Projectand Haikou International Duty-Free Shopping Complex Plot 1 have obtained 2-star GreenBuilding pre-certification.
25.78 million shopping bags
In Hainan province, more than 25.78 million shopping bags that meet environmentalprotection requirements have been provided, effectively reducing the generation ofnon-degradable plastic waste18 LEED Certifications18 stores/counters have received LEED certifications, including 16 LEED Gold certificationsand 2 LEED Sliver certifications
0.0177 Tons of standard coal/m
0.0177 Tons of standard coal/m
of comprehensive energy intensity
0.04 tonnes of carbon dioxide equivalent
Greenhouse gas emissions per square metre are 0.04 tonnes of carbon dioxide equivalent
SocialEnvironmentalCNY27.93 millionWe invested CNY27.93 million in operationsafety, organised 663 safety trainingsessionsCNY13.37 millionWe spent CNY13.37 million in ruralvitalisation, implemented 10 assistanceprojects and attracted CNY2.60 million toassistance projects
32 million32 million registered cdf members
Social Responsibility Performance Overview
LEED or Leadership in Energy and Environmental Design is a rating system devised by the UnitedStates Green Building Council (USGBC) to evaluate the environmental performance of a building.
Social Responsibility Performance Overview
Statement of the Board of Directors
In order to standardise the ESG management mechanism and enhance the quality of ESG management, CTG DUTY-FREE has established an ESGgovernance structure with the Board of Directors having the highest responsibility and decision-making authority for ESG matters, bearing full responsibilitiesfor the company’s ESG strategy, target management and information disclosure, and approving ESG improvement proposals. The Strategy andSustainability Committee mainly conducts surveys and puts forward proposals on the company’s ESG development strategy, policies and targets, as wellas substantive issues focused by stakeholders. It is also responsible for inspecting the implementation and improvement of ESG activities, and reviewingthe company’s reports on sustainable development and ESG matters. The company establishes the ESG Leadership Group, which is headed by theChairman of the company; the deputy head of it is the General Manager; and its members include heads of departments. The ESG Leadership Group isresponsible for managing and coordinating the company’s ESG-related work, which establishes and improves the company’s management system andoperating mechanism for ESG-related work, and it also formulates ESG work plans and integrates the company’s development strategy, image, brandingand operations with ESG concepts.Based on the external environment and the development strategy of the Group, CTG DUTY-FREE has identified 13 key ESG agendas through theengagement of stakeholders during the reporting period and thus clari?ed its critical tasks, including excellent service experience, customer satisfaction,health and safety of products employee welfare and satisfaction, health and safety of employees, employee career development and skill upgrading,employee diversity and equal employment, the integrity of operations, supply chain management, information security and privacy protection, responseto national strategies, collaborating with brand partners to promote environmental protection, response to climate change. The above issues have beenexamined and the performance has been improved in routine work, and target-oriented management has been carried out accordingly. In the future, wewill continue to regulate our sustainable development management strategy and promotion methods according to the expectations of stakeholders and theactual operation of the Group, in an effort to continuously improve the level of sustainable development.The Report provides detailed information on the progress and achievements regarding CTG DUTY-FREE’s ESG efforts in 2023 and has obtained approvalfrom the Board of Directors on 27 March 2024. The Board of Directors and all directors of the company hereby guarantee that the information presentedin this Report is free from any false records, misleading statements or material omissions, and undertake joint and several liabilities for the authenticity,accuracy and completeness of the information.
Company OverviewChina Tourism Group Duty Free Corporation Limited (stock abbreviation: CTG DUTY-FREE; stock code: 601888.SH 01880.HK) was listedon the Shanghai Stock Exchange in October 2009 (previously known as “China International Travel Service Co., Ltd.”, the stock abbreviation“China CITS”), and was listed on the Main Board of the Hong Kong Stock Exchange in August 2022. Our company mainly engages in duty-free business, including the wholesale and retail of duty-free commodities such as fragrance, luxury, jewellery, watch, etc. Moreover, thecompany is also involved in investing and developing commercial complexes with duty-free business as the core.Our company has established long-term and stable cooperations with 1,455 renowned brands worldwide. It also has set up over 200 duty-free shops in more than 30 provinces, cities, autonomous regions and special administrative regions in China, and also Cambodia, coveringairports, on-board aircrafts, borders, passenger stations, railway stations, foreign cruise supply, diplomatists, cruises and downtowns(offshore, departures) in these regions. Its eight customs-supervised logistics centres in Dalian, Qingdao, Shanghai, Shenzhen, Haikou,Sanya, Hong Kong SAR and Beijing cover the entire country. Its main sales channels cover large domestic hub airports in Beijing, Shanghai,Guangzhou, Chengdu and Hangzhou, international airports in Hong Kong SAR and Macau SAR in the Asia Pacific region, and SanyaInternational Duty-Free Shopping Complex, Haikou International Duty-Free Shopping Complex. China Duty Free Group has developed into atravel retail operator with the most complete types of duty-free shops and the largest number of retail stores in a single country in the world,providing duty-free commodity services to nearly 200 million domestic and foreign tourists every year.The “courageous, professional ef?cient, cooperative, innovative” corporate culture has been fostered during the company’s developmentover the years, and it is with this culture that we face challenges bravely and overcome dif?culties. In recent years, the company’s corefunctions and capabilities such as procurement, operations, channel expansion, digitalisation and marketing have been continuouslyenhanced. Our business has been steadily transformed and upgraded, achieving leapfrog development.In the future, our organisation will maintain the continuous, stable and healthy growth of the duty-free business, adhering to the conceptof “customer-centered, market-oriented”, with “duty-free business” as the core to upgrade the value chain, and “tourism retail” as theextension to upgrade the industrial chain to build a more globally competitive world-class travel retail operator.
About the Company
Corporate Culture
Corporate MissionShare the joy ofshopping and extend theenjoyment of travelCore ValuesCourageous,professional ef?cient,cooperative, innovative
Brand Positioning
The world’s leadingtravel retail operator
Operation ConceptCustomer-centered,
market-oriented
About the Company
1989
An of?ce of China Duty FreeCorporate was established inHong Kong SAR to strengthenthe overseas procurement anddistribution capability of duty-
free merchandise.
1990
Our Beijing Downtown Duty Free Shop, the first downtown duty-free store in China,
commenced its business operation.
1996Our Heihe Border Duty Free Store, the ?rst duty-free shop on the border of Asian countries
was established.
1997We began to sell domestically produced goods in dutyfree shops, showcasing the Chinese domestic brands andproducts to the world.
Our Milestones
Over the past 40 years, the company has developed intothe world’s leading travel retail operator by successfullyseizing opportunities and addressing challenges:
1984
The PRC State Council of?cially authorised theestablishment of China Duty Free Company.
2004
We are selected as one of thefranchised retailers for the 2008Beijing Olympic Games.
2006
We entered the internationalmarket and established its?rst sales terminal in theoverseas market.
2014? Our Sanya International Duty-Free Complexcommenced its business operation as the?rst travel retail complex in China. It wasthe largest standalone duty-free store in theworld in terms of sales area at that time.? Our ?rst overseas downtown duty-free store
commenced operation in Angkor, Cambodia.
2017Acquired Sunrise Duty Free (China) Co. Ltd.
2011Our Sanya Downtown Duty Free Storecommenced its business operation as the ?rstoffshore duty-free store in Hainan province.
2009We successfully listedon the Shanghai StockExchange.
2018? Acquired Sunrise Duty Free (Shanghai)
Co., Ltd.? The ?rst independent cruise duty-
free shop in China commenced its
business operation.
2020? Acquired Hainan Duty-free Co., Ltd.? We became the world’s largest travel retail operator;the membership system of cdf was of?cially launched,marking a historic breakthrough in online and of?ineinterconnection, domestic and overseas interconnection.
2022
? Listing on the Hong Kong StockExchange? Grand opening of Hiakou International
Duty-Free Shopping Complex, thelargest single duty-free shop worldwide? Ranked as the world’s largest travelretail operator for the three consecutiveyears
2021
We remained the No.1 travel retail operator inthe world.
2023Awarded the title of Model for World-class Specialised
and Innovative Enterprise by SASAC
About the Company
Honours and Awards
The list of honours and awards is not exhaustive.
1 Awarded the title of Modelfor World-class Specialisedand Innovative Enterprise bySASAC
2 Selected into the “Grade A
(Excellent) Companies” in
the Information DisclosureEvaluation of the ShanghaiStock Exchange for eightconsecutive years
4 Included in the5th session“Best Listed
Companies”selected by “NewFortune”
External Governance and Investor Relations Awards Received in 2023:
3 Received the “Hong Kong EquityIssue of the Year 2022” award
from IFR Asia
Recognised among the ListedCompanies with the BestCompetitive Edge in the “GoldenPhoenix Tree Awards” at theChinese Listed CompaniesInvestment Value Summit jointlyorganised by the China IndustrialCooperation Association, Ji’anFintech Corporation and TMTPost
6 Included in the “2023 Phoenix
Star Hong Kong Stock BestListed Companies” selected
by Phoenix TV and PhoenixNew Media
7 Received the “Best IR Team”award and “Most Honoured
Company (Consumer and Non-Staples Category)” award in the
“Institutional Investor 2023 Asia
(Ex-Japan) Executive Team”selection
8 Received the “InvestorRelations ManagementAward” in Securities Market
Weekly’s 2023 Capital MarketCrystal Ball Selection
9 Received the “Best ResponsibilityAdvancement Award” and“Best Corporate GovernanceResponsibility Award” from SinaFinance
10 Received the “Best DigitalInvestor Relations Award”,
“Best Information DisclosureAward” and “Best ESG Award”at Excellence in IR’s 7th AwardsCeremony
About the Company
11 Ranked first in theselection of “China’s 500Most Valuable Brandsof 2023” for the tourismservice sector by WorldBrand Lab
12 Recognised among the “Top 20 ChineseTourism Groups in 2023” at the “2023Chinese Tourism Group DevelopmentForum” sponsored by the China TourismAcademy and China Tourism Association
13 Received the “MostInfluential CommunicationsAward” in the “2023 CaijingMagazine EvergreenAwards” selection
14 Awarded the title of “Most Influential Culturaland Tourism Brand Value CommunicationEnterprise of 2023” at the 10th Culture andTourism Integration and Innovation Forumorganised by Xinhuanet
15 Received the “AnnualInfluential BrandCommunications” awardat the 8th Southern WeeklyBrand Conference
Brand Communication Awards Received in 2023:
17 Included in the “Leading 100ESG Cases of Chinese ListedCompanies” selection at the
2nd Sustainable Investment andFinancing (ESG) and Free TradePort Construction Forum held inSanya
19 Received the ESG Pioneer
Award for Listed Companiesin 2023 at the “8th GoldenOrange Awards of TimesFinance” organised byGuangdong Times MediaGroup
18 Recognised among
the “Outstanding ESGPractice Cases of ListedCompanies” by theChina ESG ObserversConsortium
20 Included in the “ESGExcellence TOP 20Ranking” at the “2023
Zero-Carbon MissionInternational ClimateSummit”
21 Recognised among the “Top 100
Best ESG Practices among ListedCompanies in China for 2023” by
Wind
22 Received the Best ESGPractices Award for ListedCompanies in 2023 fromYidong and Value Online
ESG and CSR Awards Received in 2023:
16 Included in ESG-Pioneer
100 Index of CentralEnterprises released bythe parallel forum of thesixth China EnterpriseForum under the guidanceof the Bureau of SocialResponsibility underSASAC and China SocialResponsibility 100 Forum
About the Company
CTG DUTY-FREE actively responds to United Nations (UN) SustainableDevelopment Goals (SDGs) 1 and 10 by extensively engaging in ruralrevitalisation with a view to promoting common prosperity.
To meet its social responsibility as a corporate citizen, the company is fully committed to responding to national strategies, ful?lling its originalaspirations and missions, and creating sustainable economic, social and environmental value.Comprehensively Promoting Rural Revitalisation to Facilitate Common ProsperityThe 20th Communist Party of China (CPC) National Congress has showcased the Chinese path to modernisation and the ambition toachieve the great rejuvenation of the Chinese nation. Rural revitalisation is key to the effort to build a modern socialist country in an all-roundway. In 2023, the company spent CNY13.37 million in rural vitalisation and implemented 10 targeted assistance projects to promote therevitalisation of industry, talent, culture, ecosystems and organisations in Menglian and Ximeng counties. In addition, the company attractedCNY2.60 million in alleviation donations, among which CNY1.3 million was provided unconditionally and CNY1.3 million was provided inthe form of an investment. The company also supported various training activities for 277 grassroots county of?cials, 382 leaders in ruralrevitalisation and prosperity, and 2,215 professional technical personnel. In addition, the company’s trade unions spent CNY1.335 millionto procure local agricultural products from Menglian and Ximeng counties, and leveraged its advantages as a leading tourism retailer, thecompany assisted in selling agricultural products, generating CNY3.93 million in revenue. In addition, to promote organisational revitalisation,we conducted Party-building and joint-construction activities as part of our paired assistance efforts. The company’s Party branch inKunming signed joint-construction agreements with four grassroots Party organisations in Menglian and Ximeng counties in 2023.
Proactively Responding to National Strategies by Ful?llingour Mission as a Central State-owned Enterprise
The company spent CNY13.37 million
assisted in selling agriculturalproductsCNY3.93 millionImplemented
targeted assistanceprojects
Supported various training activities for
2,874
grassroots countyof?cials and other categories ofpersonnel
Counting2023
Topic 1
Topic 1
The “Xing Lv Yun Pin” store opened on thesame day that Haikou International Duty-FreeShopping Complex officially opened. At thestore, visitors can purchase a wide variety oflocal specialties, such as ice wine, beef jerky,tea, preserved fruit, leisure food, honey andcoffee sourced from seven cities or countiesin four provinces (Ximeng County, MenglianCounty, Shangri-La City and Deqin Countyin Yunnan Province, Linxia City in GansuProvince, Bayingolin Prefecture in XinjiangProvince, and Lichuan County in JiangxiProvince).
Case study: “Xing Lv Yun Pin” store at HaikouInternational Duty-Free Shopping Complex
▼
Xing Lv Yun Pin store in Haikou InternationalDuty-Free Shopping Complex
Assistance by ConsumptionIn an effort to promote consumption, the company has taken various measures, such assetting up “Xing Lv Yun Pin” stores at Sanya International Duty-Free Shopping Complex andHaikou International Duty-Free Shopping Complex, and establishing WeChat groups amongcommissioned officials to facilitate the sales of local agricultural products and encouragefarmers to participate in trade fairs. Harnessing our extensive customer resources, we havealso strived to promoted the sale of local specialty products across the country, which hassigni?cantly increased the income of local farmers.
▍Consolidating and Expanding Achievements in Targeted assistance
Assistance for Immediate Need
To strengthen its achievements in assistance projects, thecompany spent CNY300,000 in the “Temporary Relief”assistance project (formerly known as the “Together –Rescue and Relief” project) in Menglian County to alleviatepressure on villagers experiencing difficulties as a result ofillness, emergencies, accidents and other issues. In 2023,a total of 58 people benefited from the “Temporary Relief”assistance project.
the company spent CNY300,000in the “Temporary Relief” assistance project
▼Photos of assistance work
▍Strengthening Responsibility for Assistance at All Levels
In 2023, the company’s Party Committee ?rmly shoulderedits responsibility for targeted assistance. During theyear, the Party Committee held four special meetings onimproving targeted assistance and implementing the workingmechanism for paired assistance. During two on-site visitsto Menglian and Ximeng counties in Yunnan Province, thecompany’s managements gave instructions to frontlinepersonnels and supervised the assistance projects to ensuretheir successful completion in 2023.
In 2023, the company successfully completed the rotation ofdesignated commissioned of?cials to paired counties. Aftertaking over the assistance missions, the newly designatedcommissioned officials continued conducting extensivesurveys of frontline personnels diligently, and took theinitiative to organise and implement a number of assistanceprojects to promote industrial development, cultural tourism,the living environment, talent training and people’s livelihood.As a result, the officials were able to make a significantcontribution to the effort to effectively connect assistanceachievements and rural revitalisation in Menglian and Ximengcounties.
Enhancing OrganisationalLeadership
Designation of CommissionedOf?cials
Assistance in the Cultural Sector
The company is dedicated to helping Menglian and Ximeng counties maintain their unique ethnic minority cultures, while also exploring thepath to rural revitalisation through the development of the cultural sector.
▼Aka Stage: an event venue for Hani ethnic minorities in Yongqian old village
▼
Akha Swing: a wooden swing for folk activities used by Hani ethnicminorities in Yongqian old village
▼
A Hani ethnic restaurant in Yongqian old village decorated for the EniJuema Banquet
▼A park used for fishing by Hani ethnic minorities in Yongqian old village
Assistance for Rural IndustryWe strive to use innovative business models to cultivate new industries in rural areas. In 2023, under the government’s “One Industry in One County” strategy,the company focused on the avocado industry in Menglian County, spending CNY1.06 million to comprehensively improve the county’s avocado industry in?ve areas: market orientation, organised development, green transformation, specialisation and scale expansion. These measures have effectively promotedthe healthy development of the avocado industry, extended the industry chain and broadened sales channels. With the help of the company’s efforts, in 2023,Menglian County’s avocado industry generated revenue of more than CNY500 million and sales of fresh fruit exceeding 10,000 tonnes.
The company attaches great importance to the transfer of technical know-how, and to this end, it continuously makes efforts to hold training sessions for ruralbrokers (bellwethers of rural revitalisation and prosperity), covering the resource economy, port economy, livestream e-commerce, and the development of theplanting and breeding industries. In this way, we are cultivating high-quality rural brokers, providing job opportunities for villagers, and taking measures to boosttheir annual incomes, with a view to improving villagers’ working and living conditions and supporting rural revitalisation in Menglian and Ximeng counties.
▼People in Menglian County receiving session 1 of a training course on avocado industry management from theChinese Academy of Tropical Agricultural Sciences under the theme of “One Industry in One County”
▼
An avocado product sample
▍Promoting the High-Quality Development of Rural Industries
Topic 1
▍Improving Living and Working Conditions to Forge Beautiful Rural Areas
Assistance for EducationThe company continued supporting the “Star of Hope” teachers programme. During the year, we launched a paired assistance project between ZhenxiongSenior High School, the af?liated school of Yunnan Normal University with Menglian County to enhance the collaboration on teaching management and leadingeducational resources, with a view to promoting education in Menglian County. The company’s contribution to the “Star of Hope” teachers programme hasenabled students in Menglian and Ximeng counties to access high-quality education resources and pursue a better education.
▼Activities under the “Star of Hope” programme
Rural ConstructionTo vigorously develop rural tourism and improve farmers’ ability to grow their income and pursue a better life, the company has made steady contributions to theBeautiful Village project, which aims to assist villagers in shaping their towns into pleasant ethnic settlements that preserve their rural character. As part of thisinitiative, the company launched a rural tourism construction project in Laga, Yongqian old village, Mangxin Town, Menglian County. In 2023, we implementedthe fourth phase of the project, which mainly included constructing a new tour path around the village, improving the village’s landscaping and decorations, andbeautifying housing in the village.
▼
A Road of Hani ethnic minorities
▼Houses in Yongqian old village
▼An aerial view of Yongqian old village
▼Greenery around Yongqian old village
Supporting Local Economic Development and Facilitating the Construction of HainanFree Trade Port and the Guangdong-Hong Kong-Macau Greater Bay Area (GBA)Focusing on its major responsibilities and core business, the company has strived to seize favourable opportunities in Hainan – which is successfully competingwith overseas destinations to attract tourists and consumer spending – in order to actively facilitate the construction of Hainan Free Trade Port and the GBA.▍Laying Deep Roots in HainanIn its effort to explore investment and development opportunities in Hainan, the company adheres to the business philosophy of “engaging in trusted businessoperations and providing excellent services”, and the strategy of “laying deep roots in Hainan”. Taking advantage of the favourable policies for Hainan Free TradePort, we have opened six offshore duty-free stores in Haikou, Sanya and Boao, striking a geographical balance in an effort to fully cover visitors leaving Hainanby “plane, ship or train” and enhance their shopping experience. Moreover, Sanya International Duty-Free Shopping Complex and Haikou International Duty-FreeShopping Complex – located at the southern end and northern end of Hainan Island, respectively – are strongholds in our Hainan network and act as integratedtourism retailers with a dual focus on “duty-free retail and cultural tourism”, with duty-free business as the foundation.
Haikou International Duty-Free Shopping Complex
Qionghai Boao Duty-Free Store
Sanya International Duty-Free Shopping Complex
Haikou Meilan International Airport
Duty-Free Store
CDFG Sanya Airport Duty-Free Store
Haikou Riyue Square Duty-Free Store
Topic 1
Leveraging brands, services and creativity, the company has been able to steadily introduce premium-brand flagship stores that offer a unique shoppingexperience and set an example for innovation in duty-free consumption in China.
The company is also committed to promoting the upgrading of the tourism industry. For example,we have organised joint promotion activities at the Hainan Tourism Consumption Carnival for twoconsecutive years. Through these types of initiatives, we are promoting common development andleveraging the advantages of the industry chain to position Hainan as a premium tourism destination forglobal consumers.We are committed to continuously satisfying consumers’ growing demands and pursuit of a better life. Tothis end, we are steadily introducing more brands and better services and providing a more convenientand pleasurable retail experience to Hainan’s offshore duty-free consumers, with a view to offeringtravellers the joy of “seeing the world and shopping at cdf”.
cdf Sanya International Duty-Free Shopping Complex Block C and the Global Beauty Plaza were inaugurated on 28 December 2023. The Global BeautyPlaza, which is housed within Block C, offers an array of top international beauty brands, unique design styles, high-quality services, and a blend of fashionand artistic elements. It is designed to provide consumers with better travel and retail experiences and enhance both cdf Sanya International Duty-FreeShopping Complex and Hainan’s position as world-class tourism and shopping destinations.
Case study: cdf inaugurated the Global Beauty Plaza in Sanya International Duty-FreeShopping Complex Block C
Project Style
cdf Sanya International Duty-Free Shopping Complex Block C, which covers an area of 78,000square metres, was jointly designed by Büro Ole Scheeren and Valode & Pistre Architectes. Theoverall design was inspired by a docked yacht and tells the story of a “Fragrant Journey”. The atriumdesign features three different themes: “The Journey of a Seed”, “Green Wonderland”. The artcorridors, which link Block C to Blocks A and B, were designed with the themes of “A tunnel of time”and “A Corridor of Flowers”. The design imbues Block C with a unique ambience and style whileforming a cohesive connection between the new block and other structures in the complex. It alsohighlights Hainan’s tropical climate and natural landscape and offers an immersive experience forvisitors.Brand Introductioncdf Sanya International Duty-Free Shopping Complex Block C expansion has been accompanied bya string of high-pro?le openings, greatly strengthening the complex’s beauty offerings. Beauty giantssuch as Lanc?me, Estée Lauder and Dior have all introduced their ?rst-ever two-storey travel retail?agship stores, while Maison Francis Kurkdjian and Pat McGrath Labs have chosen to showcasetheir latest and China travel retail-exclusive designs and concepts in Block C. The introductionof these new shops provides a wider selection of retail options and a more interesting shoppingexperience to consumers.cdf Sanya International Duty-Free Shopping Complex currentlyoffers over
Chinese and international brands
Customer ExperienceIn addition, shoppers can enjoy a variety of high-quality servicesand facilities at cdf Sanya International Duty-Free ShoppingComplex Block C, including Hainan’s first multi-brand SpaCentre. Featuring an impressive brand mix and exclusive,limited-edition products, the Spa Centre promises customers “animmersive multi-dimensional sensory experience and a serenespace for physical and mental healing”.
▍Facilitating the GBA’s Development into a World-Class Bay AreaAt the 19th and 20th National Congress of the CPC, the Central Economic Work Conference, and other major conferences and occasions,President Xi Jinping has provided important instructions on promoting the construction of the GBA. The company has actively responded tonational strategies, vigorously developed the duty-free economy, attracted Chinese consumers who would have otherwise sought overseasconsumption, assisted to build an international consumption hub and forged the new “dual circulation” development pattern.The company has seized development opportunities in the GBA by opening duty-free stores in Guangdong, Hong Kong, and Macau witha view to facilitating the construction of the GBA. At present, the company operates outbound and inbound duty-free stores in GuangzhouBaiyun Airport, as well as a number of duty-free stores in Hong Kong and Macau. The aforementioned stores include city stores, airportstores and cruise stores.The company has vigorously developed “Smart Stores” to support consumption that integrates online and of?ine capabilities. Relying ontechnologies such as passenger ?ow statistics and analysis programs, in-store virtual reality (VR) monitoring, and electronic price tags, wecontinuously innovate our services to keep up with the latest consumer experience trends. The company’s array of automated and digitaltools digitises the entire consumption chain and effectively improves stores’ operational ef?ciency.In 2023, we continued to promote the expansion and operational planning of new stores through AR and VR smart retailing. As a result, wehave achieved the successful online launch for DUTY ZERO airport & city stores and cdf Beauty stores through the VR technology, and theonline launch for CDFG (Cambodia) Limited and cdf Membership Club through AR technology.
7+1Brand Matrix and Exclusive Limited Edition Products
During the Halloween and Christmas holidays, the company launched cross-store AR and VR marketing activities. Based on a cross-platform marketing model with the theme of “trying-on makeup/cocktails + products”, users were able to enjoy various scenarios andengage with user and operator terminals that supported product interaction, visualisation, jump logic, product display, icon size changesand icon customisation. During the activities, more than 1,100 SKUs were launched by our overseas smart retail stores and MembershipClub, and month-on-month traf?c, visits, new customers, sales ?gures and other indicators signi?cantly improved after the activities ofHalloween, Christmas and New Year Holiday.
Case study: The company launches cross-store AR and VR marketing activities during festivals
▼
C-end interfaces for AR and VR activities during Halloween
▼C-end interfaces for AR and VR activities during Christmas
Topic 1
Cooperating Overseas to Improve the Company’s Brand Image under the Belt and Road Initiative
By the end of 2023, the company had opened three downtown duty-free stores in Phnom Penh, Siem Reap and Sihanoukville. Thecompany is also promoting duty-free projects in Southeast Asia and other key areas covered by the Belt and Road Initiative, with a view toplaying a leading role in the international tourism retail market.
▼On 16 October 2023, DUTY ZERO, the ?rst cdf airport duty-free store inSoutheast Asia, opened for trial operation.
The Report to the 20th National Congress stressed the importanceof promoting high-quality Belt and Road cooperation. The Belt andRoad Initiative provides a direction for Chinese enterprises on howto implement their internationalisation strategies. As the growthtrend of global tourism remains positive, we are taking action inline with the Belt and Road Initiative, actively exploring overseasmarkets, and promoting tourism retail business in order to “GoGlobal”.The company is deeply engaged in tourism retail business inSoutheast Asia, and it has steadily expanded in Cambodia andother emerging markets. In 2013, Cambodia’s tourism industryexperienced rapid development, seeing double-digit growth in termsof global visitors and Chinese visitors. Against this backdrop, wesuccessfully opened our ?rst duty-free store in Cambodia in 2014.
▼
cdf Sihanoukville International Airport Duty-Free Store
▍Enhancing Cultural Exchanges between the Chinese and Cambodian People
To improve local employment conditions, the company prefers to recruit local residentsin Cambodia, and the proportion of local to total employees at CDFG (Cambodia) Limitedexceeds 93%. Moreover, under our “Journey of Love” initiative, we provide targetedassistance to art welfare homes for Cambodian children. Since the end of 2016, thecompany has carried out public welfare activities once a quarter for eight consecutive years,delivering a positive impact on society.In recent years, CDFG (Cambodia) Limited has rapidly expanded its market share, andpromoted the construction of ancillary facilities for local tourism alongside the Cambodiangovernment and other organisations. In this way, we are meeting the growing demand fromtourists and forming a sustainable development pattern that delivers mutual bene?ts.
The company cooperated with Moutai to open its world’s ?rst overseas airport storein the DUTY ZERO by cdf Siem Reap-Angkor International Airport Duty-Free Store,bringing overseas customers Eastern culture and providing a new sales platform fornational liquors seeking overseas expansion. This cooperation is an effective move forthe company to diversify its global duty-free business.
Case study: Expanding diversified global duty-free business tofacilitate Chinese enterprises’ efforts to “Go Global”
▼
Facilitate Moutai to open its world’s firststore in an overseas airport▍Promoting Friendship between the Chinese and Cambodian People by Telling China’s Story
Based on its experience jointly organising two sessions of the “Global Consumption Innovation & Duty-Free and Travel Retail Conference”with the Hainan Provincial Bureau of International Economic Development, the company actively prepares for in?uential international eventsin Cambodia, and promotes cross-border exchanges and cooperation at major international conferences and events to demonstratethe economic and cultural charm of China. In our overseas operations, we conduct in-depth surveys of local customs, and delicatelyintegrate them with Chinese elements to tell China’s story in new ways. In this manner, we are able to showcase the true version of Chinaand improve the international community’s understanding and recognition of our country. During the implementation of key projects, thecompany strives to improve local people’s well-being and enhance their sense of achievement, happiness and satisfaction, with the aim ofdelivering mutual bene?ts and laying a solid foundation for mutual understanding.
The company fully leverages its in?uence in the supply chain and cooperates with multiple partners – from brand partners to consumers – tojointly explore innovative paths to green and sustainable development.Taking Green Actions and Joining Hands with Brands to Deliver Green Value
The company connects upstream brands and downstream customers in building a consumer space that integrates fashion andenvironmental protection. In this way, we convey the “green cdf” message and encourage customers to embrace the philosophy ofsustainable consumption, with the goal of promoting the transition to a better consumption ecosystem.
In 2009, SEKKISEI launched the “SAVE the BLUE” environmental protection project,which originally aimed to protect coral reefs. In 2022, the project was expanded toHainan, where it had helped restore about 1,500 square metres of forest as of the endof 2023.During the period from 1 July 2023 to 31 August 2023, for each bottle of designatedduty-free product sold, SEKKISEI donated CNY5 to environmental protectionorganisations in Hainan province, and six cdf duty-free stores in Hainan also madeefforts to publicise this initiative. As a result of these efforts, a total of CNY47,533 wasraised to protect the marine environment of Hainan Island.
Case study: Unlocking retail potential to help SEKKISEI carry out environmental protection activities
To actively respond to UN SDG 12, CTG DUTY-FREE focuses onful?lling its corporate social responsibility and pursuing excellenceto provide consumers with quality products and services.
Capitalising on Our Competitive Edge to Jointly Uphold ESGConcepts with Brands
Topic 2
six cdf duty-free stores in
Hainan also made efforts topublicisea total ofCNY47,533was raised to protect themarine environment
Topic 2
Under the theme of the “A Beautiful Journey towards Environmental Protection”, Clarins – a French natural skincare brand – set up apop-up store in Haikou International Duty-Free Shopping Complex in November 2023. Forest Stewardship Council (FSC)-certi?ed paperwas used for all printed products, and customers used a digital check-in system to take part in activities at the pop-up store. Moreover,the store itself was built using raw materials that had received environmental protection certi?cations.Meanwhile, the company, Clarins’ Tourism Retail team and the Blue Ribbon Ocean Conversation Association jointly carried out publicwelfare activities to encourage Chinese consumers to make “green commitments to beauty”. For each commitment made, a mangrovetree was planted by Clarins in the East Harbour National Nature Reserve, with a view to giving back to the local community.
Case study: The company and Clarins join hands with the Blue Ribbon Ocean ConservationAssociation to plant trees on Hainan Island
▼
Clarins counter
▼
Electronic check-in for the tree planting activity
President Xi Jinping stated, “We must respect science and fulfil our responsibility to mangrove protection”. In response to theseimportant instructions, in April 2023, the company, six cdf stores in Hainan, Edrington Group and the Blue Ribbon Ocean ConservationAssociation carried out mangrove restoration and planting activities in the Sanya Qingmei Port Mangrove Reserve with the theme of “Co-planting coastal forest”.
Case study: Cooperating with Edrington Group and the Blue Ribbon Ocean ConservationAssociation to jointly plantcoastal forest
▼
Tree planting activities
Cooperating in Commercial Activities to Deliver a Positive Impact on SocietyThe company continues to engage in in-depth cooperation with brands to jointly explore social bene?ts in the ?elds of art and culture. Byexploring opportunities for diversi?ed and all-round cooperation with international brands, we can provide consumers with better productsand shopping experiences, and ultimately better meet their needs.
The company recently joined hands with Kiehl’s and Hainan Binglanggu Li and Miao Cultural Heritage Park to protect, promote and pass down Hainan’sintangible cultural heritage. In September 2023, Kiehl’s opened a counter at Haikou International Duty-Free Shopping Complex to give customers theopportunity to immerse themselves in the Li people’s culture. Participants who purchased designated items received patterned satchels that had beenhandmade in an ethnic style by elderly Li women.
Case study: Collaborating with Kiehl’s to protect, promote and pass down Hainan’sintangible cultural heritage
▼Consumers enjoyed an immersive experience that took inspiration from the Li people’s original ecological style
M. Chapoutier is one of the oldest and most storied wineries in the Rhone Valley of France.It interprets the wine style of different plots in the Northern Rhone Valley in an organic andbio-dynamic way by using wild yeast, strictly controlling yield and steadily improving itswinemaking process. In 2023, the company screened and selected 23 quality wines from ?rst-hand allocations sourced directly from the brand. Notably, the blind can read the bottle labelsby touching them, which re?ects a culture of openness and the spirit that underlies the sharingof good wines.
Case study: Introducing M. Chapoutier, an inclusive,organic wine brand
In February 2023, the company, in cooperation with Qeelin – a high-end jewellery brandowned by world-class luxury group Kering – successfully held a stunning art installationexhibition with a Spring Festival theme at Sanya International Duty-Free Shopping Complex,presenting consumers with a richer duty-free shopping experience and adding a specialsparkle to the holiday. The installation’s decorations, such as the red Wulu (gourd), helpedcultivate an auspicious atmosphere, warmly welcoming visitors from around the world, andthe blooming Chinese ?owering crabapple provided a sense of happiness and prosperity. Inthis way, the company and Qeelin collaborated to convey best wishes for peace, happinessand good luck to all consumers, while also integrating traditional Chinese culture with moderndesign elements to showcase the unique charm of the country’s traditional culture.
Case study: The company and Qeelin unveil astunning Spring Festival art installation at SanyaInternational Duty-Free Shopping Complex
Topic 2
▼
Photos from Prada
On 30 October 2023, the company, together with FIYTA and the Blue Ribbon Ocean ConservationAssociation, carried out “Island Cleaning Activities” on uninhabited Xigu Island, Hainan province.Volunteers were organised to clean up litter on the island and restore the damaged ecosystem, witha view to promoting sustainable development and supporting the island’s role as a clean and greenhabitat for wildlife. During the activity, a total of 486 kilogrammes of marine garbage were collectedand disposed of.In December 2023, the company cooperated with FIYTA to launch a special edition green-themedthe “J-20” blue ocean watch in cdf stores. The watch’s strap is made of recycled plastic from thesea, to enhance customer awareness of the severe plastic pollution and encourage more people toreduce the use of plastic in their daily lives. In addition, “Ocean Guard Certi?cates” were jointly issuedby the Blue Ribbon Ocean Conservation Association, the company and FIYTA to watch buyersto recognise their use of recycled materials, which will help protect our blue oceans and promotesustainable development.
Case study: Cooperating with FIYTA and the Blue Ribbon Ocean Conservation Association to carry out “IslandCleaning Activities”, launch cdf’s special edition green-themed wristwatch
Assisting Brands in Implementing ESG ConceptsThe company takes concrete actions to put into practice the philosophy of sustainable development, such as by encouraging partners toimplement ESG concepts and assisting brands in developing ESG products. In this way, we are promoting the coordinated and sustainabledevelopment of the environment, society and economy.
The company actively cooperates with brands to introduce green, sustainable and renewable products at cdf stores. This representsone way in which we are facilitating environmental protection and the development of the circular economy and encouraging brands toengage in sustainable research & development.Case study: The company encouraging brands to promote green products
TUMI
Alpha Bravo’s products, aswell as women’s bags underthe VOYAGEUR brand, aregreen products that userecycled nylon as bodyfabric;
Tory BurchThe outer layers of Tory Burch’s EllaBio handbags are crafted from abio-based leather alternative calledBio-Tex? Susy;
PradaRe-Nylon series products are composed of ECONYL
?
regenerated nylon, a material re?ned from wasteplastics, ?shing nets and textile ?bre wasterecycled from the sea through cooperation betweenPrada and spinning manufacturer Aqua?l;
LongchampLe Pliage Original series and Le Pliage Greenseries products are made of recycled nylonre?ned from ?shing nets, carpets, ?oor matsand industrial waste, delivering a message thatpromotes waste recycling. These products havereceived Global Recycled Standard (GRS) 4.0certi?cation.
British brandTravel Be
Has launchedproducts made
of renewableor recyclablematerials thatmeet the GRS.
CTG DUTY-FREE actively responds to United Nations (UN) Sustainable Development Goals (SDGs) 16 and 17, and has been continuouslyimproving corporate governance and empowering corporate sustainability with ESG.
Principles of
GovernanceRobust Governance System forLong-term Stable Operations
Exercising Stronger Governance toImplement ESG Concepts
Complying with Commercial Ethics toReinforce Internal Control Compliance
The Journey of a Seed
▍Corporate GovernanceRobust Governance SystemThe company has established a governance system consisting of the Party Committee, General Meeting of Shareholders, the Board ofDirectors, the Supervisory Committee, and the Management with a clear division of authority, responsibilities, and regular operations. TheParty Committee plays a leading role in “setting the direction, managing the overall picture, and ensuring implementation”, and implementsthe decisions and plans made by the CPC Central Committee and national development strategies. The General Meeting of Shareholdersrepresents the highest decision-making authority and plays an overall guiding role in the company’s operation and development. The Boardof Directors is accountable to the General Meeting of Shareholders. It plays the role of “setting strategy, making decisions and preventingrisks”, exercising decision-making power on major issues of the company in accordance with legal procedures and the “Articles ofAssociation”, and carrying out its work strictly with the “Articles of Association” and the “Rules of Procedure of the Board of Directors”. Fourspecial committees, namely the Strategy and Sustainability Committee, the Audit and Risk Management Committee, the Remuneration andEvaluation Committee and the Nomination Committee, have been set up under the Board of Directors to provide consultation and advice tothe Board on signi?cant decisions. The Supervisory Committee, as the supervisory body, is responsible for overseeing the performance ofthe Board and management. The management level is responsible for the operation, implementation, and administration, and is subject tothe management of the Board of Directors and the supervision of the Supervisory Committee.
Robust Governance System for Long-term Stable Operations
General Meetingof Shareholders
(Authority)Board of Directors(Decision-making
Body)
SupervisoryCommittee(Supervisory Body)
Management
Board of DirectorsAudit and RiskManagement Committee
Board of DirectorsNominationCommittee
Board of DirectorsStrategy andSustainabilityCommittee
Board of DirectorsRemuneration andAppraisal Committee
CTG DUTY-FREE has formed a corporate governance system based on the “Articles of Association” and concerning the “Rules ofProcedure of the General Meeting of Shareholders”, the “Rules of Procedure of the Board of Directors”, the “Rules of Procedure of theSupervisory Board” and the “Rules of Work of the General Manager” in accordance with the requirements of theCompany Lawand theCode of Governance for Listed Companies. In 2023, the company revised the “Management Measures for the Standardised Operationsof Af?liated Companies’ Board of Directors”, formulated the “Detailed Working Rules for the Investment Review Committee”, devised the“Compilation of the Management System of Domestic Duty-free Subsidiaries”, and promoted the standardisation and efficiency of thecompany and its af?liated companies’ system of four committees and one level of management.As of 31 December 2023, the company’s Board comprised ?ve directors, including one female director, representing 20% of the boardof directors. Three independent directors are mainly drawn from ?rst-class universities, research institutes and think tanks. They have heldimportant positions in large state-owned enterprises, financial enterprises, and accounting firms, and they possess strong professionalquali?cations and experience in ?nancial audit, legal risk control, new retail, and digital transformation. Their presence enhances the diversityand complementarity of the company’s Board in terms of the members’ experience and capabilities. We are committed to cultivatinga professional and diverse Board of Directors that aligns with the strategic positioning of the company as a world-class tourism retailenterprise. All directors have a term of three years, and accessible for re-election when their term of of?ce expires, if eligible. Independentnon-executive directors are not allowed to hold the position for more than six consecutive years. In terms of educational background, 2directors have doctorate degrees, and 3 have master’s degrees. The directors have a balanced mix of knowledge and skills. They obtaineddegrees in various areas and possess experience from different industries and sectors. The current Board is characterised by signi?cantdiversity in terms of skills, experience, knowledge, gender, age and other areas, in compliance with the requirements on Board diversity.The company’s senior management consists of 7 executives, including 1 female executive, representing 14% of senior managementpersonnel.
Principles of Governance
In 2023, we improved the efficiency of corporate governance and successfully completed the election of the Board of Directors inaccordance with the principle of “standardisation, efficiency and smoothness”. The company strengthened support for independentdirectors to assist them in performing their duties, and provided professional decision-making, communication, and information support tonew independent directors to ensure that decisions made by the Board are reasonable, ef?cient and precise. In accordance with changingregulatory rules in China and overseas, we will continue to refine the corporate governance system, provide compliance managementtraining, and improve the compliance awareness of all staff members, especially directors, supervisors and executives.
Professional backgrounds of Board membersNameRetail
Finance &accounting
Legal
Digitaltransformation1WANG Xuan√2CHEN Guoqiang√3GE Ming√4WANG Ying√5WANG Qiang√√
▍Information DisclosureThe company has formulated the “Information Disclosure Management System” to strengthen its management of information disclosuresand protect investors’ legitimate rights and interests. In 2023, the company disclosed information truthfully, accurately, completely, promptly,and fairly, in strict compliance with theCompany Law, theSecurities Lawand other laws and regulations, as well as the relevant regulationsof the CSRC, SSE, HKEX. We continue to regard “zero-error” information disclosure as its basic goal, and we are steadily improving ourinformation disclosure system accordingly to effectively protect shareholders’ right to know and enhance the effectiveness of our informationdisclosures.As an A+H listed company, CTG DUTY-FREE has been addressing the differences in capital market regulatory concepts and rules betweenthe A-share market and the H-share market. The company follows the principle of “early start, frequent communication, and focus on qualityand ef?ciency” to optimise its system for regular reporting, announcements, and key information disclosure, and to regulate related-partytransactions, dividend planning and other details. In 2023, a total of 226 announcements were disclosed, and none of them were subject toany supplements, corrections or of?cial inquiries. The company has been awarded an A-grade evaluation for information disclosures by theSSE for the past eight consecutive years.
In 2023, a total of
announcements were disclosedhas been awarded an
A-grade
evaluation for information disclosures by theSSE for the past eight consecutive years
A
▍Investor RelationsThe company strictly complies with theCompany Law, theSecurities Law, theListed Company Investor Relations Management Guidance
and other laws and regulations and established the “Investor Relations Management System” to implement investor relations management.Guided by the needs of investors, the company continuously enrich and improve the smooth investor communication channels to enhancepertinence and effectiveness. We also improve the quality of investor relationship management and convey corporate investment value tothe market precisely and timely to promote high-quality development of the company.Diversi?ed Communication Mechanism
Based on cdf’s unique characteristics, we have been enriching and innovating investor relations (IR) activities and inviting investors to visitthe company in person. The company held many sharing sessions and reverse roadshows in Hainan, Hong Kong SAR and other regions;performance briefings are held in a timely manner after regular reporting; and sessions are also held to provide updates on businessoperations. The company has participated in the collective roadshows of listed central state-owned enterprises organised by the SSE; andit engaged in overseas roadshows for the ?rst time. We continue to promote the company’s digitalised IR platform; our of?cial WeChataccount has garnered more than 290,000 views; and our IR applet has been followed by more than 1,100 institutional users.
Theinvestorhotline
Strategysessions withbrokers
The company’sof?cial website
Online and Of?ineinvestor researchmeetings
The SSEe-interactiveplatformInvestorreception day
Investor relationsemails
Roadshowpresentations
Investor Relations WeChatof?cial account and appletField research activities
Performancepresentations
General Meetings of
Shareholders
In 2023, the company organised for investors to visit its main stores for research and exchange sessions. These activities were designedto give domestic and foreign investors the opportunity to personally experience the company’s core business scenarios, and to give thecompany the opportunity to proactively listen to investors’ valuable suggestions related to its development.The company has organised visits to “Skyrim Forest”, an immersive visual experience, the “Watches & Wonders” luxury watch exhibition,the Moutai tasting shop, the ?ying dome theatre, wine tastings, and many other IR research activities in Haikou International Duty-FreeShopping Complex to demonstrate the company’s proactive, open, and positive image to the capital markets.
Case study: Organising research and exchange sessions for investors to experiencebusiness scenarios in person
▼Research and exchange activity
▼
Exhibition visit
▼
An immersive on-site experience
▼Face-to-face sharing session
Principles of Governance
Exercising Stronger Governance to Implement ESG Concepts
ESG TargetsPlanning for Sustainability
To build a central state-owned enterprise that upholds the principles ofintegrity, safety, environmental awareness, and harmony.
With high-quality development as our core direction, we have implemented the ?ve development concepts of “innovation, coordination,going green, openness and sharing”. CTG DUTY-FREE actively ful?ls its social responsibilities as a central state-owned enterprise, and weare preparing for a new stage of development under the direction and goals described in the 14th Five-Year Plan (14th FYP) and are strivingto achieve these goals.
▍Focussing on ESG
The company has been included in various domestic and international sustainability indexes, demonstrating capital markets’ recognition ofthe company’s ESG efforts.
Strengthening green building capabilities
and implementing “four savings and one
conservation”
Improving green logistics capabilities to reduce
shipping costs
Enhancing green warehousing capabilities to
make warehousing more intelligent
Building green duty-free complexes
Promoting green consumption and facilitating
the green transformation of consumption
Stepping up rural vitalisation
Boosting regional economic development
Improving of income distribution and sharingthe fruits of company development
Improvement of public service system
Development of public service projects
Adhere to green development principles and advocate forthe peak emissions and carbon neutrality goals
Take actions that promote shared developmentstrategies and common prosperity
Actively participate in public service
Hang Seng CorporateSustainability Index (HSSUS)Hang Seng (China A) CorporateSustainability Index (HSCASUS)
Hang Seng (Mainland and HK) CorporateSustainability Index (HSMHSUS)Hang Seng Corporate SustainabilityBenchmark Index (HSSUSB)
Hang Seng (China A) Corporate SustainabilityBenchmark Index (HSCASUSB)Hang Seng SCHK China CentralSOEs ESG 40 IndexHang Seng SCHK China Central State-owned Enterprises ESG Enhanced IndexHang Seng SCHK China Central State-
owned Enterprises ESG Index
MSCI EmergingMarkets IndexCSI 800 ESG indexShanghai and Shenzhen300 ESG Leading indexSSE 180 ESGLeading index
Achievement of 2023 ESG targets2024 ESG targets? Continued to advocate energy conservation and emissions reduction, fully
implemented energy conservation and environmental protection initiatives, andthoroughly put the “Green and Low Carbon Initiative” into practice? In 2023, no major incidents involving energy conservation or environmental
protection violations occurred, and the company received no penalties ornoti?cations from environmental protection authorities
? Continue to advocate energy conservation and emissions
reduction, and improve green operations managementcapabilities and energy ef?ciency? Avoid major incidents involving energy conservation orenvironmental protection violations and avoid penalties ornoti?cations from environmental protection authorities? Haikou International Duty-Free Shopping Complex obtained LEED gold
certi?cation? Zone C of Sanya International Duty-Free Shopping Complex obtained LEEDgold certi?cation? Sanya Duty-Free Shopping Complex Phase 1 Plot 2 Commercial Projectobtained pre-certi?cation as a 2-star Green Building? Continuously optimised existing facilities’ energy ef?cient transformation, andconducted carbon footprint management capabilities? Worked with brand partners to apply for LEED certifications: 10 stores/counters obtained LEED certi?cations
? Follow green building standards in new constructionprojects and apply for green building certi?cations? Continue to promote energy-efficient transformation ofexisting facilities? Actively explore the use of new energy sources? Facilitate brand partners to obtain LEED certi?cation
? 129 responsibility pledges were signed regarding operational safety targets,
re?ecting 100% coverage, and full coverage of operational safety responsibility
(for leads in charge) was achieved? Conducted routine inspection and expert diagnostic safety inspection
activities, and full coverage of operational safety inspections (for all places) was
achieved? Held 663 operational safety trainings, 154 themed lectures, drawing 18,500
participants, and full coverage of operational safety training (for all staff)? No safety accidents and no work-related fatalities throughout the year? Enhanced automation and smart operations, diligently staged emergency drills? Spent a total of CNY27.93 million in operational safety
? Achieve 100% signatures for the responsibility pledge
regarding operational safety targets and 100% coverageof operational safety responsibility (for leads in charge)? 100% coverage of operational safety inspections (for all
places)? 100% coverage of operational safety training (for all staff)? No safety accidents and no work-related fatalities
throughout the year? Continue to enhance automation and smart operations to
empower operational safety? Guarantee investments in operational safety? Invested CNY7.543 million in employee training; total training hours exceeded
547,000 hours; training coverage reached 100% of personnel; and onaverage, each employee participated in 32.8 training hours
? Guarantee investments in employee training? Guarantee investments in launching training activities? Continue to diversify training courses and improve
training quality? Conducted onboarding integrity training for 100% of new leaders? Carried out six anti-corruption trainings for all employees and two anti-
corruption trainings for directors and supervisors, including independentdirectors, with a training coverage rate of 100%
? Conduct onboarding integrity training for 100% of new
leaders? Conduct onboarding integrity training for 100% of new
joiners? Achieve a 100% coverage rate in annual anti-corruption
training? Spent CNY13.37 million in rural vitalisation, implemented 10 assistanceprojects and attracted CNY2.60 million to targeted assistance projects? The company fully leveraged its in?uence in the supply chain and cooperates
with multiple partners – from brand partners to consumers – to jointly exploreinnovative paths to green and sustainable development.
? Closely monitor and respond to community and societal
needs
Green of?ceGreen buildingOperational safetyTraining
Anti-corruption
advocacy
Public services
CTG DUTY-FREE’s 2023 ESG performance and 2024 ESG targets
Sector
ESG Governance Structure
The Board of Directors is the highest decision-making authority for the company’s ESG work.The Strategy and Sustainability Committee of the Board of Directors assumes the primary responsibility, including:
? conducts research and makes recommendations on matters relating to the Company’s sustainability and ESG matter, including but
not limited to vision, targets and policies;? studies the Company’s ESG development strategy and the material issues that stakeholders are concerned about and put forward
corresponding suggestions;? tracks and inspects the implementation and improvement of ESG matter to ensure that the management and decision-making
mechanism of important sustainability issues, including but not limited to environment, anti-corruption, occupational safety and health,
comply with the requirements of relevant laws and regulations;? reviews the Company’s reports on sustainability and ESG matters and reports to the Board of Directors.
Principles of Governance
StakeholdersStakeholder expectationsCommunication and participation mechanismCorporate response
Investors
Improvement of marketcapitalisation and pro?tabilityProtecting shareholders’ rights and
interestsStandardisation corporate
governanceAccurate information disclosureSmooth investor communicationImprovement of ESG performance
Periodic reports and announcementsCommunication via SSE e-interactive platformOf?cial website, new media platforms, telephone,fax and emails, General Meeting of Shareholders,performance presentations, roadshows, analystmeetings, investor reception day, investorseminars
Provision of truthful and adequate informationdisclosureImprovement performance and generatepro?tsDiversi?ed investor communication channelsImprovement of ESG practices
Consumers
Product quality guaranteeImprovement of shopping
experienceProtecting customers’ legitimate
rights and interests
Communication during service processDiversified after-sales channelsCustomer satisfaction surveys
Meeting product qualityGood service qualityImprovement of the mechanism of after-sales serviceInnovative service practice
Employees
Guaranteed remunerationGood working environmentImprovement of communication
mechanismsEmployee development and career
paths
Employment contractsTrade union, general meetings of employeerepresentativesSeminars and condolence visits
Enhancement of the remuneration andwelfare systemImprovement of the system for generalmeetings of employee representativesProvision of a strong career developmentladderDiversi?ed staff trainingsVarious staff activitiesEstablishment of healthy and safe workingenvironment
Businesspartners
Honest, fair, and provision of mutual
bene?tsMaintenance of long-term
cooperationComplying with business ethicsPromotion of supply chain’s
sustainable development
Daily business exchangesBusiness meetings and negotiationsDocument correspondenceProcurement activitiesIndustry forums
Legal perform of contracts and agreementsArrangement for open and fair tenderingOpen and transparent business principlesCollaborations on environmental projectsContinuous diversi?cation of cooperationmodels
Communities
Community engagement and
developmentPublic services supportSocial development concerns
Research via site visitPublic service activitiesTargeted assistanceVolunteer services
Actively participation in public servicesTargeted assistance projectsCommunity development supportAdvocation of green development
Government
andregulators
Law-abiding compliant operationsUndertaking social responsibilityPromotion of economicdevelopment
Participation in relevant trainings, and conferencesDaily communication and information reportingDocument noti?cationsCooperation between government and enterprise
Abiding by laws and policy requirementsTax payment in accordance with lawsCompliant information disclosurePromoting regional economic developmentIncrease of local employment
Industryassociations
Promotion of industry development
Daily communicationDocument noti?cationsParticipation in associations’ conferences andactivities
Performing duties as an association memberParticipating in conferences and activitiesheld by industry associationsSharing our experiences with a wideaudience
▍Stakeholder CommunicationStakeholder Communication MechanismsThe company attaches great importance to communication with stakeholders and actively builds a robust internal and externalcommunication platform. We pay attention to material issues of concern to our stakeholders and continuously reinforces our management tobetter respond to their expectations and create value for them.
The company establishes the ESG Leadership Group, which is responsible for managing and coordinating the ESG-related work. TheESG Leadership Group establishes and improves the company’s management system and operating mechanism for ESG-related work. Italso formulates the ESG work plans and integrates the development strategy, image, brand and operations with ESG concepts. The ESGLeadership Group is headed by the Chairman of the company; the deputy head of it is the General Manager; and its members include headsof departments.The company incorporates ESG work into strategic decision-making and daily management to reinforce ESG awareness and continuouslyimproves the standardisation and systematism of work. The departments and af?liated companies allocate the ESG-related tasks to thefrontline employees; and they are responsible for supervising and implementing ESG-related work. For details regarding our work focuses,please see the “Statement of the Board of Directors” of this Report.
▍Materiality Assessment for ESG IssuesMateriality assessment processBased on the findings of theResearch on the Preparation of ESG Reports by Listed Companies Controlled by Central State-ownedEnterprisesissued by the SASAC, and with reference to the Global Reporting Initiative (GRI) procedures on materiality assessment, thecompany at least every year, collects issues of concern to critical internal and external stakeholders include employees, management,investors, consumers, brand names, etc through questionnaires and interviews. Then, we perform the materiality assessment and rank theresults to identify the company’s material environmental, social and governance issues, and disclose them in the Report.
? The company comprehensively sorts out its sustainability focuses and stakeholder feedback and de?nes the scope of
issues with reference to the issues disclosed by peer companies in China and overseas? We identify the sustainability focuses of the industry based on the ?ndings of theResearch on the Preparation of ESGReports by Listed Companies Controlled by Central State-owned Enterprisesissued by the SASAC; capital market ESGratings, such as MSCI, S&P DJSI, CDP, Sustainalytics and other relevant assessment criteria; the GRI standards; UNSDGs; the Sustainability Accounting Standards Board (SASB) and other international sustainability-related standards andtargets
Identify the issues and form an issues database
? Interview stakeholders to collect feedback and suggestions on sustainable development practices, and their views on
future sustainability strategy? Prepare the online questionnaire to assess material ESG issues, and invite stakeholders to rate the materiality of relevant
ESG issues
Communication and survey with stakeholders
? Based on the results of the stakeholder survey and the enterprises’ development, the company considers the impact of
the issues on its strategy, policies, processes, and commitments. The company also considers how the issues affect its
competitive advantage and management capabilities, as well as the issues’ current and future ?nancial implications. CTG
DUTY-FREE determines materiality from two dimensions: the company and stakeholders. Finally, the company devises a
materiality assessment matrix after ranking issues by their materiality ratings
Materiality assessment
? In combination with the company’s strategy and business policy, the company’s management reviews the preliminary
evaluation results of material issues. It comprehensively analyses the material issues and priorities that are important to the
company and stakeholders.
Materiality veri?cation
? After the end of the reporting period, the company will organise stakeholders to give feedback on the contents of the
Report and prepare for the following Report.
Materiality review
The company’s process for assessing the materiality of ESG issues
Principles of Governance
Materiality matrix
CTG DUTY-FREE determines the materiality ofsustainability issues from two dimensions: thecompany and stakeholders. Based on an effectiveselection from the issues database and sufficientstakeholder engagement, the company hasdepicted a materiality assessment matrix and ?nallyidentified 13 highly important issues, 3 importantissues and 2 related issues.
ImportanceIssuesResponse in the Report1Highly importantExcellent service experienceDelivering Excellent Services for People’s Well-being2Highly importantCustomer satisfactionDelivering Excellent Services for People’s Well-being3Highly importantHealth and safety of products
Creating a Comfortable Environment for Consumption to Ensure TrustedBusiness Operations4Highly important
Employee welfare andsatisfaction
Protecting Employee Rights and Promoting Their Interests5Highly importantHealth and safety of employeesOperational Safety and Physical and Mental Health6Highly important
Employee career developmentand skill upgrading
Diversified Training to Promote Staff Development7Highly important
Employee diversity and equalemployment
Protecting Employee Rights and Promoting Their Interests8Highly importantIntegrity of operationsRobust Governance System for Long-term Stable Operations9Highly importantSupply chain management
Optimising Supply Chain Management Driven by the Environment and
Intelligence10Highly important
Information security and privacyprotection
Complying with Commercial Ethics to Reinforce Internal Control
Compliance11Highly importantResponse to national strategies
Topic 1: Proactively Responding to National Strategies by Fulfilling our
Mission as a Central State-owned Enterprise
Engaging in Charity Initiatives to Act as a Responsible Corporate12Highly important
Collaborating with brandpartners to promoteenvironmental protection
Topic 2: Capitalising on Our Competitive Edge to Jointly Uphold ESG
Concepts with Brands13Highly importantResponse to climate changeAddressing Climate Change to Protect the Environment14Important
Advertising and responsiblemarketing
Creating a Comfortable Environment for Consumption to Ensure Trusted
Business Operations15Important
Environmental managementsystems and resourcemanagement
Green and Low-Carbon Operations for a Better Life16ImportantIntellectual property protection
Complying with Commercial Ethics to Reinforce Internal Control
Compliance17Related
Packaging materialmanagement
Green and Low-Carbon Operations for a Better Life18RelatedWaste managementGreen and Low-Carbon Operations for a Better Life
Importance to the company
Importance to stakeholders
Governance issues Social issues Environmental issues
Ranking
▍Business Ethics
The company strictly abides by theLaw of the People’s Republic of China Against Unfair Competitionand other laws and regulations. Weparticipate in fair market competition according to business ethics and market rules and forbid commercial bribery, and we continuouslyoptimise the company’s anti-bribery mechanism to ensure its effectiveness. We are earnest in conducting self-examinations and self-recti?cations, and we do not violate any laws, regulations, business ethics or market rules in business activities or engage in any unfairtrading practices that undermine fair competition. The company continues to attract consumers by engaging in trusted business operationsand providing excellent services, and we continue to promote anti-corruption, anti-monopoly, and human rights protection initiatives inrelation to our suppliers. During the reporting period, there were no corruption lawsuits ?led against the company or its employees.Working with Customs to combat the practice of the “reselling duty-free goods”, CTG Duty Free makes efforts to raise the legal andcompliance awareness of consumers by informing them of the consequences of such practices and strengthening self-supervision.Anti-corruption
Complying with Commercial Ethics to Reinforce Internal Control Compliance
The company has formulated a supervisory and management system covering its headquarter andaffiliated companies and established a leading group and a coordinating group for upholding anti-corruption. The anti-corruption leading group convened three meetings during the year to study andanalyse the development of anti-corruption Party building, anti-corruption trends, and the ecosystemof corporate politics, and then draws up work plans. The coordinating group comprises DisciplinaryInspection, Audit, Inspection, the Party Office, the General Office, Human Resources, Finance, andLegal, among other departments, held a meeting during the year. They coordinate the supervision of allparties to enhance supervisory effectiveness in accordance with the working rules.The company accepts letters, visits, and telephone reports, and announces telephone numbers, e-mailaddresses and physical mailboxes for reporting. Our staff must strictly comply with the con?dentialityand avoidance mechanism, precisely control the information scope and the clues of problems, andstrictly prohibit any disclosures regarding the case information and disposal solution. As a protectionmeasure for whistle-blowers, the company’s Disciplinary Inspection Committee enforces the “Rules onthe Handling of Whistle-blowers’ Reports by Disciplinary Inspection and Supervision Organs” and otherregulations, strictly prohibits the revealing of whistle-blowers’ information and giving priority to handlingthe accusations with a real name; for anonymous reports and reporting materials, unauthorised checksof the whistle-blowers’ information are strictly forbidden.The company regularly implements special supervisory inspection, including monitoring and reviewsbefore festival and holidays. These approaches cover persons who are in leadership positions, examinetheir performance of duties and scrutinise their business expenditures. Special supervisory inspectionsare also conducted for compliance operations.The company continues cultivating an integrity-based culture to create a stable and law-abidingoperating environment. Throughout 2023, the company implemented the “Detailed Work Arrangementsof the Company’s CPC Committee in Implementing the Opinions on Strengthening the Developmentof an Integrity Culture in the New Era” to reinforce the construction of a culture of integrity. Thecompany also issued the “Detailed Measures of the CPC Committee of China Tourism Group DutyFree Corporation Limited on Further Implementation of the Central Party Leadership’s Eight-pointDecision” to reinforce the disciplinary structure. Moreover, the company held various anti-corruption andcompliance training sessions, engaged in anti-corruption dialogue with new hires during the on-boardingprocess, staged educational seminars for all CTG DUTY-FREE employees to warn against the dangersof corruption, carried out educational activities through the “cdf e-Party” application, and strengthenededucation for company cadres to remind them to distance themselves from corruption and staycommitted to acting with integrity and complying with the law.
System andMechanisms
ReportingMechanisms
DedicatedSupervision
Advocacy against
corruption
The company has formulated the “Conclusive Evaluation Method for Personnel Selection andAppointment and Operational Integrity” in order to thoroughly meet the rigorous requirements forthe Party’s governance, strengthen the selection and appointment of cadres by the company’s CPCCommittee, select honest people with integrity, and prevent corrupt of?cials from being promoted.Select and appointcadres with integrity
Principles of Governance
In 2023, the company carried outsix anti-corruption trainings
available for all employees and
two
anticorruption trainings fordirectors and supervisors
including independent directors,with a training coverage rate of
100%
Anti-money Laundering (AML)
We strictly comply with the Anti-money Laundering Law and other laws and regulations in the local regions of our operation. We havedeveloped our AML policies and procedures accordingly, such as “Know Your Customer” procedures, transaction monitoring, suspicioustransaction reporting and record-keeping. Our company is constantly looking for ways to further improve our anti-money launderingmeasures. We provide AML training to our employees to ensure that they are kept abreast of laws, regulations and updates to our AMLpolicies and procedures.
▼Screenshot of online activities
In March 2023, the company headquarters invited externallecturers in Chinese culture to hold a special seminar for ourstaff members named “President Xi Jinping’s Family Traditionsand Classic Family Mottos” with the theme “Cultivating GoodFamily Traditions – Staff in Action”. The seminar focusedon the four aspects of “knowing, learning, practising andadvocating good family traditions”.
Case study: The company’s special “FamilyTraditions” training
As of 31 December2023, the companyhad obtained twosoftware copyrights –the IOS and Androidversions of the SunriseMall application.
More than
peopleparticipated in the seminar
Intellectual Property Right (IPR) Protection
We attach great importance to works related to IPR and has formulated the “Brand ManagementMeasures” and “Trademark Use Management System”, which regulates the management and use ofIPRs, including the standardised management of the Brand Visual Identity (VI) system and the use oftrademarks.We established a comprehensive retail terminal VI system, which conveys the corporate philosophy,culture, and norms to the public and eventually shapes a unique corporate image.For trademarks with more comprehensive applications, the company has a team of professional lawyersto monitor trademark infringement both at the time of registration and use; we will defend our rightsvigorously in the event of a violation.▍Risk ManagementRisk management
The company formulated the “Measures on Comprehensive Risk Management” and the “Management Regulations on the Reporting ofSigni?cant Operational Risk Events”, to establish an effective and comprehensive risk management system; improve risk prevention andmanagement; clarify the collection, collation and reporting of significant operational risk events; and safeguard the company’s stableoperations and sustainable development.The company performs an annual assessment of material risks based on two dimensions: the possibility of risk and the magnitude ofimpacts. CTG DUTY-FREE trained the compliance risk topics to all staff quarterly to enhance their awareness.
The company’s general manager isresponsible for guiding the company’soverall risk management, approvingrisk management matters subjectto its authorisation, and authorisingthe company’s leads in charge tobe responsible for organising andpromoting risk management.
The departments in charge of comprehensiverisk management are the Legal and Risk ControlDepartment. They are responsible for constructingand operating the comprehensive risk managementsystem; organising, coordinating, supervising, andinspecting risk management; and evaluating theeffectiveness of subsidiaries’ risk management. Theyprovide professional advice for the company’s majorrisk decisions.
The Board of Directors is theleadership group responsiblefor the company’s overall riskmanagement, and for ensuring theeffectiveness of comprehensiverisk management.
The company’s leads in charge of risk management preside over the dailywork of comprehensive risk management. They are accountable to thegeneral manager, and they exercise their risk management duties subjectto the general manager’s authorisation.Risk, internal control, and compliance responsibilities havebeen incorporated into the duties of the Audit and RiskManagement Committee under the Board of Directors tore?ne the risk management corporate governance structure.
In terms of risk governance, the company has speci?ed the top-level personnel responsible for operational risk management, the top-levelpersonnel responsible for monitoring and auditing risk management performance, and their relevant reporting lines.
To implement the requirements of the SASAC for the comprehensive promotion of the rule of law among central state-ownedenterprises, in June 2023, the company held a training session on “Prevention of Risks under International Trade Laws”, with morethan 500 staff members from relevant businesses from the headquarters and af?liated companies participating. The training focusedon the key business processes involved in international trade activities, including export controls, ?nancial settlements and internationalpayment precautions, dispute resolution, etc. By studying typical cases of international trade dispute resolution, participants could fullyunderstand the legal risks involved and the prevention methods used in international trade activities, effectively improved the enterprise’slegal risk prevention ability in regards of international trade.
Case study: Training on “Prevention of Risks under International Trade Laws” to enhancethe risk prevention capabilities of staff
The company organises a company-wide risk assessment every year to study and determine the risk situation in the coming year.In this regard, the ?rst objective is to establish the risk classi?cation of each business, fully apply the results of risk loss event analysis,internal control supervision and inspection, quantify the relevant criteria for risk analysis, and form a panoramic risk list for each businessthrough bottom-up aggregation of risks.The second objective is to further deepen and expand the study of risk early warning indicators, the key business areas are selected, andthe selection of industry indicators and the design of early warning thresholds are studied from both quantitative and qualitative aspects toform a holistic risk early warning indicator applicable to the company. In 2023, starting from the existing system of early warning indicatorsfor risk, the company has been optimising and re?ning how indicators and early warning thresholds are set. New indicators related to humanresources risks and information risks have been added, and the risk management system has been launched in a way that achieves daily,full coverage, visual management of operational risks across all the company’s important sectors.The third objective is to evaluate the probability and impact of each risk according to speci?c risks in the risk database. The evaluation teamcomprises the company’s management, various departments, and key subsidiaries. Ultimately, the team determines the risk priorities forthe coming year based on the comprehensive assessment, and response plans are devised for the top 10 risks. The company monitors andtracks its risk response on a quarterly basis to improve its risk response capabilities.
Board ofDirectors
Audit and RiskManagementCommittee under the
Board of Directors
General manager
Leads in charge ofrisk management
Departments in chargeof comprehensive risk
management
Principles of Governance
We have taken the following actions to create an effective risk management culture within the company:
According to the requirements of the company’s “14th Five-Year” strategic plan to comprehensively improve risk management and control,we comprehensively organise and implement tasks related to the risk management and control system and tasks related to the “year forstrengthening compliance management”. The company plans to establish a long-term management mechanism to enhance its overallmanagement and risk prevention capabilities.
At the end of the reporting period, the company had not identi?ed any long-term emerging risks that could have a signi?cant impact onfuture business. The company will continue to conduct risk assessments and analyse the potential impacts of emerging risks and formulatesolutions if any long-term emerging risks are identi?ed.Internal control management
To this end, we have initiated the systematic construction of aninternal control system, conducted risk analysis and diagnosisof business processes throughout the system, urged relevantunits to implement recti?cations according to the risk diagnosisreport, and put forward optimisation suggestions for key issues,such as the company’s digital transformation, to supportmanagement decision-making and enhance the company’soverall operations and management.
The company also embeds its own requirements on riskmanagement and control into speci?c control points and mapsspecific responsibilities to information in the risk database. Inthis way, we ensure that the company’s internal control lists andprogrammes and internal control system are vertically linkedand horizontally consistent. Using the system, we can generateuseful management tools, such as a practical internal controlmanual that re?ects the company’s business reality, as well asrisk control blacklists and whitelists.
According to the 2023 plan, the company has rolled out the internal control oversight and evaluation of its affiliated companies. Theevaluation aims to comprehensively assess and review the formation of stores’ risk and internal control systems and identify and rectify anypotential risks and de?ciencies. Following this, suggestions for recti?cation were proposed to promote the optimisation and standardisationof the stores’ internal control processes, implementing the use and optimisation of the internal control manual and other management tools,so that employees pay closer attention to risk prevention and control in an environment in which all employees actively participate andpromote internal control.In 2023, internal audits conducted by the company included an audit of the economic responsibilities for employee termination atsubsidiaries, and an audit of subsidiary operations and management. In addition to ethical codes, the audit also covered corporategovernance, strategic decision-making, human resources management, financial management, procurement management, projectmanagement, investment management, information systems, and other business sectors.
? In accordance with theBasic Standards for Enterprise Internal Control, theApplication Guidelinesfor Enterprise Internal Control, theGuidelines for Corporate Internal Control Assessmentand otherregulations, the company has formulated the “Management Measures on Internal Control” to establisha robust and comprehensive internal control system. The company has established a managementand organisational system for internal control comprising the Board of Directors, Board of Supervisors,Operating Department, Internal Control Construction Department, Internal Control OperationsDepartment, and Internal Control Supervision Department. For internal control management, thecompany adopts a system of “centralised leadership and hierarchical responsibilities”, which combinesthe comprehensive management of internal control supervision and management departments with theprofessional management of functional departments.
? The company implements the
internal control evaluationsand prepares the “InternalControl Evaluation Report”annually, which is disclosedon the SSE websiteconcurrently as the AnnualReport.
? The company carry out various internal evaluations for
af?liated companies to ensure the full coverage of corporatetop-down internal management. Annual internal self-assessment covers all affiliated companies, the evaluatedareas including social responsibility, safety and health,environmental protection, etc. Core entities perform semi-annual internal self-assessment regarding focused areas.On-site internal supervisory assessment is implementedirregularly. External auditors carry out the auditing task ofannual internal control.
? According to the relevant regulatory provisions, the company formulated
the “Management Regulations on Rectification of Issues Identifiedin Internal Audits” in 2023. These regulations aim to standardiserelevant recti?cation processes, strengthen the implementation of auditrecti?cation, and improve the effectiveness of audit oversights. They alsoseek to clarify recti?cation responsibilities, recti?cation procedures, resultidenti?cation, supervision and inspection, responsibility constraints, andresult implementation, while improving the internal audit system.
Desensitise key
information
Store the data in Tencent
Cloud
Membership information
cannot be exported
Establish completesystem log
Membership system hascerti?ed as Level III InformationSecurity Protection
▍Cybersecurity and Personal Information ProtectionThe company respects and protects customer privacy and assists safeguard network and information security in strict compliance with laws andregulations such as theCybersecurity Law, thePersonal Information Protection Law, and theInformation Security Technology – Personal InformationSecurity Speci?cation. The company develops its information security systems under these laws, regulations, and principles.Information security system constructionThe company and af?liated companies have established and improved various information management systems and standards to suit the company’sdigitalisation needs. CTG DUTY-FREE formulated information security management systems that cover information security management, networksecurity management, data management, information encryption rules, information security emergency plans and other aspects of information securitymanagement. In this way, we have developed comprehensive information security management systems that feature well-de?ned responsibilities,a clear division of labour and a combination of technology and management. The company’s Board of Directors is the highest responsibility anddecision-making authority with regards to information security and privacy protection. The Information Technology (IT) Department is responsible forspeci?c work in information security and privacy protection. To keep the team updated with the latest IT knowledge, IT staff members are required toreceive regular training.Client privacy protectionIn June 2023, the company updated its customer privacy policy, which is available to consumers and other stakeholders on its website(http://www.ctgdutyfree.com.cn/p/yinsizhengce.html). In accordance with thePersonal Information Protection Lawand our customer privacyprotection policy, we take the following measures to protect customers’ information:
Compliance management
To improve the company’s compliance regarding operations and management and to meet corporate needs in preventing compliance risks, in2023, the Company formulated the “Compliance Management Measures” to strengthen compliance management, improve corporate compliancemanagement, and build an effective compliance management system. In 2023, the company continued to improve its internal control andcompliance management system by incorporating risk, internal control, and compliance responsibilities into the duties of the Audit Committee andRisk Management Committee under the Board of Directors. In addition, the organisational systems for risk, internal control, and compliance arebeing steadily improved to strengthen responsibilities for the management of these areas at the corporate governance level. In 2023, the companyalso revised the “Management Measures for the Assessment and Evaluation of the Company’s Performance”, in which risk, internal control, andcompliance management are deemed indicators within the enterprises’ performance evaluation to encourage better execution of internal control,compliance and risk management.The company has given itself the speci?c task of constructing a compliance system. The task selects eight sectors as its focus, these being thesupervision of listed companies, the supervision of state-owned assets (investment and M&A), customs supervision, tenders and bidding, constructionprojects, labour, tax management, and data security.In 2023, to enhance the digital supervision of its stores, the company has been supervising system and mechanism improvements in key areas andacross key links. In 2023, operational compliance inspections were conducted in 138 stores, and disciplinary inspection cadres were dispatched tosupervise projects in areas where corruption is prone to occur. Disciplinary committees from the company and at stores work together to conductjoint inspections.
In 2023, the company selected Hong Kong SAR as a pilot programme for offshore compliance management. The pilot focuses on enhancingthe compliance operations mechanism for key sectors. The company’s compliance management system is established and improved throughthe research and diagnosis of the current compliance status, the compliance risk identi?cation system, and the responses to special compliancerisks. Supporting management tools will then be introduced to effectively prevent and address compliance risks.
Case study: Using the compliance management pilot programme to build and improve thecompany’s compliance management system
Principles of Governance
A customer can register cdf memberships at the system of member terminal (cdf membership applet, cdf membership App, cdf MembershipClub and other channels) in a self-service manner. Once the information is entered, the key parts of the personal data are desensitised; andthe customer has the right to access, adjust and delete his/her personal information at any time. The company obtains personal informationfrom the self-input of customers and does not collect personal data from third parties (except when required by law). The companyundertakes to delete customer data within the time limit required by law and does not provide personal data to any third parties (exceptwhen required by law).
Corporate Information SecurityThe company cooperates with leading domestic security server providers and adopts a variety of security protection means to guarantee thesecurity of key information systems. The data centre is designed with active-active architecture and a stable and reliable data backup plan toprovide double protection to ensure the information security of our company.The company inspects its information system regularly for all types of operating and maintenance events and performs checks to safeguardthe system’s health. Daily automatic or manual inspections are carried out for key information system to ensure that the information systemoperates in a routine and stable manner 24 hours per day. The company guarantees sound operations and maintenance for vital activitiesand events and has formed a working mechanism to ef?ciently resolve problems and rapidly rectify them afterwards.To improve the safety of employee work habits, raise awareness of safety precautions, protect the company’s data assets, and ensure thatsecurity threats are reported in a timely manner, the company conducted an online “Safety Awareness Training” for all employees.
To effectively enhance employee awareness of personal information protection and data security compliance, and to improve their abilityto address risks, the company invited a partner from law ?rm to give a lecture on compliance-related topics that included relevant legaland policy requirements, common corporate risk points and typical cases, reminders of risk points in corporate products (applications,applets), and corporate compliance systems and mechanisms.
Case study: The company’s specific training on “Corporate Response to PersonalInformation Protection and Data Security Compliance Risks”
In 2023, the company issued documents entitled “Information System Guarantee of Key Subsidiaries during Critical Times” to allemployees for their study. This aims to consolidate the company’s operational safety and emergency management, reinforce thefoundations of information construction, effectively prevent various information system failures, ensure the continuity and security of thecompany’s key information systems during critical times, and ensure that the system is safe and free from any incident to the furthestextent possible.
To ensure cybersecurity during the annual plenary sessions of the National People’s Congress (NPC) and the Chinese People’s PoliticalConsultative Conference (CPPCC) (the “Two Sessions”), the management of the company set up a cybersecurity working group anddeveloped a detailed work plan and emergency system for cybersecurity. The company carried out drills for key information systemsof the company’s headquarters and key subordinate companies, and quickly arranged personnel to rectify security issues identi?ed inthe drills. We also formed a tracking mechanism to quantify the progress of recti?cation, and successfully completed the security tasksduring the “Two Sessions”.
Case study: Issuing study materials to all employees to strengthen the company’soperational safety and emergency management
Case study: Focusing on security tasks during the “Two Sessions” in 2023
In 2023, the company provided
?ve
training courses related to information security and privacy protection.
To raise our employees’ awareness regarding customer privacy issues, the company conductsspeci?c training sessions for all employees at least
twice
a year.
CTG DUTY-FREE actively responds to United Nations (UN) Sustainable Development Goals (SDGs) 4, 10, 11, 12 and 15, and focus onmeeting our social responsibility, pursuing excellence, and providing consumers with quality products and services.
ProsperityDelivering Excellent Services for People’sWell-being
Creating a Comfortable Environment forConsumption to Ensure Trusted BusinessOperations
Optimising Supply Chain ManagementDriven by the Environment and Intelligence
Engaging in Charity Initiatives to Act as aResponsible Corporate
Setting the Industry Benchmark for High-quality Development
A tunnel of time
Delivering Excellent Services for People’s Well-beingTo comprehensively improve the development of tourist destinations and the duty-free industry, the company is expanding its offerings ofhigh-quality goods and services, with a focus on new consumption demands, while steadily upholding the concept of “trusted businessoperations and excellent services”. We aim to serve as a benchmark in the development of the modern cultural industry and the promotionof high-quality development in the tourism industry, while at the same time encouraging the vigorous development of China’s duty-freemarket.▍Service Management System and Training SystemThe company has continued to improve its service standards while implementing various related systems in an organised, structured, andeffective manner. The company has developed the “Code of Conduct for Sales Staff” to clarify requirements on customer services, the dresscode and customer-welcome etiquette. Our company also formulated the “Operating Standards for 400 Customer Service Posts” and the“Operating Standards for After-sales Services” to specify after-sales service standards.We also constantly improve our talent management and staff training system. The company continuously carries out various training,including leadership training, professional skills training for front-line staff, and general knowledge training, to ensure that employees at alllevels possess professional service capabilities. The ultimate goal of the training is to accurately grasp customers’ core demands.
In November 2023, the company held the “Customer Service ImprovementTraining Camp” to empower internal instructors. The camp lasted four days, anda total of 43 front-line business staff from af?liated companies participated. Thetraining focused on two major themes: Customer Service Skills Improvement,and Course Internalisation and Teaching Skills Improvement. As part of theprogramme, the participants were divided into groups to develop internal trainingcourses for customer service personnel, transforming what they had learnt intopractice.
Case study: “Customer Service Improvement Training Camp” for internal instructors
▼Graduation ceremony
▼A teacher instructs students at the camp
▼
Training camp group photo
▼
Roleplaying and interactive activities
On 11 April 2022, President Xi Jinping visited Sanya International Duty-Free ShoppingComplex. While there, he stressed the advantages of leveraging China’s huge market size,the need to foster a favourable market environment with the necessity of trusted businessoperations and excellent services in attracting customers, all with the aim of making agreater contribution to the development of “a free trade port with Chinese characteristics”.In response, the company has been providing employees with training on integrity cultureand related business skills. Meanwhile, the company’s “Service Quality Work Plan” aims toimprove standards for business and service quality, promote quality goods and boutiquestrategies, and uphold the concept of “trusted business operations and excellent services”,with a view to comprehensively improving customer service standards and ensuring theprovision of quality goods and services to consumers.
TrustedBusinessOperations
ProvidingExcellentServices
++
Prosperity
During the CIIE, Shanghai Airportshowcased China and Shanghai asa welcoming destination for visitorsfrom all over the world. In its role asthe “Shanghai brand” of the airportduty-free retail industry, SunriseShanghai has implemented the “Yearof Management Service Improvement”strategy, staged specific training
In 2023, Hainan DF produced a video course for etiquette training with the theme of“service with a smile”. Through the training, “service with a smile” was standardisedacross stores. A total of 163 training sessions were held, with in a total of more than5,130 attendances. Alongside the training and business practice, ‘service with asmile’ stars were selected from stores, with case studies being shared via the WeChataccounts of the stores of Hainan DF for publicity and guidance purposes, and for thecontinuous improvement in service capability and service level.
Case study: Improving Sunrise Shanghai’s customer service for the China International Import Expo (CIIE)
Case study: Hainan DF stages the “service with a smile” campaign
▼
Service skill training
▼
Practical evaluation of service skills
▼
Etiquette training course materials on “service with a smile”
On 27 September 2023, prior to itsopening, Dalian cdf invited personnelfrom the relevant Customs division foran on-site staff training. The trainingfeatured the flow of duty-free goods,sales management regulations, andother related issues.
The company provides accessible facilities to cater for special needs groups.
The company’s service guarantee for major festivals
Case study: Dalian cdf invites Customs personnel to train staff
sessions and practical evaluations to improve employees’ service skills, and improved itscustomer services according to the requirements of the CIIE.
▍Enhancing Service QualityThe consumer shopping experience and consumer shopping satisfaction are the top priorities for tourism retail development. The companytakes multiple measures to steadily improve its service quality and to create a comfortable shopping environment.Digitalisation and omni-channel are the developmental priorities of the tourism retail industry. The company continues to integrate its onlineand of?ine channels, providing consumers with “pre-sales, sales, and after-sales” tourism retail services that are both more convenient andof higher quality, fully meeting consumer shopping needs and ensuring consumers undergo a comfortable shopping experience throughoutthe entire process.
At the Boao Forum for Asia in 2023, the company’s Qionghai Boao Duty-Free Shop arranged in advance for specific training forguaranteed services at the forum. This created a thoughtful, comfortable, and convenient shopping experience for consumers andhelped build an image of high-quality service through increasing the number of temporary support staff alongside other conveniencessuch as convenient make-up counters.
Case study: Providing quality services during the Boao Forum for Asia
In early November 2023, Wuhan cdf staged a training with the theme “Empowerment Improvement for Service Improvement”, in whichpersonnel from several brand partners were invited to provide staff training to enhance their professional knowledge of merchandise.Case study: Wuhan cdf invites personnel from brand partners to train staff
Moreover, the company uses the quality services provided on its major e-commerce platforms to demonstrate its responsibility, warmth, andcommitment to customers. The company’s cdf Membership Club fully guarantees the quality of goods by the three dimensions of qualitycontrol of incoming goods, logistics services, and after-sales services, to strengthen the quality of goods and services. It also focuses on the?ve optimisations of expanded service channels, standardised services, timely services, automated services, and outcome-oriented services,to effectively improve service quality, maximise consumer satisfaction and service ef?ciency, and increase consumer con?dence and comfortin their consumptions.To further improve the consumer shopping experience, cdf has established a two-way interaction mechanism for consumers in Hainanalongside an increase in the number of online customer service portals and related capacity for cdf members to purchase in Hainan and onthe offshore duty-free shopping platform. Online customer service portals have been embedded in the product, order, and service sites togive customers multi-channel availability and further meet their service needs before, during and after sales.
the company has a training system inplace to improve the quality of talentand provide professional servicesupport
the company offers a convenientshopping experience by upgradesto the membership system, calledOneID, and through optimising thestore environment
the company has used digitalisation tostandardise its after-sales servicesFor pre-salesDuring salesFor after-sales
Prosperity
▍Improving Service Coverage
To protect consumers’ legitimate rights and interests and improve their shopping experience, the company has issued the “Public Commitment to ImprovingAfter-sales Services and the Shopping Experience”. This makes a clear and solemn commitment to enacting trusted business operations and being in strictcompliance with theConsumer Rights Protection Law, theE-Commerce Law, theInterim Measures for the Return without Reasons of Commodities PurchasedOnline within Seven Days, theMeasures for the Supervision and Management of Online Transactions, and other laws and regulations. The company hasformulated various rules and protocols for the platform in accordance with laws and regulations, has made after-sales service terms available in a clear andconvenient way, and effectively protects consumers’ legitimate rights and interests.
The “S Store” programme is a project initiated by Sanya Downtown Store that creates a new shoppingexperience through the multi-dimensional improvement of service quality and store management. Atthe beginning of 2023, Sanya Downtown Store introduced 8 benchmark stores, or “S Stores” (SaintLaurent, Moncler, Burberry, Coach, Bulgari, Blancpain, Cartier, and Van Cleef & Arpels). To improvethe operational management capability and service quality of the S Stores, Sanya Downtown Storehas optimised the existing linear “store manager with store-keepers” structure by using direct-salestores of leading luxury brands as a benchmark. Differentiated posts were designated that include astore manager, a customer management manager, a sales specialist, a concierge, and an additionalteam for service quality supervision under the Operations Management Department. A team has beenset up to supervise internal service quality and improve professional services. In addition, under theleadership of the general Party branch of the Sales Department, Party members and cadres in relevantdivisions of the Sales Department worked with the main S Stores to revise and improve the operationsmanuals of the eight S Stores, aligning the brands’ operations standards based on the actual situationof Sanya Downtown Store, while ensuring the manuals are practical and workable.
Case study: New shopping experience as part of the Sanya Downtown Store “S Store”programme in 2023
On 4 January 2023, in accordance with the instructionsof the administrative guidance meeting for duty-freeindustries organised by the State Administration for MarketSupervision (SAMR), the company headquarters arrangedfor its subsidiaries to jointly make a public commitment tosociety. The platform shopping guidance was revised todelete additional restrictions on the return and replacementof goods. Only four categories of goods have been speci?edas not applicable under the policy of return of goods withinseven days without the need to specify a reason: near-expiredgoods, damaged goods, goods without plastic packaging,and goods with a short shelf-life. The applicability of the policyto particular goods is clearly specified on the product webportal. Consumers are asked to con?rm their understanding ofthe “Shopping Guidance” and tick an additional check box fortheir acceptance of goods that cannot be returned or replacedwithin seven days without specifying a reason.
Case study: Revising the platform shopping guidance to further protect consumers’ rights and interests
The company has been improving the disclosure of merchandise information to achieve the orderlyclassi?cation of goods, the full disclosure of product information, and fair and transparent prices. Duty-free goods and non-duty-free goods are showcased separately on different web portals to avoidmisleading consumers.In strict adherence with the provisions of theInterim Measures for the Return without Reasons ofCommodities Purchased Online within Seven Days, the company provides clear procedures andguidance on the return of goods without the need to specify a reason, and clearly identifies andcon?rms with consumers those goods that are not applicable under the policy in accordance with thelaw. The company does not arbitrarily expand the scope of which goods are not applicable under thereturn of goods without specifying a reason.
Improving theDisclosure ofMerchandiseInformation
OrderlyClassi?cationof GoodsFullDisclosureof ProductInformation
Fair andTransparent
Prices
Establishing and improving after-sales service channels and listening to and responding to consumer demandsThe company has updated the “Standards for After-sales Services V3.0” to better align the system with actual business needs. The updatedstandards optimise the mechanism for after-sales solutions, aid the judgment of customer service staff, expand the after-sales serviceteam, strengthen after-sales service training, shorten the response time of after-sales services, and lay the groundwork for continuousimprovements to the consumer experience of after-sales services:
The company’s af?liated companies formulate classi?ed complaint response measures according to their own conditions. For example, CDFInternational classi?es complaints into those related to services, products, logistics and operations, and designates the handling of solutionsfor each category.
Maintaining effective public opinion management to understand consumer needs and expectationsThe company maintains a system for the effective management of public opinion in order to understand consumer needs and expectationsin a timely manner. The company monitors information across the network, collects it and sorts it in real time, stays updated on thedynamics in a comprehensive and prompt manner, operates a closed-loop monitoring system to implement a 24-hour early warningfor negative information, and distributes information to all departments and stores in a timely manner for their effective handling. Afterclassifying and evaluating customer complaints, the company deals with them by applying corresponding handling strategies. Analysis andjudgment are steadily strengthened for the purposes of taking targeted preventive and control measures and preventing and eliminatingadverse impacts in a timely manner. The company dynamically tracks unexpected negative information and post-handling developments,and continuously monitors relevant information. Customer complaints are promptly summarised, sorted out and re?ected on upon theiroccurrence, dissemination and handling to safeguard the company’s steady development.
The company works with market supervision authorities in themanagement and supervision of external customer complaints.The company strictly implements the policy of immediatelyhandling “12315” complaints and has established effectivecommunication channels with the Beijing Municipal Administrationfor Market Regulation in Dongcheng District. In March 2023, thecompany established a monthly report mechanism for “12315”complaints and implemented a policy of handling major customercomplaints within a speci?ed time frame.
The company accurately analyses customer complaints,implements categorised policy management, strengthensthe ef?ciency of the consultation and handling of customercomplaints, and strictly implements a mechanism fora 30-minute response time. The company works withfunctional authorities to jointly provide on-site services duringmajor holidays and solve customers’ demands in-person.The company is increasing its flexibility in handling customercomplaints, and is improving the completion rate for customercomplaint handling by using after-sales coupons, discounts andother incentives. Departmental links are strengthened for theregular analysis and consultation of merchandise, deliveries, andother issues, and to upgrade after-sales management.
In terms of service guarantees, the company has aprofessional after-sales service team in place that providesa 24-hour hotline service and an online customer serviceportal. The company is improving the emergency supportof call centres and increasing the efficiency of customercomplaint handling to a standard of “over 97% response rateat call centres, an online customer service response within 10seconds, and a satisfaction rate exceeding 99%”.The company has built, and is leveraging, the intelligent customerservice platform. In 2023, it built a customer service liaison centreat its headquarters subject to the normal operations of existing localcustomer service call centres, connecting local call centres withheadquarters under a centralised intelligent management platformfor customer services, generating data on customer service valuefor the Operations, Procurement, and other departments. Whencompleted, a uni?ed customer service number will be assigned incdf affiliated companies, ticket data classification will be unified,core indicators for management will be standardised, managementprocesses will be optimised and centralised, the goal of an intelligentvoice robot for response and outbound calls will be achieved, andticket assignment and circulation within the complaint and publicopinion system will be enacted.
The company continuously explores the application of smartcustomer service intelligent functions. For example, intelligentIVR voice navigation has been piloted in different timeperiods, robot callbacks in different businesses, and manualquality inspection assisted by intelligent quality inspectionwith 100% sample coverage.
Prosperity
To improve our service quality feedback and tracking system, in 2023, CDFG Haikou Riyue Plaza Duty-Free Shop, Haikou Meilan AirportDuty-Free Shop and Qionghai Boao Duty-Free Shop under Hainan DF conducted four satisfaction surveys of walk-in customers. A totalof 7,727 questionnaires were completed, with the overall satisfaction of the three Hainan DF stores exceeding 98%. Targeted collectionof customer satisfaction data on the customer shopping experience, the shopping environment and facilities, personnel, and servicesenables the company to continuously improve its service capability and competitiveness.
Case study: Hainan DF conducts consumer satisfaction surveys to provide better services
In 2023, Haikou International Duty-Free Shopping Complex conducted in-store customer satisfaction surveys as a multi-dimensionalstudy of the consumer shopping experience. A total 4,813 questionnaires were completed, revealing an overall satisfaction rate of
98.47%. Improvements have been made based on feedback from customers, including improvements related to front-line service
personnel and service materials, as well as to the publication of promotional information. In addition, special plans for serviceimprovements have been developed and implemented. Service satisfaction has been increased by identifying and rectifying gaps incustomer service.Haikou International Duty-Free Shopping Complex has made follow-up calls to VIPs who have a business relationship with the companyor are members of the VIP team. In 2023, a total of 773 follow-up calls were made, with a follow-up satisfaction rate of 98.45%. VIPsoffered 31 suggestions, and 100% of the issues raised were recti?ed.
Case study: Haikou International Duty-Free Shopping Complex conducts in-store customersatisfaction surveys to identify and rectify gaps in services
In 2023, Sanya Downtown Store conducted regular consumer satisfaction surveys and continued to generate in-depth analysis reportson data related to its business orientation and members’ consumption habits and preferences, with the aim of identifying businessproblems and opportunities and empowering business development.
Case study: Sanya Downtown Store carries out a regular survey of consumer satisfaction toempower its service business
Conducting customer satisfaction surveys and optimising service processes
Every year, our company conducts consumer satisfaction surveys. Before we implement phone interviews, we seek customers’ permissionregarding their willingness to accept the survey through SMS.
In 2023, the CustomerManagement Department ofSanya Downtown Store made atotal of 12,672 follow-up calls,including 7,907 answered calls.All respondents were satisfiedwith our services, revealing acustomer satisfaction rate of
100%
, representing anincrease of about 0.1% over2022.
The company continues tocollect customer feedback. In2023, a total of
2,158
customer survey questionnaireswere collected, including 1,358questionnaires on customerservice satisfaction that revealeda satisfaction rate of 94.9%,alongside more than 800 thematicquestionnaires with a satisfactionrate of more than
90%
.
Since May 2023, the companyhas been collecting customersatisfaction levels and feedbackand generating regular researchreports on shopping, services,and other needs through monthlyquestionnaires from customerswho have joined the VIPprogramme. More than
samples have been received,revealing a good rating of overallsatisfaction.
As an important festival IP of CTG DUTY-FREE to welcome Hainan’s traditional tourism peak season, the 5th CTG DUTY-FREE OffshoreDuty-Free Year-End Carnival was held from 15 November to 31 December 2023.
In November, the company partnered with airlines to launch themed ?ights to createa festive atmosphere and bring passengers immersive, new and interesting interactiveexperiences, while propagating knowledge of duty-free goods and promotionalcampaigns.
Case study: The 5th CTG DUTY-FREE Offshore Duty-Free Year-End Carnival to warm up thewinter shopping and duty-free shopping spree
The company also worked with its stores to launch the cdf Handbag Festival and the cdf Wine Festival themed campaigns, providing a fun,one-stop experience for duty-free consumers. Sanya International Duty-Free Shopping Complex initiated the “Christmas Shopping Season”and other year-end carnival campaigns to offer consumers a more exciting, interesting, and diverse shopping experience. The Haikou RiyuePlaza Duty-Free Shop launched its new “selected liquor brands for quick delivery to members” service. Liquor products can be deliveredin 2 hours to locations within 8 kms of the duty-free shop, allowing consumers to enjoy their drink with a single click. In addition, HaikouRiyue Plaza Duty-Free Shop has also initiated the “cdf Lighting life” campaigns that focus on popular activities like surf skating, coffee socialmeet-ups, and pet parties to create interactive, entertaining and interesting social scenarios that provide consumers with a new shoppingexperience. Working with partners to broaden the scope of servicesCurrently, demand for high-quality consumption is increasing as China accelerates the pace of its economic recovery. By integrating high-quality resources and working with global partners and consumers, the company and its partners work together to create consumptionscenarios, build an ecosystem of consumption, act as trend setters in consumption, actively explore and innovate activities, further improveservices, and jointly expand and share the tourism retail market. The company aims to provide unique and exclusive experiences tomembers to improve their lives.
▼Haikou International Duty-Free Shopping Complex – West Gate
▼A themed ?ight
▼Aerial view of Sanya International Duty-FreeShopping Complex, Phase 1 Plot 2
▍Innovation-driven Development
The company continues to provide innovation-driven services to meet consumers’ growing demands and enable their pursuit of a better life.
Innovating the service experience in response to new consumption demands
To further meet consumers’ diversified shopping demands, the company insists on prioritising consumer needs, embracing the latestconsumption trends, innovating consumption scenarios, and providing customers with an immersive shopping experience. For example,stores in Hainan have introduced various forms of shopping that allow consumers to visit, play and interact through such immersiveexperiences as camping, visiting bazaars, attending concerts and other events. Exclusive intellectual property (IP) activities have been stagedto meet consumers’ increasingly segmented and diversi?ed consumption needs.
The company collaborated with its six stores in Hainan, offline and online shoppingmalls, and many brands to exhibit a collection of boutiques. Through themedcampaigns, debut store showcases, cross-sector collaboration, celebrity store visitsand multiple other forms of interaction, the company provided a spark to the year-endshopping carnival and helped release the potential of offshore duty-free consumption.
Prosperity
At a press conference on 10 August 2023, an in-depth partnership was announced between the company’s cdf membershipprogramme and IHG
?One Rewards, a global guest loyalty programme of InterContinental Hotels Group. The two parties have enabledthe two-way exchange of exclusive privileges for VIP members under excellent and consistent operating standards and service quality.Based in Hainan, a popular destination for tourists and duty-free consumers, the parties offer ?exible access to member privileges forglobal tourists. Hainan has become a focus point for reaching out to the international tourism market and the starting point of a one-stopjourney for “duty-free shopping and luxurious accommodation”. The company won the “Best Launch Event Award” from theMoodieDavitt China Travel Retail Report, the authoritative media in the global travel retail industry.
Case study: Working with InterContinental Hotels Group (IHG) to enable the two-wayexchange of exclusive privileges for VIP members
Sanya Phoenix Airport Duty-Free Shop Phase 2 adopts a strategy that promotes multi-dimensional, cross-border, win-win collaboration.It has worked with more than ten 5A and 4A scenic spots, various well-known cultural and tourist sites, and over 80 ?ve-star high-endresort hotels in Hainan to explore opportunities for interactive collaboration that link culture, entertainment, and duty-free tourism retail.Through expanded payment channels provided by China UnionPay, China Merchants Bank, China Guangfa Bank, Alipay, etc., the shophas introduced various gifts, discounts, red envelopes, lotteries, and other exclusive shopping rewards. Meanwhile, by partnering withChina Southern Airlines, Juneyao Airlines, etc., the shop has introduced customised ?ights and rewards to jointly promote the grandopening of this new landmark duty-free retailer in Sanya.
Case study: Sanya Phoenix Airport Duty-Free Shop engages in cross-sector collaboration topromote duty-free tourism retail
In October 2023, the companyworked with Luzhou Laojiao to createan exclusive trip for Diamond VIPmembers. Diamond VIP memberswere invited to visit the Luzhou LaojiaoMuseum, Chunyang Cave, QiankunWine Fort, and other tourist attractionsto experience the profound historyand exquisite brewing technology ofLuzhou Laojiao and gain a deeperunderstanding of the history, culture,and customs of this premium liquor.The activity was warmly received andhighly regarded by our members.
Case study: The company and Luzhou Laojiao jointly create an exclusive journey named“Enter Luzhou, Taste the Cellar” for Diamond VIP members
▼
Group photo
As part of their strategic partnership, the company and China UnionPay have created anexclusive themed marketing campaign: The Members’ Bonus Points Shopping Festival.The two parties introduced the concept of a “dual membership,” which allows bonuspoints to be exchanged under either membership programme and activates marketinglinks during the payment process, thereby increasing the value of members’ rewardsand providing a better shopping experience to cdf members. The “dual membership”concept introduced by this campaign replaces traditional payment rebates with cdfpoints and activates marketing links throughout the payment process, representing abreakthrough in the marketing model in the traditional payment field. The campaignwon the Best Collaborative Campaign of the Year (Retail Winner) at the 2023 MoodieDavitt Award Ceremony hosted by theMoodie Davitt China Travel Retail Report, theauthoritative media outlet in the global travel retail industry.
Case study: The company and China UnionPay jointlyinitiate an IP-themed marketing campaign
▍Product Quality GuaranteeThe company strictly enforces procurement management measures and continuously monitors supplier selection and product qualityassurance. In 2023, the company has issued the “Regulations on Safety Management, Quality-Risk Early Warnings, Inspection and Testingfor Imported Commodities (Trial)”, which standardises and institutionalises quality and safety management for our imported commodities. Wehave strengthened safety and quality control for imported commodities to ensure that the company meets its responsibilities and protectsconsumers’ rights and interests.In 2023, we improved our “Procurement Management Measures” and strictly enforced the procurement approval process. The companyhas formulated more detailed regulations on the methods and procedures for supplier selection, the methods used to assess suppliers,and supplier bidding and procurement behaviour. For the supplier sourcing process, we have strengthened the supervision and reviewof suppliers to guard the “entrance gate”. The company has also established a list of qualified suppliers and incorporated complianceperformance requirements into the evaluation process for suppliers. We dynamically adjust the quali?ed suppliers list by promptly removingany suppliers involved in irregularities.The company regularly communicates with suppliers on how to further improve product quality. The company requires suppliers to establisha mechanism for information exchange, so that if the product recall process is triggered due to product quality problems, the company cantake timely actions to protect the rights and interests of customers. The company attaches importance to the handling of product qualityproblems, and actively works with suppliers to ensure product quality standards are met, so that our users can shop with con?dence.
In respect of the management of goods close to expiration, the company disposes of them by means of return shipments, returns to suppliers forexchange, selling them at a discount, offering special promotions, and destroying them under the supervision of customs in accordance with theproduct categories and actual circumstances. The company strives to reduce goods close to expiration by forecasting market demand, ?exiblydeploying goods and improving procurement ef?ciency, with the goal of enhancing resource use ef?ciency and operating effectiveness.▍Responsible Marketing and Sustainable Brands
We attach great importance to the management of advertisements and new media marketing. In accordance with the Advertising Lawand other laws and regulations, the company has formulated relevant documents such as the “Regulations on the Management of PressRelease” and the “Marketing Activities Management Measures” to strengthen management and control over marketing activities. Thecompany’s af?liated companies also formulate detailed management regulations following their respective business conditions, includingthe “Regulations on the Management of Promotional Videos and Brochures”, “Regulations on Advertising and Publicity Management”,“Regulations on the Management of Marketing Activities” and “Regulations on the Management of External Publicity Information”, etc. toregulate all aspects of marketing management.To explore sustainable development strategies for its brands, the company has accelerated its transition towards digital management withthe aim of becoming a global leader in this area. The company comprehensively improved its data capabilities and developed a membershipsystem called OneID, therefore formed CTG DUTY-FREE’s own member tracking system. Based on the results, the company has been ableto empower its brand; enhance collaboration, consumer services and marketing activities; and optimise tourism retail operations. Throughthis analysis work, the company was able to effectively mine the commercial value of its membership data and devise plans for how to usethis data more effectively in the future.In terms of marketing activities, the company has been adding new momentum to the tourism retail market by organising a series ofthemed marketing activities and consumption scenarios. Through these efforts, consumers can enjoy a wide variety of luxurious and qualityproducts, colourful themed activities, interactive experiences, and considerate services.
In terms of food and beverage safety, the company has made every effort to establishand improve its comprehensive management systems, including those related to foodmanagement rules, supervision and monitoring, traceability cooperation, inspection, andtesting, to ensure the food safety of our pre-packaged goods. We adhere to standardisedonline and offline management standards with respect to food safety and exercisewhole-process control in this area. In accordance with theLaw on Product Quality, therequirements of the commodity quality standards issued by the SAMR and the NationalStandardisation Administration, and other laws and regulations, the company has re-signedagreements with domestic liquor producers and suppliers, and the new agreements includethe “Liquor Quality Assurance Agreement”, which helps the company ensure the quality ofits products, protect the rights and interests of consumers. For goods with special storagerequirements, such as chocolate that needs to be stored below 20 degrees, our storesstrictly enforce the storage and transportation standards provided by suppliers and maintaindaily temperature and humidity measurement records.
Building acomprehensivemanagementsystem for food andbeverage safety
Management
Rules
TraceabilityCooperation
SupervisionandMonitoring
Inspectionand Testing
Creating a Comfortable Environment for Consumption to Ensure Trusted Business Operations
Prosperity
The company staged the third brands day campaign with the theme “Embracing Warmth and Beauty” and released the “C-LOONG”IP for the Year of the Dragon. The campaign aims to deliver warmth, love, beauty, reunion, and blessings from cdf to all of society.“C-LOONG” greets and embraces people from different cities using local dialects at more than 10 cdf stores in Beijing, Hangzhou,Guangzhou, Chengdu, Hainan, and other cities.
The company continues to develop brand stories, expand communication channels, and innovate new communication methods. News,pictures, videos, activities, and other publicity channels are used to showcase the new brand styles and narrow the distance betweenbrands and consumers using rich brand content and diversi?ed forms of expression. At the beginning of 2023, the company used itsvideo account to showcase its offshore duty-free business in Hainan and new brand styles, continuing to enhance the influence oftourism retail brands in China.
Case study: The Third cdf Brands Day
The company aims to establish a green supply chain to align its operations with the nation’s goal to construct an ecological civilisation.Based on standardisation and driven by green, intelligent, and innovation, the company has continuously been optimising its supply chainmanagement.▍Supply Chain ManagementThe company has established good partnerships with suppliers, and established a secure and stable supplier cooperation mechanism.
▼Haikou Riyue Plaza Duty-Free Shop
▼
Haikou Meilan Airport Duty-Free Shop
▼C-LOONG gift
▼C-LOONG gift
Supplier admission
In accordance with the “Supplier Management Regulations (Trial)” of and in view of the company’s business situation, the company hasestablished a supplier management working group and formulated supplier admission criteria based on product category. For publicprocurement projects, such as open bidding, open competitive negotiations, and open inquiries, the winning bidder or the bid awardee canbe directly included in the company’s supplier database. In addition to public procurement, interested suppliers should apply to relevantdivisions for admission according to the procurement relationship and the management procedures.In the process of selecting and approving suppliers, we conduct research and studies on the supplier market, steadily strengthen supplierdevelopment, and require that domestic suppliers be certi?ed through a state-certi?ed supervisory and management information platform.The company reviews suppliers’ certi?cation information and business information, runs checks to determine whether suppliers have anyrecord of legal or regulatory violations, and strictly implements supplier audit and selection processes.
The distribution of its brand partners is
in total, has
1,455
well-known brands, sales over
types of goods,and over
350,000
SKUs of goods.
Optimising Supply Chain Management Driven by the Environment and Intelligence
Tiered supplier managementAccording to the company’s “Supplier Management Regulations (Trial)”, the company, based on the results of dynamic evaluation, managessuppliers under a tiered system that includes:
In according with the requirements of the SASAC, the company implements a supplier evaluation model that combines dynamicevaluation and annual quali?cation inspection, and under which the dynamic evaluation results serve as an important basis forsupplier grading and selection.
▍Intelligent and Green Supply ChainTo implement the14th Five Year Plan for the Green Development of the Industrial Sector, the company strives to play a pivotal role indeveloping an intelligent and green supply chain, drive the ef?cient utilisation of resources and energy across upstream and downstreamenterprises, and promote green development.Intelligent Supply ChainWe are committed to digitalising and visualising the supply chain system and improving its ef?ciency and resilience by improving informationtransparency. Through a visualised supply chain system, we can monitor and track the logistics, inventory, deliveries and other keyindicators along the entire supply chain in real time. Using visualised data, the management and relevant teams can clearly understand thestatus and trend of the supply chain. A digitalised supply chain system can be used to more accurately predict demand, optimise inventorymanagement, and achieve rapid responses and ?exible adjustments of the supply chain, reducing costs and risks.The company is clearly aware of the key role played by suppliers in the supply chain. Data exchange and supply chain integration betweensuppliers, manufacturers and distributors is achieved through a visualised platform and digitalised supply chain, helping provide standardisedand digitalised information of merchandise. As a result, operational ef?ciency is improved for enterprises and supply chain partners, and theyare able to engage in harmonious, win-win cooperation.The company considers the geographical location and climate of key suppliers in its supply chain management. Through the visualisedintelligent supply chain platform, logistics personnel can identify optimal shipping routes and prioritise deliveries to reduce carbon emissions.In addition, robots are used to sort and optimise transportation routes to improve the ef?ciency and accuracy of sorting and reduce energyconsumption during transportation.
When a division issues a procurement invitation, Grade A suppliers within the division should be givenpriority to participate in the procurement project within its scope of business under the same commercialterms. Grade A suppliers shall be downgraded to Grade B if they have not had procurement transactionswith the division for one year since the date of the last completed contract.
Suppliers with which there is regular business cooperation.
There are deficiencies that should be focused on and subject to rectification. Generally,procurement transactions shall be suspended during the rectification period. For anindividual supplier with which a procurement transaction cannot be suspended, thepurchaser shall negotiate with the main person responsible, inform the supplier to improveits service level and supply quality, and try to develop or cultivate alternative suppliers.Suppliers with which procurement transactions should be suspended for three years.
excellentsuppliers
goodsuppliers
supplierssubject torecti?cation
suppliersshould bephased out
Grade BGrade C
Grade D
Grade A
Prosperity
Green WarehousingThe company is actively responding to national policies in the comprehensive implementation and promotion of green warehousing. We aimto reduce transportation costs and improve warehousing ef?ciency in order to conserve energy and reduce emissions.? The company adopts a scienti?c and reasonable warehouse layout to integrate warehouses and ensure optimal loading capacity andvehicle utilisation. In the process of warehouse operations, goods are stored and handled taking into account their characteristics andshipping requirements to minimise inventory losses.? The company gives priority to the use of energy-saving, environmentally-friendly and recyclable logistics equipment and facilities.? The company has fully applied arti?cial intelligence (AI) and remote control technologies to improve overall warehousing and logistics
ef?ciency, with a view to reducing costs, increasing ef?ciency and promoting green development. A warehouse management system isinstalled and adopted in each logistics centre to standardise warehouse operations in a more scienti?c and reasonable way, to improvethe ef?ciency of warehouse management, and to reduce energy waste. We have deployed the Internet of Things (IoT) and managementcontrol systems, such as automated guided vehicle (AGV) robots and autonomous case-handling robots (ACR), and automatic equipment,such as clothing hanging chains and four-way shuttles, for integrated storage, handling and warehousing in logistics centres in Shanghai,Shenzhen and Hainan. These systems and equipment enable intelligent handling, picking and sorting and optimise processes for inboundwarehousing, inventory management, replenishment sorting and shipping. Compared with traditional warehousing, the operationalef?ciency and storage capacity per unit are signi?cantly improved, substantially reducing land use and energy consumption.The box-type robot can pinpoint and transport goods with speci?c SKUs,enabling higher sorting precision. The of?cial launch of the box-type robothas significantly improved the overall operating capacity of the Qianhaie-commerce warehouse and doubled its order picking capacity, resultingin an error rate of less than 1/10,000. Moreover, the box-type robot hasalso helped the warehouse surpass the previous height limits imposed bymanual order picking. As a result, the warehouse has been able to expandthe number of shelf layers from 4 to 7, which has doubled its cargo boxstorage capacity from 4,500 to 9,000. In addition, the box-type robotoperates in a paperless manner by skipping order printing.The company has promoted robotic sorting in the Sanya E-Commercewarehouse, Sunrise Shanghai e-Commerce warehouse and other sites. Theintelligent console intelligently monitors the entire process, which greatlyimproves picking accuracy and sorting ef?ciency.? The company gives priority to partners who focus on environmental
protection and sustainable development to ensure that all players involved inthe supply chain are committed to emissions reduction, energy conservationand intelligent optimisation.
Supplier ESG Management
In 2023, the company urged suppliers to use more environmentally friendly products and services. For example, suppliers were asked to userecyclable materials, no-glue cartons and other environmentally friendly packaging materials. The environmental requirements and audits ofsuppliers were also tightened.We recently updated the company’s procurement policies and guidelines, and de?ned environmental requirements in detail. For example,we included goals for reducing packaging waste to save resources and promote sustainable development. We conducted in-depthcommunication and audits with suppliers to ensure they meet the latest environmental standards and requirements, and we requiredthem to provide more comprehensive certifications related to environmental protection. For example, we give priority to suppliers withISO 14001 certification for environmental management systems. In terms of supervision, we have strengthened our mechanism forevaluating and monitoring suppliers’ environmental performance. We regularly review and evaluate suppliers, keeping a close watch on theimplementation of their environmental protection policies and measures, and we work closely with suppliers to jointly promote the realisationof environmental protection goals.Through these updated practices, and implementation and monitoring approaches, we are tightening requirements on suppliers’environmental responsibilities, and ensuring that selected suppliers continue to improve and innovate their environmental protectionpractices, with the aim of achieving more sustainable supply chain management, minimising adverse impacts on the environment, andproviding customers with more environmentally friendly and reliable goods and services.The company regularly collects data related to suppliers’ sustainability and ESG performance. We inquire about suppliers’ environmentalsystem certi?cations, and conduct risk assessments on suppliers’ performance related to environmental and social factors every year.
▼AGV robots storage
▼Four-way shuttles, and AGV robots storage
▼Clothing hanging chains
▍Actively Participating in Public Welfare and Charity Initiatives
On 7 and 8 June 2023, Sanya International Duty-Free Shopping Complex staged “World Ocean Day”, acampaign with the theme of ocean protection. By workingwith The Mangrove Sanya and Wuzhizhou Island TouristScenic Area, we organised volunteers to clean up garbagealong the coastline, advocated marine environmentprotection, and emphasised working together to protectthe ocean.In April 2023, the Hangzhou cdf organised its employeesto clean up garbage along the road and from the grassyareas around Hangwu Mountain, making our contributionto the beautiful environment of Hangwu Mountain.In November 2023, Sanya Downtown Store volunteers cleaned up thedead-ends of roadside sidewalks, inter-village roads, parking lots andother areas to help create a clean and beautiful environment.On 27 October 2023, the company headquarters and CDF InvestmentDevelopment jointly launched the “Creating a Beautiful Environment,Sharing Lucid Water and Sky” voluntary initiative to improve theenvironment along the Liangma River, while providing publicity totourists.
Educational programmes
Environmental protection
In 2023, Guerlain continued the brand’s initiative of sustainabledevelopment themed “Bee School” activities. At the invitationfrom the brand, the company’s employees and their familiesvolunteered to learn about bee protection at the bee conservationbase, participated in physical tasks, further promoted the conceptof environmental protection, ecosystem protection and sustainabledevelopment, and took practical actions to ful?l our corporate socialresponsibilities.
The company takes the initiative in environmental protection and social well-beingcampaigns such as “Guarding the Coral Sea”, “Mangrove Restoration”, “World OceanDay” and “National Low-carbon Day”. These activities aim to convey the concept ofenvironmental protection and allow the company to give full play to its advantagesin shouldering social responsibilities alongside the principle that “development andenvironmental protection should go hand in hand”.
On the eve of the 2023 June 1 International Children’s Day, the Haikou Meilan Airport Duty-FreeShop volunteer team visited Hainan (Haikou) Special School to stage the “Love Heard” activity.Volunteers sang songs, drew sand paintings, and played games with children to inspire self-esteem,self-confidence, a resilient spirit within physically handicapped children and convey the Party’senergy.In 2023, Sunrise Shanghai launched the “Soma Blossom Student Assistance” charity programme. The programme aims to provide ?nancial support for disadvantagedstudents in Sichuan Province who cannot afford living expenses during their studies.
Engaging in Charity Initiatives to Act as a Responsible Corporate
Prosperity
Community activities
The company organised a second-hand clothing donation drive with the theme “Donating Clothing in HarshWinters” for the 15th consecutive year, sending our care and recycled materials to the places most in-need.In 2023, to echo the “A Piece of Paper, Donate Your Love” project launched by the China Charity Federation,the company donated used clothing and other unused items for sale, with the proceeds going to charitableorganisations to be used to treat children from disadvantaged families with congenital heart disease and patientswith echinococcosis in Tibet.In November 2023, more than 30 volunteers from the third Party Branch of Sanya Downtown Store and the PartyBranch of Haifeng Village jointly staged the Party Day activity themed “Zebra Crossing Safety and Courtesy”.Volunteers explained basic traf?c safety rules and knowledge to the public at the intersection of the zebra crossingat Sanya International Duty-Free Shopping Complex, educating people to travel in a civilised manner alongsidepractical actions to take.
In June 2023, the company’s “Spark Hero” volunteer team wentto the Zuojiazhuang Street Elderly Care Centre to carry out avolunteering activity with the theme “Greetings during the DragonBoat Festival”. Volunteers brought milk, fruit, and other festive food tothe elderly, made rice dumplings with the attendees, and helped stageart performances and other activities, sending their warm greetings tothe elderly from the Party organisation and society.
In April 2023, staff representatives from the Shenyang cdf went to the Chinese People’s Volunteersmartyrs’ cemetery in Shenyang to lay ?owers, sweep tombs and listen to the stories of war veterans.On 7 April 2023, all party members of the Guangzhou Xinmian Party Branch went to theHuanghuagang 72 Martyrs Cemetery to stage the memorial tomb sweeping ceremony for martyrs.
On 2 February 2023, during the Spring Festival travel rush, Haikou International Duty-Free ShoppingComplex arranged a team of staff members to deliver drinking water, milk, snacks and othermaterials to drivers and passengers lined up in a traf?c jam. The team served a total of 300 driversand passengers. In addition, the team has also sent their care to front-line police and city janitors.
1011
▍Fulfilling our Social Responsibility as a Central State-owned Enterprise in Hong KongSAR, Macau SAR and OverseasThe company has been promoting a globalised business network and actively initiating overseas social well-being activities to draw attentionand support from all sectors of society, so that more people can understand the importance of undertaking charitable actions.2023 marked the 65th anniversary of the establishment of China-Cambodia diplomatic relations and it also marks “China-CambodiaFriendship Year”. China and Cambodia entered the “diamond hexagon” cooperation framework, ushering into a new era for the building ofa community of a shared future between China and Cambodia. The three stores of CDFG (Cambodia) Limited have been promoting publicwelfare charities and ful?lling their social responsibilities along the Belt and Road: The Siem Reap store made cash donations to the AngkorKanthabopha Children Hospital. The Phnom Penh store has organised 26 charitable activities for the Khmer Artist for Children Organisation.The Sihanoukville store has worked with the local government to implement the idea of protecting the marine environment, cleaning, andbeautifying beaches, and building a beautiful home together.On the 10th anniversary of CDFG (Cambodia) Limited, a charity art exhibition named “Childlike Innocence” was held in the Phnom PenhStore of CDFG (Cambodia) Limited. More than 100 philanthropists from China and Cambodia participated in the exhibition, with all 30artworks on display being painted by children from the Khmer Artist for Children Organisation. There was also a charity sale arrangedalongside the exhibition, with the sale aimed at helping the Khmer Artist for Children Organisation raise funds for renovating buildings andpurchasing teaching and painting materials.
CDFG (Cambodia) Limited has been providing targeted assistanceto the Khmer Artist for Children Organisation since 2016, withcharity activities being staged each quarter. In March 2023, the cdf“targeted charity and assistance base” was of?cially unveiled. TheKhmer Artist for Children Organisation was set up with the help ofmany philanthropists and children give full play to their creativitythrough pen and paper.In 2023, CDFG (Cambodia) Limited joined the Phnom Penh Branchof Industrial and Commercial Bank of China to start a charity journeywith the Khmer Artist for Children Organisation. CDFG (Cambodia)Limited and philanthropists donated stationery, pigment, milk,candy, paper towels, fruit and 1,000 kg of rice and other materialsto the Khmer Artist for Children Organisation.▼In March 2023, the cdf “targeted charity and assistance base” was of?cially unveiled.
Prosperity
▍Following the Trends of the Time to Promote Industry DevelopmentOn the international stage, the company is using international events such as the China International Consumer Products Expo (CICPE) andthe Asian Games to tell a new story of the tourism retail industry in China, and calls for enhanced cooperation among all stakeholders toembrace a bright future for the industry. Launching various activities to be a part of the CICPE and promote consumptionFrom 11 to 15 April 2023, the Third China International Consumer Products Expo was held in Haikou, Hainan Province. The company wasdeeply involved in the expo for the third time, setting up a booth of 600 square metres to display the new fashion trends of internationalconsumer goods boutiques, as well as the rich history of the brands. In addition, the company also co-hosted the Third Global ConsumptionInnovation & Duty-Free and Travel Retail Conference, the Sustainable Consumption Summit Forum, and other events. The company sharedand discussed new opportunities for the development of the duty-free and tourism retail industry alongside domestic and foreign experts,scholars, and leading enterprises in the industry. The company played a leading role in sharing the new experience in China’s tourism retailindustry against the backdrop of a “Consumption-Boosting Year”, showcasing the innovative vitality of China’s tourism retail market and thesurging power of its industry development.During the CICPE, the company’s stores in Hainan launched various activities to further promote the release of consumption potential.Haikou International Duty-Free Shopping Complex staged creative performances during the Duty-free Culture and Tourism Week, preparedcustomised and special programmes based on Beautiful China and Skyrim Forest, held a parade performance featuring the ?rst dronedisplay of 2023 in Hainan.In addition, a sub-venue for the CICPE Fashion Week was set up in Haikou International Duty-Free Shopping Complex. Well-known designerbrands from both China and abroad staged fashion shows in the venue during Fashion Week. To facilitate exhibitors in travelling betweenHaikou International Duty-Free Shopping Complex and the CICPE main venue, Haikou International Duty-Free Shopping Complex providedfree shuttle bus services, including one-on-one privileged services for free bus rides for cdf members.With the spill-over effect of the CICPE, Sanya International Duty-Free Shopping Complex has become a high-end commercial entitypreferred by many well-known brands in China and from abroad. In 2023, Sanya International Duty-Free Shopping Complex continued topromote themed events for the third cdf Watch Festival, bringing together global collections of watches, rare watch pieces, and cdf exclusivebrands, starting a new upsurge in the duty-free consumption of high-end watches.
▼The company’s stores in Hainan seized the opportunity of the high traf?c?ow to reward consumers with diverse high-quality services
▼
The Third cdf Watch Festival
Setting the Industry Benchmark for High-quality Development
Showcasing the Chinese tourism retail industry to the world through the innovative services and experience of the Asian GamesDuring the Asian Games in Hangzhou, the company’s Hangzhou Airport Duty-Free Shop focused on innovating new services andexperiences and optimising its service quality. From improving service standards and optimising product displays, to establishing adedicated green payment channel for the Asian Games, it has comprehensively improved the capabilities of core management services andprovided solid support for the Asian Games. The company made full use of Hangzhou Airport Duty-Free Shop as the “?rst stop” for inboundtravellers to the Asian Games. The shop showcased its image of being the world’s largest tourism retailer committed to providing qualityservices.
Attending the Trinity Forum in 2023 to promote industry development and innovation
▼
Hangzhou Airport Duty-Free Shop
▼Mr. CHANG Zhujun, the company’s standing Deputy General Manager,was invited to deliver a keynote speech
▍Robust Planning for Future DevelopmentAs a leading enterprise in the global duty-free industry, the company makes investments in development projects to expand its businesscomplexes, with a focus on duty-free business, and it has been deeply engaged in the cruise industry for many years. We aim to maintainour leadership in the exploration of new growth patterns in various ?elds to enable a brighter future for the travel retail industry.
A new offshore duty-free landmarkSanya Phoenix Airport Duty-Free Shop Phase 2 was opened on 7 September 2023. The project is a rare commercial complex in thequarantine area of the airport. It operates a wide range of duty-free products including watches and accessories, bags, cosmetics,perfumes, sunglasses, imported wine, electronic products, etc., with a construction area of about 5,000 square metres. Design elements
On 25 October 2023, the Trinity Forum, jointly organised by theMoodie Davitt China Travel Retail Report (the authoritative media inthe global tourism retail industry), ACI World and ACI Asia Paci?c,was hosted by Hong Kong International Airport in Hong Kong SAR.As a platinum partner of the 2023 Trinity Forum, Mr. CHANG Zhujun,the company’s standing Deputy General Manager, was invited todeliver a keynote speech on the ?rst day of the forum. He introducedthe company’s recent developments, including its achievements inairports and overseas markets, the rapid development of Hainanmarket, and its online business, as well as the optimisation ofmerchandise innovation and shopping experience upgrades, andstressed the need to strengthen operation capabilities and the useof members’ big data to improve member benefits and rewards.He also elaborated on four prospects for continuous expansion inof?ine channels and Hainan’s strategic layout. Mr. CHANG Zhujuncalled on all parties to continue to strengthen collaboration andexchange and jointly promote industry development and innovation.
Prosperity
▼
Cruise exterior
▼
Beautiful decorations at the openingceremony
▼Star dome of Mingzhuang WineArea on the 4th ?oor
▼
In-store shopping scene
▼Lounge leisure area on the 4th ?oor
including suspensions, spheres, and mirrors are ingeniously combined to create an immersive space to experience and demonstrate the richand romantic French style, transforming the shopping mall into an art space for taking photos.
The duty-free shop on the cruise ship “Mediterranea” of Adora Cruises was opened, representing the start of aduty-free shopping journey on the sea
On 30 September 2023, “Mediterranea” resumed its voyage from Tianjin Port. The newly renovated duty-free shop on “Mediterranea”, underChina Duty-Free Cruise Services Ltd.(CDFCS), was also of?cially opened, marking the resumption of the duty-free business of the CDFCS.
▼Duty-free shop on the cruiseIn terms of duty-free business rights onboard cruise ships, the CDFCS won the duty-free business rights of the Italian Costa Atlanticaline and the Astro Ocean’s MV Piano Land line, in 2018 and 2019, respectively. In 2022, we also won the duty-free business rights on“Mediterranea” of Adora Cruises with the CDFCS having the right to independently operate three duty-free shops on cruise ships.
The duty-free shop of 600 square metres is located on the third ?oor of the “Mediterranea”.Inspired by Mediterranean culture, it provides more than 100 world famous brands, includingfashion accessories, watches and jewellery, cosmetics, perfumes, tobacco, wine, specialfood, and souvenirs. It aims to create for cruise passengers a maritime shopping spacerich with a European style and artistic atmosphere and provide a unique and unforgettablemaritime shopping experience. The duty-free shop on “Mediterranea” has also made abreakthrough in connecting with the cdf membership system, extending the rights andinterests of cdf members from the land to the sea, for more attractive and higher qualityduty-free cruise services.
The duty-free shop of
square metres is located on thethird ?oor of the “Mediterranea”it provides more than
world famous brands
Three Duty-free Shops on Cruise Ships
Duty Free Shop on the AstroOcean’s MV Piano Land line
Duty Free Shop on the“Mediterranea” of Adora Cruises
Duty Free Shop on theItalian Costa Atlantica line
CTG DUTY-FREE actively responds to United Nations (UN) Sustainable Development Goals (SDGs) 3, 5 and 8. As a people-oriented organisation,we care for our employees. We provide them with training and create a platform for the company and our people to develop together.
PeopleProtecting Employee Rights andPromoting Their Interests
Diversied Training to Promote StaffDevelopment
Operational Safety and Physical andMental Health
A Corridor of Flowers
Protecting Employee Rights and Promoting Their Interests
▍Employee Rights
We consistently uphold the “people-oriented” management philosophy regarding talent management and strictly comply with theLabour Law, theLabour Contract Lawand other laws and regulations, as well as the international human rights and labour conventionsand protocols that China has signed, such as theEqual Remuneration Conventionand theElimination of Discrimination in Respectof Employment and Occupation. We respect theDeclaration on Fundamental Principles and Rights at Workissued by InternationalLabour Organization (ILO) andGuiding Principles on Business and Human Rightsby the UN. We adhere to the principles of honesty,trustworthiness, fairness and justice in our dealings with employees, and we fully guarantee their rights and interests.
Recruitment Management
The company has developed a comprehensive employee recruitment system and has recruited our employees through on-campusrecruitment, job fairs, recruitment agencies, online recruitment platforms and internal recruitment. We sign labour contracts with employees.We adhere to the recruitment principle of focusing both on integrity and ability. We also respect differences, encourage diversity, and prohibitany form of discrimination from upholding the principles of fairness, impartiality and openness. Our company has formulated hiring criteriaaccording to the actual needs of each position without imposing any restrictions related to age, gender, ethnicity, religious beliefs or othercharacteristics. For high-end talents, we insist on a combination of external introductions and internal trainings, attracting more talents on aselective basis, and selecting the best candidates to target for recruitment.
Holiday and Working Hours Management
We strictly observe regulatory requirements regarding national statutory holidays, employees are entitled to annual leave, maternity leave,marriage leave, parental leave and additional blood donation leave, parent-teacher conference leave, etc. According to the company’ssituation, we implement two working hour systems: standard and comprehensive working hours (for the frontline employees underparticular working conditions). We strictly enforce the monthly 174 working hour working system. As for excess working hours, we arrangecompensated leave or pay overtime according to labour laws and regulations to effectively protect employees’ rights to rest.
Resignations Management
Unless exceptional circumstances arise, we generally do not voluntarily sever or terminate the labour relationship with employees. If itis necessary to terminate or rescind an employee’s labour contract, we strictly follow the process in accordance with the requirementsand procedures of labour laws and regulations. Those who should be given economic compensation according to the law will receivecorresponding compensation according to the legal requirements. The company generally does not try to restrict employees’ choice of newjobs. For cases involving competition restrictions, such restrictions are handled according to the signed agreement.
violation of laws and regulationsinvolving child labour or forcedlabour
Employment ManagementIn regards of prohibiting child labour, we strictly abide by labour laws and regulations, checkID card during on-boarding procedures and forbid the employment of child labour. In termsof preventing forced labour, we strictly prohibit restricting employees’ freedoms or forcingemployees to work by collecting deposits, detaining documents, or engaging in threats.During the reporting year, our company did not have any violations of laws and regulationsinvolving child labour or forced labour.
Standardworking hours
Comprehensiveworking hours
Twoworking
hoursystems
People
Comprehensive Remuneration ManagementThe company adheres to the concepts of market-oriented remuneration, determines remuneration standards based on the “doublebenchmarking” principle and matches the incentive level with the company’s development and talent strategy. The company has establisheda performance and remuneration management system, which aligns with the prioritises performance and follows the principles of fairness,positive motivation and sustainable development. We set the basic and performance salary ratios based on market practices. In thisregard, the company determines the basic salary based on the position duties, personal capabilities and other factors. The salary is muchhigher than the local minimum wage level standard. The performance salary is linked to the company’s comprehensive performance, thedepartment’s performance and the individual’s performance, forming a mechanism of effective incentives and restraints.The company actively implements the spirit of common prosperity to share the fruits of its corporate development with employees. Inaddition to basic salaries, we offer monetary rewards to incentivise front-line employees whose positions may expose them to hardship,danger and heavy workload. Monetary rewards are also provided to employees who achieve excellent results in their performanceappraisals. In this way, we have built a system of positive rewards and incentives for our people.In terms of medium- and long-term incentives, the company comprehensively implements a system under which corporate managers at alllevels are contractually managed on a tenure basis. Under the system, managers are required to sign contracts that reward them strictly inaccordance with performance appraisal results. Tenure incentives are only awarded to managers who meet the contractual performancestandards.In accordance with national and local policies, we have established and implemented a welfare system to make timely and completepayments of social insurance and housing provident funds for employees; and we also offer annuities, supplementary medical care, canteendining and other welfare programmes to our staff. In this way, we have built a multi-level welfare guarantee system based mainly on socialinsurance, with corporate welfare programmes acting as a supplement.Democratic ManagementWe continue to improve its democratic management system, which is based on the trade union and the staff representative assembly. Thecompany’s trade union is committed to safeguarding collective bargaining rights of employees; and it carries out its work following theTradeUnion Law, theConstitution of the Chinese Trade Unionand other laws and plays a vital role in public affairs. The trade union effectivelypromotes the participation of employees in the company’s democratic management and deliberations involving major issues concerning thevital interests of employees.When formulating, revising and deciding rules, regulations and material issues that are directly related to the vital interests of our employees,such as labour remuneration, working hours, rest and leave, labour safety and health management, insurance and welfare, employeetraining, labour discipline, headcount management, etc., we collect opinions from general meetings of employee representatives to ensurethat decisions are made through consultation and on an equal basis. We then make public announcements to all employees or notify therelevant departments or individuals after decisions are made. Employees may also appeal to the trade union through email, WeChat, in-person talks and other channels.
In October 2023, the Legal and Risk Control Department held the “Training on Labour and Employment Law for companies in Hainanprovince” in Haikou. All members of the company’s human resources management and legal and compliance management functionsin Hainan province attended the training, either online or in-person. The training introduced necessary legal knowledge relating toemployment compliance – from recruitment to the signing of labour contracts. In addition, matters calling for precautions and risk areasin the recruitment process were explained using real-life cases from the Hainan Labour Arbitration Commission and various courts.
Case study: CTG DUTY-FREE offers training on labour and employment law in Hainanprovince
▼
Training session
People
6968
China Tourism Group Duty Free Corporation Limited ? 2023 Environmental, Social and Governance Report
▍Employee CareBased on the principle of “understanding our people, meeting their needs andaddressing their dif?culties”, we continuously strive to care for our employees’needs. Our company also improves employees’ working conditions, enhancesand ensures their quality of life, increases their happiness and satisfaction,and generally creates conditions that make employees “proud to work at CTGDUTY-FREE”.In terms of employee benefits, we have formulated the “AdministrativeRegulations on Assistance for Sick Employees and the Collective Welfare ofTrade Unions”. The company’s trade union conducts complete investigationsto collect employees’ opinions. It sends warm and considerate blessingsto employees on holidays and birthdays based on their age, tastes andliving habits. The company demonstrates care for various groups, such asemployees with dif?culties and female employees. The company advocates aninclusive culture and fully considers the needs of ethnic minority employees.For example, we have set up a halal canteen for Hui staff.
▼Halal canteen
Prior to the 2023 Spring Festival, the trade union conducted on-site visits and paidspecial subsidies to staff members facing ?nancial dif?culties and front-line workers whowere on duty during New Year’s Eve and Spring Festival.At the beginning of 2024, the company held a cdf dinner party in the canteen tocelebrate the 2024 Spring Festival. All members of the headquarters staff attended theparty.
Case study: Offering heart-warming greetings during Spring Festival
In general, we strive to provide ?nancial assistance to employees experiencing dif?culties and offer gifts to those who have gotten married orgiven birth, to demonstrate support for employees facing hardships or major life events.
●Organises trade unions at alllevels to actively participate inthemed reading campaigns.●Organises and stages readingcampaigns in spring under thethemes of “Reading in Spring”,“Happy Reading Time” and“Countryside Visits andWriting”.
●Under the “Readers of the Party
Branch” initiative, each month a Partymember is invited to share a book he/she has read.● Subscribes to professional business-related publications to cultivate areading and learning environmentcharacterised by “continuous self-study, self-improvement and self-development”.
Staff library
Trade unions at all levels regularly arrange reading campaigns:
To promote reading and personalgrowth and thoroughly implementPresident Xi Jinping’s guidanceon reading, we strive to create anatmosphere that encourages all ourpeople to read, and to this end, we haveset up a staff library.
Headquarters trade unionCDF Investment Development trade union
Organises all staff members to jointhe “Forging Ahead on a New Journeyin the New Era” reading campaign.Staff select books of interest fromthe recommended book list andshare insights from their own readingexperience.
Purchases books to suit staff needs inline with the company’s developmentstatus, and encourages employees toactively take part in reading.
Organises all staff members todownload selected applications,collect and share books of interest,and share information about theirreading experience in the airportlounge.
cdf Wuhan Airport trade unionGuangzhou Xinmian trade unioncdf Kunming Airport trade union
Staff Pro?le
Employee turnover rate
Total number of employees is 16,789
Total employee turnover rate 16.63%, of which employee voluntary turnover rate was 12.10%
The number ofphysically challengedemployees is
The number of ethnicminority employees is1,169
accounting for
6.96%
accounting for
2.67%
The number of foreignemployees is 448The number offemale employeesis9,285
Male
16.09%
Female
17.05%
Employee turnover rate by categoryEmployee turnover rate by age group Employee turnover rate by
geographical regionEmployee turnover rate by gender
accounting for
55.3%
The number ofmale employees is7,504Total number of newemployees2,949
accounting for
44.7%
The percentage of ethnic minorityemployees in the management is10%
Females in the Board of Directors and the Supervisory Committee accountfor
37.5%
. Females in the management account for34%. Females inthe senior managerial roles account for20%, in middle managerial rolesaccount for35%, and in junior managerial roles account for43%.
The numberof employeesby employeecategory(person)
217 1.29%0.06% 10
16,562
98.65%
2.57%
9.82%
47.92%
2.52%
37.13%
0.04%
11.78%
12.88%
63.36%
0.33%
0.64%
2.49%
1.50%
4.13%
2.88%
1,978
2,13610,683
1,649
6,234
8,045
The number ofemployees by
age(person)
The number ofemployees byregion(person)
Over 60 58.52%50-60 14.99%40-49 8.95%30-39 12.22%22-29 19.55%Below 22 39.57%
Chinese Mainland
15.65%
China’s Hong Kong
SAR, Macau SAR
and Taiwan region
31.01%
Overseas
22.31%
Senior managerial roles
9.09%
Middle managerial roles
4.82%
General employees
16.77%
Internal hire rate15%
North ChinaEast ChinaSouth China
Central ChinaNorthwest ChinaSouthwest China
OverseasNortheast ChinaHong Kong SAR, MacauSAR and Taiwan region40-49Senior managerial rolesMiddle managerial roles
22-29Below 22General employees
50-60Over 60
30-39
We organise various cultural, recreational and sports activities foremployees. For example, the company stages festival celebrationsand promotes cultural and sports interest groups to enhanceemployees’ well-being and spiritual lives.During the period from April to May 2023, 11 trade union groups ofthe company organised a total of 22 spring outings for employees.
▼
Various spring outings
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Staff centre with 247 square metres
▼
Starbucks coffee machines in of?ce area
▼
Employee recreational and sports centre: equipped with central airconditioning, dance mirrors, soft seating, fitting rooms and othernecessary equipment and facilities
▼Warm and festive decorations in the company lobby
In terms of the work environment, we have made various efforts to improve of?ce facilities, provide convenient services, and ensure thatemployees are satis?ed with the company canteen. Our company is fully committed to creating a convenient and comfortable workingenvironment. In addition, we provide comfortable nursing rooms to protect the privacy and rights of breastfeeding mothers and generallyshow respect for female employees.
To cater to the needs of young employees, the company heldtwo sessions of social and dating events “Enjoying Youthand Encountering Romance” for young employees in Beijingand Haikou in October and December 2023 respectively, toprovide an opportunity for young single people to socialise,and enhance the sense of belonging and happiness of youngtalents.
Case study: Staging social and datingevents for staff
▼
Staff social and dating event “Enjoying Youth – Encountering Romance”
People
Diversified Training to Promote Staff Development
We have established talent-speci?c training systems that align with operations and international standards to build smooth career paths forour employees and provided them with a robust platform for their career development.▍Employee TrainingThe company regards strategic development as the core goal of training, and establishes a robust talent development and trainingmechanism, promotes talent development, and creates and develops a youth talent pool to enhance our core competitiveness. To thisend, our company has formulated “Training Management”, and we enhanced training under the management principle of “grading andclassification, and training for all employees”. Under this principle, we provide various types of training for employees across differentpositions and levels, carry out new hire training for new joiners, organise training courses for middle and senior management, and takevarious other measures to strengthen the company’s professional talent pool.In 2023, we worked with a third-party organisation to diagnose and optimise the training system, and we formed a training system plan formanagement talent and key business professionals for the coming 3-5 years, as well as speci?c training plans for each year. Throughout theyear, the company provided training courses in various forms via online and of?ine channels. In 2023, 1,520 key training sessions were held,resulting in a total of 148,000 attendances and 547,000 total training hours. On average, during the year, each employee completed 32.8training hours. The total expenditure on training and development is CNY7.543 million.In 2023, Hainan DF initiated the Leadership and Navigation talent cultivation programmes to comprehensively improve high-calibre talentand build an internal talent reserve. A total of 42 hours of training courses were provided, with 212 attendances recorded. Furthermore,Hainan DF launched the On-board Programme to help newly promoted managers in professional and management functions quickly adaptto and take on their new roles. This latter programme lasts for about 30 days, and a total of 35 people participated in the training.
▼For talent in key business areas such as retail operationsand procurement, special tiered and categorised trainingprogrammes are delivered
▼
In December, more than 40 managers of subsidiaries belowa designated size participated in the “Special Training forOperations and Management”
▼
In September 2023, approximately 50 operations and managementprofessionals from af?liated companies at all levels participated in the“Special Training for Retail Operations”
▼
In August, approximately 70 procurement personnel from theheadquarters procurement centre participated in “ProcurementStrategy and Negotiation Skills Training”
In August, we organised a ?ve-day training for new joiners. Headsand representatives from 10 departments from headquarters, andmore than 50 new joiners, participated in the training. The trainingfeatured three parts: an introduction to the company and itsprincipal activities, career orientation training for recent graduates,and team building activities. The participants bravely challengedthemselves and motivated each other during the training activities,demonstrating the perseverance, collaborative spirit and youthfulenergy of this new generation of “cdf people”.▼
Photos of the opening ceremony of the new staff training
We continue to organise management trainee projects and programmes, training programmes, job rotation, and research projects to buildan internal reserve of young talent.In 2023, the company continued to run “China Duty-Free Academy”, an online training platform. During the year, the platform had 16,500registered users, covering almost all employees. To promote the use of online learning, in 2023, courses for 25 topics were introduced, and15 live training sessions were held, resulting in a total of more than 410,000 attendances and 7.5 average training hours completed peremployee. The sessions included courses on product knowledge and sales skills for front-line sales staff, including “Lecture on Watches”,“Fragrance Products and Related Sales Skills”, “Knowledge of the Store’s Alcoholic Beverages” and other topics, with a view to enrichingthe product knowledge of staff. For professional staff at all levels, we provide courses on general skills such as team performance and thepower of communication. The company’s professionals also regularly deliver internal lecture sessions; and under the “Excellent Teachersand Excellent Courses” series of lectures, the internal lecturers themselves have had the opportunity to view eight live and recorded lectures,which are designed to improve their capabilities as internal trainers.In 2023, we conducted trainings as follows:
Employee Training Performance SummaryIndicatorSub-indicatorUnit20232022Percentage of employees trained/%100100Percentage of employees trained by gender
Male%100100Female%100100Percentage of employees trained by category
Senior management employee%100100Middle management employee%100100
General employee%100100Total training hours/
10,000hours
54.733.0
Average training hours completed per employee/hour32.819.6Average training hours completed per employeeby gender
Malehour24.419.3Femalehour30.319.9
Average training hours completed per employeeby category
Senior management employee
hour152.1162Middle management employeehour35.222.6
General employeehour32.719.5Average training hours completed per employeeby region
Chinese Mainlandhour34.219.6Chinese Hong Kong SAR, Macau
SAR and Taiwan region
hour18.116.1Overseashour19.826
As far as the training courses organised by the company are concerned, there is no signi?cant difference for employees at different categories; however,the senior management participated in more intense trainings subject to the requirement on the training hours in the Regulations on the Education andTraining of Cadres issued by the CPC Central Committee.
People
▍Employee DevelopmentBased on employees’ career development needs, we continuously improve the talent management system and consolidates the foundationof talent management to offer smooth career development channels to assist employees in achieving their dreams and living up to their fullpotential.According to the actual circumstances of the company, we have established a ranking system covering all grades and types of positionsbased on a hierarchical management system and job qualification criteria. The company determines the function, level and rank ofemployees according to their abilities, performance and quali?cations. We allow two-way movement between management positions andprofessional positions and use a ranking system that reaches every level and grade horizontally and vertically across our headquarters andsubsidiaries. We have built multiple career paths – including through annual rank promotions, promotions based on professional reviews,open recruitment of executives, and an internal system for regular talent exchange – to align the development of each employee’s careerwith the overall development of the company’s talent. We adopted the Management by Objectives (MBO), Key Performance Indicators (KPI)and 360°Feedback for integrated employee performance management. The assessment includes both work performance and professionalcapability, and the performance assessment results are determined through the ranking of the overall scores of employees responsible forthe same tasks, covering 100% of the employees.In 2023, the company continued to promote the development of skilled talents. In respect of professional title reviews, we are quali?ed toreview professional engineering titles; and staff members are encouraged to review and apply for professional titles in various ?elds. Thecompany continues to organise and implement the local ?ling of vocational skill level certi?cation, and it has completed the ?ling of the twoidenti?ed vocational skill levels of “merchandise sales” and “labour relations coordinator” with the local human resources and social securityauthority.Operational Safety and Physical and Mental Health▍Operational Safety
We vigorously carry out the establishment of a safety culture, cultivate and re?ne the safety culture system with the characteristics of CTGDUTY-FREE, ?rmly establish the safety concept of “people-oriented, service ?rst, and safety ?rst”, focusing on ?ve major pillars of safety,including Party construction, law, mechanism, science and technology, and employee awareness, to achieve the goal of “zero accidents” inoperations safety.Safety ComplianceThe company strictly abides by laws and regulations such as theWork Safety Law, theLaw on the Prevention and Control of OccupationalDiseases, and we have formulated the “Operation Safety Responsibility System for Staff”, the “Operation Safety Management Measures”,the “Safety Training Management Measures”, and the “Emergency Management Measures”. The company and each af?liated company fullyimplement the main responsibilities of operations safety, strengthening operations safety responsibility at all levels for staff, establishing aduty list and a sound safety system, and strictly carrying out safety measures.Party ConstructionThe company adheres to President Xi Jinping’s important statement on operations safety to arm ourselves intellectually and to guideour practice. Party organisations at all levels give full play to their leading role, improving the system of “equal responsibilities for CPCcommittees and government, dual responsibilities, and joint management”. All Party members should play an exemplary role in performingtheir duties, and ensure the implementation from the ?ve aspects of safety regulations publicity, safety deployment implementation, safetyfunds investment, safety performance supervision, and safety awareness enhancement.
Ensure theImplementationfrom the Five
Aspects
SafetyRegulationsPublicity
SafetyDeploymentImplementation
SafetyFundsInvestment
SafetyPerformanceSupervision
SafetyAwarenessEnhancement
In November 2023, in partnership with the Sanya Fire Brigade,the Sanya Public Security Bureau’s Haitang Branch, the HaitangDistrict Emergency Management Bureau, the Haitang DistrictCommerce Bureau, the Haitang District Fire Brigade, the TengqiaoPolice Station and other local bureaus and departments, SanyaInternational Duty-Free Shopping Complex conducted a large-scalepractical drill for its comprehensive emergency response, and heldan emergency ?re drill and personnel evacuation in zone C. Thesedrills drew more than 2,300 attendances.In addition, in 2023, Hainan DF further raised employees’ awarenessof operational safety and emergency response issues by holdingactivities such as Publicity Week for the Law on the Prevention andControl of Occupational Diseases and fire safety month, and byorganising training and special drills on ?rst-aid and ?re safety.
▼Joint ?re safety drills▼Comprehensive emergency drills
Each af?liated company also actively carried out emergency drills according to their actual situation. In June and November 2023, HaikouInternational Duty-Free Shopping Complex carried out large-scale comprehensive emergency drills. During business hours, drills werecarried out to prepare for ?res caused by violent robberies and ?res caused by spontaneous combustion of vehicles. The drills coveredvarious emergency responses, including anti-terrorism and riot control, medical treatment, material rescue and ?re?ghting rescue, amongothers. In total, more than 2,700 attendances were recorded for the drills.
Safety Mechanism
the company has clarified the composition and responsibilities of the Safety Committee. All large-scale storesand projects under construction are equipped with full-time safety management personnel as required, ensuringthe smooth implementation of all safety work. Based on the actual situation of the warehouse, the companyformulated the “Warehouse Management Code” and other normative documents to strengthen warehouse safetymanagement and ensure the regular operation of the warehouse. In 2023, the company signed 129 copies ofthe Letter of Commitment to Operational Safety, Energy Conservation and Environmental Protection, coveringeach department and af?liated company, to clarify management and assessment requirements, and reward andpunishment standards, and guide and supervise companies at all levels in the detailed implementation of relatedmeasures. Each department and af?liated company are encouraged to sign the Letter of Commitment and shoulderits responsibility, so that the company can meet 100% of its operational safety responsibilities.the company has formulated the Contingency Plan for Operational Safety Accidents. Under the plan, all af?liatedcompanies have established a robust system for emergency planning that covers ?re accidents, traf?c accidents,electric shocks and other operational safety accidents. Af?liated companies have been guided to perform scenariosimulation drills and effectively improve the ef?ciency of employees’ emergency responses. Employees participatein the preparation of the annual emergency drill plan, training on the use of ?re-?ghting facilities, and ?re evacuationdrills to improve their safety skills. All affiliated companies strive to strengthen on-site emergency rescue andemergency response capabilities, adjust and optimise emergency command systems and coordination and linkagemechanisms, and ensure materials, equipment and personnel are prepared and targeted emergency drills areconducted.
In terms ofoperationssafetymanagement
In terms ofemergencymanagementof safety risks
People
For all construction projects under CDF Investment Development,the company has set up mechanisms to exchange information andcollaborate in rescue efforts with the local authorities that handleemergency management, safety management, health managementand meteorology, among other areas.CDF International has engaged external trainers to explain andprovide on-site guidance on how to combat terrorism, theft androbbery for all its overseas projects; and ?re, anti-theft, anti-robbery,anti-terrorism and other emergency drills have been carried out atthe company’s stores in Phnom Penh, Siem Reap, Sihanoukvilleand other cities, to improve employees’ emergency response skillsand protect employees, customers and their property.
the headquarter of the company has established a risk classi?cation and control mechanism, has organisedits duty-free complexes, stores, projects under construction and warehouses to carry out comprehensive riskidenti?cation and evaluation, controlling the safety risk according to the classi?cation, and has implemented theworking mechanism of “one company one list, one store one list”. The headquarter of the company regularlychecks the management and control of significant risks, serves, guides and supervises all units to improvemanagement and control measures in combination with safety inspections.
In terms ofoperations safetyinspections andprevention andcontrolDuring the reporting period, the company effectively strengthened hazard governance in production safety, ?rmly established the bottom-lineprinciple of “unidenti?ed hazards are accidents”, thoroughly identi?ed and recti?ed hazards, and urged all af?liated companies to effectivelyensure operational safety and eliminate all forms of operational safety accidents.The company has been promoting the “Year for Strengthening Compliance Management” initiative. In accordance with national lawsand regulations and industry standards, we have determined criteria for identifying the company’s major accident hazards, priorities andrecti?cations, developed special action plans, re?ned the division of responsibilities and task assignments, and comprehensively identi?edsecurity hazards at store premises, warehouses, dormitories and other key facilities. Principals at all levels led teams in carrying out a total of315 safety inspections in 2023. The company’s Work Safety Committee has strengthened oversight of hazard identi?cation, carried out on-site safety inspections at CDF Investment Development, Sunrise China, Sunrise Shanghai, Hangzhou cdf, the Shanghai Logistics Centre, theDalian Distribution Centre, the downtown stores in Dalian and various projects under construction. The Committee has reviewed the resultsof interim safety inspections of key units in Hainan and has supported and guided all units to identify on-site safety hazards, with a view tostrengthening overall safety management and preventing operational safety accidents. In addition, all af?liated companies were organisedto actively carry out safety inspections before festivals, and special on-site inspections were conducted to ensure ?re safety, gas safety andcrane safety, among other safety concerns. Enterprises at all levels carried out a total of 468 safety inspections, and identi?ed and recti?ed1,907 safety hazards in 2023.The company encourages front-line staff to act as safety whistle blowers and take the initiative in identifying and reporting hazards andvulnerabilities. They are also encouraged keep a close eye on key issues, safety hazards and control vulnerabilities to ?rmly defend thebottom line of operational safety.
In July 2023, the company invited a group of external experts to carry out an interim operational safety inspection and assessment onfocus areas and major projects in Hainan. This project was designed to promote reform, leverage inspections to check the effectivenessof training, and strengthen troubleshooting and governance of safety hazards in critical premises such as the company’s tax-freecomplexes, projects under construction and logistics centres. In September 2023, the company engaged experts in ?re prevention,electrical safety, construction safety and other ?elds to carry out operational safety inspections at key units in Hainan before the Mid-Autumn Festival and National Day. Under this effort, for project sites under construction, experts conducted hazard troubleshooting forkey processes and areas such as construction and installation, special operations, temporary electricity, ?re-?ghting facilities, on-sitepersonnel management and controls, with a view to guaranteeing the safety of subsequent construction.
Case study: Carrying out diagnostic troubleshooting and rectifications under the guidance of experts
Science and TechnologyThe company attaches importance to using safe, reliable, efficient and practical safety management technology to improve safetymanagement. For instance, we use facial recognition devices in various projects to achieve real-name people management, and usedrones to inspect construction sites, improving the level of intelligent construction and automated operations, and further improving safetytechnology support abilities and operation safety guarantee abilities.
In 2023, for Operational Safety Month, the company staged various activities, including operational safety training and drills, with the aimof promoting awareness and knowledge of operational safety. Haikou International Duty-Free Shopping Complex hosted the openingceremony of 2023 Operational Safety Month in Haikou. Emergency rescue drills for con?ned spaces and falls from heights were carriedout on-site after the ceremony.
Case study: Staging activities for Operational Safety Month
In 2023, the company invested a total of CNY27.93 million in operations safety, and thissafety investment provided a strong guarantee for the safe development of the business.In addition, 314 drills were staged for different types of emergencies, including ?re?ghting,emergency evacuation in offices and operations areas, typhoons, and flood prevention,drawing a total of 19,500 attendances. In the past three years, the company did not recordany safety accidents. The company had no work-related injuries or deaths in 2023. Thefatality rate of the Company’s employees due to work-related injuries
is 0, and the lost-timeinjury frequency rate (per one million hours worked)
is 0.
Fatalities due to work-related injuries (per 100 workers) = number of fatalities due to work-related injuries/number of workers*100%;
Lost-time injury frequency rate (per one million hours worked) (LTIFR) = number of lost time injuries/total number of man-hours worked in the accounting
period*1,000,000
invested a total ofCNY27.93 million
in operations safety
Safety publicity
The company continued to cultivate a culture of “safety publicity”. As part of this effort, we organised af?liated companies to stage publicityand education activities, such as ?re prevention publicity month, Publicity Week for the Law on the Prevention and Control of OccupationalDiseases, national safety publicity and consultation day, and safety induction training for new joiners. We also leveraged bulletin boards,banners, online learning, “open classes”, knowledge contests and other activities to promote and publicise operational safety laws andregulations and basic information regarding operational safety, with a view to raising the safety awareness of all staff. In 2023, the companyorganised and carried out 663 safety trainings, a total of 154 lectures on operational safety, with 18,500 participants.In addition, to promote the development of a safety culture, the company organised a safety culture questionnaire for all staff, devised the “SafetyCulture Manual” and invited external experts to host seminars on cultivating a safety culture. In 2023, the company and its af?liated companiesactively participated in the collection of best practice cases and articles for safety culture, which was organised by the Publicity and EducationCentre of the Ministry of Emergency Management. The company and Sanya Downtown Store won the Ministry of Emergency Management’sbest practice case for safety culture. In addition, three articles submitted by the company, Sanya Downtown Store and CDF InvestmentDevelopment were recognised among the best national articles for corporate safety culture.
People
▍Physical and Mental HealthWe are fully committed to ful?lling our duties as a people-oriented company and puts the safety and physical and mental health of employees?rst. In terms of occupational health management, the company provides bene?ts that includes annual physical examinations for employeesand comprehensive medical insurance for employees and their young children, including accident insurance, serious disease insurance andmedical insurance. In addition, the company provides medical insurance that covers overseas medical institutions for expatriate employeesand those who are on overseas business trips, relieving employees of the burden of medical expenses while they are working abroad.The company’s staff at construction sites may be exposed to a range of occupational hazards, including noise, dust, vibrations, toxic andharmful gases, and high temperatures. Meanwhile, merchandise handlers in logistics centres may be exposed to the occupational hazardsof high and low temperatures. The company always pays attention to the physical and mental health of staff members and takes multiplemeasures to prevent occupational diseases:
First, we organise special training on occupational health, and promote education on occupational healthmanagement, including the identi?cation and prevention of occupational disease hazards, occupational diseaseclassification and categories, personal protective equipment, and employee occupational health rights, toreinforce the foundation of the company’s occupational health management.Second, the company collects and publicises typical cases of occupational health, and studies and analysesincidents such as deaths caused by inadequate implementation of heatstroke prevention measures,administrative punishments for improper management of occupational hazards, and failures to issue occupationalhazard notifications, to provide reminders and lessons for employees and increase their awareness of theimportance of occupational health management.Third, the company has been organising af?liated companies at all levels to stage activities for Publicity Weekfor the Law on the Prevention and Control of Occupational Diseases. We carried out a series of publicityand educational activities to promote education related to occupational disease prevention and effectivelyraise employees’ awareness of occupational hazards. A total of 1,450 occupational health publicity materialswere distributed; 158 themed lectures were held; and 129 educational reminder activities and 39 publicityconsultations were carried out in 2023. These efforts reached a total public audience of 11,548, effectivelystrengthening the foundation of the company’s occupational health management.Fourth, identification and rectification actions are carried out to combat occupational disease hazards. Forexample, the company conducted inspections of the working conditions in facilities and distributed personalprotective equipment, with a view to preventing occupational diseases. In addition, at all units under construction,we comprehensively inspected measures that have been implemented to prevent occupational diseases, andanalysed occupational health protection plans and emergency plans for occupational health accidents to preventand address potential risks related to occupational health.
Special Trainings
Collect Cases
OrganisePublicityActivities
Identi?cation
andRecti?cation
During Publicity Week, the heads of Sanya Downtown Store led a team to visit front-line staff to understand the occupational hazardsfacing each post and the implementation of preventive and control measures. CDF Investment Development organised specialised workersand operators, paint insulation professionals, and other operators at sites under construction to carry out education and training related tooccupational disease prevention, and checked the certi?cation of specialised operators to ensure that 100% of the workers were certi?ed.In addition, all stores held regular meetings to educate their staff about occupational disease prevention and control, and they displayedposters and played videos to cultivate a culture that upholds occupational disease prevention and control. Sunrise China organised a lectureon ?rst-aid and invited experts from the safety and health education network to explain and demonstrate emergency treatments for healthemergencies and heatstroke.
1,450
occupationalhealth publicity materialswere distributed
themed lectureswere held
educationalreminder activities
publicityconsultationswere carried out
These effortsreached a totalpublic audience of
11,548
During Publicity Week
To enhance the physical and mental health of employees, enrich their leisure time after work, and promote intragroup exchanges amongemployees at all levels, in 2023, the company’s trade union and Youth League Committee held the ?rst staff badminton championship,which carried the slogan, “Playing badminton to make new achievements” (羽动不凡 再建新功), with the purpose of promoting friendlycompetition.
Case study: The first staff badminton championship
▼
Beijing team’s group photo
▼
Hainan team’s group photo
During the period from April to May 2023, the company invited experts from external medical institutionsto provide medical consultations, physiotherapy and health education publicity activities for staff of theheadquarters and af?liated companies at all levels in Beijing.About 600 staff members took advantage of the free clinic consultations, which included traditional Chinesemedicine (TCM) pulse diagnoses, acupuncture and massage sessions, blood pressure and blood glucosemeasurement, consultations on common diseases, publicity of knowledge on a healthy and scienti?c diet,sub-health prevention and treatment, and medication safety. Staff also received personalised healthcareadvice based on their speci?c situation, with a view to providing them with scienti?c medical treatment andencouraging a healthy lifestyle.
Case study: Free clinic visits for staff
▼Free clinic activities
Haikou International Duty-Free Shopping Complex has established basketball, badminton, football and other sports clubs, and itregularly stages activities to encourage employees to be more physically active and create a healthy and positive environment for thecompany.Case study: Setting up sports clubs to encourage employees to exercise and stay fit
▼Basketball club
▼
Badminton club
▼Football club
People
Reading has been incorporated into weekly interest group activities. For example,before and after their matches, participants in badminton interest groups are providedwith readings to learn about common injuries and preventive measures, with the aim ofpromoting sports-related education and protecting employees’ health.
Case study: Integrating sports and reading to safeguardemployees’ physical and mental health
Case study: Hangzhou cdf organised a fun sports competitionIn 2023, Hangzhoucdf organised a sportscompetition to promotecommunication, friendshipand teamwork amongemployees
The company’s trade union and the Committee of Female Employees staged theWO’MEN ?ower arrangement art salon to celebrate 2023 International Women’s Day.At the activity, more than 200 female employees from the company’s headquartersexpressed themselves by designing unique arrangements of ?owers and plants with theguidance of the salon lecturer.In addition, the company invites professional instructors to provide weekly yoga coursesto employees. Through these courses, members of the yoga interest group can learnmeditation-related knowledge, balance their body and mind, and relieve themselvesof pressure through innovative exercises and reading. In this way, employees aretaking the opportunity to enrich their spiritual and cultural lives while improving theirphysical strength. These activities have been warmly received by staff members and areconducive to the company’s efforts to cultivate a harmonious environment.
Case study: Female employees design flower arrangements and engage in yoga and meditation
▼
Staff assemble ?ower arrangements
▼Yoga and meditation
CTG DUTY-FREE cares for the planet based on its business features and in light of environmental characteristics of its main businesslocations. We are actively responding to UN SDGs 2, 6, 7, 12, 13, 14 and 15 by engaging in multiple environmental protection initiatives,such as water resource management, green and low-carbon operations, green buildings, and active responses to climate change.
PlanetAddressing Climate Change toProtect the Environment
Embracing Green Buildings toFull the Green Building Philosophy
Green and Low-Carbon Operationsfor a Better Life
Green Wonderland
Addressing Climate Change to Protect the Environment
Climate change is having a broad and far-reaching impact on the world, CTG DUTY-FREE is acting quickly to analyse the potentialchallenges that climate change may bring, deploy mitigation and adaption measures, and explore opportunities. This section describesour efforts and future plans for addressing climate change with reference to TCFD (Task Force on Climate-Related Financial Disclosures)recommendations.▍GovernanceWe have established an ESG governance structure, which covers the all-round governance on ESG matters,including addressing climate change.The Board of Directors of the company is the highest decision-making authority to address climate change, and the Strategy andSustainability Committee of the Board of Directors is the committee assuming the primary responsibility. We established the ESG LeadershipGroup, and it is headed by the Chairman of the company; the deputy head is the General Manager; and its members include headsof departments. ESG governance structure, strategy and the terms of reference of the Strategy and Sustainability Committee and theESG Leadership Group, please refer to “Exercising Stronger Governance to Implement ESG Concepts”. The Strategy and SustainabilityCommittee holds meeting once a year, and the ESG Leadership Group holds regular meetings. By integrating ESG matters, includingresponses to climate change, with daily operations and management, the concerned departments and subsidiaries perform their speci?cresponsibilities within their terms of reference. In addition, the company has also set up a “Leadership Group on Carbon Peaking andCarbon Neutrality”, please refer to “Green and Low-Carbon Operations for a Better Life”.We have made it clear that the Board of Directors has to incorporate climate considerations into its review and instructions on strategies,important action plans, risk management policies, annual budgets and business plans, its formulation of performance goals for organisations,its monitoring on implementation, and its supervision on signi?cant capital expenditure, acquisitions and divestitures. The ESG LeadershipGroup and the “Leadership Group on Carbon Peaking and Carbon Neutrality” provide support for this.We steadily carry out the current status reviews, strategy formulation, risk management, and identification and tracking of metrics andtargets for risks and opportunities arising from climate change that the company may be exposed to or can embrace.▍StrategyIn view of the characteristics of the tourism retail industry and the company’s medium to long-term business planning, we continue to focuson and monitor business operations and risk management to identify, quantify and manage potential threats and uncertainties caused byglobal climate change. We then analyse the potential impact of these risks on the company’s own operations and the entire industry chain,from upstream to downstream processes, with the aim of safeguarding the steady development of the business.We referred to the TCFD framework to identify the physical risks related to climate change (hereinafter “physical risks”) and the transitionrisks related to low-carbon economic transformation (hereinafter “transition risks”). For physical risks, we use a risk forecasting tool basedon climate change scenarios (provided by MSCI) to assess the potential business and ?nancial impacts subject to the geographical locationof the company’s assets, their exposure and their hazard patterns. On this basis, we have developed systematic response strategies in siteselection, emergency management, supply chain and inventory optimisation, and online business development. We then integrated thesestrategies into the company’s daily business management, to enhance its organisational resilience.Scenario analysis
Based on the analysis of chronic and acute physical risks under different climate scenarios, we comprehensively assess the potential impactof physical risks on corporate strategy, business operations and ?nancial conditions under different scenarios. We then prioritise climaterisks, optimise resource allocation, and improve risk management.We selected the current scenario, the relatively orderly pathway toward 1.5°C set by the Network for Greening the Financial System (NGFS)(i.e., reaching net zero around 2050), alongside the climate scenario of 3°C Nationally Determined Contributions (NDCs) set by the NGFS(i.e., global warming of 3°C scenario around 2050) for scenario analysis.
Planet
Physical riskcategory
Climate risk type
Risk impact of current
scenario
Risk impact underthe 1.5°C – scenario
Risk impact underthe 3°C – scenario(hereinafter “highemissions scenario”)
Chronic risks
Extreme heatExtreme coldPrecipitation (heavy rain)
Extreme snowfall
Extreme wind
Acute risks
Coastal ?oodingFluvial ?ooding
TyphoonsWild?resRiver low ?ow
Subject to the assessment of the geographical location of the company’s assets, exposure and severity, the company’s overall businesswas exposed to extremely low to moderate risk under all climate scenarios, including extreme cold, extreme snowfall, extreme wind, ?uvial?ooding, and river low ?ow. We identi?ed physical risks with high or higher risk levels, such as extreme heat, precipitation, coastal ?ooding,typhoons and wild?res, and further elaborated on the targeted description in terms of impact, assessment, impact cycle, scope of impact,potential ?nancial impact, strategies, mitigation and adaptation measures, and comprehensively analysed the related risks, including directloss, operation interruption, customer loss, and the impact of supply chain disruption on all links of the company’s business value chain. Weactively promote the climate adaptability design of buildings, creation for a more resilient supply chain, online and of?ine business integrationand other measures, improve the company’s ability to address climate risks, enhance the durability and stability of business operations, andcontinue to provide customers with quality goods and services.
Extreme
high
Extreme
high
Extreme
high
Extreme
high
Extreme
high
Extreme
high
HighHighHigh
HighHighHigh
LowLowLow
Current scenario1.5°C – Net-zero world scenario
3°C – Hot house world scenario
Physical risk output of risk exposurebased on 2021 benchmark
RCP 1.9IEA Net-Zero by 2050NGFS Net-Zero 2050SSP1 – Sustainability
RCP 6.0IEA Stated Policies Scenarios(STEPS)NGFS NDC scenario Shared Socio-Economic Pathway – Fossil-fuelleddevelopment
1.5-°C NGFS orderly “Net-Zero 2050” scenario: the adoption of the net zero emissions by 2050 scenario, that is, the global energy sector achieving net zero
CO
emissions by 2050 is consistent with limiting the global temperature rise to 1.5°C with no temperature overshoot (with a 50% probability).
3-°C NGFS Nationally Determined Contributions “NDC” scenario: taking into consideration all pledged but not yet implemented policy measures. Theestimated physical risks would be slightly lower than in the Current Scenario case, but still well above theParis Agreement targets.
HighMediumMediumMediumMedium
Medium
Extreme
low
ExtremelowExtreme
low
Extremelow
Extreme
low
Extreme
low
Extreme
low
Extreme
low
Extreme
low
Physicalriskcategory
Climate risk
category
ImpactAssessment
Impact
cycle
Scope of
impact
Potential ?nancial
impact
Strategies, mitigation and adaptation measures
Chronic
risks
Extreme heat
High temperatures will increase demand for water supply andcooling in summer, resulting in increased energy consumptionand equipment maintenance costs. Extreme high temperaturesmay lead to excessive power loads, increase safety hazards suchas short circuits and fires, and have an adverse impact on normaloperations brought by power supply tension or power failures.Extreme high temperatures may also affect logistics andtransportation, such as the storage and distribution ofrefrigerated goods, or lead to traffic interruption in some areas,affecting commodity supplies and passenger flow in touristdestinations.
Extreme high temperatures may cause avery high risk to the company’s operationsin Hainan province, the GBA and Cambodia.Under the high emissions scenario, thenumber of operations with an extremelyhigh risk will further increase, for example,operations in Fujian province will also beexposed to extremely high risks.This will be the most common climate riskfaced by the company.
Medium andlong-term
OperationUpstream
Increase in operatingexpensesIncrease ininvestmentDecrease inoperating income
Follow green standards for the construction of new buildings from their design andplanning, continue the energy-saving optimisation of existing facilities, effectively reducecosts while saving energy, and promote the use of clean energies.Regularly check, maintain, and update in-store electrical circuit and facilities, and formulateemergency plans to deal with power supply interruptions, such as by installing standbypower supply system to prevent sudden power failure.Rigorously monitor cold-chain logistics to guarantee the quality of temperature-sensitiveproducts in hot weather, strengthen inventory management, and prepare goods inadvance to deal with possible logistics delays.Continue to expand the online business, integrate online and offline businesses andmaintain a good momentum of development to minimize the adverse impact of climate riskon the company’s of?ine business operations.
Precipitation
Heavy precipitation may lead to road flooding, trafficinterruption or potential safety hazards, and reduceconsumers’ willingness to go out and buy. In addition, it mayalso lead to instability of supply or delayed delivery, posingchallenges to inventory management and customer services.Continuous heavy rain may affect the sales of some seasonalcommodities, such as outdoor products for summer.
Nearly half of the company’s operation sitesare exposed to a high or extremely high riskof precipitation, especially certain operationsites located in the Yangtze River Delta,Chongqing city and Fujian province.
Medium and
long-term
OperationUpstreamDownstream
Increase in operating
expensesDecrease inoperating income
Geographical factors shall be fully considered when selecting sites for project developmentto avoid the severe impact of disasters on infrastructure.Check waterproof facilities to ensure that the in-store waterproof facilities are effective,and prepare necessary emergency supplies, such as waterproof sandbags, drainageequipment, emergency lighting, etc.By optimising inventory management, we can improve the inventory turnover rate whilemaintaining adequate inventory, to ensure the stability of the supply chain when thelogistics and transportation is interrupted.Adjust marketing strategies, launch targeted promotional activities, and encourageconsumers to place orders online.
Acuterisks
Coastal?ooding
Coastal flooding may cause seawater to flood stores anddamage store facilities. Goods soaked in water may decay orget damaged, resulting in economic losses. Coastal floodingmay cause delays or interruptions in port transportation andlogistics facilities, which may affect the supply chain, thusaffecting sales of goods. Coastal flooding may damage powerand communication infrastructure, leading to power failures andcommunication interruptions in stores, affecting their normaloperations. Muddy water, pollutants and pathogens left over afterfloods may pose risks to the health of employees and customers.
Some operations of the company locatedin Hainan province, the GBA, the YangtzeRiver Delta, and the Bohai Rim region areexposed to high or extremely high risks.
Short,medium andlong-term
OperationIncrease in operating
expenses
Flood levees shall be built around stores and the threshold shall be raised to reduce thepossibility of seawater flooding. Sandbags, waterproof baffles and other materials shall beprepared for rapid deployment in case of ?oods.Develop a detailed emergency response plan, including employee evacuation, customerevacuation, goods transfer and other processes, and conduct regular drills to ensure thatemployees are familiar with the emergency process.By diversifying the supply chain, we avoid heavy dependence on a single supply channel andimprove the ?exibility of the supply chain.Adjust the inventory strategy, avoid overstocking high-risk goods, and take appropriatemoisture-proof and mold-resistant measures for goods that are vulnerable to ?oods.
Typhoons
Typhoons may blow down trees or billboards, causing damageto the external structure of duty-free stores and threatening thesafety of these stores. Typhoons often bring heavy rainfall, whichmay lead to the flooding of roads and surrounding areas, thusaffecting the safe access to stores of customers and employeesand leading to business interruption.Typhoons may affect the logistics system, leading to supplychain interruptions, and delays in goods replenishment, affectingstore inventory and sales.
Some operations of the company located inHainan province, Fujian province, the GBAand the Yangtze River Delta are exposedto a very high level of typhoon risk. Underthe high emissions scenario, the number ofhigh-risk operations slightly increases.
Short,medium and
long-term
OperationIncrease in operating
expensesDecrease inoperating income
Pay close attention to the forecast and early warning information, follow the weatherforecast, and make timely adjustments to the store operating plan according to theextreme weather forecast.Strengthen the maintenance and inspection of the store structure, and ?x and reinforce itwhen necessary to ensure the structure is ?rm enough to withstand strong winds.Establish stable cooperation with suppliers to ensure timely replenishment of goods evenwhen the supply chain is interrupted.Strengthen the safety training for employees to improve their awareness of and ability tocope with typhoons.
Wild?res
The actual losses caused by wild?res may increase additional costsof maintenance. The smoke and particles generated by wildfirewill seriously affect the air quality, resulting in reduced visibility andposing a threat to the health of employees, and that may affect theshopping experience of customers, leading to reduced passenger?ow. Wild?res may lead to the blocked roads or traf?c congestion,making it dif?cult for customers and employees to access the duty-free stores. If a wild?re spreads to the nearby airport or port, it mayaffect the supply chain and logistics of duty-free stores.
Some operations in Hainan province,Heilongjiang province, Jilin province, Anhuiprovince are exposed to high risk.
Short,medium and
long-term
OperationDownstream
Increase in operating
expensesDecrease inoperating income
Establish a wildfire monitoring system to keep abreast of the fire development,take preventive measures in advance to ensure the safety of employees andcustomers.
Planet
Physical
riskcategory
Climate risk
category
ImpactAssessment
Impact
cycle
Scope of
impact
Potential ?nancial
impact
Strategies, mitigation and adaptation measures
Chronic
risks
Extreme heat
High temperatures will increase demand for water supply andcooling in summer, resulting in increased energy consumptionand equipment maintenance costs. Extreme high temperaturesmay lead to excessive power loads, increase safety hazards suchas short circuits and fires, and have an adverse impact on normaloperations brought by power supply tension or power failures.Extreme high temperatures may also affect logistics andtransportation, such as the storage and distribution ofrefrigerated goods, or lead to traffic interruption in some areas,affecting commodity supplies and passenger flow in touristdestinations.
Extreme high temperatures may cause avery high risk to the company’s operationsin Hainan province, the GBA and Cambodia.Under the high emissions scenario, thenumber of operations with an extremelyhigh risk will further increase, for example,operations in Fujian province will also beexposed to extremely high risks.This will be the most common climate riskfaced by the company.
Medium and
long-term
OperationUpstream
Increase in operating
expensesIncrease ininvestmentDecrease inoperating income
Follow green standards for the construction of new buildings from their design andplanning, continue the energy-saving optimisation of existing facilities, effectively reducecosts while saving energy, and promote the use of clean energies.Regularly check, maintain, and update in-store electrical circuit and facilities, and formulateemergency plans to deal with power supply interruptions, such as by installing standbypower supply system to prevent sudden power failure.Rigorously monitor cold-chain logistics to guarantee the quality of temperature-sensitiveproducts in hot weather, strengthen inventory management, and prepare goods inadvance to deal with possible logistics delays.Continue to expand the online business, integrate online and offline businesses andmaintain a good momentum of development to minimize the adverse impact of climate riskon the company’s of?ine business operations.
Precipitation
Heavy precipitation may lead to road flooding, trafficinterruption or potential safety hazards, and reduceconsumers’ willingness to go out and buy. In addition, it mayalso lead to instability of supply or delayed delivery, posingchallenges to inventory management and customer services.Continuous heavy rain may affect the sales of some seasonalcommodities, such as outdoor products for summer.
Nearly half of the company’s operation sitesare exposed to a high or extremely high riskof precipitation, especially certain operationsites located in the Yangtze River Delta,Chongqing city and Fujian province.
Medium and
long-term
OperationUpstreamDownstream
Increase in operating
expensesDecrease inoperating income
Geographical factors shall be fully considered when selecting sites for project developmentto avoid the severe impact of disasters on infrastructure.Check waterproof facilities to ensure that the in-store waterproof facilities are effective,and prepare necessary emergency supplies, such as waterproof sandbags, drainageequipment, emergency lighting, etc.By optimising inventory management, we can improve the inventory turnover rate whilemaintaining adequate inventory, to ensure the stability of the supply chain when thelogistics and transportation is interrupted.Adjust marketing strategies, launch targeted promotional activities, and encourageconsumers to place orders online.
Acuterisks
Coastal?ooding
Coastal flooding may cause seawater to flood stores anddamage store facilities. Goods soaked in water may decay orget damaged, resulting in economic losses. Coastal floodingmay cause delays or interruptions in port transportation andlogistics facilities, which may affect the supply chain, thusaffecting sales of goods. Coastal flooding may damage powerand communication infrastructure, leading to power failures andcommunication interruptions in stores, affecting their normaloperations. Muddy water, pollutants and pathogens left over afterfloods may pose risks to the health of employees and customers.
Some operations of the company locatedin Hainan province, the GBA, the YangtzeRiver Delta, and the Bohai Rim region areexposed to high or extremely high risks.
Short,medium and
long-term
OperationIncrease in operating
expenses
Flood levees shall be built around stores and the threshold shall be raised to reduce thepossibility of seawater flooding. Sandbags, waterproof baffles and other materials shall beprepared for rapid deployment in case of ?oods.Develop a detailed emergency response plan, including employee evacuation, customerevacuation, goods transfer and other processes, and conduct regular drills to ensure thatemployees are familiar with the emergency process.By diversifying the supply chain, we avoid heavy dependence on a single supply channel andimprove the ?exibility of the supply chain.Adjust the inventory strategy, avoid overstocking high-risk goods, and take appropriatemoisture-proof and mold-resistant measures for goods that are vulnerable to ?oods.
Typhoons
Typhoons may blow down trees or billboards, causing damageto the external structure of duty-free stores and threatening thesafety of these stores. Typhoons often bring heavy rainfall, whichmay lead to the flooding of roads and surrounding areas, thusaffecting the safe access to stores of customers and employeesand leading to business interruption.Typhoons may affect the logistics system, leading to supplychain interruptions, and delays in goods replenishment, affectingstore inventory and sales.
Some operations of the company located inHainan province, Fujian province, the GBAand the Yangtze River Delta are exposedto a very high level of typhoon risk. Underthe high emissions scenario, the number ofhigh-risk operations slightly increases.
Short,medium and
long-term
OperationIncrease in operating
expensesDecrease inoperating income
Pay close attention to the forecast and early warning information, follow the weatherforecast, and make timely adjustments to the store operating plan according to theextreme weather forecast.Strengthen the maintenance and inspection of the store structure, and ?x and reinforce itwhen necessary to ensure the structure is ?rm enough to withstand strong winds.Establish stable cooperation with suppliers to ensure timely replenishment of goods evenwhen the supply chain is interrupted.Strengthen the safety training for employees to improve their awareness of and ability tocope with typhoons.
Wild?res
The actual losses caused by wild?res may increase additional costsof maintenance. The smoke and particles generated by wildfirewill seriously affect the air quality, resulting in reduced visibility andposing a threat to the health of employees, and that may affect theshopping experience of customers, leading to reduced passenger?ow. Wild?res may lead to the blocked roads or traf?c congestion,making it dif?cult for customers and employees to access the duty-free stores. If a wild?re spreads to the nearby airport or port, it mayaffect the supply chain and logistics of duty-free stores.
Some operations in Hainan province,Heilongjiang province, Jilin province, Anhuiprovince are exposed to high risk.
Short,medium and
long-term
OperationDownstream
Increase in operating
expensesDecrease inoperating income
Establish a wildfire monitoring system to keep abreast of the fire development,take preventive measures in advance to ensure the safety of employees andcustomers.
Risk categoryDescriptionImpact cycle
Scope ofimpact
Potential?nancialimpact
Strategies, mitigation and adaptation
measures
Policy and legalrisks
National and local climate-related polices may betightened (such as the carbonprice mechanism, strictercarbon emission compliancerequirements and informationdisclosure requirements), whichmay increase the company’smanagement inputs and costs,and may put the company underregulatory pressure without thetimely improved compliance ofmanagement.
Medium and
long-term
Operation
Increase inoperatingexpenses
The company is continuously monitoringthe introduction and updating ofrelevant policies and regulations, andwe study implementation requirementsas they are released and formulaterelevant measures on time.The company is developing the “WorkPlan for Implementing the Spirit ofPresident Xi Jinping’s Important Speechon the Construction of an EcologicalCivilisation and ‘Carbon Peaking andCarbon Neutrality’”. In addition, we aresteadfastly promoting the constructionof an ecological civilisation as we workto build a world-class green tourismretailer and pursue high-quality greendevelopment.
Technology risk
Given the synergistic effect ofinformation technology and energytechnology, during our transitiontowards lower carbon and greeneroperations, the green, innovativeand intelligent managementrequirements in supply chain(including transportationand packaging links) andthe operational maintenancerequirements of online businesswill increase our technology costs.
Short,medium andlong-term
Operation
Increasein assetinvestment
We continued to optimise ourdigitalisation and informatisation,and actively built a green, low-carbon and digital smart logisticsand supply chain.
Market risk
As consumers becomeincreasingly aware of lower-carbonalternatives and environmentalprotection, they will opt for moreenvironmentally friendly products,which will reduce the demand fortraditional products and presentrelated market risks for ourpartners and us.
Short,medium andlong-term
Downstream
Decreasein operating
income
We have established a smoothmechanism for communicationwith consumers to understand theirdemands and preferences in a timelymanner and meet their needs forenvironmentally friendly products.
Reputation risk
If the company fails to switch toa low-carbon operation modein time, it may have a negativeimpression on the company due toconsumers’ preference to spendon a greener and stable platform,affecting brand reputation andmarket share.
Short,medium and
long-term
Downstream
Decreasein operating
income
We continued to convey “GreenCTG DUTY-FREE” concept to themass public through media channelsto boost customer con?dence.
Stakeholders are increasinglyconcerned about climate-relatedissues, and we may suffer fromreputation risk if we fail to meetstakeholder expectations or ifwe engage in any behaviourthat violates relevant laws andregulations.
Short,medium and
long-term
Operation
Increase inoperatingexpenses
We have established a smoothmechanism for communication withstakeholders and respond to theirconcerns in multiple ways.We have incorporated ESGconsiderations into our businessoperations via specific implementationtasks to continuously improvethe quality of the company’s ESGdisclosure, while enhancing ourcommunication with stakeholders viaregular release of ESG reports andother methods to disclose our effortsand achievements.
Transition risk impact assessment and response:
Planet
AreaDescription
Impactcycle
Scope of
impact
Potential?nancialimpact
Strategies, mitigation and adaptation measures
Thecompany’soperations
Build climateresilientinfrastructure
Short,mediumandlong-term
Operation
Decreasein operatingexpenses
We have adopted a green design philosophy for the initial design of ourHaikou International Duty-Free Shopping Complex and Sanya InternationalDuty-Free Shopping Complex. For example, during the design process forthe Sanya International Duty-Free Shopping Complex, we have adopted anumber of green and energy-saving technologies to meet the standards forfabricated buildings and the standards for fully furnished delivery. The smartand effective technical measures taken include the shape optimisation of thebuilding envelope system, integrated design of the daylighting and shadingsystem in the atrium, and adoption of energy-efficient HVAC equipment,temperature, humidity and air quality monitoring systems, sponge cities,primary WSDs, irrigation with reclaimed municipal wastewater, soundproo?ngconstruction materials, and smart system integration management, etc.The construction of infrastructure with better climate resilience can helpdefend against climate disasters, make full use of natural resources, andef?ciently save energy and reduce emissions.
Productsand services
Collaboratewith brandpartners topromotegreenproducts
Shortandmedium-term
UpstreamDownstream
Increase inoperating
income
As consumers prefer environmentally friendly green products, we havecollaborated with brand partners to promote sustainable green products tomeet their consumption demands.Integrateonline andoff-linebusinesses
Short,mediumand long-
term
Downstream
Increase inoperatingincome
To better cater to consumer shopping habits, we have continued to enhancethe integration of the on-line and off-line businesses to provide consumerswith more convenient, integrated services covering on-line and off-linechannels.
Supply Chain
Promotegreen logistics& packaging
Shortandmedium-
term
Upstream
Decreasein operating
expenses
We have adhered to the use of recyclable and biodegradable greenpackaging, have proactively promoted the automatic and intelligentupgrading of packaging, and have been committed to applying single-sheetreceipts and slim tape into the logistics chain.We have established a waste material recycling system to recycle packaging,cartons, wastepaper, and other materials, which helps extend the life cycle ofpackaging materials and improve the overall utilisation ef?ciency of resources.Optimisefreighttransport
Mediumand long-
term
Upstream
Decreasein operating
expenses
Compared with air transport, ocean transport gives off less carbon emissions,and provides a higher efficiency in energy conservation and emissionsreductions. Therefore, we have worked with brands to gradually increase theproportion of sea transportation during the procurement and transportationprocess.Promote theuse of newenergy tools
Short,mediumand long-
term
Upstream
Decreasein operating
expenses
We have vigorously promoted the use of clean energy equipment and madefull use of electric-powered forklift trucks to replace traditional fuelled ones,so as to reduce carbon emissions and environmental pollution.▍Risk ManagementWe have incorporated climate change risks into our overall risk management process. Please refer to “Complying with Commercial Ethics toReinforce Internal Control Compliance” for the risk management process.We regularly monitor the development trends of climate risk, analyse the impact of risk on the company’s business operations, supply chain,operating costs, and revenue, and take the initiative in developing mitigation and adaptation measures to improve the company’s resilienceand adaptability to potential climate uncertainty in the future.▍Indicators and Targets
Metrics related to climate change response include energy consumption and the resulting GHG emissions. Please refer to “Green and Low-Carbon Operations for a Better Life” for speci?c data during the reporting period. As for green buildings as of the end of the reporting period,please refer to “Embracing Green Buildings to Ful?l the Green Building Philosophy”. Please refer to “Exercising Stronger Governance toImplement ESG Concepts” for relevant targets.In light of the evolving conditions of the company’s operating location and the market dynamics, we will constantly review our practicalactivities and adjust our objectives and proposed measures in a timely manner. We will further improve our governance, strategy formulation,risk management, identi?cation, and management of indicators and targets, and work with all sectors of society to cope with climate changeand achieve common sustainable development.
Climate opportunity impact assessment and response:
Embracing Green Buildings to Fulfil the Green Building Philosophy
The company is committed to implementing theGreen Building Action Planand actively promoting the development of green buildings. Weare making extensive efforts to engage in resource conservation, environmental protection and pollution reduction throughout the buildinglife-cycle, with a view to making our buildings ef?cient, healthy and liveable while realising harmonious coexistence with nature.
▍Setting an Example with Our Own Conduct
To put into practice the low-carbon development philosophy, promote the high-quality development of green buildings, and work towardsthe dual carbon goals (the carbon peaking and carbon neutrality goals), the company strictly implements energy-saving standards for newlyconstructed buildings. It has also formulated the “White Paper on Low-Carbon Planning for Construction Projects” in order to integrate theconcept of sustainable development into every link of the design, construction and operation of buildings and ensure the quality of greenbuildings throughout their life cycle.So far, the application of green building certi?cations of certain key projects have been summarised below:
Haikou International Duty-Free ShoppingComplex (Block No.4 and No.6)
Sanya International Duty-FreeShopping Complex Zone C
LEED Gold certi?cationSanya International Duty-FreeShopping Complex Phase 1 Plot 2Commercial Project2-star Green Building pre-certi?cation
Sanya International Duty-FreeShopping Complex Phase 1 Plot 2Hotel Project
Plans to apply for 2-star GreenBuilding certi?cation
Haikou International Duty-Free
Shopping Complex (Block No.5)
LEED Gold certi?cationPlan to apply for 2-star Green
Building certi?cation
Sanya International Duty-Free Shopping ComplexPhase 3
Plans to apply for 2-starGreen Building, LEEDPlatinum, LEED Zero Energy,WELL Platinum and SITEPlatinum certi?cations
Haikou International Duty-FreeShopping Complex (Block No.1)2-star Green Building pre-certi?cation
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Green PlanningBased on the low-carbon technologies applied at Haikou International Duty-Free Shopping Complex’s project plots, and with reference tolow-carbon experience gained through other commercial projects, the company has prepared the “Low-Carbon Technology Guidelines forCDFG’s Investment in Tourism Retail Complexes (Commercial, Hotel and Of?ce Complexes)” (hereinafter referred to as the “Low-CarbonTechnology Guidelines”), which designed to help reduce the carbon emissions of buildings and promote energy ef?ciency. Going forward,the company will refer to these guidelines when developing projects that involve the use of low-carbon technologies.The Sanya International Duty-Free Shopping Complex Phase 1 Plot 2 Commercial Project has adhered to the philosophy of resourceconservation and environmental protection since its planning and design stage, with a focus on constructing high-quality green buildingsthat support sustainable development with reference to domestic and international green building standards. During the Project’s designstage, a number of green and energy-saving technologies were adopted that meet the standards for fabricated buildings and the standardsfor fully-furnished delivery. The smart and effective technical measures taken include optimising the shape of the building envelope system,integrating the design of the lighting and shading system in the atrium, and adopting energy-ef?cient heating, ventilation and air conditioning(HVAC) equipment, temperature, humidity and air quality monitoring systems, the concept of sponge cities, primary wearable sensingdevices (WSDs), irrigation with reclaimed municipal wastewater, soundproofed construction materials, and smart system integrationmanagement. With these measures, the Project was able to satisfy the 2-star Green Building standards in the ?ve areas of safety anddurability, health and comfortableness, convenience, resource conservation, and friendly living spaces. Through the application of thesetechnologies, the Project met international standards for sustainable site selection, indoor and outdoor water ef?ciency, energy consumptionreduction, waste management, and indoor environmental quality, among other areas. The Project has obtained 2-star Green Building pre-certi?cation.The design of the Sanya International Duty-Free Shopping Complex Phase 3 Project adopts a number of energy-saving green technologies,such as a photovoltaic pool roof, a sunken green plaza design, a waterscape recycling system, solar photothermal technology, a specialacoustic design, a fresh air ?ltration system, low-volatility coatings, environmentally-friendly refrigerants, a high-performance and multi-splitvariable frequency system and fresh-air heat recovery technology. In addition to these energy conservation technologies, the Project alsoboasts an optimised structural design, and it has adopted a series of smart and ef?cient measures, such as energy-ef?cient equipment,green energy-saving building materials, resource recycling and renewable resource use (the “four innovative technologies”), as well as smartsystem integration management, with a view to comprehensively promoting carbon reduction at the source.
BIM has been adopted in the design and construction process,and the project will feature prefabricated buildings and finedecorations. Various intelligent, high efficiency and energy-savingcapabilities, such as building shape optimisation, building spaceutilisation, building insulation materials, natural lighting design,sponge cities, rainwater recycling, garbage classi?cation, chargingpiles, solar energy, smart lighting, convenient automated payment,and smart parking will be adopted to reduce the buildings’ energyconsumption and ensure compliance with low-carbon standards.
In addition, the company aims to build a low-carbon eco-tourism destination, and focuses on the four core functions of tourism, culture,social life, and daily living, and emphasises low-carbon and ecological construction principles. By steadily engaging in scene innovation,technology innovation and content innovation, we aim to build a low carbon ecological tourism destination that integrates intelligentexperiences with technology-empowered living, designed scenarios, and cultural and tourist activities.Green Construction Management
The company also implements green and low-carbon standards during construction processes to strengthen its green building credentials.The “four conservations and one protection” principles (energy conservation, land conservation, water conservation, material conservationand environmental protection) are applied throughout the whole process, from planning, development, design, and construction though tooperations for properties and commercial complex projects invested in and constructed by the company. Measures are taken to ensure safeconstruction sites, a clean environment, on time delivery, and suf?cient funds. Construction units are required to prepare comprehensivespecial schemes on green construction beginning at the design stage and establish effective support systems to ensure that greenconstruction is ful?lled as scheduled.During the construction process, the company adopts the following management measures to reduce the impact on the environment andnatural resources:
Carbon Footprint Management
Buildings play a vital role in energy conservation and carbon reduction. The company is committed to assuming its corporate socialresponsibility, and it strives to meet the goals of carbon peaking and carbon neutrality. To this end, we are following the “Action Plan forCarbon Peaking and Carbon Neutrality”, and we plan to prioritise carbon emissions accounting as part of our effort to identify the company’scarbon footprint. We are also exploring new carbon reduction solutions that harness technological breakthroughs and innovations, with thegoal of optimising our energy structure and using more clean energy. We fully leverage the market’s role in resource allocation, and activelyparticipate in carbon trading to reduce costs related to carbon reduction.Under the direction of the “Low-Carbon Technology Guidelines”, the company incorporatesgreen building materials as much as possible during project construction. Suppliers of equipmentand materials (such as cables, air conditioners, refrigerators, diesel generators, domestic watersupply pumps, air conditioning chilled water pumps, oil separators, etc.) for Sanya InternationalDuty-Free Shopping Complex Phase 1 Plot 2 projects are all required to obtain the Certi?catefor Environmental Management System Certi?cation, and among which, cables already obtainedcarbon footprint assessment report. Props suppliers for Haikou International Duty-Free ShoppingComplex, Sanya International Duty-Free Shopping Complex, and various airport comprehensiveduty-free stores are also required to obtain environmental green certi?cations such as “Certi?catefor Certi?cation of China Environmental Labelling Product”, “Environmental Management SystemCerti?cation”, “ISO14001” and “FSC Certi?cation”, etc.The Haikou International Duty-Free Shopping Complex Plot 5 Project actively promotes theapplication of new technologies, and, in March 2023, won the Certi?cate for the Second RankAchievement in Green Construction issued by the China Construction Industry Association for itsconstruction process control efforts.
Adoption of an environment-friendly architectural designand related materials toreduce any negative impacton the environment.A preference for reusablematerials and equipment,such as stainless steel, glassproducts, etc.
Plastic material management of avoiding the useof one-off plastic products. If plastic materials areunavoidable, choose recyclable and biodegradableones, and fully recycle and reuse them by reducingdamage and waste. Plastic waste resulting fromconstruction is collected and disposed of by its type toavoid environmental pollution.Implementation of environmental protection publicityand education to enhance the public’s awareness andknowledge of environmental protection.
0103
We have formulated green construction plans for the Sanya International Duty-Free Shopping Complex Phase 1 Plot 2 CommercialProject, Haikou International Duty-Free Shopping Complex and others, respectively. These plans include site environmental protection,comprehensive utilisation of materials and resources, energy conservation and comprehensive utilisation of energy, water conservationand comprehensive utilisation of water resources, land conservation and construction land protection, construction waste management,noise pollution control, light pollution control, indoor environmental pollution control and other measures. Multiple green technologies andmeasures have been adopted for these Projects, such as the primary use of local and recycled building materials, advanced construction
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techniques, tool stereotyping, bare soil coverage for dust suppression, water-sprinkling devices on thesite to control dust, recovery and comprehensive utilisation of construction waste, reducing resourceconsumption and environmental pollution throughout all stages of construction process, to protect thenatural surroundings to the largest extent. Regarding disposal, waste generated during the constructionprocess is classified and recycled as required and then shipped to enterprises with processingquali?cations to be recast and used for producing new building materials to save natural resources.The Sanya International Duty-Free Shopping Complex Project takes advantage of energy-ef?cient processesand construction techniques to reduce particulate and waste discharge at construction sites. During theconstruction process, six types of high-quality innovative building materials (i.e., light-transmitting insulatingglass, expanded perlite concrete, environmentally friendly latex paint, low-loss transformers, variablefrequency fans, and water pump equipment) were used for energy-saving and environmental protectionpurposes.During the reporting period, a commissioning plan for the Sanya International Duty-Free Shopping ComplexPhase 1 Plot 2 Commercial Project was formulated. Under this plan, the lighting system, HVAC system, and?re-?ghting system were put into trial operation to ensure that the electromechanical systems performed inaccordance with green design standards, and to ensure that the design, construction and operation of thesystems were ef?cient and safe.
Green and Energy-Saving Operations
Sanya International Duty-Free Shopping Complex Project
Based on the operational data of Sanya International Duty-Free Shopping Complex Phase 1 and Phase 2, Phase 1 has reduced energy use bymore than 15%, and Phase 2 has reduced energy use by more than 18%.
The building’s energy-efficient design complies with national standards. The design of the building’s shape, orientation,the distance between buildings, and window-to-wall ratio, among other aspects, were optimised to reduce overall energyconsumption.Double silver LOW-E coloured glazed hollow glass roofing was adopted in Phase 1, and some glass facades have beentreated with re?ective ?lm.In Phase 2, the shading design covers about 70% of the entire site’s metal decorative roof, which prevents temperatureincreases from indoor sun exposure and reduces the energy consumed by air conditioners.Intelligent elevator management: The escalators’ intelligent speed monitoring capabilities and the elevator group controlsystem reduce power consumption.Intelligent fresh air control system: Fresh air is circulated into the buildings during transition seasons. Minimum fresh airvolumes are used to operate the system when the outdoor temperature is higher than the indoor temperature in summer.The building’s intelligent lighting considers the time of the day and scenarios to reduce electricity and energy consumption.The building has been outfitted with a variety of intelligent control systems, including intelligent office capabilities, energyef?ciency capabilities, intelligent lighting, intelligent monitoring, access control systems, and vehicle management systems.Adopting rainwater storage system and permeable pavement in the building’s “sponge city”: The permeable pavement hasbeen used to ef?ciently penetrate ground rainwater, which reduces pressure on the drainage system and maintain the urbansoil’s ecological balance.Sewage and wastewater classi?cation treatment: Sewage is discharged into the municipal network after being treated by theoutdoor septic tank, and kitchen sewage is discharged into the municipal network after being treated by oil separators twice.Phase 2 also equipped with a river revetment and plant maintenance capabilities, which enable the building to meet ?oodwaterdischarge requirements, thereby ensuring a stable riverside and preventing water and soil erosion.To save water consumed by fountains, we perform disinfection and algae-killing treatments on fountain water on a regularbasis and remove and recycle sediment at the bottom of the pool by sewage suction pump to extend the fountain waterreplacement cycle and lower the frequency of water change, helping us save over 5,000 tonnes of water in 2023 compared tothe previous year.The high-ef?ciency oil fume puri?er has been designed to the highest emission standard of 1.0mg/m?, which is stricter thanthe national standard for environmental protection and emissions in China. These measures effectively improve the park’sair quality.The building layout distance between buildings and ventilation placement have been optimised to improve on-site aircirculation.Phase 2 is equipped with an intelligent garage ventilation system. The induced ventilation system in the underground garageautomatically controls the operation of the garage fan according to the carbon monoxide concentration, which improves airquality in the garage.Noise and vibration control: Fans, pumps and other equipment emit low noise, and shock absorption devices have been deployed in relevant locations on thepremises.
AspectLow Carbon & Environmental Protection Measures
Energyconsumption
Water andsoil resources
Clean air
Noisemanagement
Haikou International Duty-Free Shopping Complex Project
Through preliminary and enhanced commissioning, we conducted a comprehensive performance verification on building data, HVACsystems, lighting and natural lighting systems, internal domestic water and electricity systems and renewable energy systems, to ensuredesign standards in these systems. In addition, we also took intelligent property service measures, such as centralised control of buildinginformation & building equipment and regular maintenance, to always ensure safe and ef?cient operations and the satisfaction of operationstandards for green buildings.Preserving BiodiversityIn January 2023, the Ministry of Ecology and Environment released China National Biodiversity Conservation Strategy and Action Plan (2023-2030), which de?nes China’s biodiversity conservation strategy in the new era. The company concerns about and protects biodiversity withaction. We actively leverage our advantages to engage more people to the cause of biodiversity protection.
Haikou International Duty-FreeShopping Complex joined hands with aBelgian artist to hold a photo exhibitioncalled “Gravity Carnival,” which includedavant-garde art installations highlightingthe conservation of endangered Hainangibbons, calling for wider concern aboutthis endangered species.
Case study: Holding a photo exhibition with a Belgian artist for endangered species protection
▼A photo exhibition at Haikou International Duty-Free Shopping Complex
Reducing the heatisland effect
High ef?ciency water-saving appliances
Rainwater recyclingEnergy ef?ciency optimisation
High ef?ciency air treatment
In addition to basic commissioning, theproject will also ensure that an efficientoperational strategy is maintained for theenergy consumption system and that timelysupport is provided for operations throughfunctional testing and problem documentationof HVAC, the HVAC control system and thelighting system.
The project has conducted a full life cycleassessment (LCA) of the new buildingto calculate the percentage reduction invarious environmental impact indicatorsof the new building compared to thebenchmark building.
Enhanced commissioningFull life cycle assessment
The project reduces groundparking spaces, uses light-coloured paving materials, anduses light-coloured materialsor highly reflective coatings forroofing materials as much aspossible.
The project uses all GradeI sanitary ware to achievehigh-efficiency watersavings, and the coolingtower’s water flow ratemeets LEED requirements.
All on-site rainwater willbe collected, treated,and reused for greeningirrigation and road washingto save fresh water.
A comprehensive energy consumption simulation has beenconducted based on the design of the project envelope and theHVAC system, the equipment’s energy ef?ciency and the indoorlighting power density. According to the simulation’s calculations,the designed building will reduce costs by 16.3% annuallycompared to the ASHRAE benchmark building.
The project adopts G4+F8 medium- and high-efficiency filtration devices to guarantee indoor airquality. In addition to basic ventilation, the volume offresh air will be increased by 30% to avoid insuf?cientfresh air when there are many people in the building.
The Company takes biodiversityconservation into consideration in thedevelopment and construction of the projectand takes the following main measures tominimise the impact of its operations onbiodiversity,
Backfills topsoil dug outduring the development andconstruction process asenvironmental compensation.
Prefers local plants forlandscaping to reduce theimpact on the environment andecology.For example, Sanya is located within a tropical marine and monsoon climate zone with high temperatures and a relatively high humidityall the year round. This makes it home to diversi?ed biological species, and helps with the shaping of its healthy, benign, and sustainableecosystem. During the development and construction of the Sanya International Duty-Free Shopping Complex Project, we paid attention tothe protection of the surrounding ecological environment and biodiversity, and adopted various green construction technical measures tominimise the impact of the Project on the ecological environment and biodiversity, such as enclosure, noise control, dust control, etc..
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▍Delivering a Green Message to Partners
The company carries out green cooperation with brands by introducing green designs for store and counter decorations and usingenvironmentally friendly materials for booth construction. It also assists brands in applying for LEED certi?cations, so as to integrate fashionwith environmental protection, and engage more social forces towards green operations.
By the end of 2023, the company had a total of
stores/counters had received LEED certi?cation, of which
stores/counters had received LEED Gold certi?cation and
stores/counters had received LEED Silver certi?cation.
In December 2021the Armani Beauty counterat Sanya International Duty-Free Shopping Complexreceived LEED Goldcerti?cation
In September 2022the De Beers shop atSanya International Duty-Free Shopping Complexreceived LEED Goldcerti?cation
In April 2022the Lanc?me counter atSanya International Duty-Free Shopping Complexreceived LEED Goldcerti?cation
In March 2022the YSL Beauté counter atSanya International Duty-Free Shopping Complexreceived LEED Goldcerti?cationIn January 2022the Cartier shop at SanyaInternational Duty-FreeShopping Complexreceived LEED Goldcerti?cation
In April 2022the Kiehl’s store at SanyaInternational Duty-FreeShopping Complexreceived LEED Goldcerti?cation
In March 2023
the YSL Beauté shop atHaikou International Duty-Free Shopping Complex
received LEED Goldcerti?cation
In October 2022the Balenciaga shop atSanya International Duty-Free Shopping Complexreceived LEED Goldcerti?cation
In March 2023the Kiehl’s shop at HaikouInternational Duty-FreeShopping Complexreceived LEED Goldcerti?cation
In March 2023the Cartier shop atHaikou Meilan AirportDuty-Free Shopreceived LEED Goldcerti?cationIn January 2023the Lanc?me shop atHaikou International Duty-Free Shopping Complexreceived LEED Goldcerti?cation
In March 2023the Helena Rubinstein shopat Haikou International Duty-Free Shopping Complexreceived LEED Goldcerti?cation
Planet
In April 2023the De Beers shop atHaikou International Duty-Free Shopping Complexreceived LEED Goldcerti?cation
In July 2023
the Van Cleef & Arpels shopat Haikou International Duty-Free Shopping Complexreceived LEED Slivercerti?cation
In May 2022the Van Cleef & Arpels shopat Sanya International Duty-Free Shopping Complexreceived LEED Slivercerti?cation
In July 2023the Cartier shop at HaikouInternational Duty-FreeShopping Complexreceived LEED Goldcerti?cationIn June 2023the Balenciaga shop atHaikou International Duty-Free Shopping Complexreceived LEED Goldcerti?cation
In July 2023the YSL shop at HaikouInternational Duty-FreeShopping Complexreceived LEED Goldcerti?cation
▍Green Office and Low-Carbon LifestyleIn accordance with theEnvironmental Protection Law, theLaw on Prevention and Control of Atmospheric Pollution, theLaw on Preventionand Control of Water Pollution, theLaw on Prevention and Control of Environmental Pollution Caused by Solid Wastes, theEnergyConservation Law of the People’s Republic of Chinaand other Chinese laws and regulations, as well as the Measures for the Supervisionand Administration of Energy Conservation and Ecological Environmental Protection at Chinese Central State-owned Enterprises, thecompany has formulated the “Administrative Measures on Energy Conservation and Ecological Environmental Protection”, which stipulatesthe strict control of pollutant discharges and the prohibition of the arbitrary discarding, stockpiling, and dumping of solid waste, as a move toavoid environmental pollution.In 2023, the company had no cases where it acted against the laws and regulations on energy conservation and environmental protection,nor any cases where it was punished or criticised by environmental protection authorities.
Green Of?ce and Low-Carbon OperationsWe are focused on implementing the “carbon peaking and carbon neutrality” goals to promote our all-round energy-saving andenvironmental protection initiatives. We also actively build upon our management methods and strengthen our green operations andmanagement capabilities, as part of our continuous efforts to promote energy utilisation ef?ciency and improve the energy conservation andutilisation of our commercial complexes and duty-free stores.
Green and Low-Carbon Operations for a Better Life
Duty-free complexes are equipped with an IOC smartbuilding integrated management platform, which supportsreal time quantitative analysis of energy consumptiondata and indicators, and identification of energyconsumption abnormalities, to explore more energy-saving opportunities and reduce energy consumptioncosts.
We actively promote the application of energy-savingequipment by installing energy-saving lighting, airconditioners, fans and other equipment in all duty-freecomplexes and stores, while eliminating equipment withhigh energy consumption, installing time control switches,and imposing strict limits on usage. We also maintain airconditioning systems on a regular basis to improve theirenergy ef?ciency.We focus on improving the management of energyconservation and green operations by controlling energyand water consumption across all duty-free complexesand stores according to the optimal operating strategy.We also formulate classified management systems andoperating plans for equipment and facilities based ontheir actual conditions, define red lines for daily energyconsumption, and carry out regular maintenance andstatistical analysis on energy consuming equipment andfacilities, as a means of reducing energy consumption.
We fully promote garbage classification. For example,Sanya International Duty-Free Shopping Complex, HaikouInternational Duty-Free Shopping Complex are equippedwith independent domestic garbage rooms and kitchenwaste refrigerators to facilitate garbage classification.Caterers in these shopping malls are also requiredto classify kitchen garbage in strict accordance withrelevant regulations, with cleaning staff arranged to guidecustomers on domestic garbage classi?cation. We havealso signed waste recycling agreements and garbagedisposal agreements with qualified professional thirdparties to ensure recycling and the safe disposal of solidwastes.We put green philosophy into practice by creating afavourable atmosphere for “anyone to make savings, inany scenario, at any time”. For example, we organisedsubsidiaries to learn and implement the spirit of PresidentXi Jinping’s important speeches and instructions andhis comments on carbon peaking and carbon neutrality,as part of our continuing efforts to further promote thetransformation to green and low-carbon development.We released the “Green and Low-Carbon Proposals” toencourage employees to lead the way in carrying out low-carbon and energy-saving practices and in conveyinggreen messages. Other measures include putting upsigns around of?ces to remind employees to turn off thelights and save water and organising publicity campaignsand training sessions on energy conservation andenvironmental protection.
The company has issued the “Administrative Measureson Energy Conservation and Ecological EnvironmentalProtection” and the “Action Plan for Carbon Peakingand Carbon Neutrality”, and has set up the “EnergyConservation and Environmental Protection LeadershipGroup” and the “Carbon Peaking and Carbon NeutralityLeadership Group” led by heads of the company. Thesehave put forward management requirements regardingprocurement, production & operations, green buildings,green logistics, the promotion of green consumption andthe implementation of a green office and a low-carbonlifestyle. The company has also improved the rewardsand punishment mechanism for energy conservation andenvironmental protection, and organised the publicity,implementation, training and assessment of varioussystems and action plans, so as to solidly promote thesystematisation, institutionalisation and standardisation ofenergy conservation and environmental protection work.
Green Office and Low-Carbon Operations
Planet
Case study: The company takes multiple measures to save energy and reduce consumption
Reducing Our Impact on the Environment and Natural Resources
To reduce the significant impact of our activities on the environment and natural resources and promote resource recycling, we haveconstructed green buildings and launched sustainable concept stores, actively applying prefabricated buildings and recyclable materials toreduce carbon emissions during the construction process.The company has signed “Responsibility Letters for Achieving Safety Production, Energy Conservation and Environmental Protection Goals”(the “Letters”) with all departments and subsidiaries, to resolutely reduce and prevent potential contamination during the construction,production, and operating process.
Virtualisation and cloud computing: We use virtualisation technology to virtualise servers and storage devices,improving the utilisation ef?ciency of hardware resources and reducing their energy consumption levels. We have alsomigrated part of the workload onto cloud platforms to share resources and for better scalability, while avoiding energywastage caused by excessive equipment procurement.
Green data centre construction: We have optimised the design and operation of data centres to reduce theirenergy consumption through the adoption of ef?cient servers, energy-saving air-conditioning systems in computerrooms, and green cooling technologies. We also use renewable energy, such as solar and wind energy, to powerdata centres and reduce carbon emissions.Remote working and video conferencing: We promote remote working and video conferences to reducecommuting time and business travel for our people, leading to a reduction in energy consumption and carbonemissions. With informatisation tools and platforms, remote collaboration and communication between staff can beachieved that improves work ef?ciency and saves energy.Data optimisation and compression: We reduce the energy required for data storage and transmission through datacompression and optimisation. Data compression algorithms, de-duplication, and compression technologies are usedto reduce the demand for, and energy consumed by, storage devices.
We strictly implement the Measures on Administrationof Fuel Cards and Vehicles, and resolutely prohibit themisuse of company vehicles and excessive refuelling.
We promote a paperless of?ce.We adopt an of?ce supplies procurement system to bring about online integrated procurement. Thissystem helps centrally control procurement quantities and amounts, so as to improve procurementef?ciency, cut expenses, and reduce waste.
SavingElectricity
SavingGasolineSavingWater
Saving Of?ceSupplies
Develop good habits and turn off the faucet after water use to prevent water running to waste.Report spills, drips and leaks to the Engineering and Property Management Department in a timelymanner for repair.The temperature of air conditioners in officesand dormitories shall be no lower than 26 °C insummer, shall be turned off 20 minutes beforeleaving, and shall be powered off if left unattendedfor a period of time.Printers, computers, fans, water heaters, lightingand other power supplies shall be turned offbefore leaving the place of work (and be shifted tostandby mode during non-office hours).Before store opening for sales, no lights more thanthose required for work routines shall be switchedon; electricity equipment to meet operating needsshall only be turned on 10 minutes before opening;all electricity equipment and lights shall be turnedoff after the closure.We have established sound electricity conservationmanagement systems and equipment operationprocedures to reduce unnecessary office electricityequipment and non-office electricity consumption.We have installed induction water faucets inrestrooms for water saving purposes.
Detailed measures include:
Type2023UnitElectricity74,773.52kWhNatural Gas326,352m
Diesel145,046LitreGasoline203,336LitreComprehensive energy consumption10,026.57tceComprehensive energy intensity0.0177tce/m
Direct greenhouse gas emissions (Scope 1 emissions)
2,056tCO
eIndirect greenhouse gas emissions (Scope 2 emissions)
22,576tCO
eTotal greenhouse gas emissions24,632tCO
eGreenhouse gas emissions intensity0.04tCO
e/m
Water consumption391,373.54m
Water consumption intensity0.69m
/m
Emissions Management
The company’s categories of emissions include greenhouse gas (GHG) emissions, exhaust gases, wastewater, and solid waste. In termsof emissions management, the company attaches importance to controlling exhaust gases and GHG emissions, and takes up emissionsreduction measures to improve air quality. For wastewater and soil management, the company is committed to protecting water andsoil resources in accordance with relevant standards by taking appropriate treatment measures to meet the requirements for dischargedwastewater.For solid waste management, the company is strongly against dumping, stacking, and discharge of waste without permission, and performsits duties in terms of source reduction and classi?cation of solid waste as required by law. It has established compliant waste storageprocesses and works with quali?ed third parties for waste disposal under the laws and regulations to prevent environment contamination. Asfor pollutant emissions, it has established standardised pre-treatment facilities such as sedimentation tanks, septic tanks and oil separators,which are subject to regular inspection and maintenance to ensure the compliant emissions. The company also handles cartons and otherrecyclable waste on a regular basis.
In 2023, the company launched a “Paperless Vouching” system, which supports online voucher submission by vouching clerks, andonline operations by the ?nancial department, to realise a paperless transaction process. The system helps greatly reduce paper usage,while improving work ef?ciency and data accuracy. The company has also set waste reduction goals, promoting paperless vouching andother sustainable initiatives to reduce waste generation and environmental impacts. We will continue to promote innovative initiatives,such as electronic document management, to achieve more ambitious waste reduction goals.
Case study: Taking innovative measures to reduce waste at the source
Energy Consumption and Greenhouse Gas Emissions
The company mainly consumes electricity, natural gas, diesel, gasoline, and water during its daily operations. Our energy consumption,resource usage, greenhouse gas emission and intensity
in 2023 are shown in the table below:
The statistic scopt of natural gas, electricity, diesel, gasoline includes the Haikou International Duty-Free Shopping Complex, Sanya International Duty-Free
Shopping Complex, Sunrise Shanghai and Sunrise China, which have already covered the majority of the company’s operating area and revenue.
Direct GHG emissions: The company’s gasoline and natural gas consumption multiplied by the corresponding emission factors which are determined withreference to①China Energy Statistical Yearbook
②IPCC 2006.
Indirect GHG emissions: The company’s purchased electricity consumption multiplied by the corresponding emission factor which are determined with
reference to theNotice on Reporting and Veri?cation Greenhouse Gas Emissions of Enterprises in Certain Key Industries from 2023 to 2025issued by theMinistry of Ecology and Environment of China.
Planet
▍Saving Food to Reduce Food Waste
The company complies with the Anti-Food Waste Law and implements the spirit of President Xi Jinping’s important instructions andcomments on “firmly combating extravagancy on foods”, as well as the important requirements of the 20th National Congress of theChinese Communist Party on “advocating frugality and thrift in the whole society”. We improve our employees’ awareness of saving food bytaking actions during daily meals in staff canteens.Detailed actions include:
The company encourages good dining habits by promoting saving at the sourceand implementing publicity and supervision activities. In November 2023, we heldthe “Serving the People by Solving Their Practical Problems – Catering ServiceImprovement Seminar”, inviting staff to interact with catering service providers.During their on-site interactions, 10 suggestions were put forward to furtherimprove catering services and reduce waste at the source.Sunrise Shanghai has established a dedicated team to save food and combat foodwaste behaviours. The team helps improve diners’ food waste awareness throughpublicity activities and by equipping canteens with dedicated staff to encouragegood dining behaviours.
Prepare food inbatches based on thenumber of staff to beserved as reported byeach department, andoffer smaller servingsto prevent waste;
Serve rice and soupin a buffet form toencourage staffto only take theamount they need;
Offer mixedcoarse-grains toenrich food varietyand reduce waste;
Set up a tablewarerecycling desk todiscourage food wasteand supervise theeffective classi?cationof leftover food.Put up postersadvocating reducingleftover food, suchas “Clear Your Plate”in the eye-catchingareas of canteens;
▍Green Transportation with Lower Emissions
The nationalDevelopment Plan for Comprehensive Transport Services during the 14th Five-year Plan Periodspecifies accelerating theconstruction of a clean and low-carbon green transportation system by encouraging enterprises to adopt integrated, ef?cient, green, andlow-carbon freight and logistics systems. The company acts as a role model in the building of a green transportation system.We have vigorously promoted the use of clean energy equipment and made full use of electric powered forklift trucks to replace traditionalfuelled ones, to reduce carbon emission and environmental pollution, at the end of the reporting period, the proportion of electric forklifts inthe company had reached 100%.The company makes continuous efforts to build an advanced and appropriate warehousing system by combining warehouses scatteredacross key areas to form an integrated warehouse distribution centre, and by leveraging big data and intelligent route optimisation algorithmtechnology to coordinate transportation routes with improved logistics ef?ciency for duty-free goods by sea, land and air. Such measureshelp maximise carrying capacity, thereby reducing the number of trips needed, the amount of energy consumed, and carbon emissionsthroughout the transportation process. For long-distance transportation, the company opts to ship by sea with relatively low carbonemissions per unit where possible. For short-distance land transportation, the company strictly regulates the use of vehicles to ensure thatthey meet the standards for emissions in their operation regions.We are well aware of the synergistic effect of the supply chain and have collaborated with brands to optimise freight modes, graduallyincrease the proportion of ocean transportation in the procurement process. Our company has also continued to strengthen communicationand exchanges with suppliers and relevant authorities in Hainan province, to expand the number of categories and products shipped by seato reduce carbon emissions further. Our efforts in this area have received massive attention and support from many brands supplier groupsin the industry.
With the goal of raising transportationefficiency and reducing energyconsumption in its transportationprocesses to facilitate the constructionof a green transportation system, andwe have obtained the TAPA
and WCA
certifications.
TAPA: Transported Asset Protection Association
WCA: World Cargo Alliance
▼Certificate of Membership by TransportedAsset Protection Association (TAPA)
▼
Certificate of Membership by WorldCargo Alliance (WCA)▍Green Packaging to Deliver a Green Message
The company is a travel retailer with an extensive operations network, and well understands its responsibility for the promotion of greenconsumption patterns. To this end, the company is committed to using in?uential activities to encourage consumers to adopt low-carbonlifestyles.The company adheres to the philosophy of “responsible packaging” and carries out green packaging actions:
In response to the national “plastic restriction” policies. In recent years, the company’s stores inHainan and its duty-free stores in major airports all provide paper shopping bags for free, other packagingbags are made of biodegradable materials as required by environmental protection regulations. In Hainanprovince, more than 25.78 million shopping bags that meet environmental protection requirements havebeen provided, effectively reducing the generation of non-degradable plastic waste.Adhere to the use of recyclable and degradable green packaging. Packaging bags used by thecompany’s stores in Hainan are all made of biodegradable and environmentally friendly materials. Cartonsand gas columns used as ?lling materials for e-commerce operations by CDF International are all madefrom recyclable materials.Reduce the packaging materials used. To avoid resource waste and excessive packaging, suppliersare required by the company to deliver their goods directly to its destination, skipping any unpacking andrepacking procedures needed during transportation. Our duty-free stores use sealing bags that meetinternational standards by strictly following the duty-free packaging requirements of International Aviation.We also try to put all goods into one shopping bag of an appropriate size, to make it easy for customersto carry around, practicing the principles of environmental protection and resource conservation.Establish a materials recovery system. The company has also established a system to recycle wastematerials, extend the life cycle of packaging materials and improve the utilisation of resources. Forexample, the company recycles cartons used during the logistics process and reuses them as containerson storage shelves, alternative turnover boxes during transportation, and packing boxes for the transfer ofoutbound goods, so as to reduce the quantity of newly purchased cartons.Promote packaging automation and intelligent upgrades. The company uses single-sheet receiptsand slim tapes into the logistics chain, and explores the use of tape-free cartons at the end of the logisticschain. Tape-free cartons are sealed entirely physically, and they also allow consumers to feel that they areparticipating in environmental protection initiatives during the unpacking process. By making this change,we hope to spread green consumption among large numbers of consumers.
The company insists on combing publicity with inspection to promote the implementation of a green philosophy. Stores activelypopularise the knowledge of plastic prohibition and restriction to customers, and guide them on how to implement plastic reductionand waste classi?cation. Kindly reminders are sent to customers when they pick up goods, to encourage them use their own canvasbags or backpacks, and to discourage misuse of environment-friendly paper shopping bags. The company has set up a dedicatedteam to carry out occasional inspections on prohibited plastic items in the Hainan area. Once identi?ed, items listed in the prohibitedplastic item catalogue will be sealed up. In 2023, Boao Duty-Free Store carried out three such inspections, and no plastic bags orplastic tableware listed in the prohibited plastic item catalogue were identi?ed.
green packaging
actions
Appendix
Glossary of TermsTermDefinitionCTG DUTY-FREE,the company, ourcompany, we
refers toChina Tourism Group Duty Free Corporation
Limited together with its af?liated companiesESG Report, theReport
refers toThe Environmental, Social and Governance
ReportThe reportingperiod, the currentyear
refers toFrom 1 January 2022 to 31 December 2022China TourismGroup
refers toChina Tourism Group Co., Ltd.CTS Holdingsrefers toChina Travel Service (Holdings) Hong Kong
LimitedCDF InvestmentDevelopment
refers toCDF Investment Development Co., Ltd.Sanya DowntownDuty-Free Store
refers toChina Duty Free Group Sanya Downtown
Duty Free Store Co., Ltd.Sunrise Chinarefers toSunrise Duty Free (China) Co., Ltd.Sunrise Shanghairefers toSunrise Duty Free (Shanghai) Co., Ltd.Hainan DFrefers toHainan Provincial Duty Free Co., Ltd.CDF Internationalrefers toChina Duty Free International LimitedCDFG (Cambodia)Limited
refers toChina Duty Free Group (Cambodia) Co., Ltd.GuangzhouXinmian
refers toGuangzhou Xinmian Duty Free Merchandise
Co., Ltd.CDFCSrefers toChina Duty Free Cruise Services LimitedDalian cdfrefers toDalian Port China Duty Free Merchandise
Co., Ltd.Hangzhou cdfrefers toCDFG Hangzhou Duty Free Merchandise
Co., Ltd.Sanya DowntownStore
refers toCDFG Sanya Downtown Duty-Free Store
Co., Ltd.Haikou MeilanAirport Duty-FreeShop
refers toHainan Duty Free Haikou Meilan Airport Duty
Free Store Co., Ltd.Shenyang cdfrefers toCDFG Shenyang Duty Free Merchandise
Trading Co., Ltd.Duty-freemerchandise
refers toImported goods that are exempt from
customs duties, value added tax (VAT) and
consumption tax on imports and domestically
produced goods that are subject to tax
rebates (VAT and consumption tax) that are
sold in duty-free shopsDuty-free storerefers toWith the approval of the General
Administration of Customs, business units set
up sales sites and supervised warehouses
for storing duty-free commodities in places
approved by the State Council of the
people’s Republic of China or its authorised
departments to sell duty-free commodities to
speci?ed sales targets
Appendix
TermDefinition
Offshore duty-freepolicy
refers toThe tax preference policy is to implement
import duty-free shopping with limitedvalue, limited quantity and limited varietyfor passengers leaving the island by plane,train, or ship (excluding departures), makepayment in duty-free shops or approvedonline sales windows where the tax-freepolicy is implemented, and pick up goodsfrom the island at designated areas ofairports, railway stations and ports. The taxexemption policies for the island includecustoms duty, import VAT and consumptiontaxSASACrefers toThe State-owned Assets Supervision and
Administration Commission of the StateCouncilCSRCrefers toChina Securities Regulatory CommissionSSErefers toShanghai Stock ExchangeHKExrefers toThe Stock Exchange of Hong Kong LimitedCompany Lawrefers toThe Company Law of the People’s Republic
of ChinaSecurities Lawrefers toThe Securities Law of the People’s Republic
of ChinaAnti-moneyLaundering Law
refers toThe Anti-money Laundering Law of the
People’s Republic of ChinaAnti-UnfairCompetition Law
refers toAnti-Unfair Competition Law of the People’s
Republic of ChinaAdvertising Lawrefers toThe Advertising Law of the People’s Republic
of ChinaCybersecurityLaw
refers toThe Cybersecurity Law of the People’s
Republic of ChinaPersonalInformationProtection Law
refers toThe Personal Information Protection Law of
the People’s Republic of ChinaLabour Lawrefers toThe Labour Law of the People’s Republic of
ChinaLabour ContractLaw
refers toThe Labour Contract Law of the People’s
Republic of ChinaTrade Union Lawrefers toThe Trade Union Law of the People’s
Republic of ChinaWork Safety Lawrefers toThe Work Safety Law of the People’s
Republic of ChinaLaw on thePrevention& Control ofOccupationalDiseases
refers toThe Law of People’s Republic of China on
the Prevention & Control of Occupational
DiseasesEnvironmentalProtection Law
refers toThe Environmental Protection Law of the
People’s Republic of ChinaAnti-food WasteLaw
refers toAnti-food Waste Law of the People’s
Republic of ChinaProduct QualityLaw
refers toProduct Quality Law of the People’s Republic
of China
Index
ESG Metrics System for ESG Reports of Listed Companies Controlled by CentralState-owned Enterprises IndexDisclosure of contentRelevant sectionBasic information of theCompany and the Report
About this Report
ESG governance
Exercising Stronger Governance to Implement ESGConceptsESG risk and opportunities
Complying with Commercial Ethics to ReinforceInternal Control ComplianceStakeholder engagement
Exercising Stronger Governance to Implement ESGConceptsMateriality assessment
Exercising Stronger Governance to Implement ESGConceptsDisclosure of content
Location/NoteTier 1indicators
Tier 2indicators
Tier 3indicatorsEnvironmental Aspect indicators
ResourceConsumption
Water
Fresh waterconsumption
Green and Low-Carbon Operations for aBetter LifeRecycled waterconsumption
Embracing Green Buildings to Ful?l theGreen Building PhilosophyIntensity of waterconsumption
Green and Low-Carbon Operations for aBetter LifeEnergy
Fossil fuelconsumption
Green and Low-Carbon Operations for aBetter LifeTotal energyconsumption
Green and Low-Carbon Operations for aBetter LifeEnergyconsumptionintensity
Green and Low-Carbon Operations for aBetter LifePackagingmaterials
Packaging materialusage
Green and Low-Carbon Operations for aBetter LifePackaging materiallightweight andreduction
Green and Low-Carbon Operations for aBetter Life
PollutionControl
Ef?uents
Wastewaterdischargecompliance
Green and Low-Carbon Operations for aBetter LifeWastewatermanagement andreduction measures
Green and Low-Carbon Operations for aBetter LifeExhausts
Exhaust emissioncompliance
Green and Low-Carbon Operations for aBetter LifeEmbracing Green Buildings to Ful?l theGreen Building PhilosophySolid waste
Legal complianceof solid wastedisposal
Green and Low-Carbon Operations for aBetter LifeGeneral industrialsolid wastemanagement
Green and Low-Carbon Operations for aBetter Life
ClimateChange
Greenhousegas emission
Sources and typesof GHGs
Green and Low-Carbon Operations for aBetter LifeGHG emissionsmanagement
Green and Low-Carbon Operations for aBetter LifeAddressing Climate Change to Protect theEnvironmentScope 1 GHGemissions
Green and Low-Carbon Operations for aBetter LifeScope 2 GHGemissions
Green and Low-Carbon Operations for aBetter LifeGHG emissionsintensity
Green and Low-Carbon Operations for aBetter Life
Emissionreductionmanagement
GHG mitigationmanagement
Green and Low-Carbon Operations for aBetter LifeAddressing Climate Change to Protect theEnvironment
Climate riskmanagement
Climate riskmanagement
Addressing Climate Change to Protect theEnvironmentGreen and Low-Carbon Operations for aBetter Life
Biodiversity
Impacts ofactivities,products andservices onbiodiversity
Impacts ofactivities, productsand services onbiodiversity
Embracing Green Buildings to Ful?l theGreen Building Philosophy
Resource andEnvironmentalManagementSystemMeasures
Low-carbondevelopment
targetandstrategicmeasures
Low-carbondevelopment targetand strategicmeasures
Exercising Stronger Governance toImplement ESG ConceptsAddressing Climate Change to Protect theEnvironment
Resourcemanagementmeasures
Water utilisationmanagement
Green and Low-Carbon Operations for aBetter LifeMaterial usagemanagement
Green and Low-Carbon Operations for aBetter LifeEnergy use andconservationmanagement
Green and Low-Carbon Operations for aBetter Life
Disclosure of content
Location/NoteTier 1indicators
Tier 2indicators
Tier 3indicators
Resource andEnvironmentalManagementSystemMeasures
Greeninitiatives andmeasures
Green technologiesand recycling
Addressing Climate Change to Protect theEnvironmentGreen and Low-Carbon Operations for aBetter LifeGreen buildingrenovation
Embracing Green Buildings to Ful?l theGreen Building PhilosophyGreen of?ce andoperations
Addressing Climate Change to Protect theEnvironmentGreen and Low-Carbon Operations for aBetter LifeGreen procurementand green supplychain management
Optimising Supply Chain ManagementDriven by the Environment and IntelligenceGreen and Low-Carbon Operations for aBetter LifeEnvironmentalpublic welfareactivities
Engaging in Charity Initiatives to Act as aResponsible CorporateTaking Green Actions and Joining Handswith Brands to Deliver Green Value
Green andlow-carboncerti?cation
Environmentalmanagementsystem certi?cation
Embracing Green Buildings to Ful?l theGreen Building Philosophy
Environmentallegalcompliance
Environmentalemergencyresponse plan
Operational Safety and Physical and MentalHealthAddressing Climate Change to Protect theEnvironment
Social aspect indicators
Employeerights
EmployeeRecruitmentandEmployment
CorporateRecruitment Policyand Implementation
Protecting Employee Rights and PromotingTheir InterestsEmployee Structure
Protecting Employee Rights and PromotingTheir InterestsAvoiding ChildLabor or ForcedLabor
Protecting Employee Rights and PromotingTheir Interests
EmployeeCompensationand Bene?ts
CompensationPhilosophy andPolicy
Protecting Employee Rights and PromotingTheir InterestsWorking Hours andRest Periods
Protecting Employee Rights and PromotingTheir InterestsCompensation andBene?ts Security
Protecting Employee Rights and PromotingTheir InterestsEmployeeDemocraticManagement
Protecting Employee Rights and PromotingTheir Interests
EmployeeHealth andSafety
OccupationalHealth and SafetyManagement forEmployees
Operational Safety and Physical and MentalHealthEmployee SafetyRisk Prevention andControl
Operational Safety and Physical and MentalHealthResponse toSafety Accidentsand Work-relatedInjuries
Operational Safety and Physical and MentalHealthEmployee Care andAssistance
Protecting Employee Rights and PromotingTheir InterestsOperational Safety and Physical and MentalHealth
EmployeeDevelopmentand Training
EmployeeMotivation andPromotion Policy
Diversi?ed Training to Promote StaffDevelopmentEmployeeEducation andTraining
Diversi?ed Training to Promote StaffDevelopmentCareer Planningand PositionChange Support forEmployees
Diversi?ed Training to Promote StaffDevelopment
EmployeeSatisfaction
Employee Turnover
Protecting Employee Rights and PromotingTheir Interests
Productand ServiceManagement
Product Safetyand Quality
ProductionStandardManagementPolicies andMeasures
Creating a Comfortable Environment forConsumption to Ensure Trusted BusinessOperationsQualityManagement
Creating a Comfortable Environment forConsumption to Ensure Trusted BusinessOperations
Appendix
Disclosure of content
Location/NoteTier 1indicators
Tier 2indicators
Tier 3indicators
Productand ServiceManagement
Product Safetyand Quality
Product Recall andWithdrawal
Creating a Comfortable Environment forConsumption to Ensure Trusted BusinessOperationsNegative EventsRelated to Productsor Services
Creating a Comfortable Environment forConsumption to Ensure Trusted BusinessOperations
CustomerService &Advocacy
CustomerSatisfaction
Delivering Excellent Services for People’sWell-beingCustomerComplaints andHandling
Delivering Excellent Services for People’sWell-beingCustomerInformation andPrivacy Protection
Complying with Commercial Ethics toReinforce Internal Control Compliance
R&D
R&D and InnovationManagementSystem
Delivering Excellent Services for People’sWell-beingInnovationAchievements
Delivering Excellent Services for People’sWell-beingSetting the Industry Benchmark for High-quality DevelopmentIntellectual PropertyProtection
Complying with Commercial Ethics toReinforce Internal Control Compliance
Supply ChainSecurity andManagement
Managementof Suppliers
Supplier Selectionand Management
Optimising Supply Chain ManagementDriven by the Environment and IntelligenceNumber andDistribution ofSuppliers
Creating a Comfortable Environment forConsumption to Ensure Trusted BusinessOperations
Supply ChainManagement
Supply ChainManagementPolicies andMeasures
Optimising Supply Chain ManagementDriven by the Environment and IntelligenceSupply ChainSecurity Assuranceand EmergencyPlan
Optimising Supply Chain ManagementDriven by the Environment and Intelligence
Nationalstrategicresponse
Taxespayment
Tax PaymentSituation
Social Responsibility Performance Overview
Communitybuilding
Policies andMeasures forParticipating inLocal CommunityConstruction
Topic 1: Proactively Responding to NationalStrategies by Ful?lling our Mission as aCentral State-owned EnterpriseEngaging in Charity Initiatives to Act as aResponsible CorporateContribution andImpact on the LocalCommunity
Topic 1: Proactively Responding to NationalStrategies by Ful?lling our Mission as aCentral State-owned EnterpriseEngaging in Charity Initiatives to Act as aResponsible Corporate
Social welfareactivities
Policies andMeasures forParticipating inSocial CharityActivities
Topic 1: Proactively Responding to NationalStrategies by Ful?lling our Mission as aCentral State-owned EnterpriseTopic 2: Capitalising on Our CompetitiveEdge to Jointly Uphold ESG Concepts withBrandsEngaging in Charity Initiatives to Act as aResponsible CorporateInvestment andEffectiveness ofParticipating inSocial CharityActivities
Topic 1: Proactively Responding to NationalStrategies by Ful?lling our Mission as aCentral State-owned EnterpriseTopic 2: Capitalising on Our CompetitiveEdge to Jointly Uphold ESG Concepts withBrandsEngaging in Charity Initiatives to Act as aResponsible CorporateConstructionof AccessibleEnvironment
Delivering Excellent Services for People’sWell-being
Nationalstrategicresponse
IndustrialTransformation
Topic 2: Capitalising on Our CompetitiveEdge to Jointly Uphold ESG Concepts withBrandsDelivering Excellent Services for People’sWell-beingRural Revitalisationand RegionalCoordinatedDevelopment
Topic 1: Proactively Responding to NationalStrategies by Ful?lling our Mission as aCentral State-owned EnterpriseBelt and RoadInitiative andOverseas Ful?llmentof Responsibilities
Topic 1: Proactively Responding to NationalStrategies by Ful?lling our Mission as aCentral State-owned EnterpriseEngaging in Charity Initiatives to Act as aResponsible CorporateSetting the Industry Benchmark for High-quality DevelopmentIndustry Featuresand Other SocialResponsibilityFul?llment
Topic 1: Proactively Responding to NationalStrategies by Ful?lling our Mission as aCentral State-owned EnterpriseTopic 2: Capitalising on Our CompetitiveEdge to Jointly Uphold ESG Concepts withBrandsSetting the Industry Benchmark for High-quality Development
Governance Aspect indicators
GovernanceStrategy andOrganizationalStructure
GovernanceStrategies andProcesses
GovernanceStrategyFormulation
Robust Governance System for Long-termStable OperationsExercising Stronger Governance toImplement ESG ConceptsGovernanceStrategySupervisionProcess
Robust Governance System for Long-termStable OperationsExercising Stronger Governance toImplement ESG Concepts
Disclosure of content
Location/NoteTier 1indicators
Tier 2indicators
Tier 3indicators
GovernanceStrategy andOrganizationalStructure
GovernanceStrategies andProcesses
GovernanceStrategy Approvaland ReviewProcess
Robust Governance System for Long-termStable OperationsParty BuildingLeadership
Robust Governance System for Long-termStable Operations
Organisationalcompositionand functions
OwnershipResponsibilities
Robust Governance System for Long-termStable OperationsOrganisationStructure andFunctions of theBoard of Directors,Supervisory Board,and Management
Robust Governance System for Long-termStable OperationsAppointmentProcedures andComposition of theBoard of Directors,Supervisory Board,and Management
Refer to the 2023 Annual Report or othercorporate documents
Compensationmanagement
Compensation Planfor Directors andSupervisors
Refer to the 2023 Annual Report or othercorporate documentsTransparencyof BoardCompensation
Refer to the 2023 Annual Report or othercorporate documentsReasonablenessof ManagementCompensation
Refer to the 2023 Annual Report or othercorporate documents
standardizegovernance
Internal controlInternal Audit
Complying with Commercial Ethics toReinforce Internal Control Compliance
Integrity inConstruction
IntegrityConstructionSystem Norms
Complying with Commercial Ethics toReinforce Internal Control ComplianceEffectivenessof IntegrityConstructionMeasures
Complying with Commercial Ethics toReinforce Internal Control Compliance
InvestorRelationsManagementandShareholderRights
InvestorRelationshipManagement
Investor RelationsManagementStrategy
Robust Governance System for Long-termStable OperationsInvestorCommunication
Robust Governance System for Long-termStable OperationsExercising Stronger Governance toImplement ESG ConceptsConstruction ofInvestor RelationsManagementDepartment
Robust Governance System for Long-termStable Operations
Shareholders’equity
General Meetingof ShareholdersSituation
Refer to the 2023 Annual Report or othercorporate documentsShareholderCommunicationSituation
Refer to the 2023 Annual Report or othercorporate documentsShareholders’Right to Knowand Participate inDecision-making
Robust Governance System for Long-termStable Operations
creditors’rights andbene?ts
Credit Status
Refer to the 2023 Annual Report or othercorporate documents
Transparencyof informationdisclosure
Informationdisclosuresystem
FinancialInformationDisclosure
Refer to the 2023 Annual Report or othercorporate documentsNon-?nancialInformationDisclosure
2023 Environmental, social and governancereport
Quality ofinformationdisclosure
RegularSupervision, Audit,and Evaluationof All DisclosedInformation
Complying with Commercial Ethics toReinforce Internal Control Compliance
Complianceand RiskManagement
Compliance
ComplianceManagementSystem
Robust Governance System for Long-termStable OperationsComplying with Commercial Ethics toReinforce Internal Control ComplianceConstructionof ComplianceSystem
Robust Governance System for Long-termStable OperationsComplying with Commercial Ethics toReinforce Internal Control ComplianceSpeci?c Process ofCompliance Review
Robust Governance System for Long-termStable OperationsComplying with Commercial Ethics toReinforce Internal Control Compliance
Riskmanagement
Risk Identi?cationand Early Warning
Robust Governance System for Long-termStable OperationsComplying with Commercial Ethics toReinforce Internal Control ComplianceRisk Control andTracking
Robust Governance System for Long-termStable OperationsComplying with Commercial Ethics toReinforce Internal Control ComplianceRisk Reporting andManagement
Robust Governance System for Long-termStable OperationsComplying with Commercial Ethics toReinforce Internal Control Compliance
HKEX Environmental, Social and Governance Reporting Guide Index
AspectContentReport Content
Mandatorydisclosure
A statement from the board
Statement of the Board ofDirectorsGovernance Structure
Statement of the Board ofDirectorsExercising StrongerGovernance to ImplementESG ConceptsReporting PrinciplesAbout this ReportReporting BoundaryAbout this ReportA. Environmental
Aspect A1: EmissionsA1
General DisclosureInformation on:
(a) the policies; and(b) compliance with relevant laws and
regulations that have a significantimpact on the issuer relating to air andgreenhouse gas emissions, dischargesinto water and land, and generation ofhazardous and non-hazardous waste.
Green and Low-CarbonOperations for a Better LifeA1.1
The types of emissions and respectiveemissions data.
Green and Low-CarbonOperations for a Better LifeA1.2
Direct (Scope 1) and energy indirect (Scope
2) greenhouse gas emissions (in tonnes) and,
where appropriate, intensity (e.g. per unit ofproduction volume, per facility).
Green and Low-CarbonOperations for a Better LifeA1.3
Total hazardous waste produced (in tonnes)and, where appropriate, intensity (e.g. perunit of production volume, per facility).
Need further improvementA1.4
Total non-hazardous waste produced (intonnes) and, where appropriate, intensity (e.g.per unit of production volume, per facility).
Need further improvementA1.5
Description of emission target(s) set andsteps taken to achieve them.
Green and Low-Carbon
Operations for a Better LifeA1.6
Description of how hazardous and non-hazardous wastes are handled, and adescription of reduction target(s) set andsteps taken to achieve them.
Green and Low-Carbon
Operations for a Better LifeAspect A2: Use of ResourcesA2
General DisclosurePolicies on the efficient use of resources,including energy, water and other rawmaterials.
Green and Low-Carbon
Operations for a Better LifeA2.1
Direct and/or indirect energy consumptionby type (e.g. electricity, gas or oil) in total(kWh in ’000s) and intensity (e.g. per unit ofproduction volume, per facility).
Green and Low-Carbon
Operations for a Better LifeA2.2
Water consumption in total and intensity (e.g.per unit of production volume, per facility).
Green and Low-Carbon
Operations for a Better LifeA2.3
Description of energy use efficiency target(s)set and steps taken to achieve them.
Green and Low-Carbon
Operations for a Better LifeA2.4
Description of whether there is any issue insourcing water that is fit for purpose, waterefficiency target(s) set and steps taken toachieve them.
Green and Low-Carbon
Operations for a Better LifeA2.5
Total packaging material used for finishedproducts (in tonnes) and, if applicable, withreference to per unit produced.
Green and Low-Carbon
Operations for a Better Life
AspectContentReport ContentAspect A3: The Environment and Natural ResourcesA3
General DisclosurePolicies on minimising the issuer’s significantimpacts on the environment and naturalresources.
Addressing ClimateChange to Protect theEnvironmentEmbracing Green Buildingsto Fulfil the Green BuildingPhilosophyGreen and Low-CarbonOperations for a Better LifeA3.1
Description of the significant impacts ofactivities on the environment and naturalresources and the actions taken to managethem.
Embracing Green Buildingsto Fulfil the Green BuildingPhilosophyGreen and Low-CarbonOperations for a Better LifeA4
General DisclosurePolicies on identification and mitigation ofsignificant climate-related issues which haveimpacted, and those which may impact, theissuer.
Addressing ClimateChange to Protect theEnvironmentA4.1
Description of the significant climate-relatedissues which have impacted, and thosewhich may impact, the issuer, and the actionstaken to manage them.
Addressing ClimateChange to Protect theEnvironment
B. Social
Employment and Labour PracticesAspect B1: EmploymentB1
General Disclosure Information on:
(a) the policies; and(b) compliance with relevant laws and
regulations that have a significantimpact on the issuer.
Protecting EmployeeRights and Promoting TheirInterestsB1.1
Total workforce by gender, employment type(for example, full – or part-time), age groupand geographical region.
Protecting EmployeeRights and Promoting TheirInterestsB1.2
Employee turnover rate by gender, age groupand geographical region.
Protecting EmployeeRights and Promoting TheirInterestsAspect B2: Health and SafetyB2
General DisclosureInformation on:
(a) the policies; and(b) compliance with relevant laws and
regulations that have a significant impacton the issuer relating to providing a safeworking environment and protectingemployees from occupational hazards.
Operational Safety andPhysical and Mental HealthB2.1
Number and rate of work-related fatalitiesoccurred in each of the past three yearsincluding the reporting year.
Operational Safety andPhysical and Mental HealthB2.2Lost days due to work injury.
Operational Safety andPhysical and Mental HealthB2.3
Description of occupational health andsafety measures adopted, and how they areimplemented and monitored.
Operational Safety andPhysical and Mental HealthAspect B3: Development and TrainingB3
General DisclosurePolicies on improving employees’ knowledgeand skills for discharging duties at work.Description of training activities.
Operational Safety andPhysical and Mental HealthDelivering ExcellentServices for People’s Well-beingDiversified Training toPromote Staff Development
Appendix
AspectContentReport Content
B3.1
The percentage of employees trained bygender and employee category (e.g. seniormanagement, middle management).
Diversified Training toPromote Staff DevelopmentOperational Safety andPhysical and Mental HealthB3.2
The average training hours completed peremployee by gender and employee category.
Diversified Training toPromote Staff DevelopmentAspect B4: Labour StandardsB4
General DisclosureInformation on:
(a) the policies; and(b) compliance with relevant laws and
regulations that have a significant impacton the issuer relating to preventing childand forced labour
Protecting EmployeeRights and Promoting TheirInterestsB4.1
Description of measures to reviewemployment practices to avoid child andforced labour.
Protecting EmployeeRights and Promoting TheirInterestsB4.2
Description of steps taken to eliminate suchpractices when discovered.
Protecting EmployeeRights and Promoting TheirInterestsOperating PracticesAspect B5: Supply Chain ManagementB5
General DisclosurePolicies on managing environmental andsocial risks of the supply chain.
Optimising Supply ChainManagement Driven by theEnvironment and IntelligenceCreating a ComfortableEnvironment for Consumptionto Ensure Trusted BusinessOperationsB5.1Number of suppliers by geographical region.
Creating a ComfortableEnvironment for Consumptionto Ensure Trusted BusinessOperationsB5.2
Description of practices relating to engagingsuppliers, number of suppliers where thepractices are being implemented, and howthey are implemented and monitored.
Optimising Supply ChainManagement Driven by theEnvironment and IntelligenceCreating a ComfortableEnvironment for Consumptionto Ensure Trusted BusinessOperationsB5.3
Description of practices used to identifyenvironmental and social risks along thesupply chain, and how they are implementedand monitored.
Optimising Supply ChainManagement Driven by theEnvironment and IntelligenceB5.4
Description of practices used to promoteenvironmentally preferable products andservices when selecting suppliers, and howthey are implemented and monitored.
Topic 2: Capitalising on OurCompetitive Edge to JointlyUphold ESG Concepts withBrandsOptimising Supply ChainManagement Driven bythe Environment andIntelligenceGreen and Low-CarbonOperations for a Better LifeAspect B6: Product ResponsibilityB6
General DisclosureInformation on:
(a) the policies; and(b) compliance with relevant laws and
regulations that have a significantimpact on the issuer relating to healthand safety, advertising, labelling andprivacy matters relating to productsand services provided and methods ofredress.
Creating a ComfortableEnvironment forConsumption to EnsureTrusted BusinessOperationsB6.1
Percentage of total products sold or shippedsubject to recalls for safety and healthreasons.
Need further improvement.B6.2
Number of products and service relatedcomplaints received and how they are dealtwith.
Delivering Excellent
Services for People’s Well-
being
AspectContentReport Content
B6.3
Description of practices relating to observingand protecting intellectual property rights.
Complying withCommercial Ethics toReinforce Internal ControlComplianceB6.4
Description of quality assurance process andrecall procedures.
Creating a ComfortableEnvironment forConsumption to EnsureTrusted BusinessOperationsDelivering ExcellentServices for People’s Well-beingB6.5
Description of consumer data protectionand privacy policies, and how they areimplemented and monitored.
Complying withCommercial Ethics toReinforce Internal ControlComplianceAspect B7: Anti-corruptionB7
General DisclosureInformation on:
(a) the policies; and(b) compliance with relevant laws and
regulations that have a significantimpact on the issuer relating to bribery,extortion, fraud and money laundering.
Complying withCommercial Ethics toReinforce Internal ControlComplianceB7.1
Number of concluded legal cases regardingcorrupt practices brought against the issueror its employees during the reporting periodand the outcomes of the cases.
Complying withCommercial Ethics toReinforce Internal ControlComplianceB7.2
Description of preventive measures andwhistle-blowing procedures, and how theyare implemented and monitored.
Complying withCommercial Ethics toReinforce Internal ControlComplianceB7.3
Description of anti-corruption trainingprovided to directors and staff.
Complying withCommercial Ethics toReinforce Internal ControlComplianceCommunityAspect B8: Community InvestmentB8
General DisclosurePolicies on community engagement tounderstand the needs of the communitieswhere the issuer operates and to ensureits activities take into consideration thecommunities’ interests.
Engaging in CharityInitiatives to Act as aResponsible Corporate
B8.1
Focus areas of contribution (e.g. education,environmental concerns, labour needs,health, culture, sport).
Topic 1: ProactivelyResponding to NationalStrategies by Fulfilling ourMission as a Central State-owned EnterpriseTopic 2: Capitalising on OurCompetitive Edge to JointlyUphold ESG Concepts withBrandsEngaging in CharityInitiatives to Act as aResponsible CorporateB8.2
Resources contributed (e.g. money or time)to the focus area.
Topic 1: ProactivelyResponding to NationalStrategies by Fulfilling ourMission as a Central State-owned EnterpriseEngaging in CharityInitiatives to Act as aResponsible Corporate
GRI Standards Index
GRI
Standard
DisclosureLocation/NoteGRI 1: Foundation 20211:
Foundation
2021
Report foundation, including GRI content
index and instructions for use, etc
About this ReportGRI Content IndexGRI 2 General Disclosures 2021The organization and its reporting practices2-1Organizational details
About this ReportAbout the Company2-2
Entities included in the organization’s
sustainability reporting
About this Report2-3
Reporting period, frequency and contactpoint
About this Report2-4Restatements of information
No relevant incidents during the reporting
period.2-5External assuranceNeed further improvement.Activities and workers2-6
Activities, value chain and other businessrelationships
About the Company2-7Employees
Protecting Employee Rights and
Promoting Their Interests
Diversi?ed Training to Promote Staff
Development
Operational Safety and Physical and
Mental Health2-8Workers who are not employees
Operational Safety and Physical and
Mental HealthGovernance2-9Governance structure and composition
Robust Governance System for Long-term
Stable Operations2-10
Nomination and selection of the highestgovernance body
Refer to the 2023 Annual Report.2-11Chair of the highest governance bodyRefer to the 2023 Annual Report.2-12Role of the highest governance body inoverseeing the management of impacts
Statement of the Board of Directors
Robust Governance System for Long-term
Stable Operations
Exercising Stronger Governance to
Implement ESG Concepts2-13
Delegation of responsibility for managingimpacts
Refer to the 2023 Annual Report.2-14
Role of the highest governance body insustainability reporting
Statement of the Board of Directors
Robust Governance System for Long-term
Stable Operations
Exercising Stronger Governance to
Implement ESG Concepts2-15Con?icts of interestRefer to the 2023 Annual Report.2-16Communication of critical concerns
Exercising Stronger Governance to
Implement ESG Concepts
Complying with Commercial Ethics to
Reinforce Internal Control Compliance2-17
Collective knowledge of the highestgovernance body
Statement of the Board of Directors
Exercising Stronger Governance to
Implement ESG Concepts2-18
Evaluation of the performance of thehighest governance body
Refer to the 2023 Annual Report.2-19Remuneration policiesRefer to the 2023 Annual Report.2-20Process to determine remunerationRefer to the 2023 Annual Report.2-21Annual total compensation ratioRefer to the 2023 Annual Report.Strategy, policies and practices2-22Statement on sustainable developmentstrategy
Statement of the Board of Directors
Exercising Stronger Governance to
Implement ESG Concepts2-23Policy commitments
Statement of the Board of Directors
Exercising Stronger Governance to
Implement ESG Concepts
Complying with Commercial Ethics to
Reinforce Internal Control Compliance
Protecting Employee Rights and
Promoting Their Interests2-24Embedding policy commitments
Statement of the Board of Directors
Exercising Stronger Governance to
Implement ESG Concepts
Complying with Commercial Ethics to
Reinforce Internal Control Compliance
Delivering Excellent Services for People’s
Well-being
Creating a Comfortable Environment for
Consumption to Ensure Trusted Business
Operations2-25Processes to remediate negative impacts
Exercising Stronger Governance to
Implement ESG Concepts
Complying with Commercial Ethics to
Reinforce Internal Control Compliance
GRI
Standard
DisclosureLocation/Note
2-26Mechanisms for seeking advice andraising concerns
Exercising Stronger Governance toImplement ESG ConceptsDelivering Excellent Services for People’sWell-being2-27Compliance with laws and regulations
Robust Governance System for Long-termStable OperationsExercising Stronger Governance toImplement ESG ConceptsProtecting Employee Rights andPromoting Their InterestsGreen and Low-Carbon Operations for aBetter Life2-28Membership associations
Setting the Industry Benchmark for High-quality DevelopmentStakeholder engagement2-29Approach to stakeholder engagement
Exercising Stronger Governance toImplement ESG Concepts2-30Collective bargaining agreements
Protecting Employee Rights andPromoting Their InterestsGRI 3: Material Topics 20213-1Process to determine material topics
Exercising Stronger Governance toImplement ESG Concepts3-2List of material topics
Exercising Stronger Governance toImplement ESG Concepts3-3Management of material topics
Exercising Stronger Governance toImplement ESG ConceptsGRI 201: Economic Performance 2016201-1
Direct economic value generated anddistributed
Social Responsibility PerformanceOverviewRefer to the 2023 Annual Report.201-2
Financial implications and other risks andopportunities due to climate change
Addressing Climate Change to Protect theEnvironment201-3
De?ned bene?t plan obligations and otherretirement plans
Protecting Employee Rights andPromoting Their Interests201-4
Financial assistance received fromgovernment
Refer to the 2023 Annual Report.GRI 202: Market Presence 2016202-1
Ratios of standard entry level wage bygender compared to local minimum wage
Protecting Employee Rights and
Promoting Their Interests202-2
Proportion of senior management hiredfrom the local community
Need further improvement.GRI 203: Indirect Economic Impacts 2016203-1
Infrastructure investments and servicessupported
Topic 1: Proactively Responding to
National Strategies by Ful?lling our Mission
as a Central State-owned Enterprise203-2Signi?cant indirect economic impacts
Topic 1: Proactively Responding to
National Strategies by Ful?lling our Mission
as a Central State-owned EnterpriseGRI 204: Procurement Practices 2016204-1Proportion of spending on local suppliersNeed further improvement.GRI 205: Anti-corruption 2016205-1
Operations assessed for risks related tocorruption
Need further improvement.205-2
Communication and training aboutanticorruption policies and procedures
Complying with Commercial Ethics to
Reinforce Internal Control Compliance205-3
Con?rmed incidents of corruption andactions taken
Complying with Commercial Ethics to
Reinforce Internal Control ComplianceGRI 206: Anti-competitive Behavior 2016206-1
Legal actions for anti-competitive behavior,anti-trust, and monopoly practices
Need further improvement.GRI 207: Tax 2019207-1Approach to taxRefer to the 2023 Annual Report.207-2
Tax governance, control, and riskmanagement
Refer to the 2023 Annual Report.207-3
Stakeholder engagement andmanagement of concerns related to tax
Exercising Stronger Governance to
Implement ESG Concepts207-4Country-by-country reportingRefer to the 2023 Annual Report.GRI 301: Materials 2016301-1Materials used by weight or volumeNeed further improvement.301-2Recycled input materials usedNeed further improvement.301-3
Reclaimed products and their packagingmaterials
Need further improvement.GRI 302: Energy 2016302-1
Energy consumption within theorganization
Green and Low-Carbon Operations for a
Better Life302-2
Energy consumption outside of theorganization
Need further improvement.302-3Energy intensity
Green and Low-Carbon Operations for a
Better Life302-4Reduction of energy consumption
Embracing Green Buildings to Ful?l the
Green Building Philosophy302-5
Reductions in energy requirements ofproducts and services
Need further improvement.GRI 303: Water and Ef?uents 2018
Appendix
GRI
StandardDisclosureLocation/Note303-1Interactions with water as a sharedresource
Embracing Green Buildings to Ful?l theGreen Building PhilosophyGreen and Low-Carbon Operations for aBetter Life303-2
Management of water discharge- relatedimpacts
Embracing Green Buildings to Ful?l theGreen Building PhilosophyGreen and Low-Carbon Operations for aBetter Life303-3Water withdrawal
Green and Low-Carbon Operations for aBetter Life303-4Water dischargeNeed further improvement.303-5Water consumptionNeed further improvement.GRI 304: Biodiversity 2016304-1
Operational sites owned, leased, managedin, or adjacent to, protected areas andareas of high biodiversity value outsideprotected areas
Addressing Climate Change to Protect theEnvironmentEmbracing Green Buildings to Ful?l theGreen Building Philosophy304-2
Signi?cant impacts of activities, productsand services on biodiversity
Addressing Climate Change to Protect theEnvironmentEmbracing Green Buildings to Ful?l theGreen Building PhilosophyTopic 2: Capitalising on Our CompetitiveEdge to Jointly Uphold ESG Conceptswith Brands304-3Habitats protected or restored
Topic 2: Capitalising on Our CompetitiveEdge to Jointly Uphold ESG Conceptswith Brands304-4
IUCN Red List species and nationalconservation list species with habitats inareas affected by operations
No relevant incidents during the reportingperiod.GRI 305: Emissions 2016305-1Direct (Scope 1) GHG emissions
Green and Low-Carbon Operations for aBetter Life305-2Energy indirect (Scope 2) GHG emissions
Green and Low-Carbon Operations for aBetter Life305-3Other indirect (Scope 3) GHG emissionsNeed further improvement.305-4GHG emissions intensity
Green and Low-Carbon Operations for aBetter Life305-5Reduction of GHG emissionsNeed further improvement.305-6
Emissions of ozone-depleting substances(ODS)
Need further improvement.305-7
Nitrogen oxides (NOx), sulfur oxides (SOx),and other signi?cant air emissions
Need further improvement.GRI 306: Waste 2020306-1
Waste generation and signi?cant waste-related impacts
Green and Low-Carbon Operations for a
Better Life
Embracing Green Buildings to Ful?l the
Green Building Philosophy306-2
Management of signi?cant wasterelatedimpacts
Green and Low-Carbon Operations for a
Better Life
Embracing Green Buildings to Ful?l the
Green Building Philosophy306-3Waste generatedNeed further improvement.306-4Waste diverted from disposalNeed further improvement.306-5Waste directed to disposalNeed further improvement.GRI 308: Supplier Environmental Assessment 2016308-1
New suppliers that were screened usingenvironmental criteria
Optimising Supply Chain Management
Driven by the Environment and Intelligence308-2
Negative environmental impacts in thesupply chain and actions taken
Need further improvement.GRI 401: Employment 2016401-1
New employee hires and employeeturnover
Protecting Employee Rights and
Promoting Their Interests401-2
Bene?ts provided to full-time employeesthat are not provided to temporary or part-time employees
Protecting Employee Rights and
Promoting Their Interests401-3Parental leave
Protecting Employee Rights and
Promoting Their InterestsGRI 402: Labor/Management Relations 2016402-1
Minimum notice periods regardingoperational changes
Need further improvement.GRI 403: Occupational Health and Safety 2018403-1
Occupational health and safetymanagement system
Operational Safety and Physical and
Mental Health403-2
Hazard identi?cation, risk assessment,and incident investigation
Operational Safety and Physical and
Mental Health403-3Occupational health services
Operational Safety and Physical and
Mental Health403-4
Worker participation, consultation, andcommunication on occupational healthand safety
Operational Safety and Physical and
Mental Health403-5
Worker training on occupational healthand safety
Operational Safety and Physical and
Mental Health403-6Promotion of worker health
Protecting Employee Rights and
Promoting Their Interests
Operational Safety and Physical and
Mental Health
GRI
StandardDisclosureLocation/Note
403-7Prevention and mitigation of occupationalhealth and safety impacts directly linkedby business relationships
Operational Safety and Physical andMental Health403-8
Workers covered by an occupationalhealth and safety management system
Operational Safety and Physical andMental Health403-9Work-related injuries
Operational Safety and Physical andMental Health403-10Work-related ill health
Operational Safety and Physical andMental HealthGRI 404: Training and Education 2016404-1
Average hours of training per year peremployee
Diversi?ed Training to Promote StaffDevelopment404-2
Programs for upgrading employee skillsand transition assistance programs
Diversi?ed Training to Promote StaffDevelopment404-3Percentage of employees receiving regularperformance and career developmentreviews
Diversi?ed Training to Promote StaffDevelopmentGRI 405: Diversity and Equal Opportunity 2016405-1
Diversity of governance bodies andemployees
Robust Governance System for Long-termStable OperationsProtecting Employee Rights andPromoting Their Interests405-2
Ratio of basic salary and remuneration ofwomen to men
Need further improvement.GRI 406: Non-discrimination 2016406-1
Incidents of discrimination and correctiveactions taken
No relevant incidents during the reporting
period.GRI 407: Freedom of Association and Collective Bargaining 2016407-1
Operations and suppliers in which the rightto freedom of association and collectivebargaining may be at risk
No relevant incidents during the reporting
period.GRI 408: Child Labor 2016408-1
Operations and suppliers at signi?cant riskfor incidents of child labor
Protecting Employee Rights and
Promoting Their Interests
Complying with Commercial Ethics to
Reinforce Internal Control ComplianceGRI 409: Forced or Compulsory Labor 2016409-1
Operations and suppliers at signi?cant riskfor incidents of forced or compulsory labor
Protecting Employee Rights and
Promoting Their Interests
Complying with Commercial Ethics to
Reinforce Internal Control ComplianceGRI 410: Security Practices 2016410-1
Security personnel trained in human rightspolicies or procedures
Not applicable.GRI 411: Rights of Indigenous Peoples 2016411-1
Incidents of violations involving rights ofindigenous peoples
No relevant incidents during the reporting
period.GRI 413: Local Communities 2016413-1
Operations with local communityengagement, impact assessments, anddevelopment programs
Exercising Stronger Governance to
Implement ESG Concepts
Setting the Industry Benchmark for High-
quality Development
Topic 1: Proactively Responding to
National Strategies by Ful?lling our Mission
as a Central State-owned Enterprise413-2
Operations with signi?cant actual andpotential negative impacts on localcommunities
No relevant incidents during the reporting
period.GRI 414: Supplier Social Assessment 2016414-1
New suppliers that were screened usingsocial criteria
Optimising Supply Chain Management
Driven by the Environment and Intelligence414-2
Negative social impacts in the supplychain and actions taken
No relevant incidents during the reporting
period.GRI 415: Public Policy 2016415-1Political contributionsNot applicable.GRI 416: Customer Health and Safety 2016416-1
Assessment of the health and safetyimpacts of product and service categories
Creating a Comfortable Environment for
Consumption to Ensure Trusted Business
Operations416-2
Incidents of non-compliance concerningthe health and safety impacts of productsand services
No relevant incidents during the reporting
period.GRI 417: Marketing and Labeling 2016417-1
Requirements for product and serviceinformation and labeling
Complying with Commercial Ethics to
Reinforce Internal Control Compliance
Creating a Comfortable Environment for
Consumption to Ensure Trusted Business
Operations417-2
Incidents of non-compliance concerningproduct and service information andlabeling
No relevant incidents during the reporting
period.417-3
Incidents of non-compliance concerningmarketing communications
No relevant incidents during the reporting
period.GRI 418: Customer Privacy 2016418-1
Substantiated complaints concerningbreaches of customer privacy and lossesof customer data
No relevant incidents during the reporting
period.