2023 Environmental, Social and Governance (ESG) Report
Environmental, Social andGovernance (ESG) Report
Stock code：300428
To pursue green, low-carbon andsustainable development
To be an environmentally andsocially friendly enterprise
Appreciation
Released by Lizhong Sitong Light Alloys Group Co., Ltd.
InnovationHard-workingConcentration
Registered address: No. 359, Fazhan West Street, QingyuanDistrict, Baoding City, Hebei Province, ChinaPostal code: 071000Phone: 0312-5997688
Table ofContents
E?cient GovernanceStable Operations
Improving Corporate GovernanceDeepening Investor Communication andInformation DisclosureSecuring Stable and Compliant Operationand Risk ManagementStrengthening Business EthicsEnhancing Information Security Protection
Focusing on CustomerNeeds Pursuing CustomerSatisfactionQuality Control SystemCustomer Service Management
Compliance OperationGreen and SustainableDevelopment
Environmental ManagementWaste ManagementResponse to Climate Change
Prioritizing Digital Intelligencefor Lean and Low-carbonDevelopmentIndustrial Digital TransformationBreakthrough in Green TechnologyGreen OperationTechnological R&D System for Industrial ChainSustainable Supply Chain Management
Harmonious WorkplaceCreating a Sense ofBelongingEmployees' Rights and Bene?tsEmployee DevelopmentEmployees' Compensation and Bene?tsEmployee CareOccupational Health and SafetyContribution to Community Development
Appendix60
About This ReportPerformance DataGRI StandardsFeedback Form
Chairman’s Message
Topic：Lizhong GroupRoadof "Recycling"
About Lizhong Group
Lizhong Group's SustainabilityManagement
Competitive Advantages Across the EntireIndustrial ChainIndustrial LayoutBusiness Performance of the Group in 2023ESG Honors and AwardsHonors and Awards
Communication with Stakeholders andIdenti?cation of Material Issues
Bao Ding Yi Lake
0302
Chairman’s Message
In an era presenting numerous challenges and opportunities, Lizhong Group has persistentlypromoted the Environmental, Social and Governance (ESG) practices over the past year. We arecommitted to achieving the optimal balance among the uncertainties of the international situation,the escalating customer needs and the Group’s development.
In 2023, the world faces unprecedented challenges, includingaccelerating climate change, resource scarcity, volatility inglobal trade, and geopolitical tensions. These challengespresent both di?culties and opportunities to Lizhong Group.The Group strives to minimize its impact on the environmentby strengthening environmental protection measures,such as adopting cleaner energy sources, reducing wasteemissions and improving production efficiency. In terms ofsupply chain management, we have stepped up assessmentsof suppliers’ environmental and social responsibilities toensure that our business partners also follow the principlesof sustainable development. Through these measures, wehave not only improved the adaptability and resilience of ourbusiness but also made contributions to global sustainabledevelopment. 100,000 tons of CO
e were reduced for Scope 1and Scope 2 in 2023.Nowadays, customers are increasingly prioritizing sustainabledevelopment, and we understand that meeting and evenexceeding our customers’ expectations is the key to oursuccess. Therefore, we conduct technological innovationand service optimization to ensure that our products andservices not only excel in terms of performance but also set abenchmark in terms of environmental protection and socialresponsibility. Adhering to the concept of “technology ?rst”,we work hard to tackle scienti?c research problems and havemade breakthroughs in the recycling of aluminum scrapand R&D of recycled aluminum. When it comes to factorydigitalization Lizhong Group completed the renovation of its5G+ smart industrial park and built a 5G cloud-based smartdemonstration factory in 2023. By means of questionnairesand active market communication, we help our customersknow about our efforts in carbon reduction and betterunderstand their needs through diversified interaction andfeedback mechanisms.
We always believe that long-term success can only besecured if sustainable development is deeply incorporatedinto our corporate culture and strategy. In the past year, westrengthened the corporate governance structure to ensuretransparency and fairness in the decision-making process.We continued to optimize greenhouse gas accountingand enhance carbon emission management. In addition,we increased the investment in employee training anddevelopment so that each of our employees can play a rolein promoting sustainable development. A variety of publicbenefit activities have also been conducted to promotethe construction of harmonious communities and fulfillcorporate social responsibilities.In the future, Lizhong Group will unswervingly carry forwardthe sustainable development strategy and explore a moreefficient, environmentally friendly and fairer developmentpath. We will promote lean production, green and low-carbon production, and digital and intelligent transformationto achieve green, low-carbon and sustainable development.Besides, we will further evaluate the relationship betweenour development and the environment, governance, andsocial responsibilities, identify existing environmental, socialand governance issues and risks, to achieve sustainabledevelopment.
ChairmanZang Yongxing
2023 Environmental, Social and Governance (ESG) Report
About Lizhong GroupFounded in 1984, Lizhong Sitong Light Alloys Group Co., Ltd. was listed on the GEM board of the Shenzhen Stock Exchange in 2015(stock code: 300428). The listed company operates its business mainly in four sectors: Lizhong Alloy, Lizhong Wheel, Sitong NewMetal Material and Lizhong New Energy. We are an international group that focuses on R&D and manufacturing of recycled castaluminum alloys, wrought aluminum alloys, aluminum alloy wheels, auto aluminum alloy parts, functional intermediate alloy newmaterial, precision molds, auto-melting equipment, and new lithium/sodium ion battery materials. In 2023, the listed companyhas 9 production bases around the world, with more than 12,000 employees and operating income of RMB 23.36 billion.
Operate honestly to be a respectedcentury-old enterprise Implementintelligent management and advancedtechnology to create value Pursue steadydevelopment and pragmatic progressto achieve the common prosperity ofemployees, customers and shareholders
Group business policy
Strive more andcooperate moreEnterprise spiritKeep learning, making innovations,and producing excellent products, tomeet the market demands and achievethe common prosperity of employees,customers and shareholders
Corporate value
Products ofLizhong Alloy
Products ofSitong New MetalMaterial
Products ofLizhong Wheel
Products ofLizhong NewEnergy
Competitive Advantages Across theEntire Industrial Chain
A leading manufacturer of low-carbon aluminumalloys and new materials. With nearly 40 yearsof experience in recycling, processing andproducing recycled aluminum, as well as directdelivery technology of aluminum alloy liquidwithin a radius of 60 km, the company providesstrong technical support for green and low-carbon manufacturing of aluminum alloy users.
The company has a series of products includingaluminum-based functional intermediatealloys, special intermediate alloys of aerospacegrade, ?uxes, and additives, with more than 360kinds of products.
The company has ?ve production technologies,namely low-pressure casting, casting spinning,solid forging, liquid die forging and counter-pressure casting. The products have theadvantage of being ultra-lightweight, with morethan 2,000 specifications and models frommore than 400 varieties, ensuring the marketcompetitiveness of Lizhong Wheel.
The company's main products include newenergy lithium batteries, new materials for sodiumbatteries and ?uoride salt series products, amongwhich potassium fluorozirconate, potassium?uorotitanate and potassium ?uoroborate are thekey raw materials for the production of functionalintermediate alloys by Sitong New Metal Material.
Lizhong Alloy
Sitong New Metal Material
Lizhong Wheel
Lizhong New Energy
Lizhong Sitong Light Alloys Group Co., Ltd.
Lizhong Sitong Light Alloys Group Co., Ltd.
Industrial Layout
MexicoSpainBelgiumJapanThailandUSARepublic of KoreaUKGermany
BrazilMorocco
Italy
Overseas industrial layout
Yangzhou, Jiangsu
Xuzhou, Jiangsu
Yantai, Shandong
Yingde, GuangdongShanghaiWuhan, Hubei
Qinhuangdao, Hebei
Guangzhou
Daye, Hubei
Baoding, Hebei
Jining, Shandong
Yangzhong, Jiangsu
Changchun, JilinBaotou, Inner Mongolia
TianjinBinzhou, ShandongQingyuan, GuangdongLu'an, AnhuiChangsha, Hunan
ChongqingDomestic industrial layout
As a globalized enterprise, Lizhong Group hasadvanced production bases and business networksin 20 provinces and cities in China, which ensureextensive coverage and efficient market response ofproducts and services. The Group actively expands intothe international market and currently has establishedbusiness organizations in 12 countries and regions,including the US, the UK, Thailand, Mexico, Brazil,and the Republic of Korea, forming a solid globalbusiness layout. The global workforce of about 12,000employees provides the momentum for the Group'scontinuous development and competitivenessenhancement in both domestic and overseas markets.
Production Base (41) (China 38 + Thailand 2 + North America 1)Logistics Center (10)Sales and Delivery Assurance Company (7)
China（38）
Thailand（2）
GermanyUKBelgium
ItalyMoroccoSpain
Japan
Brazil
USA
MexicoRepublic of Korea
2023 Environmental, Social and Governance (ESG) Report
Lizhong Sitong Light Alloys Group Co., Ltd.
Business performance of the Group in 2023Honors and awards
ESG honors and awards
Shandong Lizhong New Energy Material Co., Ltd.2023 2nd batch of DCMM ImplementationPilot Enterprises in Shandong Province
Lizhong Sitong Light Alloys Group Co., Ltd.Excellent Quality Award of Yongjie
Supplier Conference
Hebei New Lizhong Nonferrous Metals Co., Ltd.
First Prize of 2023 Technical StandardExcellence Award by China Nonferrous MetalsStandardization Technical Committee
Lizhong Sitong Light Alloys Group Co., Ltd.
Green Manufacturing Pioneer Award(Zhongtian Technology Group)Tianjin Lizhong Light Alloy Forging Co., Ltd.
National Specialized, Elaborative,Characteristic, and Emerging “Little Giant”(small and medium-sized) EnterpriseBaoding Lizhong Wheel Manufacturing Co., LtdNational Intellectual PropertyAdvantageous Enterprise
Joined the AluminumStewardship Initiative (ASI)
Lizhong Sitong Light Alloys Group Co., Ltd.2023 Top Ten Suppliers ofwww.cnal.com
Hebei New Lizhong Nonferrous Metals Co., Ltd.Third Prize of Standard Sample Excellence Awardby Nonferrous Metals Sub-committee of NationalStandard Sample Technical Committee
Guangdong Longda Aluminum Co., Ltd.
National Green Factory
Baotou Shengtai Auto PartsManufacturing Co., Ltd. and TianjinLizhong Light Alloy Forging Co., Ltd.National Green FactoryTianjin Lizhong Wheel Co., Ltd.
National Green Supply
Chain EnterpriseBaoding Lizhong Wheel Manufacturing Co.,Ltd., Tianjin Lizhong Wheel Co., Ltd., XintaiWheel Manufacturing Co., Ltd.
CDP climate change questionnaire andwater security questionnaire Rating: B-
Tianjin Lizhong Wheel Co., Ltd.
SAQ level B 85 points
Xintai Wheel Manufacturing Co., Ltd.
EcoVadis bronze
Lizhong Group
Wind ESG rating AA
CNI ESG rating A
Operating income(RMB 10,000)R&D investment(RMB 10,000)
Total assets(RMB 10,000)Net pro?t attributable to parent company (net of
equity incentive amortization)(RMB 10,000)
2022
2,137,141
2023
2, 336, 486
2022
66,600
2023
74,492
2022
1,694,473
2023
1,872, 035
2022
61,443
2023
70,957
2023 Environmental, Social and Governance (ESG) Report
1110
Lizhong Group
Road of "Recycling"
Topic
Lightweight
Compared with steel wheels, our aluminum alloy wheels reducethe weight of each vehicle by 30 kilograms.
Compared with steel wheels, our aluminum alloywheels save 0.18 liters of fuel per hundred kilometers.
Energy-saving and carbon-reducing
Each ton of recycled aluminum
In 2023, we
Saves 14,000 kilowatt-hours of electricity
Reduces CO
and SO
emissions by 13 tons
Saves 22 cubicmeters of water
Reduces miningextraction by 11 tons
Reduces solid wasteemissions by 20 tons
In 2023, approximately190,000 tons of automobile
exhaust emissions were
reduced globally
Saved 6.3 billion kilowatt-hours of electricity
Reduced CO
and SO
emissions by 5 million tons
Saved 10 million cubicmeters of water
Reduced mining extraction
by 5 million tons
Reduced solid wasteemissions by 9 million tons
1312
Shareholdersand investors
?Sustainable pro?tability
?Regulation of corporate governance?Disclosure of business information?Return to shareholders
?Improvement of business management
?Optimization of internal compliancemanagement system?Timely and accurate disclosure of information?Organization of a general meeting ofshareholders
Customers
?Integrity in performance?High-quality products?High-quality services?Response to demands
?Strict implementation of contract content?Strengthening product quality control?O?ering high-quality services?Improving customer complaint handling processes?Customer privacy protectionEmployees
?Legitimate rights and interestsprotection?Salary and welfare guarantee?Health and safety protection
?Building a development platform
?Equal and standardized employment
?O?ering competitive salary
?Providing a healthy and safe work environment?Improving talent development channelsSuppliers andother partners
?Sunshine purchase?Integrity in performance?Win-win cooperation
?Signing sunshine agreements with suppliers?Open and fair procurement?Supporting supplier growthCommunities
?Protecting local environment?Supporting community development?Charity
?Carrying out energy saving and emissionreduction to protect ecological environment?Supporting the development of communitypublic utilities?Carrying out community charity activitiesGovernmentagencies
?Observing disciplines and obeying laws?Paying taxes according to law?Promoting local economicdevelopment
?Observing the laws and regulations?Paying taxes according to law?Providing the opportunities of employment?Driving the development of relative industriesFinancialinstitutions,media, etc.
?Common development?Information transparency
?Conducting strategic cooperation?Organizing visits, meetings, etc.
Lizhong Group'sSustainability Management
Organizational structureLizhong Group has formally established an organizational structure for sustainable development and formulated the 2021-2030 StrategicPlan for Sustainable Development to ensure the systematic, comprehensive and e?cient promotion of sustainable development.The Board of Directors of Lizhong Group takes a comprehensive view of the general situation to make the strategic plan for sustainabledevelopment. The Sustainable Development Management Committee is established under the Board of Directors, responsible formanaging the advancement of signi?cant matters in sustainable development and the assessment of related performance and reportingto the Board of Directors on a regular basis. The subordinate Sustainable Development Division is responsible for overall coordination ofspeci?c tasks and matters related to sustainable development. An external expert group is engaged to provide guidance on the sustainabledevelopment of Lizhong Group. Each sector has a dedicated responsible person. All companies of the Group have set up a sustainabledevelopment promotion team headed by the general manager to comprehensively promote sustainable development.
Communication with Stakeholders andIdenti?cation of Material Issues
Communication with stakeholders
Communication with stakeholders is an important part of Lizhong Group's sustainable development management. LizhongGroup accurately identi?es stakeholders, maintains communication with them through meetings, regular visits and satisfactionsurveys to understand their expectations and interest demands for Lizhong Group, and takes measures to respond to and meet thereasonable demands of stakeholders based on its own production and operation situation.
Major concernsResponse methodsStakeholders
Green, low-carbon, sustainabledevelopment, to be an environmentallyand socially friendly enterprise
Philosophy
To promote social developmentand be a respected enterprise
Mission
To be a leader in green, low-carbonand sustainable development
Vision
Board of DirectorsSustainable Development Management CommitteeExternalExpert GroupAlloy GroupWheel Group
Sitong New MetalMaterial
New Energy
SustainableDevelopment Division
SustainableDevelopmentPromotion Team
SustainableDevelopmentPromotion Team
SustainableDevelopmentPromotion Team
SustainableDevelopmentPromotion Team
1514
Make sure that the coverage of occupational health examination and thecompletion rate of safety training for employees are both 100%.
Harmonious Workplace Creating aSense of BelongingSet up the "Knowledge Academy" and establish a three-tier training system.
Harmonious Workplace Creating aSense of BelongingInsist on equal pay for equal work between men and women to promotegender equality.
Harmonious Workplace Creating aSense of BelongingUse water-saving equipment to maximize the reuse of water resources.
Prioritizing Digital Intelligence for Leanand Low-carbon DevelopmentPrioritize the use of photovoltaic and other clean energy to reducegreenhouse gas emissions, with an overall capacity plan of 29.29 MW forphotovoltaic projects.
Prioritizing Digital Intelligence for Leanand Low-carbon DevelopmentCreate a career development path for management, technology and skillsrespectively.
Harmonious Workplace Creating aSense of BelongingContinuously increase investment in scienti?c research and introduceleading testing and inspection equipment and talents at home and abroad.Cooperate with domestic famous universities and research institutions.
Prioritizing Digital Intelligence for Leanand Low-carbon DevelopmentAdvocate employee diversity.
Harmonious Workplace Creating aSense of BelongingActively participate in social donations and public welfare activities.
Harmonious Workplace Creating aSense of BelongingEnsure a sustainable production model.
Prioritizing Digital Intelligence for Leanand Low-carbon DevelopmentCarry out carbon inventory and carbon footprint accounting, and makeenergy-saving and carbon reduction planning to e?ectively reducegreenhouse gas emissions.
Compliance Operation Green andSustainable DevelopmentEstablish a Sustainable Development Management Committee to enhancesustainable development e?orts.
Lizhong Group's SustainabilityManagementEstablish close partnerships with domestic universities and research institutes,with an aim to promote the sustainable development of the industry.
Prioritizing Digital Intelligence for Leanand Low-carbon Development
Identi?cation of substantive issuesBased on the expectations, business scope and sustainable development of internal and external stakeholders, Lizhong Groupconducts identification, evaluation and analysis of substantive issues to establish substantive issues that are important to theGroup and stakeholders in order to better respond to the demands and expectations of stakeholders in the report. In 2023, LizhongGroup distributed a questionnaire on substantive issues of sustainable development reports to stakeholders, extensively collectingsuggestions from investors, customers, employees, suppliers and others on the Group's sustainable development issues.
Lizhong Group contributing to global sustainable development goals
Lizhong Group responds to the requirements of SustainableDevelopment Goal under Transforming our World: The 2030Agenda for Sustainable Development passed on the 70th Sessionof The United Nations General Assembly. This Agenda announced17 sustainable development goals, which aims to solve issues in 3aspects, including economic, social and environmental issues, andachieve global sustainable development. Based on our business,Lizhong Group actively responds to 13 sustainable developmentgoals involved, continuously improves internal sustainabilitymanagement, improves the Group's social in?uence, and promotesthe sustainable development of the industry and the whole society.Our actionsChapter
Lean productionSocial welfare
Employees' rights and bene?ts
Water resource managementEmployees' compensation and
bene?ts
Sustainable supply chain management
Employee development
Information security and privacy protection
Occupational health and safety
Product quality and safety
Customer serviceCompliance operation
Energy managementWaste management
Greenhouse gasemissions
Importance to enterprise development
Importance to stakeholders
2023 Environmental, Social and Governance (ESG) Report
Improving CorporateGovernance
As of December 31, 2023
GeneralMeeting ofShareholders
Supervisory CommitteeBoard of Directors
AuditCommittee
NominatingCommittee
Remunerationand Appraisal
Committee
StrategyCommittee
Strengthening the cornerstones of governance
Lizhong Group strictly follows the requirements of laws, regulations, and relevant normative documents such as the Company Law of thePeople's Republic of China, the Securities Law of the People's Republic of China, the Code of Corporate Governance for Listed Companies,and the Articles of Association to ensure the healthy and orderly operation of various production and business activities, and lay an importantfoundation for achieving sustainable development. The Group has established a general meeting of shareholders, a Board of Directors and aSupervisory Committee. The Board of Directors is responsible for reviewing important matters related to the development of the company. TheGroup has taken multiple measures to diversify its board members, including professional experience, skills, knowledge, services, term of o?ce,region, culture, educational and age, to ensure professionalism and rationality. The Board of Directors promotes the diligence and responsibilityof the board members and safeguards the interests of the Group, shareholders and other stakeholders through a well-established system andworking mechanism. During the reporting period, the Board of Directors comprised a total of 7 directors (including 3 independent directors).In the future, the Group will consider adding foreign and female independent directors to enhance the diversity of the Board of Directors.TheCompany has one female supervisor at present.The Board of Directors has four special committees, namely the Strategy Committee, Audit Committee, Nominating Committee, andRemuneration and Appraisal Committee. The special committees study the professional matters and put forward opinions and suggestions forthe reference of the Board of Directors in making decisions. The members of each special committee are held by the Group's directors.
E?cient Governance,Stable Operations
SDGs benchmarking
The Group has convened
board meetingsand held
Audit Committee meetings
Nominating Committee meetings
Strategy Committee meetings
Remuneration and AppraisalCommittee meetings
E?cient Governance, Stable OperationsChapter 1
Lizhong Group is committed to improving the corporate governance system toachieve a higher level of corporate governance. The Group has established a setof scientific and efficient decision-making system as well as a set of monitoringmechanism featuring mutual constraints, fairness and balance, which havecontributed to the healthy development and stable operation of the Group.
1918
Deepening Investor Communication andInformation Disclosure
Securing Stable and CompliantOperation and Risk Management
Investor relations management
Compliance management
Information disclosure
Lizhong Group attaches great importance to the protection of investors' rights andinterests. In order to further strengthen information communication between theGroup and investors and potential investors, deepen investors' understanding andrecognition of the Group, and enhance the investment value, the Group has formulatedthe Investor Relationship Management System of Lizhong Sitong Light Alloys GroupCo., Ltd. to clarify the work content and responsibilities of investor relationshipmanagement and establish long-term, stable and benign cooperation with investors.In 2023, the Group conducted online performance exchanges, on-site surveys, androadshows, and answered questions from the online interaction platform (https://irm.cninfo.com.cn/), which enabled investors to further understand the Group’soperating situation and future development plans. In 2023, the Group held a total of 4performance brie?ng sessions, with high participation from institutional investors.
Lizhong Group abides by the business philosophy of integrity, effectively fulfills its obligations as a listed company, constantlyimproves the internal control system, and ensures that the production and operation activities meet the requirements of nationallaws and regulations and listed company regulators. The Group has established compliance management systems such ascompliance training and compliance inspection, timely revised and improved existing systems in accordance with regulatorypolicies, and prepared and issued relevant system documents such as the Safety Management System, Procurement ManagementSystem, and Provisions on Trade Secret Protection. Multiple measures have been taken to enhance the awareness and capability ofcompliance management across the Group and provide support for sustainable and healthy development.
Risk managementThe Group attaches great importance to the construction and supervision of internal control and risk management system. The Group receivesregular reports on internal control, evaluates major risks, determines prevention and control measures and response plans, and ensures theimprovement and e?ective operation of the internal control system. Lizhong Group has formulated the Internal Control System in accordancewith laws and regulations such as the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, andthe Shenzhen Stock Exchange Guidelines No. 2 on Self-regulation of Listed Companies - Standard Operation of GEM Listed Companies. The Groupadheres to the seven principles of legality, comprehensiveness, materiality, e?ectiveness, checks and balances, adaptability and cost e?ectivenessto continuously strengthen the construction of the internal control system and enhance the ability to prevent and resolve major risks.
In order to standardize information disclosure, Lizhong Group has formulated theInformation Disclosure Management System. Following the principles of justice,equity and publicity, the Group improves the information disclosure system, disclosesthe information timely, accurately and completely, and performs the decision-makingprocedures in strict accordance with the listing rules and regulations to protectthe rights and interests of investors. The Group presents the corporate operationand management information to investors objectively, truthfully, accurately andcompletely, maintains good communication with investors, and strives to creategood business performance to repay investors.
The Group released
A
As of December 31, 2023
Strengthening Business Ethics
The Group has established and improved anti-corruption procedures and continuously optimized anti-corruption work. Correspondingsystems have been established to regulate the operation of risk areas and key links that are prone to corruption in the process of operationand management. The Group improves management systems for key links such as marketing, procurement and quality to prevent internaland external corruption risks; emphasizes clauses such as avoidance of employee con?icts of interest, and actively carries out declarationand inspection of employees' relationships with suppliers, partners and other important stakeholders.Strictly abiding by the Law of the People's Republic of China Against Unfair Competition, the Anti-Monopoly Law of the People's Republic ofChina and other laws and regulations, the Group adheres to fair competition, opposes any form of commercial bribery, monopolization andunfair competition, and strictly requires all employees to adhere to the business ethics. By carrying out training activities on anti-monopolyand fair competition, we continue to enhance the awareness of business ethics among employees. During the reporting period, we had noviolation incidents involving improper competition behavior and violation of anti-monopoly laws.We establish a Supervisory Committee and an Audit and Supervisory Committee that are responsible for the anti-corruption work. We alsoformulate the Regulations on Supplier Selection and Business Cooperation with Suppliers and the Regulations on Internal Personnel MakingContact with Suppliers. Putting emphasis on the training and signing of the Sunshine Agreement, we require the business departmentsto send the Sunshine Cooperation Letter to Suppliers to our suppliers and the business personnel to learn the Sunshine Agreement.Furthermore, we are committed to establishing and using the e-tendering and procurement platform.The Group disseminates anti-corruption management requirements, promotes a clean, honest and self-disciplined corporate culture,deepens employees' awareness of anti-corruption, promotes the Group's healthy development, and safeguards the Group's reputation andthe legitimate rights and interests of shareholders through publicity and training.The Group accepts reports of violations by telephone, email, etc. Employees, third parties who have dealings with the Group, and the publiccan report any fraud related to business and crime related to duties. The Group carefully investigates the content of the report and providestimely feedback on the handling results.
Training on business ethics
Telephone:
19030326789Reporting methods
To enhance the anti-corruption and integrity work, the Management Department issued a notice on organizing training foremployees to learn the Sunshine Agreement again in June 2023. The training covered all functional, operational and technicalemployees, and a total of 1,382 employees attended the training. The total duration of the training was 2,073 hours.
In December 2023, the Management Department of the Group issued the Notice on Strengthening Integrity Construction as Wellas Self-Investigation and Self-Correction Work, requiring the management personnel to incorporate the integrity work into theannual duty report and publicizing that the employees establish complaint channels. Comprehensive measures have been takento eliminate the internal corruption of Lizhong Group.
Case
Case
Email:
zangliguo@lizhong.com.cn
regular reports and provisionalannouncements During the reportingperiod, the Group was ratedby the Shenzhen Stock Exchangefor information disclosure
Investor exchange activity
2120
Enhancing Information Security Protection
Information management
A database auditing system has been deployed to strengthen data security, enhance internal control and meet regulatoryrequirements. By monitoring database activities in real time, recording detailed logs and detecting abnormal operations, thesystem prevents the risk of data leakage and misuse and protects the data privacy of customers and partners. Besides, the systemenhances internal control and compliance management. Through the management of database users' rights, only authorizedusers can access and modify data, reducing the risk of internal data misuse and unauthorized operations. In addition, the systemrecords detailed logs of database activities, providing the basis for subsequent audits and investigations and facilitating analysis ofthe cause and impact of security incidents.
Data privacyLizhong Group places a high value on information security management and strictlycomplies with laws and regulations such as the Data Security Law of the People'sRepublic of China and the Personal Information Protection Law of the People'sRepublic of China. In accordance with ISO 27001:2022 and TISAX internationalstandards, the Group has set up an information security team responsible for overallinformation security work. The team contains positions such as information securitysupervisor, executive team leader of information security, and information securityengineer to strengthen information security management.
Lizhong Group had no incidents of datainformation leakage.
As of December 31, 2023
Lizhong Group is committed to building ahigh-availability IT infrastructure that canensure the continuity and reliability of keybusiness systems. We adopt a high-availabilitycluster architecture, which enables highsystem availability and fault tolerance throughredundancy and load balancing of multipleservers. It helps minimize the risk of businessinterruption and data loss and ensures theprovision of reliable services.We actively speed up the construction of greendata centers to reduce energy consumptionand environmental impact. Energy-efficientequipment, including high-efficiency servers,storage devices and network equipment, aswell as intelligent temperature control andenergy management systems, have beenadopted. The layout and cooling design ofdata centers are optimized to minimize coolingloads and energy wastage. We perform real-time monitoring and analysis of data centerenergy consumption and e?ciency. Moreover,we continuously improve energy managementand reduce carbon footprint based on energyinventories, energy metrics and energye?ciency improvement programs.
To strengthen information security, we havetaken a series of measures, such as banninghigh-vulnerability software, standardizing IPmanagement, deploying the Group version ofantivirus software and regularly conductinginformation system security assessments.We test the protection capability of theinformation system from aspects includingvirus identification and response, threatdefense and response, vulnerability scanningand assessment, and password policycompliance. We integrate computing, storage,network, and security resources throughvirtualization technology, and provideadvanced features such as operation andmaintenance management, disaster recoverybackup, and intelligent monitoring to build astable, e?cient and modular data center.
Lizhong Group has established a set ofinformation security management systemsin accordance with ISO 27001 and otherinternational standards for informationsecurity management. We have formulatedrules and regulations, such as theRegulations on the Use of Computers andInformation Systems, the Regulations on theUse of Server Rooms, and the InformationSystem Contingency Plan. We set up aninformation security team, formulate varioussecurity policies, standardize the behavior ofemployees, and conduct regular informationsecurity training and drills to raiseemployees' overall awareness of informationsecurity and to reduce the risk of corporateinformation security.
We cooperate with domestic informationsecurity experts every year. In view of newviruses, trojans and various problems in thenetwork, we collect relevant informationand formulate countermeasures, prepareinformation security emergency drillprograms, and carry out network securityemergency drills and information securitytraining. At present, we have completed theTISAX audit and certification as well as therenewal review of many domestic companies.In July 2023, we successfully passed the TISAXcerti?cation for overseas factories.
Hardware managementSoftware management
System managementInformation security audit
2023 Environmental, Social and Governance (ESG) Report
Industrial Digital TransformationLean management
5G fully connected intelligent factory platform
Lizhong Group carries out lean production, optimizes production processes, and improves the automation of productionprocesses and equipment by improving the layout of production lines and upgrading existing production equipment, to reducewaste and to lay the foundation for the digital transformation of the company. Lizhong Group promotes 5S, standardization andrefinement management, so that the backbone staff of the Group can enhance their professional ability of lean managementand devote themselves to increasing production e?ciency, improving product quality, enhancing delivery guarantee capabilityand continuously meeting customers' needs.Through lean management and by enhancing the quality and e?ciency, as well asreducing costs, we boost the competitive edge of Lizhong Group products.The Lizhong Wheel Group’s Qingyuan factory makes full use of the integration of new-generation information and communication technologies represented by 5G, to build a 5G cloud-based intelligent demonstration factory.By adopting the cloud-based 5G customized products independently developed by the operator,and based on a uni?ed lightweight cloud network base, UPF, MEC, and innovative cloud networkapplications are deployed to create Lizhong’s proprietary industrial convergence platformthat integrates computing and network resources. Being oriented to cost reduction, qualityimprovement, and efficiency increase and focusing on the wheel manufacturing process, theproject involves 12 workshops and 8 processes. Based on the actual production scenarios,the project plans to implement seven 5G innovation applications for 4 major categories(manufacturing, testing and monitoring, warehousing and logistics, and operation andmanagement). The applications include 5G + AI visual personnel management, 5G + intelligentmobile security monitoring, 5G + AR remote collaboration, 5G + AI robotic wheel sorting, 5G + AGVintelligent warehousing, 5G + digital intelligent park management, and visualized data cockpit. Inthis way, a 5G digital intelligent factory is built to empower the innovative change of productionand manufacturing.As the ?rst implemented full-scene application of the 5G customized network in the auto partsmanufacturing industry in the northern region, the project has achieved great social bene?ts. As aresult, Lizhong Group won the ?rst prize of Hebei Regional Competition (Thematic Competition)of the 6th "Blooming Cup" 5G Application Collection Contest and the Award of Excellence inNational Finals sponsored by the Ministry of Industry and Information Technology, setting anexample for the domestic industry.
5G intelligent platform
Award of Excellence for
5G Application
Lizhong Group actively promotes the digital and intelligent transformation of thecompany. We leverage advanced technologies to achieve intelligent businessmanagement and lean production, thereby enhancing operational efficiency.Additionally, in response to the call for low-carbon initiatives, we implementgreen strategies and adopt energy-saving measures, actively fulfilling our socialresponsibilities in an e?cient, green, and sustainable manner.
Prioritizing Digital Intelligencefor Lean and Low-carbonDevelopment
SDGs benchmarking
Prioritizing Digital Intelligence for Lean and Low-carbon DevelopmentChapter 2
2524
Breakthrough in Green TechnologyAdhering to the technological innovation model based on "independence + cooperation" to pursue innovation drivendevelopment, Lizhong Group actively implements the development strategy of technological priority to plan for forward-looking,ground-breaking and green technological innovation projects. Guided by the market and customers' demands, Lizhong Groupplans the development and innovation of recycled aluminum technology and products, continuously improves the scienti?c andtechnological innovation system, strengthens the basic management of innovation, and meets the external customers' demands.At the same time, Lizhong Group actively carries out technical exchanges with professional institutions and scholars in the industrysectors, leads the global development of recycled aluminum technology, and contributes to the promotion of green, low-carbonand sustainable development.
Application of high-gloss silver waterborne coating process for aluminum alloy wheelsThe automobile manufacturing industry features a large scale, a high level of technology, a long industrial chain, wide coverage, andstrong relativity, and it holds a strategic position in the national economy. Low consumption and emission reduction in the automobilemanufacturing industry are key elements for promoting environmental protection. From the perspective of automobile coatings,waterborne paint with low VOC emission plays a huge role. To meet the personalized and low-emission technology development of high-end wheels, Lizhong Wheel developed high-gloss silver waterborne paint and the infrared resonance fast drying process. By using infraredlamps instead of natural gas for drying, VOC emissions of the primer, color paint, and bright paint decrease from 70%-75%, 95%-98%, and65-70% to 10%-15%, 3%-5%, and 15%-20%, respectively, which improves the green manufacturing level of aluminum alloy wheels. Theapplication of waterborne coating technology for aluminum alloy wheels is of great signi?cance to energy saving and carbon reduction.While reducing energy consumption, saving resources, and lowering carbon emissions for environment and health protection, thetechnology cuts production costs and improves product quality, which facilitates sustainable development and green manufacturing.
Case
High-e?ciency low-carbon heat treatment process for aluminum alloy wheelsTo meet the requirements of low-carbon and energy-saving technology for high-end wheels, Lizhong Wheel developed a high-efficiency low-carbon heat treatment process for aluminum alloy wheels on the basis of the T6 process. The existing processof "long solid solution duration + long aging at a low temperature" is optimized by shortening the solid solution and agingduration and increasing the aging temperature. With an increase in the production capacity of a single month by 9%-11%,electricity consumption is reduced by 10%-13% and natural gas consumption is reduced by 11-15%, which improves the greenmanufacturing technology level of aluminum alloy wheels. The application of new heat treatment technology for aluminum alloywheels is of great signi?cance to energy saving and carbon reduction. While reducing energy consumption, saving resources, andlowering carbon emissions for environment and health protection, the technology cuts production costs without lowering productquality, which facilitates sustainable development and green manufacturing.
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Development of high-e?ciency magnesium removal agent
Due to high economic bene?ts and environmental friendliness, recycled aluminum alloy has been increasingly applied with greatpotential for development. The high-e?ciency magnesium removal agent, which was developed by Lizhong Sitong and appliedin the recycling field of recycled aluminum, can remove the magnesium element in recycled aluminum alloy. The agent hasthe advantages of environmental protection, high magnesium removal e?ciency and lower radiation value. It is in line with therequirements for green recycling of aluminum and promotes the recycling and reuse of recycled aluminum.
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Hebei Sanyi Renewable Resources Utilization Co., Ltd. carriesout in-depth research around resource regeneration andrecycling and harmless resource utilization of aluminumash slag and other directions related to the comprehensiveutilization of secondary aluminum ash. At present, thecompany has a calcium aluminate production line with anannual treatment capacity of 80,000 tons of aluminum ash.The calcium aluminate products are mainly used as auxiliaryraw materials of pre-melting re?ning slags for steelmaking.In addition, the company has the quali?cation of hazardouswaste disposal, which provides technical support foraddressing the challenges of aluminum ash stockpiling,disposal and utilization in the local area. The company drivesthe advancement in aluminum ash disposal and utilizationby other companies of the Group and the surroundingprocessing enterprises. Furthermore, it sets an example forthe e?cient disposal and high-value utilization of aluminumash hazardous waste in China.
Longda Aluminum (Shunping) Co., Ltd. and Baoding LongdaAluminum Co., Ltd. jointly undertook the 2023 Hebei Provincemajor scienti?c and technological achievement transformationproject "R&D and industrialization of heat-treatment-freealuminum alloy materials for super-large-scale integrateddie-casting of new energy vehicles". This project will carry outthe composition design and optimization of heat-treatment-free aluminum alloy materials for large-scale integrated die-casting, the research on joint re?nement and metamorphosisand multi-stage puri?cation and melting process, the researchon low-carbon and environmentally friendly heat-treatment-free aluminum alloy material preparation technology, and theresearch on the application of heat-treatment-free aluminumalloy materials in integrated die-casting of new energy vehicles.In addition, the project will transform the existing productionline as well as equipment and facilities to support an annualoutput of 15,000 tons of heat-treatment-free aluminum alloymaterials for new energy vehicles. The implementation of thisproject will achieve energy savings of 80,000 tons of standardcoal and 220,000 tons of emission reduction.
Harmless resource utilization of secondaryaluminum ash
Integrated die-casting helps the low-carbondevelopment of new energy vehicles
Discussing green development with BMW
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Case
Green Operation
Construction of distributed photovoltaic projects
Energy management
Lizhong Group is actively engaged in energy management, and all its major subsidiaries have obtained ISO 50001 energymanagement system certi?cation. We have formulated the Management Process of Energy Consumption and Statistical Analysis,set targets related to energy management, and optimized the energy use structure to improve the energy management system.In the context of global energy saving and carbon reduction, Lizhong Group actively practices national policies and respondsto customer requirements. We continuously increase the use of clean energy by photovoltaic power generation and reduce thecarbon emissions of products. By renovating high energy-consuming equipment, actively exploring new types of power-savingequipment, and continuously promoting the use of waste heat to save gas, we optimize the e?ciency of energy use and achievecontinuous energy saving.
The Group makes an overall plan of photovoltaic projects totaling 29.29 MW, of which 22.99 MW will be connected to the grid in2024-2025. The average annual power generation capacity is about 26.35 million kWh.
Remodeling of high energy-consuming equipment
Continuously enhancing the utilization of conventional waste heat
We actively explored power-saving measures. Under the premise of meeting process requirements, we adjusted the energy-consumingstructure by changing the equipment structure. For example, we replaced the 15 kW hydraulic system with a gas-liquid booster cylinder inthe helium testing machine. The remodeling of a single piece of equipment can save about 56,000 kWh of electricity per year.Remodeling of inverters and high-e?ciency equivalent motors:
We added inverters to some fans of the old production line and adjusted the fan power to reduce power consumption. We used high-e?ciency energy-saving pumps to replace high energy-consuming pumps. The energy is saved by 20% compared with the same period in2022 and 2021, and an annual power saving of 0.9 million kWh is expected.We replaced high energy-consuming transformers with S22 energy-saving transformers, which reduced transformer losses by about 40,000kWh per year. We installed on-site compensation cabinets and improved the power factor, which reduced power consumption by 0.17million kWh per year.We actively explored new power-saving technologies and installed advanced power management equipment for thermal workshops, whichsaved power by 6%, with annual power savings of 0.34 million kWh. The accumulated electricity saving in 2023 is 1.506 million kWh.
We used regenerative burners for smelting furnaces to increasethe heat accumulator and used waste heat of ?ue gas to dry andpreheat aluminum skimmings. We saved 10 million m? of naturalgas throughout the year.We added heat exchangers on the exhaust of preheating furnacesand preheated the combustion air, lowering the natural gasconsumption by 0.147 million m?.We utilized waste heat from air compressors. Combined with thecompressed air station monitoring system, we recovered heatgenerated in the working process of the air compressor throughthe oil-water heat exchange. We used an intelligent electroniccontrol system to utilize the hot water after heat exchange forproduction and life use, thus reducing energy consumption. Everyyear the wheel company saves about 8 million m? of natural gas by
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Case
Alloy Group Co., Ltd. has an average annual powergeneration capacity of about 1.4 million kWh.The 4 MW photovoltaic project of Lizhong Sitong LightAlloys Group Co., Ltd. has an average annual powergeneration capacity of about 4.4 million kWh.Baoding Lizhong Dong'an Light Alloy Parts ManufacturingCo., Ltd. makes a plan for a 10 MW photovoltaic project,the ?rst phase of which is 3.7 MW, with an annual powergeneration capacity of about 3.66 million kWh.The 1.3 MW photovoltaic project of Guangdong LongdaLishan Light Metal Products Co., Ltd. has an annualpower generation capacity of about 1.3 million kWh.
The 1.6 MW photovoltaic solar carport project of TianjinLizhong Wheel Co., Ltd. was put into use in June 2023,with an average annual power generation capacity ofabout 1.69 million kWh.The 7.5 MW photovoltaic project of Xintai WheelManufacturing Co., Ltd. has an average annual powergeneration capacity of about 9.9 million kWh.Lizhong (Mexico) Co., Ltd. makes a plan for a 3.5 MWphotovoltaic project with an average annual powergeneration capacity of about 4 million kWh.The 1.39 MW photovoltaic project of Tianjin New Lizhong
the utilization of conventional waste heat
recycling waste heat from air compressors.Low-temperature waste heat utilization project: After the utilizationof high-temperature flue gas from industrial furnaces and aircompressors, there still exists a large amount of low-temperaturewaste heat, such as process circulating water and equipmentcooling water. As the water temperature requirements are stringentand the waste heat temperature is lower than the industrialfurnace group, the utilization of low-temperature waste heat isa little complex. We adopted efficient low-temperature wasteheat utilization technology (exchange unit) to absorb the processcirculating water and equipment cooling water low-temperatureheat. Then we converted the water for temperature regulation inthe production and living environments. It is expected that 0.35million m? of natural gas will be saved and 628 tons of carbondioxide emissions will be reduced.
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Water resources usage and managementLizhong Group attaches great importance to water resources protection and is committedto building a water-saving friendly enterprise. Lizhong Group strictly abides by the Water Lawof the People's Republic of China, the Law of the People's Republic of China on Preventionand Control of Pollution, the Environmental Protection Law of the People's Republic of Chinaand other relevant laws and regulations and local policies, and has formulated relevantmanagement systems such as the Regulations on Management of Water Use and the Policieson Management of Periodic Maintenance of Water Supply Facilities. Each company in theGroup regularly entrusts professional testing organizations to conduct water balance tests andcarries out special recti?cation based on the test results. This helps continuously improve theutilization rate of water resources. Advanced equipment has been adopted to increase the useof reclaimed water and maximize the reuse of water resources. In 2023, Tianjin Lizhong WheelCo.Ltd and Baoding Lizhong Wheel Manufacturing Co.Ltd.achieved a water resource reuse rateof 45% We aim to reach the industry's best-in-class standards by the end of 2024 in terms ofoverall water conservation.Water utilization balance chart
Lizhong Group had used270,399As of December 31, 2023
Promoting the use of recyclable packaging materialsLizhong Group responds to the national policy of sustainable development and environmental protection and continues topromote the use of recyclable packaging materials. We reduce the use of disposable packaging materials and adopt recyclableones, which reduces the loss of wood resources and lowers waste generation.Of the 31 domestic supporting customers of Lizhong Wheel, 26 have used recyclable packaging materials. We used 9.575 millionpieces of recyclable packaging materials in 2023, representing 96.6% of orders from all domestic supporting customers.In 2024, 10.652 million pieces of recyclable packaging materials will be used for orders from domestic supporting customers. Atthe same time, we promote the use of recyclable packaging materials by overseas customers, such as Opel supplied by XintaiWheel Manufacturing Co., Ltd. and Hyundai supplied by Baoding Lizhong Wheel Manufacturing Co., Ltd.
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202220232024
Green o?ce
Lizhong Group pays attention to resource conservation and pollution control in the process of operation, and actively promotesthe concept of green operation in o?ce to reduce the impact on the environment.
We prioritize online cloud videoconferencing, which reduces thefrequency of o?-site meetings, cutsoperating costs and reduces carbonemissions from business travel.
To help reduce paper waste,we carry out online ratherthan paper-based approvalprocedure.
We prioritize the use of LEDlighting in o?ce areas to reduceenergy consumption and wasteof resources.
Lizhong Group attaches great importance to the publicity of environmental protection and the drills of environmental emergencies,and strives to improve the environmental protection awareness and environmental emergency handling ability of all employees,and improve the technical level and professional quality of environmental protection professionals. We carry out variousenvironmental training and emergency drills every year to minimize environmental-related risks. To raise employees' awareness ofenvironmental protection, we take measures in all aspects of the production process according to the Law of the People's Republicof China on the Prevention and Control of Environmental Pollution by Solid Waste. We equip the factory and workshops withsweepers and sprinklers, which clean the site every day to lower the hazardous nature of solid wastes.
Environmental protection publicity and drills
of reclaimed water
m?
Municipal sewerage pipe network
E?uent treatment plantReclaimed waterstation
Wastewater tank
Production process
Production processProduction processProduction processProduction processProduction processProduction processProduction processProduction processProduction processProduction processProduction processProduction processProduction processProduction processProduction processProduction processProduction processTap water
Production processProduction process
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Production processProduction processProduction processProduction processProduction process
Production processProduction process
1065.2
734.9
957.5
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Sustainable Technological R&D Systemfor Industrial Chain
Technological R&D management system for the industrial chain
Collaborative R&D throughout the entire industrial chain represents the core competitiveness of Lizhong Group. Under theprinciple of "promoting corporate development by scienti?c and technological progress", we formulate clear technological R&Dobjectives and strategic planning and ensure that the R&D work matches our strategic development. Adhering to the concept ofinnovative development and regarding innovation as the driving force, we establish a technology R&D management system forthe whole industrial chain. In 2023, the Group invested a total of RMB 744.92 million in scienti?c research, with 2,054 technologicalR&D and quality control employees, of which, R&D employees accounted for 17.17% of the total.
While focusing on the R&D, we are also increasing international cooperation and deeply integrating our global scientific researchforces to facilitate technological innovation and corporate development. We have established strategic cooperation with 10+ domesticand foreign universities and R&D institutions such as the Chinese Academy of Sciences, National Supercomputing Center, TsinghuaUniversity, Beihang University, University of Science and Technology Beijing, and Brunel University London to deepen the cooperationon production, education and research. We actively drive key technology breakthroughs in the industry, build a technological innovationplatform, and set up an R&D team for new products and new technology. We are committed to high-tech, high-quality aluminum alloywheel R&D and transformation of results. Lizhong Sitong Light Alloys Group Co., Ltd. acquired MQP in the UK in 2016, a global technologycompany specializing in the research and development of high-end grain re?ners, then established research platforms such as the jointresearch center at Brunel University, UK, and Wannike laboratory in Sweden, and introduced the technology into the production processto implement the business development model of "R&D overseas, manufacturing in China and sales worldwide".
The project "Hebei Engineering Research Center of Recycled Aluminum Alloy Automobile Parts Manufacturing", which is jointlyconstructed by Baoding Lizhong Dong'an Light Alloy Parts Manufacturing Co., Ltd., Hebei University of Technology, University ofScience and Technology Beijing, and Hebei New Lizhong Nonferrous Metals Group Co., Ltd., has been formally included in thepreparatory plan for the construction of provincial engineering research centers.Baoding Lizhong Wheel Manufacturing Co., Ltd. obtained the title of "Hebei Provincial Science and Technology Leader Enterprise",and Tianjin Lizhong Light Alloy Forging Co., Ltd. obtained the title of "Tianjin Science and Technology Leader Cultivation Enterprise".
Lizhong Group actively participated in the development of national and industry standards. We have presided over or participated in thepreparation or revision of 73 national, industry and group standards, in a way to e?ectively promote the orderly and high-quality developmentof the industry. As of December 31, 2023, Lizhong Group owned 1,100 patents, including 136 invention patents, 877 utility model patents and 87design patents, and had 202 global leading scienti?c and technological achievements.Lizhong Group respects intellectual property rights, establishes an intellectual property management organization with professional personnel,and formulates standardized systems and procedures, including the intellectual property management system, to form a scienti?c intellectualproperty protection system. In August 2022, Baoding Lizhong Wheel Manufacturing Co., Ltd. successfully passed the certi?cation of GB/T29490-2013 Intellectual Property Management System by Zhongzhi (Beijing) Certi?cation Co., Ltd., which provides the management basis for thecompany's intellectual property management and ensures the comprehensive and systematic management of intellectual property. In 2023,the company was identi?ed as a National Intellectual Property Advantageous Enterprise, which enhanced the company's innovation ability,improved the commercial position and competitive advantage, and promoted the healthy development of intellectual property work.
Brunel UniversityUniversity of Kentucky
Instrumentation Technologyand Economy Institute
China Academy of MachineryScience and TechnologyUniversities and research institutions conductinguniversity-industry cooperation with the Group
The Group signed a contract with King Mongkut's University of
Science and Technology Thonburi
The Group conducted technical exchanges with Hoesch Germany
Six laboratories including the Testing Centers of Hebei New Lizhong Nonferrous Metals Group Co., Ltd., Lizhong Sitong Light AlloysGroup Co., Ltd., Experiment Center of Tianjin Lizhong Wheel Co., Ltd., Laboratory of Baoding Lizhong Wheel Manufacturing Co., Ltd.Tianjin New Lizhong Alloy Group Co., Ltd., and Xintai Wheel Manufacturing Co., Ltd. passed the ISO 17025 certi?cation.Baoding Lizhong Wheel Manufacturing Co., Ltd. passed the acceptance of the project "Research and Application of Lightweight WheelTechnology with a Highly Tough Hollow Structure" by the Hebei Provincial Science and Technology Department.Lizhong Sitong Light Alloys Group Co., Ltd. has obtained the titles such as the Champion Enterprise in Individual Fields in HebeiProvince’s Manufacturing Industry, and the Leading Enterprise in Hebei Province’s County-Level Characteristic Industry Clusters.
Lizhong Sitong Light Alloys Group Co., Ltd. participated in the “14th Five-Year Plan” National Key Research and DevelopmentProgram, focusing on the project of “Key Technologies for New Type Aircraft Aluminum Alloy Plate Featuring Ultra-High Strength,Toughness, Fatigue Resistance, and Damage Tolerance”.
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Conductivity improvement technology for aluminum alloy products
Through material composition optimization and organization design, Lizhong Alloy Group has achieved a good balance betweenyield strength and thermal and electrical conductivity of aluminum alloy materials. The LZGDD-4 highly conductive aluminum alloyproduct developed by Lizhong Alloy Group is applied in rotors of high-speed automobile drive motors, which enables nearly 60%weight reduction of the conductor and promotes a signi?cant increase in the power density of the electric drive system. As the ?rstlow-cost A-Mg-Si high-speed aluminum alloy rotor material in the industry, our LZGDD-4 product leads the direction of the researchand application of the rotor material for high-speed drive motors.
Case
High-yield performance enhancement technology for aluminum alloy productsThrough the composition and organization design of aluminum alloy, Lizhong Alloy Group has greatly enhanced the performanceof the alloy in the as-cast state: tensile strength ≥ 380 MPa, yield strength ≥ 240 MPa and elongation ≥ 4%. Compared with thetraditional A380 aluminum alloy, the yield strength of the newly developed LZ.Al-Si-Cu-Mg high-yield heat-treatment-free die-casting aluminum alloy material increases by more than 50%. This technology can meet the speci?c high-yield service conditions,and also enables the lightweight design of traditional A380 and ADC12 series material parts, thus facilitating the weight reductionand carbon reduction of the electric drive assembly shell of target parts.
Case
Research and application of characterization analysis technology foraluminum alloy wheel substrate and surface materials
The project "Research and application of characterization analysis technology for aluminum alloy wheel substrate and surfacematerials" is jointly carried out by Baoding Lizhong Wheel Manufacturing Co., Ltd. and the Institute of Oceanology, ChineseAcademy of Sciences. The project analyzes the composition and structure of the surface coating of aluminum alloy wheels as wellas the bonding mechanism between the coating and the substrate. Based on the analysis, the project clari?es the compositionalorganization and structure of the corrosion products formed after the coating fails, determines the influence of the coatingimprovement process on the compositional organization of the coating and the corrosion resistance, and puts forward a rapiddetection method for the surface coating of aluminum alloy wheels. The results of this project improve the corrosion resistance ofaluminum alloy wheels and provide technical support for product failure analysis, technical improvement, and speci?c propertiesmonitoring of incoming materials, which accelerate the development of the aluminum alloy wheel industry.
Case
Simulation automation facilitates e?cient and lean R&D of productsThe project "Key technology R&D of the automated simulation system for lightweight aluminum alloy wheels" is jointly carried outby Baoding Lizhong Wheel Manufacturing Co., Ltd. and Yancheng Institute of Technology. To solve the problems of standardization,automation and integration in the simulation of lightweight aluminum alloy wheels, this project uses the secondary developmentcapability of simulation software to research the key technologies of the automated simulation system for lightweight aluminumalloy wheels. In this project, we have established a standardized, automated and integrated wheel simulation and analysis processand method. In addition, we have developed a user-friendly, easy-to-operate automated simulation system with comprehensiveinterfaces, realizing the automation and integration of wheel simulation and analysis. The results of this project improve thequality and reliability of wheel products, cut R&D costs of wheel products, enhance the core competitiveness and internationalcompetitiveness of the Group, and facilitate the digital transformation of the aluminum alloy wheel industry.
Case
Development of grain re?ners for battery aluminum foil
Battery aluminum foil is the basic material of new energy lithium batteries, and the rapid development of the new energy ?eld putsforward higher requirements on the performance of battery aluminum foil. The grain re?ner for battery aluminum foil developedby Lizhong Sitong is an important additive material for the production of battery aluminum foil. It plays a decisive role in thequality of battery aluminum foil products and can signi?cantly improve the comprehensive performance of battery aluminum foil.This product meets the quality demand of grain re?ners for high-performance battery aluminum foil. Furthermore, it enhances thecompetitiveness of our products and boosts the new energy ?eld.
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Low interstitial impurity and high homogenization control technology foraerospace-grade intermediate alloyTo meet the stringent quality requirements of aerospace-grade titanium alloys, Lizhong Sitong Light Alloys Group Co., Ltd. has achievedthe control of low interstitial impurities in intermediate alloys for aerospace-grade titanium alloys by combining the principles of self-propagation and electromagnetic induction melting. Featuring ?ne organization and high homogeneity of composition, the intermediatealloys produced based on this technology have been applied to the aerospace-grade titanium alloy materials.
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Microstructure control technology of aluminum-scandium rare earth intermediate alloyfor aerospace-grade aluminum alloy materials
By optimizing and adjusting the processes of charging, alloying and casting, Lizhong Sitong Light Alloys Group Co., Ltd. hasmastered the microstructure control technology of aluminum-scandium rare earth intermediate alloy for aerospace-gradealuminum alloy materials. Featuring low impurity and high homogeneity, the products produced based on this technology havebeen applied to the aerospace-grade aluminum alloy materials.
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The Group signed a contract with Tsinghua University
2023 Environmental, Social and Governance (ESG) Report
Lizhong Sitong Light Alloys Group Co., Ltd.
Sustainable Supply Chain Management
Lizhong Group is committed to building a green and low-carbon supply chain. On the basis of meeting customers' requirementsfor and audits of product carbon footprints, the Group is also promoting the sustainable construction of its own supply chain. TheGroup prioritizes raw and low carbon materials during purchasing and utilization, and incorporates management factors such asenvironmental and social management responsibilities into the supplier audit and evaluation system.Supplier management systemThe purchasing departments of all sectors of Lizhong Group are responsible for supplier management and have formulated theSupplier Management Procedures. To further standardize supplier behavior, Lizhong Group has signed the Sunshine ProcurementAgreement with suppliers, which clearly de?nes the obligations and rights of both parties to avoid any form of bene?t transfer.
Supplier due diligence
Supplier withdrawal mechanism
At the beginning of each year, Lizhong Group formulates a supplier audit plan and carries out audits according to the plan. Theprocess focuses on due diligence investigation of suppliers. We issue supplier questionnaires to investigate and audit the supplier'sbasic situation, technological R&D strength, quality management, equipment production capacity, logistics, emergency responseand so on. The investigation results will be used as one of the scoring items for comprehensive supplier evaluation and beincorporated into the annual promotion and demotion assessment.
Lizhong Group has formulated clear supplier withdrawal mechanisms, such as the Supplier Blacklist Management System, to minimize thepotential negative impact when a supplier violates national laws and regulations, breaches the contract, or supplies unquali?ed products.
Supplier withdrawal mechanism
Sustainable supply chain managementAluminium Stewardship Initiative (ASI) audit has been added to the supplier audit process of Sitong New Metal Material segmentof Lizhong Group, which evaluates the suppliers' corporate integrity, greenhouse gas emissions, air pollutants, water pollutants,wastes, water resources management, biodiversity, occupational health and safety, and supervises the performance of suppliers.Meanwhile, Sitong New Metal Material segment has formulated the Statement on the Purchasing Policy of Con?ict-free Metals tosource from environmentally and socially responsible suppliers of raw materials. This ensures that metals used in raw materialssupplied to the Group are not sourced from con?ict areas.
Lizhong Group gradually increases the proportion of renewableenergy power use by purchasing International RenewableEnergy Certificates (I-RECs) based on the power use of thefactories. In addition, we indirectly purchase green powercertificates for aluminum supplied from upstream aluminumelectrolysis plants that use thermal power, e?ectively reducingScope 2 carbon emissions in the supply chain and contributingto the achievement of emission reduction targets.
We have set up a recycled metal raw material purchase andutilization center and established a comprehensive managementsystem for the purchase, supply, use and marketing of recycledmetal. Besides, we continuously increase the use of recycledaluminum, recycled silicon and other materials. Currently, theproportion of A356 recycled aluminum added can reach up to75%, which plays a positive role in achieving energy saving andcarbon reduction.
Sustainable purchase
Use of renewable energy
Use of recycled aluminum andrecycled silicon
We gradually increase the use of low-carbon aluminum,sort the aluminum ingots from different suppliers inorder of their carbon footprint value from low to high,and reasonably set the proportion of use based on ourcarbon emission targets and customers' requirements,which greatly reduces the carbon footprint value ofwheel products.
The location of Lizhong Group's new factory gives fullconsideration to convenient logistics of the raw materialsupply chain. We preferentially choose places in thevicinity of electrolytic aluminum plants and directly extractaluminum liquids to reduce the cost of natural gas and fueloil. In 2023, 180 thousand tons of aluminum liquids weredirectly extracted, which saved 13 million m? of natural gasand 670 thousand liters of diesel fuel.
Use of green and low-carbonaluminum ingot
Green supply chain
Selection criteria for coresuppliers of Lizhong Group
Has obvious leading advantages in theproduct ?eldHas passed the qualitymanagement system certi?cationand other system certi?cations
Complies with the contract in theconduct of production and businessactivities, and has sound and e?ectivequality management/productioncapacity/?nancial management
Sources from environmentally andsocially responsible suppliers to ensurethat metals used in raw materials arenot sourced from con?ict
Has passed the necessaryproduct certi?cation
Designated by customers
When a supplier violates the laws andregulations, we will evaluate the riskof the supplier, and decide whether tosuspend or continue our cooperationaccording to the risk evaluation.
Violation of national lawsand regulations
When a supplier breaches thecontract, we will communicatewith the supplier in writing to askit to perform the contract. If thesupplier still fails to perform thecontract, the liability for breachof contract shall be investigatedaccording to the relevant terms ofthe contract.
Breach of contract
If a supplier supplies unqualifiedproducts, we will solve the disputeby returning goods and loweringprices, and carry out third-partytesting if necessary. If the supplier’sproducts have serious qualityproblems, we will ask the supplier toissue a rectification report. We willsuspend cooperation with supplierswhose recti?cation is ine?ective.
Unquali?ed product
2023 Environmental, Social and Governance (ESG) Report
Quality Control System
SDGs benchmarking
The main subsidiaries of Lizhong Group have passed the IS0 9001and IATF 16949:2016 certifications for quality management. Thequality departments of the business sectors are in charge of overallquality management affairs and have formulated managementprocedures, including the Manufacturing Process ManagementProcedure, the Product Audit Management, and the NonconformingProducts Management Procedure. We continuously improveproduct quality by enhancing process control and “zero productdefect” management. Continuous e?orts are devoted to process,product and system audits within the Group, so as to guarantee thee?ective implementation of its quality management systems fromthe three perspectives. Improvement and prevention measures aretaken to tackle problems found during the audit. The improvementmeasures are specifically taken in the design and development,process control, inspection and verification, and error preventionrespects, to prevent the recurrence of quality problems, improvethe process assurance capability, and better satisfy customers’requirements. Meanwhile, Lizhong Group implements an e?ectivequality traceability system to trace the source of product qualityissues and identify hidden troubles. The Group uses tools such asAPQP, MSA, SPC, FMEA, and PPAP to continuously optimize qualitycontrol in new product development and manufacturing processes.Lizhong Group pursues “zero defects” in project management. Tothat end, it has designated “zero defects” management personnelfor all key processes, including supervisors who are in charge of dailyspot checks and management team leaders who are responsible forroutine inspections. When ?nding hidden quality issues, the Groupwill organize the responsible departments for correction, follow-up
inspection, and improvement, include typical issues in the daily spotcheck for ensuring “zero defects”, and make “zero defects”warming cards. The Group will follow up on quality issue checkingand prevention progress, to e?ectively control and manage projectsaimed at “zero defects”.Lizhong Group has three R&D and testing centers, which can carryout more than 120 performance tests and analyses for aluminumalloy materials, aluminum alloy automobile wheels, motorcyclewheels, aluminum alloy automobile parts, aluminum-basedfunctional intermediate alloys, and other products. The testingcenters are equipped with numerous international ?rst-class testingequipment, including ZISS (EV018) scanning electron microscope,MTS hydraulic servo actuator, YXLON industrial CT, Thermo ICPEmission Spectrometer, Holland Panalvtical X-ray ?uorescence (XRF)spectrometer, ARL spectrometer, ZISS metallurgical microscope,ultra DoF laser spectroscopy microscope, X-ray diffractometer,Germany Makra biaxial fatigue tester, bending fatigue tester, radialimpact tester, and ATLAS lamp aging tester. The comprehensivetesting capability can meet the test requirements of domestic andforeign mainstream customers.Lizhong Group insists on responsible sales and marketing and is freefrom exaggerated marketing.
Lizhong Group has successfully established a comprehensive and rigorous productquality control system and customer service management system. Presently, it hasestablished strategic partnerships with numerous renowned enterprises at homeand abroad. With high-quality service and excellent products, Lizhong Group hasgarnered widespread acclaim and high recognition in the industry.
Focusing on CustomerNeeds and PursuingCustomer Satisfaction
Lizhong Group has not experienced any product recalls.
As of December 31, 2023
DOT (US), TIP general certi?cation for labs (US), VIA labcerti?cation (Japan), KBA (Germany), INMETRO (Brazil),SNI (Brazil), ARAI (India) and TR CU (EAC) certi?cation
Technical quality certi?cations oninternational markets
ISO 14001 Certi?cation — Environmental ManagementSystemsIATF 16949 Automotive QMS Certi?cationTISAX international standardsISO 45001 Certi?cation — Occupational Healthand Safety Management SystemsISO 50001 Certi?cation — Energy Management SystemISO/IEC 17025 — Testing and Calibration Laboratories
Certi?cations passed by majorcompanies of Lizhong Group
Focusing on Customer Needs and Pursuing Customer Satisfaction
Chapter 3
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Customer Service ManagementUpholding the customer service philosophy "focused, dedicated and expert", LizhongGroup keeps improving customer services before, during and after sales. The Group hasestablished effective customer service systems and customer relationship managementprocedures such as the Service Control Procedure, to specify the responsibilities of itsdepartments, meet customers' needs, and build up its ability to serve customers.
Lizhong Group's customersatisfaction rate was
As of the end of the reporting period,
Lizhong Group carries out a customersatisfaction survey every year throughthe distribution of Customer SatisfactionQuestionnaires, customer visits by salespersons, or on-site customer informationrecording. In such a manner, theGroup manages to timely understandcustomers' needs and problems andinstruct its relevant departments tomake rectification based on the needsand problems, ensuring that its productquality always meets customers' needs.
%
Response mechanisms to customer complaints
Lizhong Group has formulated customer complaints management procedures such as the Customer Quality Complaint Management Proceduresand the Customer Complaint Handling SOP. We set up an after-sales service department, which is responsible for managing customer complaints.Taking Baoding as the command center, our domestic customer service covers North China, Central China, East China, and South China. Takingthe Group as the command center, our overseas customer service covers North America, Asia, and Europe, and is conducted by the overseasfactories with assistance from the agency teams. This enables all quality issues to be dealt with quickly, which is highly recognized by customers. Inthis way, customer complaints are resolved e?ciently and the quality of service is improved continuously.To address problems customers encounter after sales, the Group has taken a string of measures, such as setting up a special team, compiling 8Danalysis reports to ?nd the root causes of the problems, taking targeted recti?cation measures, monitoring the e?ectiveness of those measures,and building a database of lessons learned for identifying potential quality problems in products in the same categories. In this way, the Groupmanages to prevent similar problems from happening again, thus ensuring continuous quality improvement.For after-sales issues, the Group promises to give a quick response within 24 hours for emergency containment. We will complete issue analysisand formulate e?ective improvement measures within 3-7 working days, and submit a report according to the time required by the customer.The after-sales service department establishes customer complaint accounts, shares information within the Group, and pays return visits tocustomers by telephone, WeChat, e-mail and ?eld visits to ensure that the issues are solved. A dedicated person is arranged to monitor the qualityperformance indicators on our customers’ website to rapidly respond to any abnormality that is found and ensure continuous improvement.
Recognition by main customers
As of December 31, 2023, Lizhong Group had secured strategic partnerships with nearly one hundred well-known companiesat home and abroad and won their recognition with its high-quality products and services. Our honors include a Q1 certi?categranted by Ford, outstanding-quality supplier of FCA in North America, excellent-quality supplier of GM, global outstanding qualitysupplier of FCA, global excellent quality award of Chrysler, global outstanding supplier of Hyundai-Kia, outstanding supplier ofDongfeng Nissan, outstanding supplier of Changan Mazda, special contribution award for SAIC supply chain guarantee, qualityexcellence partner of NIO, overseas aftermarket 2T excellent supplier, outstanding supplier of the Chinese aluminum processingsector and Northeast Light Alloy Co., Ltd., and long-term partnership with NIO NEXTEV LIMITED. As of December 31, 2023, LizhongGroup has obtained new awards such as Silver Award of Dongfeng Honda Engine NHC Presentation Conference, Quality SupplierAward of Mysteel, Excellent Supplier Award of Exquisite Automotive, 2023 Top 10 Excellent Supplier of www.cnal.com, ExcellentQuality Award of Yongjie Supplier Conference, Pioneer Award of Green Manufacturing of ZTT, Production Guarantee Award ofShaanxi Fast Automobile, Excellent Supplier Award of Suzhou Xiaodong Metal, and Strategic Partner of Great Future Group.
Passenger vehicles
Commercial vehiclesRail transportation, aerospace,marinePower electronics, food &pharmaceutical packaging, high-end manufacturing
2023 Environmental, Social and Governance (ESG) Report
Environmental ManagementEnvironmental management systemIn the practice of environmental management, Lizhong Group adheres to the policy of "complying with laws and regulations,meeting emission standards, energy conservation and consumption reduction, pollution prevention, continuous improvement, andenvironmental friendliness". Through continuous self-examination and evaluation, the Group optimizes the environmental managementprocess and upgrades the environmental protection standards to ensure the e?ectiveness of environmental management measures andthe continuous improvement of environmental performance.To raise the importance of environmental management, a Safety and Environmental Protection Committee under the directmanagement of the Board of Directors has been set up. We employ professional and technical personnel, establish an effectiveorganizational structure, and conduct monthly summaries, quarterly meetings and year-round monitoring of environmentalmanagement of the subsidiaries.We implement a three-level management structure group level, company level, and department level to ensure the standardizationand e?ective implementation of environmental management. To meet international environmental management standards, all majorsubsidiaries of the Group have passed the ISO 14001 certi?cation. Based on the requirements of this standard system and the provisionsof the Environmental Management Law, the Group has formulated key environmental management systems, such as the Compilationof Safety and Environmental Management Systems and the Environmental Management Manual, to guide and standardize theenvironmental management practices of subsidiaries.In order to comply with the provisions of the Measures on Legal Disclosure of Enterprise Environmental Information promulgated by theMinistry of Ecology and Environment, a total of 16 companies of Lizhong Group completed the disclosure of enterprise environmentalinformation in the local enterprise environmental information disclosure system in accordance with the speci?c requirements of thelocal ecological environment agencies.In response to the local government's call, Lizhong Group launched a cleaner production project, set up a cleaner production auditleading group, and invited a third-party professional organization to upgrade and transform its original high-energy-consuming, high-pollution process links to build a cleaner production line. At present, a total of 10 companies including Lizhong Group have passed thecleaner production audit and acceptance by the local government.
ISO 14001 certi?cates
obtained by somesubsidiaries of Lizhong Group
Lizhong Group steadfastly implements the strategy of innovation-drivendevelopment, promoting green growth through technological innovation. Inresponse to global climate challenges, we proactively adjust energy strategiesin alignment with domestic and international policies. We strive to minimize theenvironmental footprint of our production and operations, enhance resourceefficiency, and implement robust energy-saving measures. We are dedicated tofostering harmonious coexistence with the natural environment.
Compliance OperationGreen and SustainableDevelopment
SDGs benchmarking
Compliance Operation Green and Sustainable DevelopmentChapter 4
2023 Environmental, Social and Governance (ESG) Report
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Environmental risk managementLizhong Group has formulated a comprehensive environmental management strategy, which is coordinated by the Safety andEnvironmental Protection Management Committee. The strategy requires the Group's four main business segments, namely LizhongWheel, Lizhong Alloy, Sitong New Metal Material, and Lizhong New Energy, to adopt independent control measures based on theirbusiness characteristics. Evaluations by third-party organizations and cross-department checks are also carried out. Through thesemeasures, each segment can e?ectively identify and manage environmental risks and complete the Environmental Risk AssessmentReport and the Environmental Risk Accident Plan in compliance with national regulations. In this way, environmental hazards can berecti?ed and managed in a timely manner.We require our subsidiaries to conduct various emergency drills to avoid environmental management risks, including emergencydrills for handling equipment failures and emergency drills for pollution spills. This can improve the emergency response capabilitiesof employees, reduce the potential damage caused by environmental emergencies, and prevent and effectively control adverseenvironmental factors.Lizhong Group has formulated the Environmental Management Assessment Standards, which e?ectively regulate the daily behaviorof employees, and established a normalized environmental management mechanism to promote the integration of environmentalmanagement into production and operation, so as to realize the continuous optimization of environmental management.
Waste gas
Wastewater
Solidwaste
Waste ManagementManagement of three wastesLizhong Group's Safety and Environmental Protection Management Committee is responsible for coordinating and supervising themanagement of waste gas, wastewater, and solid and hazardous waste by Lizhong Group's subsidiaries.
Lizhong Group strictly adheres to the Law of the People's Republic of China on the Prevention and Control ofAtmospheric Pollution and other relevant laws and regulations, and sets its annual target for the reduction ofwaste gas emissions in accordance with the Compilation of Safety and Environmental Management Systems.As of December 31, 2023, Lizhong Group's subsidiaries have continuously equipped environmental protectionfacilities in each production plant and production line. The particulate matter is treated by a bag filter anddischarged through a 15m high exhaust pipe. The organic waste gas is treated by "adsorption and concentrationby zeolite molecular sieve rotor + RTO" and discharged through a 15m high exhaust pipe. Besides, an onlinemonitoring system is provided. The emissions of waste gases meet the relevant national and local standardsand requirements.The subsidiaries of Lizhong Group have carried out relevant works in strict accordance with the wastewatermanagement requirements in the Compilation of Safety and Environmental Management Systems. Thesubsidiaries of Lizhong Group have equipped each production plant with supporting facilities for thecomprehensive treatment of polluted industrial wastewater and installed an online monitoring system forpolluted industrial wastewater at the main discharge port of the effluent treatment plant to monitor thetreatment of polluted industrial wastewater in real time. After the comprehensive wastewater is treated bythe urban wastewater treatment plant, the water quality can meet the relevant national and local standardsand requirements.In accordance with the Law of the People's Republic of China on the Prevention and Control ofEnvironmental Pollution by Solid Waste, the Standard for Pollution on the Storage and Disposal Site forGeneral Industrial Solid Wastes and other environmental protection laws and regulations, as well as relevantnational environmental protection laws and regulations in force at the place where the project is located,Lizhong Group strictly manages the generation, transfer and storage of solid wastes and advocates thereuse of solid waste resources to e?ectively reduce the generation of solid wastes. General solid wastes aree?ectively disposed of and are not discharged.In order to treat hazardous wastes, Lizhong Group has established the Hazardous Waste ManagementRules. We conduct intelligent online supervision and management from the aspects of collection, storage,transportation, utilization and disposal in accordance with such systems. We also purchase internationaladvanced equipment, hire a professional third-party team to manage hazardous pollutants, and storehazardous wastes in accordance with the Standard for Pollution Control on Hazardous Waste Storage(GB18597-2023), ensuring that all pollutants are treated in a safe and harmless manner according torelevant national laws and regulations.As of December 31, 2023, all of Lizhong Group’s hazardous wasteswere temporarily stored in hazardous waste rooms. With a 100% disposal rate, the hazardous wastes wereregularly disposed of by quali?ed third parties.
Environmental risk analysis
Risk assessment ofenvironmental emergencyresponse capability
Analysis on the gap betweenexisting risk preventionand control and emergencyresponse measures
Analysis of environmentalemergency and its consequences
Implementation plan onimproving environmental riskprevention and control andemergency response measuresSource term analysis ofenvironmental risk accident
Six analysisaspects of theenvironmental riskassessment report
Lizhong Sitong Light Alloys Group Co., Ltd.
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Response to Climate Change
Carbon management organization structure
The Board of Directors of Lizhong Group is in overall charge of the whole situation, and the Sustainable Development Division is set upunder the Sustainable Development Committee to conduct routine carbon emission management. By formulating carbon managementnorms, processes, and systems and establishing a carbon management system, the carbon emission management level of Lizhong Grouphas been improved. Lizhong Group also makes every e?ort to deploy the path of realizing "Carbon Peak and Carbon Neutrality".
Comprehensive monthly evaluation and annual audit system forcarbon managementThe Sustainable Development Division of Lizhong Group incorporates carbon management into the Environment and SustainableDevelopment Self-Evaluation Form, which is used to evaluate the fulfillment of carbon management work of each subsidiaryevery month. Meanwhile, the Sustainable Development Division of Lizhong Group regularly issues the Monthly Analysis Report onEnvironment and Sustainable Development every month. Annual audits are conducted for each segment to continuously enhanceLizhong Group's carbon management capability.
Carrying out carbon inventoryIn 2023, the Sustainable Development Division of Lizhong Group organized an independent carbon inventory by each subsidiary inaccordance with the Carbon Inventory Management Procedure and issued the Monthly Analysis Report on the Carbon Inventory ofLizhong Group every month. This measure meets the needs of Lizhong Group's sustainable development, and the advantageousresources are integrated to enable uni?ed planning, uni?ed management, uni?ed coordination and uni?ed implementation ofLizhong Group's carbon management work.The Monthly Analysis Report on the Carbon Inventory of Lizhong Group collects the highlights of internal energy-saving and carbonreduction management. New technologies, products and equipment are introduced to reduce the carbon emission intensity ofeach subsidiary. The carbon inventory results of each subsidiary are disclosed every month to improve the ability to respond tothe carbon market.
In response to the "UAE Consensus" put forward by the 28th Conferenceof the Parties to the UN Framework Convention on Climate Change(COP28), Lizhong Group has established a comprehensive carbonmanagement organization structure and management system, to reachthe target of "keeping the increase in global average temperature to wellbelow 2°C above pre-industrial levels and pursuing e?orts to limit thetemperature increase to 1.5°C" and respond to the national policy ofgradually transforming the dual-control of energy into dual-control ofcarbon emissions. By carrying out carbon inventory, product carbonfootprint accounting and certification, and carbon quota fulfillment,building a uni?ed digital carbon management platform, and optimizingthe carbon emission reduction management scheme for the wholeindustrial chain, we e?ectively prevent and respond to climate risks andcontribute to the realization of the global sustainability goals.
The Sustainable Development Divisionmonitors the changes in the carbon emissionintensity of each subsidiary, conductsbenchmarking analysis, and requires eachsubsidiary to independently carry out energy-saving and emission reduction efforts. Theaverage carbon emission intensity of LizhongGroup in 2023 was 5.4% lower than that in 2022.Note: Carbon emission intensity refers to thecarbon dioxide emission equivalent per unitof product, that is, carbon dioxide emissionequivalent/product output.
On June 20, 2023, Baoding Lizhong WheelManufacturing Co., Ltd., Tianjin Lizhong Wheel Co., Ltd.and Xintai Wheel Manufacturing Co., Ltd. had their 2022carbon inventory accounting completed by LianheEquator Environmental Impact Assessment Co., Ltd.,which is a third-party organization. A certificate hasbeen obtained from T?V Rheinland (China) Ltd.
Unit: 10,000 tons
2023
2024
2025
2026
2027
2028
Scrap aluminumElectrolytic aluminumTotal production capacityLizhong Alloy Group replaces electrolytic aluminum with recycledaluminum, aiming to achieve carbon peak by 2028
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Training on sustainable development management capability
Establishing a uni?ed digitalized carbon management platform - CarbonStar
To quickly implement the dual-carbon managementproject of Lizhong Group, the Sustainable DevelopmentDivision arranges for the personnel involved indual-carbon management of each subsidiary toparticipate in the nationally recognized "CarbonManager" qualification training, thus enhancing thecomprehensive ability of dual-carbon management.In 2023, Lizhong Group organized and held trainingsessions on ESG management, green finance, greengovernment subsidy programs, and CBAM. Bypublicizing our concept of sustainable development,we speed up the construction of green plants and greensupply chains, promote sustainable development.Focusing on the national vision of carbon peak and carbon neutrality and valuing green and low-carbon development, LizhongGroup works with Lianhe Equator Environmental Impact Assessment Co., Ltd. to launch a digital, intelligent and visualized carbonmanagement platform based on the Internet and big data technology. This platform integrates ?ve core functions under multipledomestic and international methodologies, including organization carbon inventory, product carbon footprint, carbon emissionanalysis and statistics of the Group and the four major business segments, carbon asset management, and carbon marketcondition, to achieve accurate accounting and business empowerment.To continue to deepen the digital transformation, Lizhong Group will upgrade the CarbonStar carbon management platform tostrengthen the monitoring and optimization of energy consumption and achieve the fine management of energy and carbonemissions. Multiple languages will be supported to meet internationalization and diversi?ed business needs. Besides, we will adda CBAM management module to the platform to unify the management of companies included in CBAM. We will take advantage ofthe platform to actively respond to the European Union's requirements for CBAM.
ISO 14064 carbon inventory certi?cateDigital carbon management platform - CarbonStar
Carbon quota management process
Each year, all subsidiariesverify whether theyhave been includedin the list of emissioncontrol enterprises in thenational carbon marketor local carbon emissionpermit trading pilots.
Verify the list ofemission controlenterprises
Report the carbonquota ful?llmentprogram
Surrendercarbon quota
Formulate awork planEach subsidiary prepares theCarbon Quota Ful?llment andTrading Program and submitsit to the person in charge ofthe related segment, whothen submits the program tothe Sustainable DevelopmentDivision.
The SustainableDevelopment Divisionformulates the carbon quotaful?llment and tradingstrategies and supervisescarbon quota ful?llment andtrading by each subsidiary.
Each subsidiary analyzesthe current status of carbonemission managementand formulates the AnnualCarbon Reduction WorkPlan based on the carbonquota ful?llment situationof the current year.
Product carbon footprint calculation and certi?cation
Carbon quota ful?llment
As of December 31, 2023, Lizhong Group has selected a total of 42 models of typical products and entrusted Lianhe EquatorEnvironmental Impact Assessment Co., Ltd., a third-party organization, to conduct product carbon footprint calculation. We haveobtained certi?cation from T?V Rheinland (China) Ltd., which provides a basis for improvement and de?nes the improvementdirection and target for our carbon reduction work.In 2023, the Sustainable Development Division of Lizhong Group compiled and issued the Lizhong Group Carbon QuotaManagement Procedure, achieving the uni?ed management of carbon quota work. While meeting the requirements of the nationaland local environmental protection departments, we increase economic bene?ts through carbon asset trading and continue toreduce the carbon emission intensity of each subsidiary.In 2023, Tianjin Lizhong Wheel Co., Ltd., as a pilot enterprise for carbon emissions permit trading in Tianjin and anenterprise included in the quota management, completed the accounting of carbon emissions for 2022 and the approvaland issuance of quotas. It also ful?lled its obligations in accordance with the regulations.
In the procurement of raw materials,the carbon footprint of suppliers'products is included in the scopeof investigation. We incorporate thecarbon footprint requirements intothe procurement contracts and asksuppliers to provide a carbon footprintcertificate and implement carbonreduction measures to jointly build agreen supply chain.We have formulated the EquipmentProcurement Procedure, whichrequires an internal expert evaluation inthe process of purchasing equipment,and makes energy saving and carbonreduction an important indicator in thetechnical agreement of equipment.
Implementation path and scheme for carbon reduction in the whole industrial chainLizhong Group has optimized the carbon reduction implementation scheme for the whole industrial chain. We take measures fromproduct design, supply chain, production, packaging, transportation and recycling to reduce carbon emissions in the whole lifecycle of products.
Lizhong Group prioritizes the planning ofrecycled aluminum application productionlines based on a 75% ratio, 35% of whichare in-plant scraps (processing residualsand back-station scrapped wheels) and40% are outsourced A356 aluminum alloyscrapped wheel recycling materials. Thecarbon footprint of the product can bereduced by about 55% compared to thatwhen 100% thermal aluminum is used asthe raw material.Lizhong Group actively develops lightweightaluminum alloy wheel technology to meetthe requirements of high-end passenger carsfor lightweight and high-strength aluminumalloy wheels and to achieve the goal ofenergy saving and carbon reduction.
We actively explore a new mode of energyconservation and emission reductionand increase the use of clean energyby constructing photovoltaic powergeneration. Through the transformation ofhigh energy-consuming equipment andother measures, we optimize the e?ciencyof energy use, improve the proportionof waste heat utilization, and realize thecontinuous saving of energy.The Group makes an overall plan ofdistributed photovoltaic projects totaling
29.29 MW, of which 22.99 MW will be
connected to the grid in 2024-2025. Theaverage annual power generation capacityis about 26.35 million kWh. We prioritize theuse of green power in the plant to reduceemissions from the production process.
Emission reduction for transportationEmission reduction
for packaging
Lizhong Group reduces carbonemissions throughout theproduct life cycle by increasingthe use of recycled materials.
Emission reduction
for recyclingLizhong Group preferentially purchases raw materials as close aspossible to its factories. At the time of factory location selection,Lizhong Group considers building factories in a place whereupstream and downstream industries are clustered to shorten thetransportation distance.Lizhong Group adopts the "door-to-door" sales model for thealuminum liquids produced from recycled aluminum, which canshorten the transportation distance of the products and reduce oneremelting process in the whole life cycle of the products. For everyton of aluminum liquid produced, about 75 m
of natural gas can besaved. At present, Lizhong Group has a sales volume of 477 thousandtons for recycled aluminum liquid. The total carbon emission of thewhole product life cycle has been reduced by 76 thousand tons.We actively negotiate with customers to adopt water transportationwith lower carbon emissions and avoid using air transportation asmuch as possible.
Lizhong Group continues topromote the use of recyclablepackaging materials. Wereduce the use of disposablepackaging materials andadopt recyclable ones toreduce carbon emissions.
Emission reduction for
the supply chainEmission reduction for
product design
Emission reductionfor production
The Group participated in the BMW Group China Sustainability Summit
2023 Environmental, Social and Governance (ESG) Report
Employees' Rights and Bene?tsLizhong Group devotes itself to sustainable social development and takes the initiative to assume its corporate socialresponsibilities. Upholding a people-oriented development philosophy, the Group values talent production and development,provides multiple promotion channels for its skill-oriented and management personnel, and integrates corporate developmentand employee development, to further the healthy development of both the Group itself and its employees.Employee hiring
Lizhong Group abides by all applicable labor laws and regulations and has formulatedthe Recruitment and Allocation Management Measures and standardized the processesof corporate need release, interview, and employment in accordance with the LaborLaw of the People's Republic of China, the Labor Contract Law, and the Provisionson Prohibition of Child Labor. In accordance with the Staff Recruitment ManagementProcess, the want ads of the Group are free from gender, race and age discrimination.To further promote equal, standardized and diversified employment, the Group hasspecially formulated the Administrative Provisions on the Prohibition of Discriminationand Administrative Provisions on the Prohibition of Forced Labor. As of December 31,2023, no child labor or forced labor violations occurred in Lizhong Group.Lizhong Group has developed long-term strategic cooperation with many recruitmentcompanies, and it has been honored as the best employer of the year by Zhilian Zhaopinfor many years in a row.Under the principle of "positive cooperation, resource sharing, mutual benefit,complementary advantages and common development", Lizhong Group has establisheda long-term and close partnership with many schools. Lizhong Group provides a platformfor the practice and employment of students in the schools, while the schools provide theGroup with human resources and technical resources, thus achieving a win-win situation.Employee diversi?cation
Lizhong Group has set up subsidiaries in Hebei, Tianjin, Jilin, Inner Mongolia, Shandong, Jiangsu, Anhui, Hubei, Hunan, Chongqing,Guangdong, Hong Kong, Thailand, the Republic of Korea, the US, the UK, Mexico, Brazil, etc. Practicing a talent diversificationstrategy, the Group is sourcing all kinds of talents around the world. By "putting the appropriate personnel in the appropriatepositions to assume the appropriate responsibilities", the Group is building a fair, just and open working and developmentenvironment for employees.Democratic management and communicationLizhong Group takes active measures to establish an open, transparent and democratic communication mechanism and build ademocratic communication platform featuring diversi?cation for employees.Each subsidiary organizes two employee satisfaction surveys every year and holds regular sta? forums based on the AdministrativeProvisions on Employee Satisfaction Survey, to understand what employees think and listen to their opinions and advice. As ofDecember 31, 2023, the Group's employee satisfaction was 86.2%.Lizhong Group has a trade union and allows employees to join the union of their free will. We have created various communicationchannels, such as employee communication groups on our OA system and WeChat groups, emails, phone calls, and work, videoand telephone conferences. We organize a sta? congress every year, for which the employee representatives are elected by secretballot by all employees and have a term of o?ce of two years.
Lizhong Group is committed to sustainable development from a long-termperspective and actively fulfills its corporate social responsibilities. Guided by thepeople-oriented core value, we place great emphasis on employee training anddevelopment. We endeavor to create diverse career advancement opportunities,providing equal growth prospects for both technical and managerial talents.Moreover, we align the development vision of the Group closely with the personalcareer aspirations of our employees, so as to stimulate vitality for both theorganization and the employees.
Harmonious Workplace,Creating a Sense ofBelonging
SDGs benchmarking
Harmonious Workplace, Creating a Sense of BelongingChapter 5
5352
Seniortechnician
TechnicianHigh-leveltechnician
Senior workerEmployees with lower education degrees
but with professional expertise
Employee Development
Employee training
Employee promotion
We highly value talent training. Following the policy of "Recruit excellent talents,cultivate expert-level employees, and promote loyal and excellent managers", weprovide diversified training for employees at different levels. Specialized traininglessons are developed based on our excellent training systems and employees'skill needs for their positions. As of December 31, 2023, the Group's training systemincluded lessons on technical quality, human resources, procurement management,financial management, safety environment, and management. To make full useof internal intellectual resources, we formulate the Management Regulations forInternal Trainers and promote the selection and teaching of internal trainers. Thisnot only improves the theoretical and teaching level of the internal trainers butalso provides a way for the effective dissemination of the intellectual resourcesaccumulated by the Group. We have established an online learning platform, whichprovides abundant learning courses and allows trainees to learn on the cell phoneaccording to their interests.In 2023, we set up the "Knowledge Academy" and established a three-tier trainingsystem. Relying on the "Knowledge Academy", we will carry out a series of trainingactivities such as the "Middle-level Cadre Enhancement Class (Phase II)" in 2024 tocontinuously improve the quality of employees.In Lizhong Group, employees are promoted from lower positions to higher positions step-by-step. Professional development pathshave been set from aspects of management, technology, and skill, ensuring adequate promotion opportunities for employees.
Employee promotion channels
Employees' Compensation and Bene?ts
Remuneration and bene?ts
Employees' bene?ts
Lizhong Group abides by the applicable laws and regulations including the Labor Law of the People's Republic of China, attachesequal importance to material and non-material incentives, and strives to improve the sense of happiness and sense of belonging of theemployees. The Group has made a well-established compensation management system, providing premiums added to basic salaries, suchas post pay, merit pay, piece rate pay, skill-based pay, expatriate pay, seniority pay and year-end bonus. In addition, we implement an equityincentive policy for some employees, which can enhance their sense of "ownership" and achieve the common development of employeesand the enterprise.In 2023, we reformed and optimized the compensation system in aspects of regional coe?cients, performance appraisal, optimizationof year-end reserve and so on, to form management systems that guide the implementation of the compensation system. To motivatethe employees, we have formulated a competency level evaluation table for different positions, evaluated employees' comprehensivecompetency level every year, and adjusted employees' salaries based on their evaluation results. These measures can not only completetalent review but also play a positive role in retaining and attracting talents for the Group. Besides, we have formulated the Measures onIncentives and Rewards for Scientific and Technological Personnel, and set up awards including the Continuous Improvement Award,Monthly Advanced Worker in Quality, Safe Production Award, Rationalization Suggestion Award, Monthly Award for Meeting ManufacturingTargets, and 5S Field Evaluation Award.
The Group provides various employee benefits, including birthday benefits, holiday benefits, meal subsidies, travel andaccommodation allowances, free medical examinations and high-temperature subsidies. By making well-rounded attendanceregulations and continuously improving the office environment and accommodation, the Group strives to create a happy andharmonious working environment for employees.
The Group's General ManagementDepartment organizes professionaltraining for employees from theproduct development, mold,technology, and quality departmentsas well as the laboratory center of theGroup and subsidiaries. From January2023 to December 2023, 56 trainingsessions were conducted. A total of2,864 trainees attended the trainingsessions, with an average of 51 traineesper session. Among them, 1,125trainees completed the satisfactionsurvey, and the average satisfactionscore of the training sessions was 95.44.
GeneralManagerVice GeneralManager
Expert-level engineerExpert-level economistExpert-level accountantDepartmentSupervisor
Senior engineerSenior economistSenior accountantDeputy DepartmentSupervisor
Professor-level engineer/professor-level economist/professor-level accountantSection Chief
High-level engineer/high-leveleconomist/high-level accountantDeputy Section ChiefEngineer/economist/accountantSubsection Chief
Assistant engineer/assistanteconomist/assistant accountantExtrovert employees withmanagerial talent
Introvert employees graduating fromtechnical secondary schools or above
and with professional expertise
Attaching great importance to the protection of each employee'srights and interests and fair assessment, we have established acomprehensive performance complaint process. Employees havethe right to ?le a complaint if they disagree with the results of theirperformance appraisal. Employees can submit their complaintsin writing or through the online system. The Human ResourcesDepartment, in collaboration with relevant departments, willreview the complaint within a speci?ed period of time and providetimely feedback on the review results as well as opinions on how tohandle the complaint.The Group actively formulates remuneration and bene?ts policiesfor overseas companies. In early 2023, the Group revised theremuneration system for expatriates of Xintai Wheel and LizhongMexico. Besides, the Group initiated the reform of the remunerationand benefits system for Thai employees of Xintai Wheel withsupport from a third-party organization to continuously improvethe Group's competitiveness.Employee Care
The Group sticks to a people-centered corporate culture, advocates a work-life balance for employees, and manages employeesbased on "regulation and emotion". By carrying out a variety of recreational activities, the Group creates a corporate culturalatmosphere featuring "unity, harmony, friendship, happiness and warmth".
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Occupational Health and SafetyManagement of occupational health and safetyThe Group abides by the laws and regulations concerning occupational health and safety, including the Work Safety Law of thePeople's Republic of China, the Law of the People's Republic of China on Prevention and Control of Occupational Diseases, and theFire Control Law of the People's Republic of China. Under the guideline of "safety ?rst with an emphasis on prevention and overallcontrol", the Group has established a sound management system of occupational health and safety, and drawn up documentssuch as the Work Safety Accountability System, the Rules and Regulations on Work Safety, and the Occupational Health and SafetyManagement System. Major subsidiaries of the Group have passed certi?cations including the ISO 45001 OSHMS certi?cation andthe RBA Validated Audit by the Responsible Business Alliance.In 2023, Lizhong Group actively promoted intelligent production safety management and established management modules suchas safety training, hidden risk identification, dual-control system, and special equipment management to achieve informationsharing and multi-level supervision and enhance the Group's safety management level.
The Group has set six safety management objectives based on the safety management philosophy of "ensuring safetythrough design, management, and accountability" and the principles of "people-oriented" and "three controls andthree musts".
Measures for occupational health and safety management
Objectives of occupational health and safety management
Number of employees su?ering fromoccupational diseases or suspectedoccupational diseases
Rate of special equipmentoperators with certi?cates
%
Completion rate of safetytraining for employees
%
Identi?cation and recti?cationrate of hidden dangers
%
Number of minorincidents
Coverage ofoccupational healthexamination
%
Mexican employees in festival celebrationThai employees in festival celebration
Awards ceremony for employees
Employee consolation activities by Board of
Directors during the Spring Festival
Employee team building activity of Lizhong Group in China
Tug of war for employees
Marathon event for employees
Lizhong (Mexico) employees in birthday celebration
5756
Occupational protection and safety technology improvement
All the business sectors of Lizhong Group keep improving their production processes, technologies, and environments. They make theworkplace safer and reduce or eliminate personal injuries by replacing laborers with manipulators and minimizing equipment noise.
Fire safety managementTo reduce the risk of ?re and prevent ?re accidents, Lizhong Group increases the investment in safety by adopting dust removalequipment with higher safety performance, installing automatic ?re extinguishing devices in areas with ?re risks and establishingmicro ?re stations.
Occupational health examination and health monitoring
Lizhong Group checks its workplace for occupational hazards and evaluates workplace conditions according to the applicableregulations, insists on "pre-job, on-job and o?-job occupational health examination" for personnel facing occupational hazards,and maintains a complete occupational health monitoring ?le for employees.
Emergency plan on occupational health and safetyIn accordance with laws, regulationsand government requirements, LizhongGroup has drafted the EmergencyRescue Plan for Work Safety Accidentsand arranges emergency drills for thestaff regularly. The drills cover fire?ghting, liquid aluminum leakage, heatstroke accidents, intoxication in limitedspaces, etc. After participating in thedrills, employees have mastered the?ow and methods of emergency rescue,with their ability to deal with safetyaccidents improved.
Employee health managementTo guarantee employees' mental and physical health, all the business sectors have signed consulting service agreements withhospitals nearby, to provide regular health examinations and psychological guidance for employees. Furthermore, Lizhong Groupequips the workplace with medical boxes containing adequate ?rst-aid medicines and organizes some employees for ?rst-aidertraining. Those employees have obtained the ?rst aider certi?cate.
Safety culture constructionLaying emphasis on standardized and normative safety management, we have made improvements in setting warning signs,safety channels and equipment protection and formed a set of standardized templates that can be quickly copied. We strengthenall employees' awareness and execution of safety standardization by erecting safety visualization signboards and video displays,organizing one-day safety o?cer activities, and building excellent groups, thus ensuring production safety.
2023 Environmental, Social and Governance (ESG) Report
5958
Training on occupational health and work safetyEach segment of Lizhong Group formulates and implements occupational health and safety training and publicity plans every year,compiles training materials and test banks, and organizes safety training for personnel at all levels according to the plan. Safety assessmentsare used as one of the conditions for cadre appointment, so as to further implement the responsibility system for production safety.
Contribution to Community Development
Lizhong Group always takes social welfare activities as a corporate responsibility. The Group takes the initiative to donate toeducation, rural revitalization and community support. As of December 31, 2023, the Group had donated funds and suppliestotaling over RMB 345,900 to those causes and for ?ood disaster relief.With the aim to promote the employment of disabled people, we now have more than 200 disabled employees. We take an activepart in public welfare activities, care about disabled people, and work hard to facilitate the career development of disabled people.Due to our contribution to disabled people, we were awarded the title "Caring Enterprise of Hebei Province".
Volunteer activity: The Group hosted the 13th "Disabled Persons' Fitness Week" in Qin-gyuan District, Baoding CityEntrusted by the Disabled Persons' Federation of Qingyuan District, Baoding City, we held the 13th "Disabled Persons' FitnessWeek" in Qingyuan District on August 18. The theme of this activity is "Welcoming Asian Para Games, Striving for a New Journey".We set up competitions of table tennis, badminton, tug-of-war, and chess as well as fun competitions for this activity. Theparticipants are mainly employees with disabilities, fully embodying the concept of "equality, participation, and sharing" for thedevelopment of people with disabilities. The Fitness Week has enriched the lives of disabled employees and promoted theirphysical and mental health. In the tense but joyful atmosphere, each participant enjoyed the joy of victory and rich prizes, whichfully demonstrated the optimistic spirit of disabled employees.
Case
Public bene?t activities
In 2023, Baoding Lizhong Wheel Manufacturing Co.,Ltd. donated RMB 100,000 to support ?ood relief andfacilitate recovery and reconstruction work in thedisaster area.
Baoding Lizhong Wheel Manufacturing Co., Ltd.
In 2023, Xintai Wheel donated scholarships andeducational equipment totaling 60,000 baht to theelementary school where the company is located andsponsored 10,000 baht for the Children's Day activities.Xintai Wheel provided living materials worth 40,000baht to help local residents with difficulties. Tofacilitate local green development, Xintai Wheelparticipated in tree planting activities organized by thepark and donated 3,000 saplings.
Donation by Xintai WheelSapling donation by Xintai Wheel
Xintai Wheel Manufacturing Co., Ltd.
Focusing on the three-level education andtraining on occupational health and safety,Lizhong Group engages professionals aslecturers to educate new employees, organizespre-job assessment, and allows only thosepassing the assessment to start working.
In June of each year, its "work safetymonth", the Group carries out variouskinds of safety promotion andtraining activities, such as training onoccupational disease and heatstrokeprevention, online quizzes, andknowledge contests.
The Group reviews and standardizes safety trainingmaterials for employees at regular intervals andorganizes professionals to improve those materialsand training activities. Meanwhile, the Groupdistributes work safety information to employeesthrough the training platform, bulletin boards,multi-media facilities, and WeChat, diversifyingthe modes of training on occupational health andwork safety.
Lizhong Sitong Light Alloys Group Co., Ltd.
Lizhong Sitong Light Alloys Group Co., Ltd.
This report is the second Environmental, Social and Governance (ESG) report published by Lizhong Sitong LightAlloys Group Co., Ltd. (hereinafter referred to as the “Group”, “we”, or “us”) to stakeholders.
Availability
The report is published in simpli?ed Chinese and English. The electronic version of this report is available on ourwebsite (http://www.lizhonggroup.com/), the website of the Shenzhen Stock Exchange (www.szse.cn), and www.cninfo.com.cn.We will keep improving our report disclosure performance and better perform our CSRs. Please feel free to contactus if you have any questions or advice on this report:
Based on the ESG practices of the Group, this report was prepared step-by-step from feasibility survey, informationcollection, preparation and revision to examination by the management and the Board of Directors and publicrelease. During the feasibility approval, preparation and revision, we exchanged ideas with stakeholders on theframework and content of this report.
Preparation Process
Global Reporting Initiative (GRI) StandardsISO 26000: 2010: Guidance on Social ResponsibilitiesCASS-ESG 5.0Guidelines on Corporate Social Responsibilities of Listed Companies on the Shenzhen Stock Exchange
Preparation Basis
Data sources of this report include data published by government agencies and the original operation data, annual?nancial data, internal statistics, etc., of the Group. The ?nancial data in this report are in renminbi. In case of anyinconsistency with the ?nancial statement, the ?nancial statement shall prevail.
Data of This Report
This report is free from false records, misleading statements and material omissions, and we areresponsible for the authenticity, accuracy and completeness of its content.Reliability Assurance
The disclosure scope of this report is consistent with that of the 2023 annual ?nancial statement of the Group,and some of the information disclosed may be information on policies and practices of previous years.Report Scope and Boundaries
Appendix
About This Report
Performance Data
Lizhong Sitong Light Alloys Group Co., Ltd.Address: No. 359, Fazhan West Street, QingyuanDistrict, Baoding City, Hebei Province
Telephone: 0312-5997688Email: info@stnm.com.cn
6160
Operating incomeRMB 10,0002,137,1412, 336, 486R&D investmentRMB 10,00066,60074,492Total assetsRMB 10,0001,694,4731,872, 035Net pro?t attributable to parent company (net ofequity incentive amortization)
RMB 10,00061,44370,957
Economic performanceUnit20222023
2023 Environmental, Social and Governance (ESG) Report
Environmental performanceUnit20222023
Investment in environmental protectionRMB 10,0004,2164,518Natural gasm
166,073,472150,754,003
Gasolinel1,449,110391,548Diesell295,5824,582,782Outsourced powerkWh237,443,757376,424,903Power generation by solar projectskWh1,020,0009,395,325Total greenhouse gas emissions (scope 1 + scope 2)t CO
e661,130561,849Volatile organic compounds (VOCs)t15.417.5Sul?de emissiont36.983NOx emissiont175.2283PM emissiont55.673Wastewater dischargem
598,769.7796,247Total Chemical Oxygen Demand (COD)t24.215.649Total ammonia nitrogent1.3 1.557Total volume of hazardous wastest21,133.5 38,979Total volume of general wastes generatedt13,253.6 12,338Total water intakem
925,824.6 1,892,716Total reclaimed waterm
248,499270,399R&D investmentRMB 10,00066,60074,492.63Number of R&D personnelPerson1,8432,054Proportion of R&D investment%3.12%3.19%Number of possessed patentsPiece9921,100Total investment in work safetyRMB 10,0008,0576,516.98
Social performanceUnit20222023
6362
GRI Standards
Coverage of occupational health examination%100%100%Employees with occupational diseasesPerson00Deaths due to work-related injuriesPerson00Number of suppliersPerson1,3272,282Number of domestic suppliers/1,3042,133Number of overseas suppliers/23149Suppliers signing provisions on environmentaland labor requirements
/5651,261Result of customer satisfaction survey%99%99%Total employeesPerson10,58811,960Male employeesPerson8,4589,786Female employeesPerson2,1302,174Employees aged 51 and abovePerson549658Employees aged 30-50Person6,3137,108Employees aged below 30Person3,7264,194Employees with a master's degree or abovePerson111128Employees with a junior college orundergraduate diploma
Person3,2734,108Employees with a vocational school, high schooldiploma or below
Person7,2047,724
Total number of low-level managersPerson10,11211,455Total number of middle-level managersPerson312364Number of female employees among middle-level managers
Person6475
Total number of senior managersPerson164141Number of female employees among seniormanagers
Person2121Total number of employees trainedPerson10,58811960Total duration of employee trainingHour88,584124,478Average duration of employee trainingHour810Total hours of male employee trainingHour66,571100,002Total hours of female employee trainingHour22,01324,476Total hours of grassroots employee trainingHour73,892110,853Total hours of middle management trainingHour10,34210,576Total hours of senior management trainingHour4,3503,049Total number of separated employeesPerson1,9922,200Employee turnover rate%18.81%18.39%Number of employees volunteeringPerson134508Total amount donatedRMB 10,00030034.95
Description
Lizhong Sitong Light Alloys Group Co., Ltd. reported the information referenced in this GRIStandards from January 1, 2023 to December 31, 2023 by reference to the GRI Standards.GRI 1 usedGRI1: Foundation 2021
GRI 2: GeneralDisclosures 2021
2-1Organizational detailsAbout Lizhong2-3Reporting period, frequency and contact pointAppendix2-7Employees
Harmonious WorkplaceCreating a Sense ofBelonging2-9Governance structure and composition
E?cient GovernanceStable Operations2-12
Role of the highest governance body inoverseeing the management of impacts
E?cient GovernanceStable Operations2-14
Role of the highest governance body insustainability reporting
E?cient GovernanceStable Operations2-22Statement on sustainable development strategy
Lizhong Group'sSustainability Management2-29Approach to stakeholder engagement
Lizhong Group'sSustainability ManagementGRI 3: Material Topics 2021
3-1Process to determine material topics
Lizhong Group'sSustainability Management3-2List of material topics
Lizhong Group'sSustainability Management3-3Management of material topics
Lizhong Group'sSustainability ManagementGRI 201: EconomicPerformance 2016
201-1Direct economic value generated and distributedAbout Lizhong GroupGRI 205: Anti-corruption 2016
205-2
Communication and training about anti-corruption policies and procedures
E?cient GovernanceStable Operations
GRI 301: Energy2016
302-1Energy consumption within the organization
Prioritizing Digital Intelligencefor Lean and Low-carbonDevelopment
GRI 303: Water andE?uents 2018
303-1Interactions with water as a shared resource
Prioritizing Digital Intelligencefor Lean and Low-carbonDevelopment303-2Management of water discharge-related impacts
Prioritizing Digital Intelligencefor Lean and Low-carbonDevelopment
303-3Water withdrawal
Prioritizing Digital Intelligencefor Lean and Low-carbonDevelopment
Social performanceUnit20222023
GRI standardItems disclosedChapter
6564
Feedback Form
GRI 306: Waste 2020
306-1
Waste generation and signi?cantwaste-related impacts
Compliance OperationGreen and SustainableDevelopment306-2
Management of signi?cantwaste-related impacts
Compliance OperationGreen and SustainableDevelopment306-3Waste generated
Compliance OperationGreen and SustainableDevelopmentGRI 308: SupplierEnvironmentalAssessment 2016
308-1
New suppliers that were screened usingenvironmental criteria
Focusing on CustomerNeeds Pursuing CustomerSatisfactionGRI 401:
Employment 2016
401-1New employee hires and employee turnoverPerformance Data
401-2
Bene?ts provided to full-time employeesthat are not provided to temporary orpart-time employees
Harmonious WorkplaceCreating a Sense ofBelonging
GRI 403:
OccupationalHealth and Safety2018
403-1
Occupational health and safetymanagement system
Harmonious WorkplaceCreating a Sense ofBelonging403-3Occupational health services
Harmonious WorkplaceCreating a Sense ofBelonging403-4
Worker participation, consultation, andcommunication on occupational healthand safety
Harmonious WorkplaceCreating a Sense ofBelonging403-5
Worker training on occupationalhealth and safety
Harmonious WorkplaceCreating a Sense ofBelonging403-6Promotion of worker health
Harmonious WorkplaceCreating a Sense ofBelonging403-7
Prevention and mitigation of occupationalhealth and safety impacts directly linked bybusiness relationships
Harmonious WorkplaceCreating a Sense ofBelonging403-10Work-related ill health
Harmonious WorkplaceCreating a Sense ofBelongingGRI 404: Trainingand Education 2016
404-1Average hours of training per year per employeePerformance Data404-2
Programs for upgrading employee skills andtransition assistance programs
Harmonious WorkplaceCreating a Sense ofBelongingGRI 405: Diversityand EqualOpportunity 2016
405-1Diversity of governance bodies and employees
Harmonious WorkplaceCreating a Sense ofBelongingGRI 414:
Supplier SocialAssessment 2016
414-1
New suppliers that were screenedusing social criteria
Harmonious WorkplaceCreating a Sense ofBelonging
This report is the second Environmental, Social and Governance (ESG) report publishedby Lizhong Group to the public. To continuously strengthen our ESG management andimprove our ability and performance of ful?lling ESG responsibilities, we are looking for-ward to your opinions and suggestions.Please answer the relevant questions in the feedback form and return it to us in one of thefollowing ways.
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GRI standardItems disclosedChapter
Advanced production processesand technologies havebeen used toachieve the recycling of renewableresources, to continuously pursuethe goal of green development,andto contribute to achieving carbonpeaking and carbonneutralization