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洽兴集团2024年可持续发展报告

3

Report Preparation Instructions

This report is the 4thsustainability reportissued by Qiaxing Group, aiming to disclose to all stakeholders the company's philosophy on sustainable development issues, the management methods established, the work implemented, and the results achieved in its operations.

Report Scope

Organizational Scope:This report covers Qiaxing Group and its main subsidiaries. Unless otherwise specified, it is consistent with the scope of the consolidated financial statements of Qiaxing Group for the same period.

Company Abbreviation

Full Company Name

Company, We

Qiaxing Group

Qiaxing Packaging(Kunshan),Kunshan Factory

Qiaxing Packaging Industrial (China) Co., Ltd.

Qiaxing Packaging(Cixi),Cixi Factory

Qiaxing Packaging Industrial (China) Co., Ltd. Cixi Branch

Qiaxing Packaging(Taizhou)

Qiaxing Packaging Industry (Taizhou) Co., Ltd.

Copolymer Biochemical

Copolymer Biochemical Technology (Kunshan) Co., Ltd

Chia Hsing Plastics (Taiwan),Taiwan Factory

Chia Hsing Plastics Co., Ltd.

Chia Hsing Co. (Mexico),Mexico Factory

SHYAHSIN PACKAGING MEXICO SA DE CV

Time Period:The period covered by this report is from January 1, 2024, to December 31, 2024. Unless otherwise specified, the data in this report are from this period.

Basis of Preparation

This reportis prepared with reference to theGlobal Sustainability Standards Board (GSSB) issued Sustainability ReportingStandards (GRI Standards) (2021),International Sustainability Standards Board (ISSB) "International Financial Reporting Sustainability Disclosure Standard No. 1: General Requirements for Disclosure of Sustainability-related Financial Information" (IFRS S1),United Nations Sustainable Development Goals (UN SDGs), and the stakeholder requirements of Qiaxing Group.

Data Description

The data in this report comes from government public data, internal statistical reports of Qiaxing Group, administrative documents and reports, third-party evaluation interviews, and third-party research reports.

All financial data in the report are denominated in RMB (yuan) or USD (thousand USD). The relatedfinancial data have been audited and contain no false records, misleading statements, or material omissions.

Principles of Report Preparation

Materiality

The company identifies key issues related to operations that are of concern to various stakeholders, which are the focus of this report. While reporting on these key issues, this report also considers the characteristics of the industry and business operations in which the company operates. The process and results of the materiality analysis are detailed in the "Materiality Assessment" section of this report.

Accuracy

This report strives to ensure the accuracy of information as much as possible. For quantitative information, the data scope, calculation basis, and assumptions have been explained to ensure that the margin of error in calculations does not mislead information users. Quantitative information and notes are detailed in the "ESG Data Tables and Notes" section of this report.

Balance

The content of this report reflects objective and truthful facts, providing unbiased disclosure of both positive and negative information related to the company. No negative events that should have been disclosed but were not have been found during the reporting period.

Clarity

This report is published in Simplified Chinese and English versions, and in case of any discrepancies between the two languages, the Chinese version shall prevail.

This report includes tables, model diagrams, and other information as supplements to the textual content, facilitating stakeholders' better understanding of the text. To help stakeholders access information more quickly, the report provides a table of contents and an index aligned with ESG standards.

Quantifiability

This report discloses key quantitative disclosure items and discloses historical data as much as possible.

Comparability

This report maintains consistency in the statistics and disclosure methods of the same quantitative disclosure items across different reporting periods; if there are changes in data collection, measurement, and calculation methods, relevant data will beretrospectively adjusted, and the adjustments and reasons will be explained in the report notes to enable stakeholders to conduct meaningful analysis and assess the development trend of the company's ESG data level.

Integrity

The scope of disclosure in this report is consistent with the scope of the company's consolidated financial statements.

Timeliness

This report is an annual report. The company strives to publish the report as soon as possible after the end of the reporting year to provide timely information for stakeholders' decision-making.

Verifiability

The cases and data in this report come from the company's actual operational original records or financial reports. The sources and calculation processes of the disclosed data are traceable and can be used to support external verification and inspection.

External Verification

The data and textual information in this report have been verified by an external third-party organization, which has issued a verification report (see appendix for details). The report was approved by the board of directors on X month XX day, 2025.

Report Access

This report is published in electronic form and can be accessed on the company’s official website (http://shpgroup.com/). If you have any questions or suggestions regarding the report, please send an email to xucui@shyahsin.com.

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CEO Message

[GRI 2: General Disclosures]

CEO Guan Ye

Dear stakeholders:

Hello everyone!

Welcome to the 2024 Sustainability Report of Qiaxing Group.

We are living in a time of profound transformation. Capital markets, leading customers, and increasingly stringent global regulations are reshaping the value standards of the beauty packaging industry with unprecedentedforce. This is not only a challenge but also a strategic opportunity for Qiaxing to identify business opportunities and build differentiated competitiveness. We firmly believe that sustainable developmentis nota passive compliance cost but an active value creation process.

Asan active promoter of industry sustainability, Qiaxing continues to deepen its global layout, steadily increasing strategic investment in its factories in Mexico and Portugal. We support the global implementation of sustainable concepts with two core capabilities: first, “green product innovation” rooted in materials and mold technology, and second, “sustainable operational capability” across global factories. Through this “dual-drive” model, we are effectively turning our green commitments into trusted solutions for our customers.

Looking back at 2024,Qiaxing Grouphas achievedpositiveresults across multiple dimensions: from the Kunshan headquarters being the first to pass the living wage certification at the beginning of the year, to the mid-year carbon reduction target approved by SBTi, and then at the end of the year, both the Kunshan and Mexico factories were awardedEcoVadisGold Medals,as well as recentlyKunshanreceiving double “A” ratings in the 2024 CDP Climate Change and Water Security questionnaires.These achievementsstrongly demonstrate that oursustainable development strategyissteadily advancing.

Sustainability,Harmony,Promotion—the concept of sustainable development has deeply integrated into the underlying logic of Qiaxing’sgrowth.We look forward to working hand in hand with all partners across the value chain, upholding the innovative confidence to be pioneers, jointly turning challenges into opportunities, andachievinga harmonious coexistence of business value and social valuein the tide of the times!

Co-building the entire chain,implementing greenoperations

Qiaxing Groupcontinues to advance the upgrade of its environmental management system, using the construction of “green factories” as a key focus to systematically promote green transformation.Wereplicate and promote the successful experiences accumulated in China globally, introducing advanced processes such as high solid content in the Mexico and Portugal factories, effectively reducing the environmental impact ofsprayingand electroplating stages. To achieve green development goals, the group invested 1,495 thousand USD in environmental protection and 230 thousand USD in energy-saving projects in 2024. At the same time,weset higher requirements for the supply chain, empoweringsupplierswith experttrainingto support low-carbon development and promote collaborative transformation upstream and downstream.

Technology-driven,embedding green genes

Qiaxing Group is guided by sustainable design, promoting single-material components and replaceable parts to enhance product recyclability.We actively promote PCR and bio-based materials as alternatives to traditional plastics,and leverage leading mold and injection molding technologies to achieve end-to-end application of innovative materials in products. At the same time,we collaborate with upstream partners in joint R&D to explore sustainable solutions at the source of plastics. In 2024,the Group added 125 new authorized patents, continuously injecting innovative momentum into high-quality development.

Humanistic care, conveying warmth and value

Qiaxing Group adheres to the “Health, Harmony, and Prosperity” philosophy, placing occupational health and safety as a top priority,and is committed to creating a fair, inclusive, and warm working environment. In safeguarding employees’ core rights, the Kunshan headquarters passed third-party certification for living wages in 2024. We advocate gender equality through special interviews, conduct sign language training to promote barrier-free communication with hearing-impaired colleagues, and regularly carry out satisfaction surveys on dormitories and canteens,putting care into practice. We use “Unity and Harmony” as a bond to unite team strength and jointly build the Qiaxing family.

Excellence in Governance, Building a Lasting Legacy

Outstanding corporate governance is the solid foundation for Qiaxing Group to achieve sustainable development. We continuously optimize management systems, strengthen internal supervision, and improve risk prevention and control mechanisms. As a global enterprise, we place great importance on the standardized construction and steady development of overseas factories, actively responding to the complex and ever-changing international trade environment, and guarding against potential tariff and policy risks. In 2024, all employees of the Group completed business ethics training, demonstrating the shared commitment of Qiaxing people to integrity in business and responsibility.

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About Qiaxing Group

【GRI 2: General Disclosures】

Company Profile

SHP Group is a globally leading cosmetics packaging company with over 50 years of experience in the design and production of packaging containers for makeup and skincare products. The company has consistently collaborated with numerous internationally renowned cosmetics brands and independent brands, providing clients with integrated services from development and design to after-sales support. Committed to sustainable development, the company continuously explores environmentally friendly production methods to reduce its environmental footprint, while establishing a green packaging brand. It is dedicated to promoting environmental awareness throughout the entire supply chain and offering customers sustainable innovative packaging solutions, earning recognition and support from major global brands.

SHP Group Main Product Display

SHP Group Development History

1970

1991

2005

2011

2017

2021

2022

2023

2024

2025

Establishment of Taiwan Factory

Establishment of Kunshan Factory

Establishment of Kunshan Copolymer Biochemical

Establishment of Qiaxing Packaging

Blackstone Group Acquisition

MexicoPhase OneFactory Completion

Completion of Zhejiang Cixi Factory

MexicoPhase Two Factory

Qiaxing Group Brand Restructuring

Mexico Phase TwoFactoryProject Commissioning

Portugal Factory Planned for Production

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Business Strategic Layout

To meet global market demand, Qiaxing Group continuously advances its international business layout, establishing production bases, warehouses, sales offices, and R&D design centers in multiple countries and regions including China, Europe, the US East Coast and West Coast, and Mexico, to better serve customers worldwide. Currently, the company has four production bases located in Kunshan, Cixi, and Taizhou in China, as well as Mexico City, Mexico. All company production bases apply cutting-edge technology and are equipped with advanced equipment to meet product innovation needs and ensure excellent product quality.

The successful commissioning of Qiaxing Co., Ltd.'s (Mexico) factory in 2022 marked an important milestone in the company's expansion of its global footprint. Following this, the company further accelerated its global production pace, completing the Phase II project of the Mexico factory in 2024. The European Portugal factory project is expected to be commissioned in July 2025, laying a solid foundation for the future expansion of Qiaxing Group's global manufacturing map.

Qiaxing Group Business Layout

Sales Offices

Production Factories

Internationalization Footprint Plan

USA Los Angeles,Hoboken

China Kunshan (Headquarters, Co-polymer Biochemical), Cixi, Taizhou

Step OneMexicoPhase OneFactory Completed 2022

Europe Paris

Mexico Mexico City

Step 2 MexicoPhase 2Factory Completed 2024

China Kunshan, Shanghai,Taizhong

Step Three Portugal Factory Planned Production 2025

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Corporate Culture

Corporate Values

Qiaxing Group adheres to its commitment to quality and innovation, dedicated to building a trustworthy and respected brand. To better convey and promote the corporate culture, the company continuously cultivates and establishesQiaxing Group's core values, incorporating them into the annual performance evaluations of employees, so that every employee can be customer-centered, results-oriented, enhance team collaboration, uphold truth-seeking and pragmatism, continuously improve and innovate, jointly driving the company's long-term development.

Qiaxing Group Core Values

Customer First

Externally customer-centered, internally production site-centered

Team Collaboration

Open and inclusive, learning from each other's strengths, humbly accepting opinions, courageously taking responsibility, working together with collective wisdom

Seeking truth from facts

Honest and upright, adhering to principles, being pragmatic

Result-oriented

Keep promises and accomplish the mission

Continuous improvement, constant innovation

Today's best performance is tomorrow's minimum requirement, bravely challenging newthingsand not fearing change

Capacity Building

With the vision of "building a globalized enterprise led by Chinese people," the company continuously advances capacity building in five areas: global manufacturing capability, global business expansion capability, new project execution capability, innovation leadership capability, and strong organizational capability, in order to meet the growing demands of globalized business.

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Honors and Recognition

Qiaxing Group continues to advance sustainable product innovation, actively promoting the green transformation and upgrading of the packaging industry,injecting strong momentum into the high-quality development of the regions where it operates, writinga brilliant chapter of green development and responsible commitment. In 2024, the company received multiple recognitions both domestically and internationally for its outstanding contributions in environmental and social practices.

Honors and Recognitions Received by Qiaxing Group in 2024

Awards

Award Recipients

Awarding Organization

Medal/Certificate/Announcement

EcoVadisRating Gold Medal

Qiaxing Packaging(Kunshan)

EcoVadis

EcoVadisGold Rating

Qiaxing Co., Ltd. (Mexico)

EcoVadis

CDP Climate Change QuestionnaireA

CDP Water Questionnaire A

Qiaxing Packaging (Kunshan)

CDP Global Environmental Information Research Center

Second Batch of Provincial Star-Level Cloud-Enabled Enterprises

Qiaxing Packaging (Kunshan)

Jiangsu Provincial Department of Informatization

Suzhou 3A Green Factory

Co-polymer Biochemical

Suzhou Municipal Bureau of Industry and Information Technology

Suzhou Industrial Design Center

Qiaxing Packaging (Kunshan)

Suzhou Municipal Bureau of Industry and Information Technology

The Fourth Batch of Leading Enterprises in the Intellectual Property Strengthening Project in Suzhou

Qiaxing Packaging (Kunshan)

Suzhou Market Supervision Administration

Regional Headquarters and Functional Institutions of Multinational Corporations

Qiaxing Packaging (Kunshan)

Suzhou Municipal Bureau of Commerce

Enterprises with Outstanding Contribution to Industrial Output

Qiaxing Packaging (Kunshan)

Kunshan Municipal Committee of the Communist Party of China

Kunshan Municipal People's Government

Enterprise with Outstanding Contribution to R&D Investment

Qiaxing Packaging (Kunshan)

Kunshan Municipal Committee of the Communist Party of China

Kunshan Municipal People's Government

Enterprise with Outstanding Contribution to Industrial Investment

Qiaxing Packaging (Kunshan)

Kunshan Municipal Committee of the Communist Party of China

Kunshan Municipal People's Government

Enterprise with Outstanding Tax Contribution

Qiaxing Packaging (Kunshan)

Kunshan Municipal Committee of the Communist Party of China

Kunshan Municipal People's Government

Outstanding Import and Export Contribution Enterprise

Qiaxing Packaging (Kunshan)

CPC Kunshan Municipal Committee

Kunshan Municipal People's Government

Green Low-Carbon Award

Qiaxing Packaging (Kunshan)

Kunshan Economic and Technological Development Zone Management Committee

Top Ten Carbon Reduction Pioneer Suppliers in North Asia

Qiaxing Packaging (Kunshan)

L'Oréal

Green Style Award

(Green Vibes Award)

Qiaxing Packaging (Kunshan)

L'Oréal

Outstanding Carbon Disclosure Partner

Qiaxing Packaging (Kunshan)

Carbon Trace

APR Certification

Qiaxing Group

The Association of Plastic Recyclers (APR)

The 28th

CBE Outstanding Supplier

Qiaxing Packaging (Kunshan)

China Beauty Expo (CBE) / Beauty Supply Chain Expo

Best Innovation Award

Qiaxing Packaging (Kunshan)

YixianGroup

Government Subsidies

Qiaxing Group has always resonated with local development, fully leveraging its own advantages to provide solid support for local development in promoting new industrialization, energy saving and carbon reduction, and job stability. In 2024, the company received a total of 8 government subsidies, amounting to3,309,862 yuan (approximately equivalent to460.44 thousand USD)[1].

Qiaxing Group's Government Subsidies Received in 2024

Serial Number

Project

Category

Amount

1

New-type industrialization: output value increment crossing stages, etc.

Tax-related

798,000 yuan

2

Green energy-saving technological transformation

Environmental Responsibility Related

700,000 yuan

3

Professional Skills Improvement

Human Capital Related

322,240Yuan

4

Effective Investment of Industrial Enterprises in Suzhou

Related to Promoting Investment

307,800Yuan

5

Provincial-level Green Factory

Environmental Responsibility Related

294,000 yuan

6

Personnel Stabilization and Job Expansion

Human Capital Related

478,500 yuan

7

EHS Related Engineering

Environmental Responsibility Related

253,322Yuan

8

Suzhou Industrial Design Center

Encouraging Innovation Related

156,000Yuan

[1]UsingDecember31, 2024, the central parity rate of RMB in the interbank foreign exchange market1USD=7.1884RMB for conversion.

Industry Communication and Recognition

Qiaxing Group has participated in major international exhibitions for many years. While showcasing its brand value, it discusses industry development trends with professionals from various fields and explores a sustainable future for the industry. In 2024, the company appeared at international exchange exhibitions such as LUXE PACK MONACO luxury packaging exhibition in Monaco, Makeup in New York brand beauty cosmetics exhibition in the United States, and COSMOPROF ASIA exhibition in Hong Kong, demonstrating the company’s active pursuit of market expansion and industry communication, showcasing outstanding corporate style.

LUXE PACK MONACO exhibition site

Makeup in NewYork exhibition

Hong Kong COSMOPROF ASIA Exhibition

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ESG Governance System

【GRI 2: General Disclosures】

2.1 ESG Value Concept

Qiaxing Group upholds the industrial values of Sustainability (green and sustainable), Harmony, and Promotion (advocacy and communication), and through value creation pathways, aligns with and integrates the United Nations Sustainable Development Goals (UN SDGs), seeking a win-win for business value and environmental and social value, leading the sustainable transformation and value creation of cosmetic packaging enterprises.

Industrial Value Connotation

Value Creation Pathways

Key Focus Issues

Responding to UN SDGs Goals

Sustainability

Environmental Sustainability, Green and Low-Carbon Development

Addressing Climate Change

Energy Management

Water Resource Management

Pollutant Emission Management

Waste Management

Green Packaging and Materials

Harmony

United in spirit, creating a beautiful home together

Human Rights and Labor Rights

Diversity and Inclusion

Employee Training and Development

Health and Safety

Social Contribution

Promotion

Excellent governance, forging an evergreen foundation

Lean operations, empowering a prosperous future

Corporate governance

Compliance and Risk Management

Business Ethics

Product Responsibility

Technological Innovation and Intellectual Property Management

Customer Service

Information Security

Supply Chain Management

Qiaxing Group firmly believes that sustainability is a key factor for business success. Looking ahead, the company will continue to focus on:

Environmental Protection

Reduce the company's environmental footprint through innovative and sustainable business practices, promoting environmental protection and resource conservation.

Social Responsibility

Focus on employee well-being, support community development, and actively participate in social welfare activities to fulfill corporate social responsibility.

Supply Chain Management

Promote transparency and ethical standards in the supply chain together with partners to ensure the sustainabilityof the entire supply chain.

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2.2 ESG Management Framework

To continuously improve ESG governance, Qiaxing Group has established a clear hierarchical and responsibility-defined ESG governance framework to ensure comprehensive and solid implementation of ESG work.

Qiaxing Group ESG Governance Structure and Responsibilities

Levels

Management Responsibilities

Board of Directors

The highest regulatory body, mainly responsible for the final decisions on the group's ESG management policies, target strategies, and action plans, providing advice and necessary support to achieve the group's ESG goals.

ESG

Committee

ESG Committee

Chairman

Led by the CEO, responsible for presiding over ESG work and convening meetings, and reporting work progress to the board of directors.

ESG Committee

Secretary

Held by the COO, responsible for coordinating communication between the committee, the board of directors, and working groups.

ESG Committee

Members

Composed of executives in charge ofE, S, Grelated work, responsible for supervising and reviewing the formulation and implementation of relevant policies, as well as the implementation of ESG measures and targets.

ESG

Working Group

Working Group

Person in Charge

Held by managers of each department, responsible for the overall planning, progress supervision, and results reporting of the ESG work corresponding to each department.

Working Group Members

Held by section chiefs of each department, responsible for the specific execution of ESG work.

The company has formulated the "Qiaxing Group ESG Committee Rules of Procedure" to support the management and implementation of the company's ESG work. The system requires the ESG Committee to hold meetings quarterly to review ESG goals and track the execution of these goals, discuss and make decisions on key issues, and adjust related strategies in a timely manner to ensure the orderly progress of the objectives.

To further enhance the enthusiasm and sustainability of senior management's ESG efforts, the company links ESG-related performance indicators to the CEO's compensation assessment, with the assessment indicators accounting for 15% of the total weight. The ESG-related performance indicators included in the CEO's performance evaluation are as follows:

Annual per capita output value

Annual output value per unit area

Annual Material Overconsumption Rate

Greenhouse gas emissions per unit of output value

Proportion of clean electricity usage

Water consumption per unit of output value

Hazardous waste generation per unit output value

ESG contract signing rate of Category One suppliers

Work injury rate per 200,000 working hours

Proportion of Employment of Vulnerable Groups

Proportion of Female Management

Proportion of Products Offering PCR Material Solutions

Proportion of Products Offering the "3R" Concept

Average Annual Training Hours per Employee

Compliance Training Coverage Rate

Volunteer Annual Service Hours

In addition, the company voluntarily discloses ESG information through the Sustainability Report and Environmental, Social, and Governance Report, and hires external expert organizations to conduct ESG capacity-building activities for relevant departments, enhancing the internal team's awareness and capabilities in ESG.

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2.3 ESG Goals and Progress

Qiaxing Group is committed to sustainable corporate development and has set ESG development goals for 2025. The company regularly reviews its current development status, plans reasonably, and follows up on goal progress in a timely manner, treating ESG as a management approach and effective tool, integrating it into internal operations management and external business output. The following shows the ESG goals set by the company and the current progress:

Qiaxing Group ESG Goals and Progress in 2024

Dimension

ESG Goals

Unit

2020

(Baseline)

Year 2021

Year 2022

Year 2023

Year 2024

Year 2025

(Target Value)

Completion Status

Reduce Operational Waste

Annual per capita output value continues to rise by 15%

Thousand USD/person

49.62

62.04

69.11

83.38

88.17

57.06

Completed

Annual unit area output value continues to rise by 10%

Thousand USD/square meter

1.02

1.52

1.89

1.95

2.31

1.12

Completed

Annual material overconsumption ratio decreased by 10%

%

0.88

0.61

0.64

0.57

0.63

0.79

Completed

Energy and Carbon Emissions

Greenhouse Gas Emissions per Unit of Output Value Decline[1]

Tons of CO2 Equivalent/Thousand USD

0.43

0.36

0.24

0.21

0.18

0.32

Completed

Proportion of Clean Power Usage[2]

%

0

0

2.18

7.15

8.38

7.00

Completed

Environmental footprint

Hazardous Waste Generation per Unit Output Decreased by 25%3]

kg/thousand USD

8.71

9.36

10.97

2.62

2.42

6.53

Completed

Water consumption per unit output value reduced by 10%

tons/thousand USD

2.15

2.10

1.83

1.44

1.38

1.94

Completed

Social Impact

Work Injury Rate per 200,000 Working Hours4]

/

/

/

0.13

0.12

0.13

0.12

In Progress

Proportion of Employment of Vulnerable Groups[5]

%

3.34

4.26

6.30

7.22

7.88

5.00

Completed

Proportion of Female Management[6]

%

40.00

26.32

26.08

33.33

36.28

39.00

In Progress

Average Annual Training Hours per Employee

Hours/Year

/

/

14.30

10.64

13.62

16.00

In Progress

Volunteer Service Hours Per Year

Hours/Year

0

5,817.00

19,989.00

10,243.00

9,713.00

10,800.00

In progress

Governance and Supply Chain

ESG Contract Signing Rate for Category A Suppliers7]

%

0

10.00

45.00

100.00

100.00

100.00

Completed

Compliance Training Coverage Rate

%

0

100.00
(Management)

100.00
(Management)

100.00
(Basic management and above)

100.00

100.00
(Management)

80
.00
(Grassroots)

Completed

Innovation and Strategic Growth

Proportion of products that can provide PCR material solutions

%

8.33

25.00

50.00

75.00

100.00

100.00

Completed

Proportion of products that can provide the "3R" concept8]

%

10.00

20.00

40.00

80.00

100.00

100.00

Completed

Note:

[1]The greenhouse gas emissions hereareScope 1 and Scope 2 greenhouse gas emission data.

[2]The proportion of clean electricity usage = (photovoltaic power generation + purchased green electricity) / (traditional power consumption + photovoltaic power generation + purchased green electricity) * 100.

[3]In 2022, hazardous waste was mainly generated by the Qiaxing Qiandeng factory. The Qiaxing Qiandeng plant was closed in 2023, so the hazardous waste generated per unit output value significantly decreased in 2023 and 2024.

[4]The target scope for the work injury accident rate per 200,000 working hours includes Qiaxing Packaging (Kunshan).

[5]The company defines vulnerable employees as disabled employees and ethnic minority employees.

[6]The company defines management as employees with a rank ≥4, and the proportion of female management = number of female management employees / number of management employees.

[7]To make the target more aligned with the company's operational reality and improve supplier management efficiency, in 2023, this indicator was changed from "Supplier ESG Contract Signing Rate" to "Category A Supplier ESG Contract Signing Rate".

[8] The "3R" concept: reduce, reuse, recycle.

Summary of ESG Certification and Rating Results

Operating Locations

Qiaxing Packaging (Kunshan)

Qiaxing Packaging (Cixi)

Copolymer Biochemical

Qiaxing Plastics (Taiwan)

Qiaxing Corporation (Mexico)

Qiaxing Packaging (Taizhou)

Environment-related Certifications

ISO 14001

ISO 50001

ISO 14064

ISCC PLUS

[1]

Product Green Footprint Evaluation Certificate

Social-related Certifications

ISO 9001

ISO 45001

ISO 22716

SA8000

CNAS Laboratory Accreditation Certificate

Governance-related Certifications

ISO 27001

ISO 22301

ISO 37001

CyberVadis

IntellectualPropertyCompliance Management System Certification

Third-Party Evaluation

EcoVadis

Gold Medal

Gold Medal

CDP Climate Questionnaire

A

CDP Water Questionnaire

A

[1] The copolymer biochemical ISCC PLUS certificate is valid until 2024.7.14.

Assessment of Topic Importance

【GRI 3: Material Topics】

3.1 Stakeholder Communication

Qiaxing Group has established a regular and diversified communication mechanism to promptly disclose relevant information such as policy updates, daily operations, development changes, and special events to all stakeholders, updating the progress of the company's ESG work.

Qiaxing Group Stakeholders and Issues Communication Table

Stakeholders

Expectations and Demands

Communication Channels

Government and Regulatory Agencies

Compliance and Risk Management

Energy Management

Water Resource Management

Waste Management

Pollutant Emission Management

Climate Change Response

Information Disclosure

Supervision and Inspection

Meetings and Communication

Investors and Board of Directors

Corporate Governance

Compliance and Risk Management

Business Ethics

Energy Management

Water Resource Management

Waste Management

Pollutant Emission Management

Responding to Climate Change

Board of Directors

On-site Research

Email Communication

Meeting Communication

Investor Conference

Clients

Product Responsibility

Customer Service

Information Security

Technological Innovation and Intellectual Property Management

Green Packaging and Materials

On-site Visit

Customer Research

Email Communication

Meeting Discussion

Customer Communication and Complaint Mechanism

Suppliers

Supply Chain Management

Compliance and Risk Management

Business Ethics

Addressing Climate Change

Presentation Session

On-siteVisit

Email Communication

Supplier Conference

Supplier Audit

Supplier Training Activities

Employees

Human Rights and Labor Rights

Health and Safety

Employee Training andDevelopment

Diversity and Inclusion

Email Communication

Meeting Communication

Employee Union

Employee Communication Mechanism

Employee Training Activities

Internal News Publications

WeChat Public Platform

Employee Satisfaction Survey

Community

Social Contribution

Waste Management

Pollutant Emission Management

Media Communication

Volunteer Activities

Community Public Welfare Activities

Resident Community Communication

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3.2 Analysis of Topic Importance

In 2024, Qiaxing Group invited experts to participate. Based on the company's activities and business relationship background, combined with standard benchmarking, policy analysis, and peer benchmarking, preliminary identification and screening of topics were conducted. The actual and potential impacts, risks, and opportunities related to the topics were analyzed. The importance of each topic was analyzed from both financial materiality and impact materiality perspectives. Finally, the company will review and approve the results of the topic importance analysis and disclose the methods, processes, and results of the topic importance analysis in the 2024 ESG report.

Qiaxing Group 2024 Dual Materiality Analysis Process for Topics

Process

Specific Content

Step One

Understand the background of company activities and business relationships

Understand the external market environment in which the company operates.

Understand the value chain links that generate impact and the main affected stakeholders.

Step Two

Establishing an Issue List

Combining standard benchmarking, policy analysis, and peer benchmarking, preliminarily identify and screen sustainability issues related to the company, and analyze the actual and potential impacts, risks, and opportunities associated with these sustainability issues.

Step Three

Assessment and Confirmation of Issue Importance

Assess the importance of issues from the perspectives of impact significance and financial materiality, and determine the priority ranking of the issues.

Step Four

Issue Report

After review and confirmation by the company management, key disclosures on issues of higher importance for the year 2024 will be made in the report.

In 2024,the company initially identified and screened 19 issues. Among them, there are 6 issues in the environmental dimension, 10 issues in the social dimension, and 3 issues in the governance dimension.After analysis, the company has 6 issues with double materiality, 5 issues with only financial materiality, 7 issues with only impact materiality, and 1 issue with neither financial nor impact materiality. The results of the company's double materiality analysis are shown in the table below:

Dimension

Serial Number

Issue Name

Whether it has dual significance

Environment

1

Addressing Climate Change

2

Waste management

3

Water Resource Management

4

Energy Management

5

Green Packaging and Materials

6

Pollutant Emission Management

Society

7

Human Rights and Labor Rights

8

Employee Training and Development

9

Health and Safety

10

Diversity and Inclusion

11

Supply Chain Management

12

Social Contribution

——

13

Customer Service

14

Product Responsibility

15

Technological Innovation and Intellectual Property Management

16

Information Security

Corporate Governance

17

Business Ethics

18

Compliance and Risk Management

19

Corporate Governance

Note 1: “” indicates financial materiality, “” indicates impact materiality. “——” indicates neither financial materiality nor impact materiality.

Qiaxing Group Issue Materiality Matrix

10

Materiality of Economic, Social, and Environmental Impacts

Waste Management

Pollutant Emission Management

Human Rights and Labor Rights

Diversity and Inclusion

Employee training and development

Compliance and Risk Management

Corporate Governance

5

Addressing Climate Change

Green Packaging and Materials

Health and Safety

Product Liability

Technological Innovation and Intellectual Property Management

Business Ethics

Social Contribution

Not important

Water resource management

Energy management

Supply chain management

Customer Service

Information Security

Importance to Company Finances

0 5 10

Legend:

The issue has dual significance

The issue has only financial significance

The issue has only impact significance

The issue has neither financial significance nor impact significance

Qiaxing Group 2024ImportantAgenda Changes Explanation

2024 Agenda

2023 Agenda

Reasons for Changes

Pollutant Emission Management

Toxic and Hazardous Substance Management

Combine topics based on the company's actual management and industry benchmarking results

Pollutant Emission Management

Social Contribution

Community Investment

Revise topic statements in accordance with domestic and international standards

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Excellent Governance, Building a Lasting Legacy

4.1 Corporate Governance

The issue has significant impact importance

Qiaxing Group regards good corporate governance as an important cornerstone for survival and development, continuously improving various management systems, strengthening internal supervision, and perfecting risk prevention mechanisms to ensure the company's sustainable and healthy development.

Based on the investors' expected targets and the group's strategic planning each year, the company formulates annual performance budget goals and breaks down these goals in detail to each department, constructing a Financial &Non Financial KPIs Dashboard (Financial & Non-Financial Key Performance Indicators Dashboard) to clearly present the specific financial indicators each department needs to achieve.

The company holds regular Steering Committee Meetings monthly and Board of Directors (BOD) Meetings quarterly to track the company's financial results, business expansion, cost reduction and efficiency improvement, innovation development, and other strategic initiatives. Combined with industry trends and changes in the market environment, other strategic initiatives are timely adjusted and optimized to ensure the company always maintains keen market insight and strong strategic execution capabilities.

In daily management, the company tracks and regularly evaluates the achievement of relevant indicators during weekly and monthly management meetings. Once a red alert is detected (i.e., deviation from the set target exceeds 5%), an in-depth analysis is immediately launched to identify the root cause of the problem, and a targeted action plan is quickly formulated to ensure all indicators progress normally and to guarantee the smooth realization of the company's overall strategic goals.

In communication and collaboration with investors, the company strictly follows established procedures, submitting key information such as financial data and headcount to investors quarterly to ensure they timely and accurately understand the company's operational status.

In addition, the company also holds meetings with the investment team from time to time based on actual business needs to jointly discuss the company's KPI Dashboard (Key Performance Indicator Dashboard) and performance forecasts. Through in-depth communication and collaboration, the company promotes continuous and steady development.

Blackstone Group Holds China Operations and Energy Summit

From May 21 to 22, 2024, Blackstone, the investor of Qiaxing Group, held the 2024 China Operations and Energy Summit, includingQiaxing Groupand some manufacturingenterprisesparticipated together to jointly explore operations and energy development strategies in China and across Asia.

The successful holding of this summit provided valuable opportunities for communication and learning for the participating companies and injected new vitality and momentum into promoting operations and energy development in the Asian region.

China Operations and Energy Summit On-site

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4.2 Compliance and Risk Management

[GRI 207: Tax]

The topic has significant impact importance

Compliance Operation

Qiaxing Group always adheres to compliance operation, continuously improving the compliance management and internal control system, strictly abiding by the "Company Law of the People's Republic of China," "Enterprise Income Tax Law of the People's Republic of China," and other relevant laws and regulations, formulating the "Qiaxing Group Conflict of Interest Management Policy" and "Qiaxing Group Travel and Hospitality Policy" and other internal systems, managing conflicts of interest properly, ensuring tax compliance, cultivating a compliance culture, and preventing compliance risks.

Qiaxing Group's Key Compliance Management Initiatives for 2024

Initiatives

Detailed Description

Conflict of Interest Management

Company RequirementsAll company employees must disclose in writing to the General Manager or Chairman any actual, potential, or perceived personal conflicts of interest.

In the 2024 fiscal year, Qiaxing Group conducted an investigation on employees involved in conflicts of interest and required them to sign a conflict of interest disclosure form, involving a total of 290 employees.

Tax Compliance

The company requires the tax team to compile and summarize the tax compliance matters and filing requirements of the group’s companies in different countries on a monthly basis, forming a checklist to ensure timely tax filing.

The company continuously monitors the group's overall tax burden rate to ensure the tax burden rate remains within a reasonable range.

Compliance Training

The company regularly conducts compliance training to continuously enhance the compliance awareness and capabilities of employees at all levels.

All new employee onboarding training includes content on business ethics and SA8000 compliance.

In November 2024, the investor Blackstone Group invited Kaiyi Law Firm to hold a training session on anti-corruption and international risk compliance for the company's management team.

In addition, as a global operating enterprise, Qiaxing Group always attaches great importance to the compliant operation of overseas factories,and duringthe construction process, places high emphasis on environmental compliance,pressure equipment (RACs) compliance,chimney compliance, waste management compliance, and hires external lawyers at theoperation sites to provide professional support for standardized corporate operations.

Qiaxing Group's Overseas Compliance Initiatives in 2024

Dimension

Content

Environmental Compliance

Conduct Environmental Impact Assessment (EIA) and environmental due diligence to identify and evaluate the environmental impacts of the project construction, including qualitative descriptions of the expected positive and negative impacts during the construction, operation, and decommissioning phases.

Specify the nature, extent, scope, and significance of the impacts, and determine project measures proposed to minimize the expected negative impacts during the construction, operation, and decommissioning phases to the greatest extent.

Pressure Equipment (RACs) Compliance

Ensure that containers used for compressed air, oxygen, or inert gases (RACs) comply with the installation and operation technical rules approved by Order No. 2957/2022.

Chimney Compliance

Chimney height calculation complies with Ministerial Order No. 190-A/2018, and the chimney structure and function meet NP 2167:2007 and EN 15259 standards,

Waste Management Compliance

Comply with relevant regulations for factory waste disposal, including classifying waste according to lists (such as the list in Annex III of Directive 2008/98/EC).

Risk Management

Qiaxing Group is committed to achieving steady development and has established a comprehensive risk management system covering the entire business chain and all process stages. It conducts real-time monitoring and in-depth analysis of key risk areas such as market fluctuations, supply chain security, compliant operations, and financial health, formulates graded and categorized response strategies, continuously enhances the agility and resilience of risk responses, and ensures stable operation and sustainable development in a complex and ever-changing market environment.

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4.3 Business Ethics

[GRI 205: Anti-corruption 2016; GRI 206: Anti-competitive Behavior 2016]

[EcoVadis: Corruption]

The issue has dual significance

Governance

Qiaxing Group attaches great importance to business ethics management. The company's board of directors and the administrative management department are directly responsible for business ethics supervision, and the legal department conducts daily supervision and inspection of the business ethics practices of the company and employees, regularly carrying out business ethics audits to ensure that the group's regulations are implemented effectively, forming a long-term mechanism for preventing integrity risks.

In terms of anti-corruption management, the company strictly complies with the Criminal Law of the People's Republic of China, the Foreign Corrupt Practices Act, and other relevant laws and regulations of the company's location and countries (regions). Benchmarking against the highest standards such as SA80002014, it has formulated and implemented internal management systems such as the Employee Handbook and the Code of Business Conduct and Ethics, requiring employees to adhere to business ethics codes of conduct and fostering a clean and upright corporate culture atmosphere.

Qiaxing Group’s 《Code of Business Conduct and Ethics》 Anti-Corruption Regulations

The company has zero tolerance for any form of bribery, kickbacks, or corruption, whether committed directly or through a third party, and regardless of whether such conduct is explicitly prohibited by this code or by law.

Company employees must not give or offer anything of value to anyone for the purpose of improperly obtaining or retaining business interests. Likewise, employees must not solicit or accept any improper payments.

The company has established a comprehensive and effective anti-bribery management system. In 2024, Qiaxing Packaging (Kunshan) and Qiaxing Packaging (Cixi) passed the ISO 370012016 Anti-Bribery Management System certification and obtained the certificate.

In terms of anti-unfair competition, the companystrictly complies with laws and regulations such as the Contract Law of the People's Republic of China, the Anti-Monopoly Law of the People's Republic of China, and the Anti-Unfair Competition Law of the People's Republic of China, as well as related standards. It upholds the principles of voluntariness, equality, fairness, and integrity, encourages fair and legal competition with competitors, and establishes fair and beneficial business relationships with customers and suppliers. The company ensures that directors, supervisors, and employees comply with legal and ethical standards when conducting business transactions to avoid unfair competitionbehaviors.

Strategy

Good business ethics not only relate to corporate image but are also closely connected to product quality, customer trust, talent development, and more. Strengthening business ethics management helps create an honest and trustworthy corporate culture atmosphere, while also promoting a healthier and fairer industry environment, thereby fostering a favorable development space for technological innovation.

Analysis of Risks and Opportunities Related to Business Ethics

Risks:

Fraud risks in the company's procurement process, such as kickbacks, false quotations, and substituting inferior products, may lead to product quality issues and increase operating costs;

Fraud risks in the company's recruitment process, such as accepting bribes and illegal hiring, may result in the loss of outstanding talent, thereby damaging the company's business competitiveness.

Opportunities:

Good business ethics help establish a positive corporate image, enhance customer trust, boost investor confidence, and bring more market and financing opportunities to the company.

Risk Management

The company requires all employees to sign the "Commitment to the Code of Business Conduct and Ethics," take measures to protect trade secrets, conduct business ethics training, ensure the smoothness and confidentiality of reporting channels, and continuously build a clean professional defense line involving all employees and jointly maintained.

Key Measures for Business Ethics Management of Qiaxing Group

Measures

Specific Description

Signing the "Letter of Commitment"

The company attaches the "Code of Business Conduct and Ethics" to the end of the "Employee Handbook," requiring all new employees to understand the relevant content and sign the "Commitment." Each employee must strictly abide by the commitment, consciously resist corruption, and jointly create a good working atmosphere.

Protecting Trade Secrets

The company has established the "Commercial Confidentiality Management Work Instruction" and includes key personnel related to business, research and development, and production technology within the scope of non-compete management to prevent employees from engaging in unfair competition by using trade secrets, customer resources, and professional knowledge and experience obtained during their employment after leaving the company, thereby avoiding resulting commercial losses.

Conduct business ethics training

The company conducts anti-corruption compliance training for all employees at least once a year. The training content includes the group's anti-corruption policies and system promotion. After the training, a knowledge test is organized to assess the effectiveness of the training.

In 2024, the company's employee anti-corruption/business ethics training coverage rate was 100%, and the employee training test pass rate was 100%.

Smooth Reporting Channels

The company values the smoothness of reporting channels,suppliers,employeesand other stakeholderscan report violations or disciplinary breachesor behaviors that may violate business ethicsthrough channels such as email and feedback hotlines,the company legal department'semail address is 999@shyahsin.com,and the feedback hotlineis0512-55122503.

Establish a Whistleblower Protection System

The company requires strict confidentiality of the whistleblower's identity and investigation process, explicitly prohibits retaliation against whistleblowers who truthfully report suspicious misconduct, and will discipline violators.

Indicators and Goals

The companyalways upholds a strong sense of social responsibility and mission, considering the enhancement of overall business ethics as one of the coreissuesfor sustainable corporate development, promoting the establishment of a clean, fair, and just business environment.To this end, the company has developed a business ethics-related indicator systemand established a regular monitoring mechanism to conduct in-depth analysis and evaluation of the progress of each indicator periodically, ensuring steady advancement and effective results in business ethics construction.

Qiaxing Group 2024 Business EthicsManagement Status

Indicator

Unit

2024 Progress

Number of Corruption Litigation Cases

0

Number of cases of business ethics violations reported through internal or external whistleblower programs

0

Proportion of employees participating in business ethics training

%

100

Proportion of third-party anti-corruption due diligence

%

100

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Environmental Sustainability, Green and Low-Carbon Development

5.1 Environmental Management System

Qiaxing Group actively responds to the national requirement to adhere to the green development concept, strictly following the "Environmental Protection Law of the People's Republic of China," "Energy Conservation Law of the People's Republic of China," "Air Pollution Prevention and Control Law of the People's Republic of China," "Water Pollution Prevention and Control Law of the People's Republic of China," and "Solid Waste Pollution Prevention and Control Law of the People's Republic of China," among other laws and regulations, while promoting the implementation of green design concepts and innovating a low-carbon packaging product matrix, deeply embedding environmental governance throughout the entire production and manufacturing chain.

Qiaxing Group Environmental Policy

Commitment to incorporating environmental work into the continuous improvement of management performance in all business operations

Compliance with domestic and international environmental laws and related requirements

Dedicated to pollution prevention, energy conservation, resource recycling, and industrial waste reduction

Strengthening education and training to enhance employees' environmental responsibility awareness and response capabilities

Implement various automatic inspection tasks, identify environmental hazards through risk assessment

Continuously carry out environmental management advocacy and inspection operations for contractors

In daily production and business activities,the companystrictly implements multiple internal system procedures such as the "Environmental Operation Control Procedure," "Environmental Factor Identification and Evaluation Procedure," and "Self-Monitoring Plan Regulations," identifying direct or indirect environmental impacts that may arise during the production process. Based on the assessment results of the impact severity, corresponding measures are taken to control environmental risks, continuously improving the company's environmental performance.As ofend of 2024,Qiaxing Packaging (Kunshan), Qiaxing Packaging (Cixi),Qiaxing Packaging (Taizhou),Gongju Biochemical, Qiaxing Co., Ltd. (Mexico) have obtained ISO 14001 Environmental Management System certification.During 2024,the companydid not experience any incidents causing significant environmental impact.

Caption: Environmental Management System Certification Certificate

Since 2020, when Qiaxing Group began planning green project investments, we have continuously increased capital input and accelerated the green transition. In 2024, Qiaxing Group's environmental protection investment amounted to 1,495.33 thousand USD, of which Qiaxing Packaging (Kunshan) invested 1,356.21 thousand USD in environmental protection.

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5.2 Responding to Climate Change

[EcoVadis Energy Consumption and Greenhouse Gases]

【SDGs 13: Climate Action】

The topic has dual significance

Qiaxing Group deeply recognizes the strategic importance of climate change,and based on the goal set by the Paris Agreement to limit global temperature rise to within 1.5°C, follows a net-zero pathway aligned with this temperature control target.This pathway is not only a scientific guide for enterprises to fulfill their environmental responsibilities but also a key step in shaping sustainable competitiveness in the low-carbon economy era.

Governance

In order to addressthe risks and opportunities brought by intensified climate change, and at the same timeimprovemanagementefficiency and professionalism, the company has strengthened the top-level design of climate governance,establishing a management framework to respond to climate change.

Qiaxing Group Climate Change Response Management Framework

Organization

Responsibilities

Board of Directors

Responsible for overseeing climate-related risks and opportunities

ESG Committee

Composed of the CEO, COO, directors, and other senior members, the main responsibilities include:

Led by the CEOto assess and manage climate-related risks and opportunities, and incorporate climate-related issues into the strategy when necessary

Responsible for overseeing the company's climate change target setting and implementation

Review the company's annual climate change response report

Regularly report the progress of climate change response initiatives to the board of directors.

ESG Committee holds quarterly meetings to review climate change targets, monitor their implementation, discuss and make decisions on key issues, adjust related strategies as needed, and ensure the orderly advancement of the targets.

The company plansto establish a climate-relatedcommittee in the future,to coordinate climate risk assessment, strategic planning, and dynamic monitoring work.

Strategy

The companyaligns withChina's“3060” carbon peak and carbon neutrality strategic goals,China's 14th Five-Year Planand other national strategies,ensuring that the climate change response strategy is precisely connected with national policies.

The company has clearly defined the systematic strategic planning before 2030 as a medium-term goal and divides the period from 2030 to 2060 into a long-term strategic phase.To this end, the company has establisheda dynamic tracking mechanism to continuouslymonitorpolicy evolution and industry technology development trends, providing a solidfoundation for refining the long-term strategic path.In the future,the companywill alsoestablish a normalized strategic reviewmechanism to regularly assessthe progress of achieving climate change-relatedgoals,anddynamically optimize the implementation path based on actual conditions.

Scientifically identifying, assessing, and effectively managing environmental and climate change-related dependencies, impacts, risks, and opportunitiesis key to the company'sachieving sustainable development.Analyzing extreme scenarios of climate change-related supply risks helps the company proactively address major future challenges. Through extreme scenario analysis, the company can systematically identify vulnerabilities in the existing system, develop contingency plans and long-term strategies, increase technological transformation and forward-looking infrastructure investments, and optimize the global supply chain and business operation models.

Qiaxing Group Climate Change Risk Management Process

Stage

Specific Content

Identification

Sort out the internal and external key resources related to climate change, and clarify the dependency elements of business operations under climate conditions.

Analyze how the company's activities affect stakeholders (including customers, employees, suppliers, and the community).

Assessment

Use methods such as SWOT analysis, PEST analysis, and climate scenario planning, combined with expert opinions on climate, to qualitatively assess the identified climate change dependencies, impacts, risks, and opportunities.

Using tools such as climate risk matrices and net present value (NPV), the levels of climate risks and opportunities are quantified. Specific financial indicators, such as profit margins, cash flow, and capital expenditures, as well as safety and compliance standards (such as drainage regulations), are used as benchmarks to measure operational risks and serve as key thresholds to trigger the assessment of risks or opportunities.

Using the risk and opportunity assessment method (LEAP), starting from factories and business sites, the assessment scope extends upstream along the value chain to the company's raw material suppliers, identifying the priority climate-related issues throughout the entire value chain and providing a basis for identifying and managing climate-related risks and impacts.

Management

Based on the assessment results, targeted management strategies are developed, regularly monitoring changes in these dependencies, impacts, risks, and opportunities, using data analysis and market feedback to continuously optimize our business strategy, ensuring sustainability and adaptability.

Qiaxing Group Climate Change Related Risks and OpportunitiesAnalysis

Risk/Opportunity Type

Specific Description

Potential Financial Impact

Scope of Impact

Physical Risks

Acute Physical Risks

Extreme weather such as typhoons and heavy rain may cause damage to factory facilities and production interruptions.

Operating costs ↑

Operating revenue↓

Short, medium, and long term

Chronic physical risks

Climate change causes abnormal temperature and precipitation, affecting the quality of raw materials and the stability of supply.

Operating costs ↑

Operating income ↓

Transformation risk

Policy risk

National climate and environmental protection policies are becoming stricter. If the company does not meet the latest policy requirements and reaches the relevant standards, it will face fines and other penalties.

China's carbon emissions trading implements a carbon pricing mechanism, and the company may be included in the carbon quota management list.

Operating costs ↑

Market risk

With consumers' environmental awareness increasing, the market demand for certified sustainable materialsis rising,ifthe companyfails to adopt such materials in a timely manner,the companymay experience a decline in market share.

Operating revenue↓

Reputational risk

The public's concern about chemicals in products that may harm health and the company'senvironmental performance is increasing,which may triggernegative public opinion damaging the brand image.

Operating revenue↓

Technical risk

During the transition to low-emission technologies and products or the transition to water-intensive low-carbon energy, if the transformation technology is immature, it may lead to a decline in production efficiency;unsuccessful investment in new technologies, where invested funds cannot be converted into productivity, resulting in the company's cash flow and market competitiveness being affected.

Operating revenue ↓

Liability Risk

If environmental regulations are not followed or if the packaging products have safety hazards,there will be litigation risks,whichwill affectthe company'snormal operations.

Operating costs ↑

Operating revenue ↓

Opportunities

Resource efficiency

By recycling and processingplastic sheetsinto products to replace traditional ones,raw material consumption is reduced,operating costs are cut, achieving economic benefits.

Operating Costs ↓

Operating Income ↑

Mid-term

Product and Service Opportunities

In response to customers' carbon reduction needs,through energy-saving renovations,expand services with low-carbon advantages, which canattract new customersandstrengthen cooperation, increasing revenue.

Revenue ↑

Short term

Market opportunities

Regarding the customer's requirement to include low-carbon management in procurement evaluation, the company can more easily acquire new customers or expand into new markets due to its good reputation in low-carbon management.

Operating costs ↑

Operating revenue ↑

Mid-term

Note: Short-term impact range is 0-2 years, medium-term impact range is 3-9 years, and long-term impact range is over 10 years.

Risk Management

In the face of the global challenges brought by climate change, the company actively responds to climate change through systematic actions, advancing its own carbon reduction through technological and management innovation, and actively coordinating with upstream and downstream enterprises to promote carbon reduction across the value chain, committed to achieving a full-chain low-carbon transformation and resilience enhancement.

Qiaxing Group Carbon Reduction Management Measures

Category

Specific Actions

Own Carbon Reduction

Target Certification:By integrating internal and external resources and relying on a data-driven management model, the carbon emission reduction targets for scopes 1, 2, and 3 have been precisely defined. Energy management has been incorporated into the overall carbon management strategy to promote dual reduction and control of energy consumption and carbon emissions, supporting the company's long-term carbon reduction goals.The company's carbon reduction targets were certified by the Science Based Targets initiative (SBTi) in April 2024.

Intelligent Transformation:Using smart water and electricity meters and an energy carbon management platform's data-driven architecture at various production bases. This architecture's closed-loop management process offers a systematic solution, covering hotspot identification, anomaly investigation, investment accounting, implementation promotion, review optimization, and transparent disclosure, making it easy to apply in diverse scenarios.

Green Transportation:Within the company’s factory, shipments and receipts are handled by tow tractors instead of forklifts,reducing time waste during transportation, decreasing the charging frequency of electric forklifts, lowering logistics energy consumption by over 70%, and reducing approximately 8,400 kilograms of carbon dioxide equivalent emissions annually.

Assessment Achievement:To actively respond to investor and customer expectations,the companyhas participated annually in the CDP Climate Change Questionnaire since2018. In the2024latest assessment,Qiaxing Packaging (Kunshan)was awardedan Agrade,indicating the company has reached a leadership level in climate change management.

Value Chain Carbon Reduction

Benefit Radiation:The company collaborates with the procurement team to promote energy-saving and carbon reduction experiences to core suppliers, assisting the supply chain's low-carbon transformation through training and guidance. The company provides technical support and energy-saving and carbon reduction guidance to customers, consolidating customer relationships while expanding influence, and promoting the green development concept to take root and flourish on a larger scale.

External Evaluation:Qiaxing Packaging (Kunshan)has been awarded CDP (Carbon Disclosure Project) 2024 disclosure cycle Supplier Engagement Assessment (SEA) A grade due to its systematic measures and outstanding practices in promoting supply chain decarbonization.

Caption: Certified by the Science Based Targets initiative (SBTi)

Caption: 2024Qiaxing Packaging (Kunshan)CDP Score

Caption:2024Qiaxing Packaging (Kunshan)CDP Supplier Engagement (SEA) RatingScore

Note:CDP’s annual supplier collaboration assessment (SEA): evaluates corporate supply chain engagement on climate issues.

Product Full Life Cycle Carbon FootprintTracking

In response to the high sustainability packaging standards of international brand clients, the company conducted product carbon footprint accounting fora certain brand’slip gloss bottles andmascarabottles.The company collaborated with a third-party professional organization, based on ISO 14067 standards,to quantitatively analyze carbon emissions across all stages including raw materials, energy resources, production waste treatment, product transportation, product use, and product disposal. This project not only enhanced the product’s green competitiveness but also provided clients with data support that meets international ESG disclosure requirements, helping to promote low-carbon collaborative development in the supply chain.

Caption: Lip gloss bottle Mascarabottle

Co-hosted the "Earth Hour" Glow Night Run Event

In March 2024, the company participated in the "Earth Hour" Glow Night Run event jointly hosted by the Kunshan Ecological Environment Bureau and the Kunshan Development Zone Safety and Environmental Protection Bureau. Representatives from various companies wore night run vests and glow bracelets, using the night run as a way to deepen everyone's understanding of the importance of environmental protection, thereby encouraging more attention to energy saving and emission reduction behaviors in daily life.

Caption: Scene of the Glow Night Run event

Indicators and Targets

The company sets "greenhouse gas emissions (Scope 1+2)" and "greenhouse gas emissions (Scope 1+2) / output value" as monitoring indicators, dynamically tracking progress. In April 2024, the company passed the Science Based Targets initiative (SBTi) review, committing to reduce Scope 1+2 emissions by 42% and Scope 3 emissions by 25% by 2030, based on 2022 emission levels. To actively achieve the SBTi targets, the company continued to advance emission reduction efforts in 2024 and achieved results:

Qiaxing Group Greenhouse Gas Emissions Situation

The company firmly believes that improving corporate environmental performance is essentially a value reshaping of harmonious coexistence between humans and nature. The company will deepen climate governance practices with stronger strategic determination and continuously improve carbon measurement and tracking mechanisms. At the operational level, the group will focus on green packaging technology innovation, promote the use of renewable energy, optimize resource utilization efficiency to reduce greenhouse gas emissions, and achieve a deep integration of environmental benefits and business value.

15

5.3 Energy Management

[GRI 302: Energy 2016]

EcoVadis Energy Consumption and Greenhouse Gases】

【SDGs 7: Affordable and Clean Energy】

The issue has financial significance

Qiaxing Group mainly uses electricity, steam, natural gas, diesel, and gasoline as energy sources in its operations. The company strictly complies with the Energy Conservation Law of the People's Republic of China and other laws and regulations, actively adopts energy-saving and emission-reduction measures, continuously optimizes energy management, and ensures efficient use of energy and sustainable development in production and business activities.

Governance

Management Policy: Clean production, energy saving and consumption reduction, comprehensive utilization, continuous improvement.

The company has established a well-structured and efficient energy management framework covering multiple dimensions such as organizational management, system monitoring, target assessment, technical projects, and compliance benchmarking, ensuring institutionalized, data-driven, and closed-loop energy management operations.

Qiaxing Group Energy Management Structure

Organization/Position

Specific Functions

CEO

The highest manager of the company,is the primary person responsible for the company's energy management, committed to supporting the energy management system and continuously improving the performance of the energy management system

Management Representative

Top Management Representative,establishes, operates, implements, and maintains our company's energy management system, and continuously improves its performance.

Administrative Management Center

Overall planning of the company's energy management strategy and objectives.

Plant AffairsManagement Department

Leading the advancement of specific energy-saving tasks, including the execution of energy-saving projects, identification and improvement of energy waste, all fully managed by the Plant Affairs Manager.

The company's investor energy expert team provides professional guidance and forward-looking advice for the management structure. Additionally, the company promotes energy management down to the grassroots level by establishing a "section-level energy consumption budget" mechanism, breaking down energy consumption targets to each section, with section chiefs responsible for achieving these targets, which are incorporated into performance and incentive systems. Section teams that meet their targets receive corresponding rewards to fully stimulate enthusiasm for energy-saving participation.

The companyhas establishedmultiple energy management systems including the "Energy Management Position Responsibility System," "Energy Metering Management System," "Energy Quota Management System," "Energy Statistics Management System," "Rational Energy Use Management System," "Energy Management Manual," and "Energy Saving Reward and Punishment Management Measures,"clarifying the responsibilities of each position, strengthening the company's energy use standards, and comprehensively improving the overall energy utilization efficiency and management level of the company.

Qiaxing Packaging (Kunshan) has obtained ISO 50001 Energy Management System certification, and the certification is still valid.

Caption: Energy Management System Certification Certificate

Strategy

The company's use of energy in the production process not only bringsreduced greenhouse gasenvironmental impact, but also embodies social value in promoting green transformation.By implementing energy management projects, the company canprovide a replicable model for society,and promote the awareness of sustainable development in society.

Analysis of Risks and Opportunities Related to Energy Management

Risks:

If the company faces physical risks from long-term climate change affecting the stability of energy supply, it will need to invest more costs to ensure energy supply, which may impact production efficiency and reduce operating income;

If it encounters transition risks such as policy and regulatory risks or technological risks, it will face pressures such as purchasing environmental protection and energy-saving equipment, increasing operating costs.

Opportunities:

The company, recognized by the industry for good energy management, such as receiving high scores in related ratings, can expand its business and increase revenue.

Risk Management

The company actively fulfills its corporate responsibility in the development of a low-carbon economy by optimizing the energy structure,implementing energy-saving projects, introducing digitalenergy management systems,and strengthening capacity building.

Qiaxing Group Energy Management Measures

Methods

Specific Content

Optimize Energy Structure

The company actively promotes clean production to reduce energy consumption from the source.

In 2024, Qiaxing Group purchased97,616,923kWh of electricity.

Photovoltaic power generation7,175,041.6kWh,purchased green electricity 1,756,000 kWh,clean powerusageproportionis8.38%.

Implementation of energy-saving projects

The company has established an energy-saving project database, covering replacement of air conditioning circulation water pumps, heating system improvements, air compressor optimization, application of frequency conversion technology, etc., continuously exploring energy-saving potential.

In 2024, the company implemented 13 energy-saving projects, with a total investment of230 thousandUSD, saving about 3 million kWh of electricity, accounting for 3.5% of the company's total electricity consumption.

Introduction of Digital Energy Management System

The company has introduced a digital energy management platform to achieve real-time collection, trend analysis, anomaly warning, and data traceability functions for energy media such as electricity and gas, comprehensively enhancing data transparency and decision-making efficiency. The system supports automatic generation of monthly and quarterly energy consumption reports, providing a reliable basis for energy efficiency analysis, project formulation, and target achievement evaluation.

Strengthening Capacity Building

Regularly organize training sessions on energy-saving awareness and skills for section chiefs and related personnel to improve grassroots execution capabilities.

Promote green office practices

Reduce electricity consumption of lighting equipment, ensuring lights are turned off when no one is present.

Reduce air conditioner usage by running it one hour less each day.

Set air conditioner temperature reasonably to save electricity.

Qiaxing Group Energy-saving Projects and Energy-saving Benefits (Partial)

Project Name

Project Implementation Overview (Post-renovation)

Energy-saving Benefits

Replacement of air conditioning circulating water pump in office building

Replacing with a high-efficiency energy-saving pump to improve pump operation efficiency; the highest efficiency point of the replaced pump is 5~8% higher than that of ordinary pumps with the same parameters.

Adding a self-developed pump energy-saving assist device on the pipeline.

Annualenergy savings102,627kWh, equivalentto1261tonsof standard coal

Add insulation cotton to the heating rings of injection molding machines and pelletizers

Barrel heating coilSurface temperature 35 degrees, low heat dissipation to the outside, reducing energy waste and improving the workshop environment.

Annualenergy savings of 291,727.98kWh, equivalent to3585 tons of standard coal

Integration and replacement of air compressors

Replacement of one air-cooled 160kW two-stage compression variable frequency air compressor, unit gas energy consumption reduced from 0.2371kW/m3 to 0.0990kW/m3.

Annualenergy savings of 863,800kWh, equivalent to10616 tons of standard coal

Note: The method for converting energy into standard coal refers to "GB/T 2589-2020 General Rules for Comprehensive Energy Consumption Calculation."

Indicators and Targets

The company sets“comprehensive energy consumption conversion”and “comprehensive energy consumption intensity (based on output value)” as monitoring indicators, dynamically tracking progress to ensure the effective implementation of various energy management measures, helping the company improve corporate energy management levels and market competitiveness, and promote the steady realization of sustainable development goals.

Qiaxing Group Energy Management Situation

15

5.4 Water Resource Management

【GRI 303: Water and Effluents 2018】

EcoVadis Water Resources】

The issue has financial materiality

The company's water resources mainly come from municipal tap water.The company's manufacturing base in Jiangsu is located in an area with scarce water resources and faces extremely high pressure levels.The company strictly complies with the Water Law of the People's Republic of China and other laws and regulations, continuously improving water management systems and monitoring frameworks,actively fulfilling its water resource management responsibilities.

Management

To strengthen water resource management, improve water use efficiency and economic benefits,the company has established a water resource management system.

Qiaxing Group Water Resource Management Organizational Structure

Organization

Responsibilities

ESG Committee

Composed of the CEO, COO, directors, and other senior members;

Plays a key management role in ESG-related matters (including water resource management issues).

Water Conservation Management Leadership Team

The team leader isthe Director of the Administrative Management Center, responsible for the company's overall water resource management, convening regular inspections of water usage across departments; the executive leader is the Plant Manager, who holds a water conservation officer certificate issued by Kunshan;

Team members are the main heads of each company department, specifically responsible for water conservation work within their departments.

The company has formulated according to GB/T 23331-2012 the "Energy Measurement Management System" and "Energy Statistics Management System," both covering the procurement, measurement, statistics, and consumption control of water resources, effectively promoting the orderly implementation of various water-saving management tasks within the company.

Strategy

With the increase in extreme precipitation events, the seasonality and spatial distribution of rainfall will become more uneven, exacerbating issues such as summer heavy rains and winter droughts, which will affect the water resource allocation in the Yangtze River Delta where the company is located. However, disruptive technologies (such as low-cost water-saving technologies) may change the availability and management practices of water resources. The company assists in identifying potential risks such as water supply security, water quality deterioration, and regulatory compliance, and in formulating response strategies through extreme scenario (such as RCP8.5 and SSP3) water supply risk analysis.

Under scenario analysis, it is expected that by 2100, the average temperature in the Yangtze River Delta region may rise by more than 3 degrees Celsius, and the increase in extreme precipitation events will alter rainfall patterns, intensifying urban flood risks. The seasonality and spatial distribution of precipitation will become more uneven, with prominent issues of summer heavy rains and winter droughts, affecting water resource allocation in the Yangtze River Delta, especially for agricultural irrigation and industrial water use. In socio-economic development, although regional competition and technological progress are slow, some countries or regions may still adjust policies, strengthen climate action, international cooperation, or develop low-cost water-saving technologies, all of which will change the availability and management practices of water resources, requiring enterprises to plan response strategies in advance.

Analysis of Risks and Opportunities Related to Water Resource Management

Risks:

Since water is crucial for processes such as injection molding and spraying, if the company faces water shortages caused by extreme weather, it may experience water use restrictions, supply interruptions, and increased water prices;

If water quality in the Yangtze River Basin deteriorates, it will increase the pressure on urban water treatment facilities, reduce the reliability of water supply, affect normal production operations, and lead to decreased output and revenue.

Opportunities:

Government policies and incentives that support a favorable environment can help sustainable water resource management and reduce water usage costs.

Risk Management

Based onthe water supply riskanalysis results, the companyreduces dependence on water resources through network optimization and leak prevention and repair, smart metering upgrades, water recycling, enhanced water-saving awareness, and strengthened supplier management, which helps mitigate potential impacts on company operations and the supply chain,improving water resourcerelatedrisk resilience.

Qiaxing Group Water Resource Management Measures

Category

Specific Content

Pipeline Network Optimization and Leak Prevention and Repair

To address issues with some existing concealed pipelines that are difficult to inspect and prone to "dripping, leaking, and escaping," the company has implemented a "concealed pipe to exposed pipe" renovation project, significantly improving the maintainability of the pipelines and effectively curbing water resource waste from the source.

Intelligent Metering Upgrade

Installed 10 sets of smart water meters, achieving precise measurement and dynamic monitoring of key water usage points, providing data support for refined management and water-saving potential analysis.

Water Resource Recycling

Actively promote reclaimed water reuse technology, applying purified reclaimed water for drip irrigation of greenery in the plant area. This not only saves valuable tap water resources but also reflects the company's environmental responsibility.

Enhance Water Conservation Awareness

Post water-saving slogans in prominent areas to raise awareness of the importance of water resources.

Strengthen supplier management

Require suppliers to ensure compliance with laws and regulations related to surface water discharge and establish safe procedures for handling water-related pollutants.

Suppliers with advanced water-saving technologies (such as water reuse systems) are the preferred long-term partners of the company.

Qiaxing Packaging (Kunshan)CDP Water Security Questionnaire Assessment AwardedA Grade Score

In response to the expectations of investors and customers,Qiaxing Packaging (Kunshan) actively participated in the CDP Water Security Questionnaire Assessment. In the latest 2024 annual evaluation,Qiaxing Packaging (Kunshan) was awarded an A grade, signifying significant progress in our water resource management and demonstrating our leading position in the industry.

Caption:2024 Qiaxing Packaging (Kunshan) CDP Score

Indicators and Targets

The company sets“water consumption”water usage/output value” and othermonitoring indicators,dynamically tracking progress to ensurethe effective implementation of water resource management measures.

Qiaxing Group Water Resource Management Status

15

5.5 Pollutant Emission Management

【GRI 303: Water and Effluents 2018; GRI 305: Emissions 2016】

[EcoVadis: Air Pollution]

The issue has significant impact importance

Reduce wastewater and exhaust gas

The company mainly generates wastewater in areas such as spraying, cleaning, cooling, and living quarters. This wastewater may contain organic pollutants, inorganic chemical pollutants, thermal pollution, microplastics, as well as high levels of chemical oxygen demand (COD) and biological oxygen demand (BOD). In addition, the company mainly produces exhaust gases in spraying, printing, and injection molding. These exhaust gases contain non-methane total hydrocarbons, xylene, benzene series, acetate esters, nitrogen oxides, sulfur dioxide, particulate matter, styrene.

The company strictly complies withthe "Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution" and the "Law of the People's Republic of China on the Prevention and Control of Water Pollution"and other laws, regulations, and rules,always upholding a highly responsible attitude,managing pollutants discharged into the air, water, and soil during production and operation processes.

The company has established standardized pollutant management systems to ensure compliant pollutant discharge during production and operation while minimizing emission levels as much as possible.In 2024, the companycontinued toobtainthenational pollutant discharge permit.

Qiaxing Group Pollutant Discharge Management Measures

Category

Specific Measures

Standardize Processes and Monitoring

The company implements strict wastewater management protocols and treatment procedures. Each complies with local regulatory requirements and sets classification and threshold levels based on these regulations. The monitoring frequency is determined by permits and authorizations defined by the regulatory framework, and sampling methods comply with national and international standards.

Outsourced Testing

The company cooperates with external third-party professional environmental protection companies to monitor pollutants in real time, and conducts outsourced testing of noise, exhaust gas, wastewater, and soil annually to promptly understand the generation of pollutants and take corresponding measures to control their environmental impact.

Research on water-based coating technology

To further reduce pollutant emissions during the process, the company is focusing on researching a more environmentally friendly coating technology, namely water-based coating. Compared to traditional solvent-based coatings, water-based coatings can effectively reduce80%-90% of volatile organic compounds (VOCs) emissions, and can do so without exhaust gas treatment, thereby achieving source control ofVOCs emissions. Water-based coating can be applied in the future to product components such as cosmetics (tube parts, pen types) and skincare (bottle parts, jar parts). Currently, this project is in the preliminary demonstration and exploration stage. In the future, Qiaxing Group will continue to track the feasibility of the plan and strive to implement the project investment as soon as possible.

Prevent chemical spills

Qiaxing Group attaches great importance to the safety of hazardous chemicals, recognizing the risk of sudden leakage incidents involving UV coatings, coating additives, UV inks, ink solvents, ink hardeners, thinners, alcohol, liquefied petroleum gas, and other substances during the company's production and operation activities.It has formulated management systems such as the "SOP for Effective Control of Hazardous Goods Receipt and Dispatch Periods," "Hazardous Chemicals Expiry Management Standards," and "Hazardous Chemicals Warehouse Operation Procedures," and carries out hazard investigation and remediation as well as emergency response to sudden incidents.According to regulations, in the event of a chemical raw material leakage, the company's emergency response team should, as much as possible, cut off the leakage source to prevent it from entering rainwater drains and sewage pipe networks or other confined spaces, and promptly respond and handle the situation in accordance with various chemical leakage disposal methods.

To minimize and eliminate chemical leakage pollutants, the company requires relevant personnel to collect the wash water into emergency pools during on-site cleanup of leaked materials, and to treat it centrally after the incident ends; if water bodies are polluted, the company should promptly contact water authorities to suspend water gate discharge to prevent the spread of pollution.The company also encourages consulting relevant experts to determine safe and optimal methods, and if necessary, to have cleaning performed by qualified cleaning agencies.Years without any chemical leakage and wastewater tests showing that total organic carbon(TOC) andvolatile organic compounds(VOC) levels comply with relevant laws and standards will be regarded as effective management.

In 2024, the company conducted special chemical safety training for personnel in spraying, printing, and warehouse A, strengthening their awareness of environmental safety responsibilities and red lines, as well as improving employees' professional operational skills and safety prevention capabilities. The training activities achieved the expected results.

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5.6 Waste Management

【GRI 301: Materials 2016】

EcoVadis Raw Materials, Chemicals, Waste】

【SDGs 11: Sustainable Cities and Communities】

The issue has significant impact importance

The waste from Qiaxing Group mainly includespaint sludge, sludge, and waste chemical containers generated during the spraying process; cutting fluid and machine oil from the mold manufacturing process; waste activated carbon and waste filters generated during the exhausttreatmentprocess, etc..

The companyadheres to the principles of "reduction, resource utilization, and harmless treatment" of solid waste,actively promoting the concept of a circular economy.The companyhas established multiple waste management systems such as the "Waste Classification and Treatment Management Measures," "Hazard Identification and Risk Assessment Management Procedures," and "Hazardous Waste Management Measures," to promote compliant disposal and reuse of waste from the four dimensions of collection, storage, treatment, and reuse.

Waste Management Measures of Qiaxing Group

Method

Specific Content

Waste Collection

Layered collection management of waste is carried out, divided into recyclable general waste, non-recyclable general waste, recyclable hazardous waste, and non-recyclable hazardous waste.

According to waste classification, the "Waste Return Storage Period" is formulated, and waste is strictly managed in layers according to the prescribed return storage time.

Waste Storage

Set up general waste placement areas, hazardous waste storage areas, and domestic garbage placement areas.

Recyclable general waste and hazardous waste shall be classified and stored in the designated areas of the temporary storage zone according to regulations, and the weight of the waste shall be classified, counted, and recorded.

Waste disposal

Recyclable general waste shall be entrusted to units with corresponding qualifications for recycling and disposal.

Non-recyclable general waste (household garbage) is entrusted to the local environmental sanitation unit for disposal and is regularly collected every morning.

Kitchen waste is entrusted to qualified units for collection and transportation, with agreements signed and filed with the municipal sanitation and environmental management department.

Waste reuse

A recycling and reuse mechanism is established to recycle waste packaging generated within the factory.

Establish turnover times for in-plant product packaging trays (PSP trays, PP trays, PET trays, etc.), which need to be reused in cycles if not contaminated.

Uncontaminated product scraps need to be reprocessed for secondary use, minimizing and reusing self-made product waste as much as possible.

In 2024, the company will achieve a reduction in the total amount of hazardous waste generated compared to 2023 through refined management and measures to reduce paint sludge.

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5.7 Green Packaging and Materials

[EcoVadis Raw Materials, Chemicals, Waste]

[SDGs 11: Sustainable Cities and Communities; SDGs 12: Responsible Consumption and Production]

The issue has dual significance

Governance

To ensure the effective advancement and long-term management of the related work on this topic,the companyhas formulated the "Design Control Operation Measures",establishedthe relevant management structure,and through clear division of responsibilitiesand collaboration mechanisms, promotes the implementation and deepening of the work.

Qiaxing Packaging Design Control Organizational Structure

Qiaxing Group has formulated multiple R&D management and innovation incentive systems such as the "Research and Development Management System," "R&D Investment Accounting Management System," "Talent Introduction Management System," and "Technical Innovation Incentive Measures," vigorously promoting sustainable innovation in materials, product structure, processes, equipment, and tooling.

The companyvaluessustainable innovationwork,establishes and improves sustainable innovation mechanisms, and continuously focuses onthe research and development of green packaging and materials.The companyis market-oriented, combining sustainable design principles and the optimization and enhancement of internal R&D projects as three core driving forces, continuously advancing product innovation.In addition, through creative design capabilities and engineering production capabilities,the company achieves efficient transformationof products related to green packagingand materials.

Qiaxing Group Sustainable Innovation Mechanism

Innovation Driving Forces

Market-Oriented Innovation Drive

Establish an internal product management team to regularly launch new products

Establish proprietary market intelligence and insight capabilities

Innovation Driven by Sustainability Development Orientation

Exploring and Establishing Proprietary PCR Solutions

Using Bio-based and Other Environmentally Friendly Materials

All new products in all categories can provide the “3R” concept

Innovation driven by internal optimization and improvement

Internal demand for new material research and decorative process innovation

Internal demand to shorten project execution cycles

Achieve design modularization and standardization

Practical execution capability

Creative design ability

Market research and trend analysis

Mood Board Creation

Dynamic Thinking and Hand-drawn Sketch Visualization

World-class CAD Drafting

Image, Branding, and Packaging Design

Engineering Production Capability

Latest Internal3D Printing/SLA Technology

Functional Finished Model Production

Dedicated Global Design Engineering Team

Prototype Product Manufacturing Capability

Strategy

With the rise of social awareness on green environmental protection, consumer demand forenvironmentally friendlyproducts has significantly increased.The companyhas innovatively developed more greenpackaging and materials, which caneffectively reduce resource consumption and waste pollution,anddrive upstream and downstream partners to jointly transition to green, helping society achieve low-carbon development goals.

Analysis of Risks and Opportunities Related to Green Packaging and Materials

Risks:

With intensified competition in the green packaging market, if the company fails to maintain technological leadership, or if green packaging products encounter negative incidents such as failing to meet environmental standards, it may lead to loss of market share and a decline in revenue.

Opportunities:

If the company develops degradable and recyclable packaging products that align with the circular economy concept and meet customer demands for single materials (such asPET and PP), it can consolidate its market position and increase revenue.

Driven by customer demand, the company is accelerating the R&D process for green product solutions, actively overcoming key technical bottlenecks, and formulating sustainable innovation strategic goals, aiming to become by 2027 a market-insightful, independently sustainable product R&D capable, industry-leading sustainable product and carbon footprint traceable packaging supplier, with a comprehensive central materials technology database, and a technically advanced engineering and technical team. Additionally, the company is actively exploring joint innovation models with key customers, collaboratively advancing R&D, and through patent layout and value conversion, achieving high-quality and sustainable development of the green packaging industry.

Qiaxing Group 2024-2027 Sustainable Innovation Strategic Goals

Risk Management

Qiaxing Group places great importance on risk management in the application of green packaging and materials, committed to building an environmentally friendly management system throughout the entire lifecycle. By deeply integrating sustainable design, sustainable materials, and sustainable packaging concepts into product research and development and production processes, the company systematically identifies and controls risk factors that may impact the environment and society. In terms of sustainable design, the group aims to reduce resource consumption and improve recyclability by optimizing product structure and functionality; in the field of sustainable materials, it widely adopts PCR materials, single materials, and bio-based materials to reduce carbon footprint and environmental burden; while in sustainable packaging practices, it focuses on packaging reduction and recycling, promoting the formation of an efficient, low-carbon green supply chain system.

Sustainable Design

The company consistently incorporates the "3R" sustainable development concept (Reduce, Reuse, Recycle) in packaging product design, building a green design system with systematic thinking. The company continuously focuses on lightweighting and innovative development of alternative packaging products, achieving scientific packaging reduction through multiple approaches such as optimizing structural design, material selection, and process upgrades, aligning with the industry trend of efficient resource utilization, and continuously promoting packaging sustainability.

Specific Measures for Qiaxing Packaging Sustainable Design

Weight Reduction Design

Flock-Free Lip Brush Head

Using injection molding technology to create ultra-fine bristles, replacing the secondary flocking process, while also eliminating the use of glue, making the brush head product lighter and more environmentally friendly.

SHP Mono PP Jar

Compared to the classic three-piece jar, the design without a pull tab minimizes the number of components. This lightweight design reducesover 50% of plastic usage. Additionally, the product is100% made from highly recyclable PP material, promoting a circular economy and effectively reducing carbon emissions.

Replaceable packaging

Powder cartridge design

Design of multiple interchangeable powder trays.

Cream Product Design

Made entirely of PP material,eliminating the foam gasket and glue assembly process.

SHP G3rd Generation Air Cushion Bladder

For different inner material components, PP bladder and PET bladder materials are designed respectively, with high air tightness and stable functionality.

Sustainable Materials

The company focuses on innovative applications of sustainable materials, committed to enhancing the environmental attributes of packaging through material innovation. The company has widely applied PCR materials, single materials, and bio-based materials across multiple product lines, not only meeting the functional and safety requirements of packaging products but also significantly reducing environmental impact. The company provides strong support for building a resource-saving and environmentally friendly society.

PCR Materials

PCR (Post-Consumer Recycled material, materials recycled after consumer use) generally refers to plastics such as PET (polyethylene terephthalate), PP (polypropylene), HDPE (high-density polyethylene) recovered from waste after consumer use, which are processed and made into recycled plastic raw materials that can be used to manufacture new packaging materials. Compared to virgin plastics, PCR materials reduce resource consumption and carbon emissions.

Caps and bottles of high-solid-content mascara use PCR PP materials

Using PCR PP materials, the carbon emissions per kilogram of material are 0.622 kilograms of CO2 equivalent, which is a 65% reduction compared to ordinary PP materials per kilogram, resulting in a carbon emission reduction of 205 tons per year (based on an annual order volume of 18 million units).

Gao Gu Han Mascara

Qiaxing Group PCR Material Application Performance

Indicators

Units

2022 year

2023 year

2024 year

PCR material proportion

%

10.0

9.0

11.4

Note:PCR material ratio =Total PCR usage / Total inventory.Data for 2022 and 2023 have been tracedand adjusted.

Single material

Our company deeply understands the critical value of material simplification for the recycling system; single-material packaging is easier to recycle and reuse.Our company has currently scaled the application of single materials such as PP, PET, and PE (polyethylene), and while meeting product functionality requirements, we improve the recyclability of packaging waste from the source, providing strong support for building a circular economy system.

Qiaxing Group Single Material Application

Category

Application

Image

PP

Single-layer polypropylene (Mono PP) dropper heads and spring pumps: Developed using an all-PP formula, the soft segments of the olefin chain are cut and re-grafted to ensure recyclability. The recyclable design reduces waste, improves the efficiency of limited natural resources, and increases the supply of high-consumption recycled components. The tube is made of metallocene PP, with transparency increased to 90%, replacing traditional glass materials.

Mono PPDropper: Uses an internal spring with a spiral structure design combined with elastic PP material, meeting the single-material requirement and replacing theoriginalspring.

Caption: Dropper head and spring pump

All-PP material powder box.

Caption: All-PP material powder box

All-PP material powder box, plastic entirely made of pure PP with 50% PCRPP added.

Caption: Full PP material toner cartridge

PET

Full PET material toner cartridge.

Caption: Full PET material toner cartridge

FullPET material nozzle dropper.

Caption: Nozzle dropper

PE

The product's spring parts use PE material blow molding. After solving the issue of abnormal high-temperature fatigue rebound of PE material springs, all other parts can be replaced with PE material, forming a single-material pump.

Caption: PE spring parts

Bio-based materials

The company is actively deploying applications of bio-based materials, developing bio-based inks, bio-based PEF (polyethylene 2,5-furandicarboxylate), PLA (polylactic acid) biodegradable materials, and other materials, promoting the implementation of bio-based material packaging solutions, reducing packaging carbon footprint from the source by replacing traditional petroleum-based raw materials, minimizing the ecological impact of packaging, and driving the green transformation of the packaging industry.

Qiaxing Group Bio-based Material Applications

Application

Image

Bio-based Ink

In terms of environmental protection and sustainability, the ink contains more than 10% bio-based components, which effectively reduces dependence on fossil fuels compared to traditional petroleum-based products, lowering carbon emissions and environmental burden during the production process. Bio-based inks typically do not contain heavy metals, petroleum, or toxic solvents, helping to reduce environmental pollution and protect human health.In addition,this type of ink does not contain chemicals harmful to the human body, and does not release toxic gases or pollutants during use, reducing health risks to operators.

Caption: Bio-based ink materials

Bio-based PEF materials

Straw, as agricultural waste, is converted into PEF through sugar production, effectively mitigating pollution caused by straw burning,whichcan reduce carbon emissions at the source. The company has developed bio-based PEF materials derived from straw sugar, which show significant environmental advantages compared to traditional PET, and can reduce the packaging material's reliance on petroleum-based materials, laying a solid bio-based material foundation for Qiaxing's green packaging strategy.

Caption: Bio-based PEF material thick-walled bottle

PLA biodegradable material

Using PLA biodegradable material as the base, combined with water-based electroplating technology and bio-based soybean ink, the product achieves environmental friendliness.It has excellent degradability and can fully decompose within 90 days under specific landfill conditions, significantly reducing long-term environmental burden.

Caption: Bio-based powder box

Establishment of Joint Innovation Laboratory for Bio-based Polyester Packaging Materials

On December 12, 2024, Guan Ye, CEO of Qiaxing Group, and his delegation visited the Hangzhou headquarters of Zhongke Guosheng. The two parties held a comprehensive strategic cooperation meeting and officially established the "Joint Innovation Laboratory for Bio-based Polyester Packaging Materials."This cooperation aims to jointly develop high-performance, environmentally friendly, low-carbon, and cost-competitive bio-based packaging materials to meet the high standards of green packaging demanded by global brands.

The two parties will start from the development of bio-based raw materials and the optimization of packaging solutions to provide more market-competitive green packaging solutions, jointly building a complete green packaging ecosystem and promoting the widespread application of furan polyester green packaging materials.

Caption: Scene of the laboratory establishment ceremony

Caption: Packaged Products

Sustainable Packaging

The company firmly opposes excessive packaging and actively advocates for comprehensive packaging solutions that are reasonably designed, material-saving, easy to recycle, and cost-effective, focusing on both the selection of packaging materials and forms to reduce resource waste and environmental impact caused by over-packaging, promoting the transformation of packaging towards low carbon and intensive use.

Specific measures for packaging optimization by Qiaxing Group

Optimizing packaging materials

1

PSP tray packaging

Packaging Breakthrough

Heaven and Earth Box Packaging

9 per tray216PCS, packaging weight 24KG, each product shares261G.

Non-recyclable material 3.75KG.

17 per tray160PCS, packaging weight 26.4KG, each product shares154G, the same transport and storage volume of Heaven and Earth Box packaging holds 86.2% more than PSP disc packaging.

All made of recyclable materials.

2

PP hollow turnover boxes replace cardboard boxes.

PP hollow boxes are impact-resistant, wear-resistant, and can be reused.

Plastic material is completely waterproof, suitable for humid environments or scenarios requiring cleaning.

Stable structure, load-bearing capacity superior to cardboard boxes

Facilitates automated warehousing and logistics tracking

3

HIPS turnover tray replaces PSP turnover tray

HIPS material is more sturdy and durable than PSP, suitable for repeated use, reducing breakage rate

HIPS can be reused for a long time, reducing waste

HIPS structure is more rigid, not easily crushed when stacked, suitable for automation

Optimize packaging format

1

Recycle and reuse PP hollow boxes, reducing the number of packaging materials issued in the current batch

A total of 4,882 PP boxes are reused annually

2

Classify and store existing packaging materials, and select appropriate packaging methods according to product attributes

A total of approximately 22,198 turnover boxes are reused annually

Indicators and goals

The company promotes continuous progress in the field of green packaging and materials through the scientific establishment of a quantitative indicator system.In 2024,the company'ssustainable product[1]revenue accounted for16.44%.As the market influence of sustainable products gradually expands, in the future, the company will continue to optimize technological innovation and market layout, further explore the potential of green packaging products, and drive the sustainable product revenue proportion to a new level.

[1] Sustainable products as defined by the company are products with the following attributes: single material, replaceable packaging, weight reduction, disassemblable, produced from PCR or bio-based materials.

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Lean operation, empowering a prosperous future

6.1 Product Responsibility

【GRI 416: Customer Health and Safety 2016】

EcoVadis Customer Health and Safety】

【SDGs 12: Responsible Consumption and Production】

The issue has dual significance

Governance

Qiaxing Group strictly complies with the "Product Quality Law of the People's Republic of China," the "Standardization Law of the People's Republic of China," and other quality management-related laws and regulations, rigorously implementing standardized and regulated production management in accordance with ISO 9001 quality management system requirements.

The company has established a management structure centered on the Quality Management Department, which oversees the entire product quality process control, led by a team headed by the Director of the Quality Management Department, including the CQE Manager, CQE Supervisor, PQE Quality Deputy Manager, QC Quality Manager, and Quality System Supervisor, each performing their respective duties, ensuring product quality and safety.The company ensures continuous and stable provision of products or services that meet customer needs and legal regulatory requirements at every stage, including product design, raw material procurement, manufacturing, inspection and testing, and sales service, by establishing comprehensive quality policies, objectives, procedures, specifications, and standards.

The company has formulated the "Quality Manual" and "Sample Operation Management Measures", and in 2024 revised the "Product Withdrawal and Recall Management Procedure" to improve the detailed process of product withdrawal or recall; revised the "Corrective and Preventive Action Control Procedure", updating content related to improvement reports and team problem-solving, and revised the "Product Identification and Traceability Control Procedure" to ensure clear identification and traceability of products throughout their entire lifecycle (from raw materials to finished product delivery).

Quality Policy

Comprehensive quality control, full participation, rapid response

Quality first, customer foremost

Quality is the life of the enterprise

Strategy

The company through strict implementation of quality control systems and environmental standards,can reduce the negative impact of products on the environment while ensuring consumer health and safety.The company, based on the Risk and Opportunity Response Procedure, identifies and addresses risks and opportunities in various departments during production and management activities, and evaluates the severity and frequency of identified risks.

Analysis of risks and opportunities related to product responsibility

Risks

Sudden equipment failure caused by physical risks during product production, or raw material contamination, leading to product safety hazards, which in the short term will result in high operating costs;

If compatibility issues arise in the application of new technology, or if market demands cannot be met, resulting in increased R&D costs;

If negative publicity spreads due to product quality issues, it may seriously damage the company's brand image, affect customer cooperation and market expansion, thereby leading to a decline in revenue.

Opportunities

If the company develops and offers new packaging solutions that meet customer needs, it can increase revenue;

If the company leverages its product liability advantages to participate in international certification and the formulation of industry standards, thereby enhancing brand influence, it will expand market share and increase revenue.

Risk Management

The company evaluates identified risks according to the Risk and Opportunity Response Procedure and takes measures based on the evaluation results to reduce or eliminate risks. Based on this, the company has established a strict quality management process, using quality maps to identify key processes and risk points, combined with effective corrective and preventive measures to strengthen closed-loop problem management. At the same time, the company reduces quality risks and improves product stability by promoting automation equipment and process innovation, as well as optimizing production plans through rational scheduling strategies.

Qiaxing Group Product Liability Related Risk Response Measures

Category

Specific Measures

Strict Quality Management Process

The product quality management strictly follows the PDCA (Plan-Do-Check-Act) principle, integrating quality control processes into the product development stage, initiating Quick Response Quality Control (QRQC) procedures during production, and Outgoing Quality Control (OQC) procedures during sales. It requires rigorous oversight at every stage from product development to finished product shipment to ensure the stability and reliability of product quality.

Application Quality Map

In the pursuit of excellent manufacturing,the companybuilds process assurance capabilitiesqualitymaps,systematically strengthening quality control through four key steps.

Analyze the failure modes of each process step to determine root causes and control measures;

Select high-risk stations to draw theQ-mapand mark key stations;

Regularly update new actions based on audit results to address emerging issues;

Establish specific control points to ensure standards and monitoring methods.

Effective corrective and preventive measures

According to the "Corrective and Preventive Measures Control Procedure", the company's quality control department is responsible for issuing the corresponding "Corrective and Preventive Measures Handling Form" when major quality, product safety issues, critical control point deviations from critical limits, or non-compliance with prerequisite program requirements occur. They organize the formulation of corresponding corrective and preventive measures and track and verify their implementation effectiveness. Each responsible unit is in charge of analyzing the causes of nonconformities and implementing corrective and preventive measures. The business department is responsible for conveying customer requirements and the results of complaint handling.

Automation equipment and process innovation

Based on past project development experience,the company'sautomation transformation work prioritizes projects with high feasibility, rapid replicability, and scalability, focusing on injection molding line collection, lip gloss/mascara assembly, vibration feederfeeding projects, and turntable loading and unloading projects.The company'sautomation transformation solutions cover multiple product categories, including lip gloss, caps, pumps, and lipsticks, with the greatest effectiveness and widest implementation scope in lip gloss projects, which also include several innovative projects.

Rational Production Scheduling Strategy

Combining customer expectations and historical order data, the future forecasted high monthly demand is detailed into production plans by mold product and the number of production days in the month, with advance layout to balance monthly and weekly production schedules, reduce changeover time, and improve efficiency. For products with frequent quality issues and high wastage, bulk combined production is implemented to avoid resource waste caused by repeated changeovers. In addition, each operating factory holds daily production quality meetings, and cross-department project synchronization daily meetings are conducted to ensure timely communication of information, quick response, and handling of exceptions, ensuring smooth production operation.

Hold Quality Pledge Conference

In the current context of intensified global competition and rising customer quality expectations, quality has become a key factor for enterprise development. To meet market demands,the companyOperations Center guided the first-, second-, and third-tier lines as well as the Cixi factory to hold a quality pledge conference, promoting the transformation of quality control from passive post-inspection to preventive process design and lean management strategies.

The company solemnly committed through the pledge conference to convey its determination for transformation. This is not only a responsibility to customers but also an investment in future development, helpingthe companyto consolidate global market trust, take practical actions toward new heights of quality excellence, and drive the enterprise to steady and long-term success on the quality track.

Caption: Scene of the pledge conference

Held the“Five-Star Team Building” project launchmeeting

On December 7, 2024,the company’s “Five-Star Team Buildingproject was officially launched, markinga key initiative by thecompany to advance lean production and move towards excellence in manufacturing. The project focuses on frontline production teams, aiming to build highly efficient, collaborative, and excellence-driven production teams to supportthe company’s efforts in promoting lean production and achieving manufacturing excellence.

Caption: Scene from the launch meeting of the Five-Star Team Building project

Indicators and Goals

The companydrives continuous improvement in quality management and production efficiency through specific quantifiable indicators.In 2024, Qiaxing Group reduced defective quality costs by $58,632.80 compared to the previous year,and automation in special process areas saved 30 labor days per day.These indicators not only reflect the company’s commitment to product quality control but also demonstrate its strategic planning in enhancing production efficiency and reducing costs, laying a solid foundation for achieving sustainable development goals.

QiaxingGroup 2024Product Responsibility Related Goals and Progress

Indicator

Unit

Target

2024 Progress

Customer Complaint Rate

%

≤0.40

0.69

Customer Return Rate

%

≤0.33

0.71

Customer First Inspection Rejection Rate

%

2.83

1.48

Automation saves labor input

400

599

15

6.2 Technological Innovation and Intellectual Property Management

【SDGs 9: Industry, Innovation, and Infrastructure】

The issue has dual importance

Governance

Qiaxing Group regards R&D innovation as a key support for core competitiveness and continuously strengthens the construction of product R&D and technological innovation systems.The companyis market demand and customer requirements-oriented, deeply analyzes industry trends and consumer patterns, captures market pain points and potential needs, provides clear directional guidance for new product development, and promotes the deep integration of technological innovation and market demand.

The company has established systems such as the "Research and Development Management System," "R&D Investment Accounting Management System," "Talent Introduction Management System," "Technical Innovation Incentive Measures,"the "Design Control Operation Measures," and the "Special Project Development Operation Procedures" to standardize the company's new product research and development and design processes.

In terms of intellectual property protection, the company strictly complies with laws and regulations such as the "Patent Law of the People's Republic of China,"and follows GB/T29490-2013 "Enterprise Intellectual Property Management Specification," formulating the "Intellectual Property Management Measures"as well asthe "Intellectual Property Statement," "Intellectual Property Acquisition Control Procedures," "Intellectual Property Maintenance Control Procedures," and "Intellectual Property Reward and Punishment Control Procedures" and other supporting procedural documents to provide institutional guarantees for the company's intellectual property management.

The company has established a patent studio, with intellectual property managementcoordinated by the Product Design Department,which has a patent teamresponsible for specific patent work, managed through a hierarchical and clearly defined structure to ensure orderly progress of intellectual property work, supporting the protection and transformation of the company's innovation achievements.To encourage employees to participate in research and innovation,the company has established a technical innovation incentive mechanism and formulated an intellectual property incentive system that clarifies rewards and compensation for employees' intellectual property creation, protection, and utilization. The company has a global R&D team of over500people and in2024added professional technical positions such as materials engineers (new materials, bio-based materials, PCR materials), dedicated to developing environmentally friendly, high-performance materials to enhance product sustainability and market competitiveness.

Intellectual Property Policy

Quality First, Customer Supreme, Strengthen Innovation

Intellectual Property Goals

Establish a sound intellectual property management system, rigorously improve the quality supervision and production system, and promote continuous technological advancement of the company

QiaxingPackaging (Kunshan)has passed the intellectual propertycompliancemanagement system certificationcertificate, valid until June 1, 2026.

Caption:Qiaxing Packaging (Kunshan)obtained the Intellectual Property Management System Certification

Strategy

Technological innovation drives the iteration of packaging materials, supporting the green transformation of the packaging industry. Strengtheningintellectual property managementandR&D investmentcancultivate industry technical talent, promote upstream and downstream collaborative innovation, and facilitate industrial employment and skill upgrading.

Analysis of risks and opportunities related to technological innovation and intellectual property management

Risks:

New technologiescarryrisks such as long R&D cycles and difficulties in成果转化,whichmay lead to wasted R&D expenses;

If competitors accelerate technology iteration and the company cannot maintain continuous innovation capability, it may result in loss of market share;

If intellectual property disputes or technical quality issues arise, they may damage the company's brand image.

Opportunities:

With the continuous rise in demand for green packaging and intelligent packaging, the company can drive revenue growth by launching differentiated products that meet market needs through technological innovation.

Risk Management

The company focuses on process and technological innovation, strengthening awareness and capability in protecting intellectual property rights of innovative achievements by establishing an intellectual property management system and conducting relevant training.

Qiaxing Group's Technological Innovation and Intellectual Property Management Measures

Category

Specific Measures

Process Innovation

High Solid Content Electroplating Process

The high solid content electroplating process produces less waste liquid discharge and causes relatively less environmental pollution; the high solid content volatile organic compound (VOC) content is 289g/L, about 64% lower than that of ordinary electroplating VOC content, reducing high solid content VOC emissions by 44 tons per year (based on an annual order volume of 14 million)

High-Solid Content Mascara

Innovative Design

New High Airtightness Powder Hinge

The innovative design of the new hinge ensures the hinge function between the inner lid and the base, while allowing the inner lid a certain axial movement space. This enables free adjustment of the inner lid's levelness to ensure uniform compression around the entire circumference of the powder sieve holes, thereby achieving high sealing performance of the product.

High Airtightness Loose Powder

Building an Intellectual Property Management System

The new patent management system significantly improves the efficiency and reliability of patent management by optimizing data storage, personnel access control, approval processes, and full lifecycle management.

The system supports data backup and recovery, version control, and multi-dimensional protection to ensure the security and integrity of patent data.

In terms of personnel permissions, access rights are set according to different positions and roles to prevent unauthorized operations and ensure data security.

The approval process is clearly designed and automated, reducing human intervention, improving approval efficiency, and making the application and management process more standardized and transparent.

The system monitors and manages the approval flow and data flow throughout the entire patent lifecycle. From application to authorization and then to maintenance, each stage has clear records and tracking, making patent management more controllable and efficient.

Caption:Intellectual Property Management SystemPage

Conduct Training

In May 2024, the company conducted training on the application of patent-related knowledge,focusingon the search, extraction, and utilization of patent information, aiming to enhance employees' ability to use patent information in research, development, and production processes. A total of 56 relevant personnel participated in this training,whichdeepened the understanding of the value of patent information,laying a solid foundation for promoting the company's technological innovation and achievement transformation.

Caption: On-site of patent knowledge application training

Developed an innovative new coating process in collaboration with Dalian University of Technology

The company works closely with Dalian University of Technology,conducting in-depth research on the physics of material interfaces.Relying on collaborative projects, they jointly developed an innovative new coating process,the application of which significantly enhances the lubrication performance of material surfaces,effectively achievingthe effect of non-stick essence on bottle bodies after the innovative coating process. This technology not only improves the user experience of the product but also further strengthens the company's competitiveness in the packaging field.


Figure: "Interfacial Molecular Lubrication" Research and Testing Content

Indicators and Goals

The company, combining industry development trends with its own strategic planning, has establishedquantitative indicatorsand goals in the areas of technological innovation and intellectual property management,and strictly reviews progress toward these goals annually,committed to leading technological innovation through continuous innovation and efficient management.In 2024, mold production capacity increased by24.8%compared to 2023.As of the end of December 2024, Qiaxing Group has accumulated 388 patents.

15

6.3 Customer Service

【GRI 416: Customer Health and Safety 2016】

EcoVadis Customer Health and Safety】

【SDGs 17: Partnerships for the Goals】

The issue has significant impact importance

Qiaxing Group always adheres to a customer demand-oriented approach, continuously strengthening innovation capabilities and comprehensive strength.The companyabides by the principles of integrity, regards product quality as the foundation of development, pursues high-quality service as its core value, and has earned wide market recognition through solid performance. Whether it is an internationally renowned cosmetics brand or a growing startup,the companyis able to provide comprehensive service supportand assistancewith professional capabilities.

Full-process service system

The companyhas established a complete pre-sales and after-sales service system, achieving efficient interaction with customers through pre-sales demand communication and after-sales response mechanisms, ensuring that customer issues and requests are handled promptly. To strengthen the standardization and normalization of customer service management,the companyhas formulated the "Customer-related Process Control Procedure," establishing systematic process standards for contract and order management, customer property management, and customer satisfaction evaluation procedures, continuously improving customer service quality.

Contract and order management

Qiaxing Group Contract and Order Management System

Contract Review Stage

Order Review Stage

Product Pricing Stage

The initial purchase contract must be confirmed by the legal department for accuracy before being archived and entered into the system. Subsequent contracts are converted into internal orders by customer service personnel and reviewed.

The quality agreement is proposed by sales, led in review by the quality department, and countersigned by relevant departments. The review results are recorded in the "Contract/Agreement Review Form."

The business system receives the customer's order, which is entered by customer service personnel and issued as a "Manufacturing Notice."

The Production Management Department reviews the delivery date according to the "Production Planning and Control Operating Procedures."

Customer service personnel reply to customers and confirm the order delivery date based on the production schedule maintained in the system.

If the price maintained by the project personnel in the business systemthe price maintained by the price analysis team, the system will automatically approve. If the price maintained by the project personnel<the price maintained by the price analysis team, the system requires approval from the business system supervisor before it can be approved.

All products must be priced before placing an order. The system fully controls the order data throughout the process.

Customer asset management

Customer property includes customer-customized molds, provided materials, etc.The companyrequires that products provided by the customer be used only for the purposes specified by the customer,and must not be used for other purposes without authorization or improperly handled without the customer's permission. If the materials provided by the customer are not fully used after production is completed, the remaining data must be provided to the customer to determine the handling method.

In addition, if customer property is lost or damaged during receipt, storage, or production, the warehouse must tally the total quantity and notify the production management personnel and the customer service staff of the business system. The customer service staff of the business system will notify the customer and communicate with them to determine how to handle the situation. If the materials can be warehoused, the warehouse is responsible for safekeeping; if the materials need to be returned, the customer service staff of the business system is responsible for the shipment of the materials.

Customer Satisfaction Evaluation

The customer satisfaction management system is based on a standardized indicator system andsurvey mechanisms, laying a solid foundation for improving service quality.

Qiaxing Group Customer Satisfaction Evaluation System

Category

Specific Content

Management System

A scientific and effective customer satisfaction indicator system has been established, forming the "Customer Satisfaction Survey List and Tracking Form."

The business system is responsible for entering customer information into the company's customer directory, and such customers become the company's subjects for investigation and tracking.

Investigation Mechanism

The business system conducts a customer satisfaction survey every six months (July and January).

Before June 15 and December 15 each year, the list of customers to be surveyed is compiled and approved, and the "Satisfaction Survey Form" is sent to the customers to be surveyed via email and mail.

Customer service staff of the business system are responsible for tracking customer feedback and collecting satisfaction survey forms within fifteen working days, with a recovery rate required to exceed 80%.

The company regards customer feedbackasthe corebasisfor service optimization, systematically organizing customer opinions and suggestions to accurately identify service pain points.The companyfocuses on root causes to implement closed-loop management, continuously promoting the upgrade of customer service quality and effectively improving customer satisfaction.

In 2024,Qiaxing Group's monthly OTIF (On Time In Full) consistentlyreached95 points or above,with customer satisfaction scores exceeding90 points.

Customer Complaint Handling

Qiaxing Group focuses on the quality of customer service, standardizing customer communication and complaint handling processes. Through regular complaint analysis, tracing the root causes of product defects, formulating quality improvement plans, establishing complaint control targets linked to employee performance, simultaneously improving staff training mechanisms, and employing strategies such as strengthening on-site management, preventing human errors, and introducing automation technology, the company comprehensively enhances the level of customer service.

Customer Complaint Handling Process

Note: If there are special customer requirements above, implement the special customer requirements.

In 2024,the companyreceived a total of 204 major customer complaints,with the complaintsmainly involving personnel issues. The primary personnel problems focused on "failure to identify issues" and "not following required standard operations." In response to the above complaints, the companyattached great importance and promoted problem-solving through process management,workshop renovation,and upgrading supplier management, among other measures.Specifically, these include:

Establishing process improvement projects centered around process management;

Develop a workshop renovation plan to address foreign objects and dust in the environment;

Develop a supplier management improvement plan, requiring all abnormal cases to be assigned to different personnel for tracking until the case is closed; establish an internal supplier quality meeting system to report improvement progress and support requests weekly; establish a special improvement team for high-difficulty customer complaints and track improvement progress in real time.

In 2024, the overall complaint rate of Qiaxing Group EBB

0.69%(monthly average)

2024, Qiaxing Group Customer Feedback + Complaint Rate

1.90%(Monthly Average)

2024, Qiaxing Group Customer Complaint Abnormal Closure Rate

99.5%(Monthly Average)

Digital Upgrade Boosts Customer Service Quality

In the construction of the customer service system, Qiaxing Packaging focuses on digital upgrading and began implementing the PLM project management collaboration system at the end of 2024.This system runs through the entire process from development decision-making, product design, process design to production, building an integrated platform covering data services, project management, and collaborative operations.After the system is operational, with upgraded digital collaboration capabilities,it achieves improved customer demand response speed and shortened project delivery cycles, continuously enhancing the company's efficiency and collaboration ability in customer project management.

Caption: Diagram of the PLM Project Management Collaboration System

15

6.4 Information Security

【GRI 418 Customer Privacy 2016】

[EcoVadis Responsible Information Management]

The issue has financial significance

In the current context of accelerated digital transformation, information security has become one of the core guarantees for enterprises to achieve sustainable development. Qiaxing Group attaches great importance to information security and risk control, continuously strengthening the construction of the information security management system. The companystrictly complies with laws and regulations such as the Cybersecurity Law of the People's Republic of China, the Data Security Law of the People's Republic of China, and the Personal Information Protection Law of the People's Republic of China. In 2024, the company did not experience any major information leaks or violations in the areas of customer privacy and information security.

Governance

The companyplaces great emphasis on building an information security management system and has established a multi-level, clearly defined information security management structure. Each organization collaborates according to functional divisions, ensuring information and data security throughout the entire process—from policy decision-making, daily control, emergency response to execution and supervision.

Qiaxing Group Information Security Management Structure and Responsibilities

Organization

Responsibilities

Information Security Management Committee

Responsible for decision-making related to information security management policies, holding regular or as-needed meetings annually to review matters related to information security management, and coordinating the allocation of resources required for the implementation of information security management policies.

Information Security Officer

Responsible for early warning, monitoring, and handling of information security status, proposing improvements for information security management, and assisting in the execution of information security self-assessments.

Information Security Working Group

Responsible for formulating information security management-related standards, promoting information security-related activities, conducting information security education and training, establishing information security risk management systems, formulating emergency response and recovery measures for security incidents, and implementing audit improvement recommendations.

Information Security Audit Team

Responsible for evaluating the implementation of information security management systems, formulating and executing internal information security audit plans, and tracking the progress of corrective actions for non-compliance issues.

Emergency Response Team

In the event of a major information security incident, coordinate and supervise the responsible persons of key business processes to carry out related operations, and coordinate the allocation and use of resources; in the event of a disaster, convene relevant personnel to formulate, maintain, updateand execute various disaster recovery procedures, cooperate with rescue units to be responsible for rescuing personnel, materials, and equipment, and command on-site work; after the disaster, coordinate and command the cleanup of the disaster site, and plan the restoration of the original operating site; convene relevant personnel to conduct testing and drills of the business continuity operation plan.

The companyhas established multiple internal information security management regulations such as the "Compliance Management Procedure," "Data Security Protection Management Procedure," "Information Security Management Manual,""Information Security Risk Assessment and Management Procedure,"and others. Following the principles of classified management, hierarchical protection, and authorized use, it details the security management of corporate and personal data, assigns the responsibility for the confidentiality and security control of customer information to specific departments, and, combined with the data leakage prevention management system, provides technical support to protect customer privacy security.

Information Security Management Policy

Comply with laws and regulations, act with integrity and professionalism, ensure customer satisfaction

Standardized management, ensure safety, continuous improvement

Strategy

Information security forthe companynot only concernsthe company'sinternal information and customer data security, but also has indirect impacts on the environment and society. Information security incidents triggering emergency operations in data centers increase energy consumption and carbon emissions; electronic devices damaged and replaced due to data breaches also cause resource waste and environmental pollution.Therefore,ensuring information security can potentially avoidenvironmental pollution or resource waste issues.At the same time,the companycan enhance customer trust by strengthening information security measures, promote social recognition of corporate responsibility, and thereby drive sustainable development and social stability.

Analysis of information security-related risks and opportunities

Risk:

Ifexisting protection technologies lag behind, they are vulnerable to hacker intrusions, resulting in data theft or tampering,and in the short termit is necessaryto invest a large amount of funds to upgrade the technology;

Oncean information security breach causes customer data leakage, consumer trust decreases, market share declines in the short term,and revenueis damaged.

Opportunities:

By obtaining authoritative information security certification, demonstrating the company's security strength, it is beneficial to expand market share and increase revenue;

Promotingoperationalprocess intelligencethroughdigital transformation, optimizing production processes and resource management, optimizing digital tools such asRPA (Robotic Process Automation) and AI (ArtificialIntelligence)localized deployment,building a digital collaboration platform helps the company respond more accurately to market demands,reducing operating costs and increasing revenue in the medium to long term.

Risk Management

To strengthen the information security defense,the company has implementedmulti-dimensionalinformation security managementmeasures,coordinating efforts across assessment and audit, monitoring and early warning,emergency response and drills, technical protection and certification,security awareness training, and digital transformation supportto safeguard information security.

Qiaxing Group Information Security Management Measures

Dimension

Specific Measures

Evaluation and Audit

Regular Comprehensive Assessment:Conduct information security risk assessments across all business lines through third-party professional organizations (Sangfor), covering data storage, transmission, processing, and other stages to identify potential vulnerabilities (such as cyber attacks, data leaks, third-party cooperation risks),ensuring the security of information assets.

Compliance Benchmarking: Based on international standards (ISO 27001) and industry regulations (such as the Personal Information Protection Law and Data Security Law), assess the alignment of the existing management system with regulations, ensuring that information security measures comply with legal requirements and reduce compliance risks.

External Independent Audit: Undergo annual independent third-party audits, verifying the comprehensiveness and accuracy of risk identification, providing independent third-party oversight for risk management.

Monitoring and Early Warning

Comprehensive Network Security Monitoring: Continue using Sangfor security services for around-the-clock network-wide information security monitoring and protection, with the annual overall security score rising from 86.78 to 87.5, effectively preventing various security threats.

Dynamic Monitoring: Using the Sangfor Security Service Platform for 24-hour real-time threat intelligence monitoring, combined with AI technology to analyze abnormal behavior, providing early warnings for high-risk scenarios such as ransomware attacks, supply chain vulnerabilities, and phishing email threats, ensuring stable system operation.

Emergency Response and Drills

Annual Disaster Recovery Drill: Conduct an annual disaster recovery drill to simulate emergency response and recovery processes when major issues occur in information systems, enhancing employees' ability to handle emergencies and ensuring business continuity.

Technical Protection and Certification

VPN Line Policy Configuration:Based on Sangfor solution, building an information security transmission defense line; through firewall rule settings to allow policies to ensure communication security.

File Encryption Control: Deeply using Si'an Zhiyun file encryption system to achieve file encryption control, preventing sensitive information from being illegally accessed or tampered with during transmission and storage, ensuring data security.

System Certification: Qiaxing Packaging (Kunshan), Qiaxing Packaging (Cixi) have passed the ISO/IEC 27001:2022 information security management system certification, with the certification scope covering information security management activities related to the manufacture of plastic cosmetic packaging containers and their accessories. Qiaxing Packaging (Kunshan), Qiaxing Packaging (Cixi) have also passed ISO22301 2019 business continuity management system certification, applicable to business continuity management activities related to the production of plastic cosmetic packaging containers and their accessories.

Network Security Audit: CyberVadis network security audit, further verifying the company's network security protection capabilities.

Information Security Awareness Training

Organizing Training:The companyorganizes annual information security-themed training,and irregularly sendsinformationsecurity-related posters every quarter,ensuring employees understand and comply with information security requirements and processes, enhancing the information security awareness of all employees.The training content includesQiaxing Group Network Information Security Matters Explanation,” “2024 Qiaxing Group Email Security Training,” “2024 Qiaxing Group Information Security Training.”

Digital Transformation Support

Application Systems:Digital transformation provides technical support for information security management.For theconnected IOT & OEE systems,the companystrengthens real-time monitoring and security protection of equipment operation, enhancingvisual management through workshop TV boards and mobile boards.Using the OEE systemarchitecture, managementnodes are embedded in processes such as calendar scheduling and abnormal shutdown management.

Qiaxing Group completedCyberVadiscybersecurity risk assessment

In 2024, the companyimplemented multiple key improvement measures,covering supplier management optimization, antivirus system upgrades, and strengthening of network security early warning mechanisms, comprehensively enhancing the enterprise's information security protection capabilities. In March 2025,the company passed the CyberVadis cybersecurity audit,scoring 934 points. The specific measures are as follows:

Optimized management and control of third-party integration and cloud service providers, clearly defining incident response times and business continuity requirements in contracts, and adding audit clauses. Conduct quarterly technical and service capability assessments regularly to ensure supplier compliance and service quality.

Replaced the original Kaspersky antivirus software with SangforaES endpoint case system, integrated and linked with the Sangfor security management platform to achieve 24-hour real-time monitoring and response.

The Sangfor security management platform took over the original PA firewall linkage,achieving real-time network threat early warning, and canblock threats through 24-hour security service engineers, ensuring the security of network entry and exit points.

Caption:CyberVadisCybersecurity AuditScore

Conducting Cybersecurity Awareness Training to Uphold Regulatory Boundaries Together

On July 26, 2024, the company held a cybersecurity regulations briefing session at the employee activity center. This event not only deepened and expanded the company’s long-term efforts in cybersecurity and anti-fraud awareness but also strengthened and enhanced every employee’s sense of responsibility for cybersecurity.

Caption:Scene from the Cybersecurity Regulations Briefing Session

Indicators and Goals

The company demonstrates its actions and effectiveness in strengthening the security defense by settingmanagement goalsand timely reviewingthe progress of each phase. In 2024, the company successfully completed multiplemanagement goals,consolidating theinformationsecurity foundation.

Qiaxing Group2024Information Security ManagementRelatedGoals and Progress

Indicators

Management Objectives

Progress in 2024

Number of Major Information Security Incidents per Year

0 times

Achieved

Important information system annual availability rate

Not less than 99%

Achieved

Annual information security training for key positions not less than

No less than 2 times per year

Achieved

Vulnerability Scanning (Global)

Execution Cycle1time(s)/month

Achieved

Information Security Education and Training

Execution Cycle2times/year

Achieved

Intrusion and Penetration Testing

Execution Cycle1time/year

Achieved

Backup and Restore Testing

Execution Cycle1 time/week

Achieved

Disaster Recovery Testing and Restoration Drills

Execution Frequency1time/year

Achieved

15

6.5 Supply Chain Management

【GRI 308: Supplier Environmental Assessment 2016; GRI 404: Supplier Social Assessment 2016】

[EcoVadis Supplier Environmental Practices; Supplier Social Practices]

【SDGs 17: Partnerships for the Goals】

The issue has financial significance

The company's suppliers are categorized based on material types, mainly divided into four categories. The company strictly complies with the "Tendering and Bidding Law of the People's Republic of China" and other laws and regulations, establishing a sound supply chain management system to prevent supply chain security risks.

Governance

To standardize supply chain management, and establish a sound supplier governance mechanism, the company has formulated the "Supplier Management Procedure" and "Supplier Code of Conduct" systems. In the supply chain management system, the Purchasing Department serves as the core coordinating department, internally divided into three modules: development purchasing, order purchasing, and supplier quality management (SQE).

Supplier Management Structure

Organization

Responsibilities

Purchasing Department

As the core coordinating department, responsible for the development of externally purchased products, supplier selection and management, and establishing sustainable procurement standards

Development Purchasing

Responsible for supplier development and new product development, and carrying out designated management

Order Procurement

Responsible for order follow-up of mass-produced products, supplier reconciliation, and other business processes

SQE

Responsible for auditing suppliers, handling supplier quality issues, and8D analysis follow-up, supplier KPI assessment

Strategy

If the company actively implements green procurement policies and selects environmentally friendly suppliers in supply chain management, it can help the industry reduce plastic use and carbon emissions, alleviate ecological pressure; if through supply chain compliance management, the rights of upstream and downstream employees are protected, it can promote employment stability, enhance supply chain resilience and socio-economic resilience.

Supply Chain Management Related Risk and Opportunity Analysis

Risks:

Natural disasters such as floods and typhoons may disrupt the supply of key raw materials, causing production stoppages and delivery delays, increasing operating costs in the short term and reducing revenue;

Long-term resource shortages caused by climate change may increase the difficulty and price volatility of procuring basic materials such as plastics, thereby raising operating costs in the medium to long term;

Changes in customer demand may affect the flexibility and efficiency of the existing supply chain structure, increasing operating costs in the short term;

If suppliers are found to have issues such as environmental pollution or labor rights violations, it may damage the company's brand image and customer trust, leading to a short-term decrease in revenue.

Opportunities:

Under the globalESG trend, downstream customers are paying more attention to supply chain sustainability. If the company strengthens supply chain ESG management and provides customers with full-chain ESG traceabilitymeetingcustomertransparency demands, it canexpand market share,and increase revenue.

Risk Management

The companyplaces great importance on various potential risks in the supply chain field, adheres to sustainable procurement,strictly selects suppliers, strengthens access and dynamic management,and actively promotes the construction of a resilient supply chain to ensure stable operation and sustainable development of the supply chain in a complex environment.

Sustainable Procurement

The company carries out a series of management practices,focusing on six major dimensions: establishing strict standards, conducting due diligence, supplier access management, building communication channels, supervision and auditing, and providing training and support. From environmental and social standards and norms, to supplier selection, information collection, interactive collaboration, and then to supervision improvement and capacity empowerment, the entire process solidifies the foundation of sustainable procurement and promotes the sustainable development of the supply chain ecosystem. In addition, the company is committed to working with partners to jointly promote supply chain transparency and ethical standards, ensuring the sustainability of the entire supply chain.

Qiaxing Group Sustainable Supplier Management Practices

Category

Specific Measures

Establish Strict Standards

The company has established the "Supplier Code of Conduct", which covers environmental and social standards. The company requires all suppliers to sign this code agreement to demonstrate their compliance with these standards or commit to meeting these standards in the future by communicating their action plans with us. These guidelines are the basic requirements that suppliers must follow and form the foundation of our cooperation.

Environment: Covers aspects such as energy efficiency, water resource protection, waste management, and emission control.

Social: Covers standards related to labor rights, health and safety, environmental protection, and business ethics.

Implement due diligence

When selecting new suppliers, strict due diligence is conducted mainly through self-assessment questionnaires and on-site audits.

Self-assessment questionnaire: Suppliers are required to complete a detailed questionnaire about their environmental and social dimensions management systems and practices, serving as an initial screening tool.

On-site audit: For key suppliers, regular on-site visits are arranged to directly inspect the actual operation of their environmental and social dimensions management systems.

Supplier admission management

The company invites suppliers to fill out the "Sustainability Survey" and the SA8000 Supplier Survey," collecting in-depth information from environmental, labor, and other dimensions.

The company requires suppliers to sign the "Statement on Social Responsibility Management System," to ensure their actions comply with the standards requirements.

Establish communication channels

The company has created an open supplier communication platform to facilitate their feedback on issues and seek solutions, while encouraging them to share successful experiences in improving working conditions and fulfilling social responsibilities. Through a two-way interactive mechanism, it continuously enhances the sustainability level of the supply chain.

Supervision and Audit

Encourage and verify whether suppliers have obtainedISO 14001or other internationally recognized environmental management system certifications.

The company conducts regular on-site inspections and third-party audits to check whether suppliers comply with relevant codes of conduct and social responsibility standards. For identified issues, specific improvement plans are developed and their implementation is tracked until the problems are fully resolved.

Conduct training and support

Provide training resources and support to suppliers to helpthemunderstandand implementthe company's established code of conduct and social responsibility standards.

Through hosting seminars,developing online training courses, and other diverse forms,the companyshares best practices in sustainable development and the latest environmental technology trends with suppliers.

The companyactively fosters a culture of continuous improvement in collaboration, encouraging suppliers to jointly explore efficient and environmentally friendly solutions. Through cooperative R&D, joint projects, and other methods, it promotes technological innovation and process optimization,effectively reducingenvironmental impact.

The company has established a series ofsocial responsibility management commitments aimed at ensuring suppliers meet requirements in labor rights, environmental protection, and business ethics. The following lists the core social responsibility clauses that suppliers must comply with:

Supplier Social Responsibility Management Commitments

Child Labor:Suppliers must not employ child labor.

Forced Labor:Suppliers must not employ any forced or compulsory labor.

Human Rights:Suppliers must respect employees. Employees should not endure any unfair treatment physically, verbally, psychologically, or based on gender.

Working Hours:Suppliers must comply with the working hours limited by local laws and must not force employees to work overtime.

Remuneration:Suppliers must pay employees wages that are not less than the minimum legal wage standard or provide more favorable remuneration.

Discrimination:Suppliers must not engage in any unfair or improper discrimination in employment, remuneration, promotion, or other aspects when hiring employees.

Freedom of Association:Suppliers must respect employees' rights to freely associate and elect representatives in accordance with local laws.

Health and Safety:Suppliers must ensure that their workers' working environment is clean, healthy, and safe.

Environment:Suppliers commit to strictly complying with environmental laws and regulations applicable to our business. In terms of the environment, suppliers should systematically prevent, reduce, or remediate the adverse impacts of the company's actions, products, and services on the environment through proactive measures and responsible management.Suppliers must ensure compliance with applicable laws and regulations, including those related to air emissions, noise, pollution, and surface water discharge. Suppliers should also establish safe procedures for handling, transporting, and disposing of waste.

Business Ethics:We expect partners to comply with all laws, regulations, and best practices applicable to their business, especially in areas such as anti-corruption and anti-money laundering, conflicts of interest, adherence to business practices, and compliance with competition laws.

Additionally, we strive to promote environmentally friendly procurement. For example, regarding the procurement quota of plastic pellets,the companyrecommends customersto useenvironmentally friendly recyclable PCR materials,from 2022to2024, the proportion of PCR material usage increased from10% to 11.4%. When selecting suppliers, under equal cost conditions, priority is given to factories certified with management systems such as "Green Factory," "Environmental Management System," and "SA8000System." Furthermore, when purchasing electrical equipment,the companyfocuses on environmental friendliness, prioritizing equipment with top energy efficiency ratings to minimizeenergy consumption and pollution emissions, safeguarding environmental sustainability.

Supplier Management

Qiaxing Group has established a comprehensive supplier management system covering key aspects such as supplier admission, assessment incentives, and audit evaluation,promoting continuous improvement in compliance, integrity, efficiency, and sustainable development, helping to build an efficient, transparent, and sustainable supply chain system.

Qiaxing Group Supplier Management Measures

Category

Specific Measures

Supplier Admission

Information Collection:The companyinvites suppliers to complete the "Supplier Evaluation Survey," "Sustainable Development Survey," and "SA8000 Supplier Survey"documents,to fully understand the suppliers' operations and social responsibility practices, while simultaneously signing a "Confidentiality Agreement" to strengthen the information security barrier.

Audit and Scoring:For Category 1 material suppliers, based on category characteristics and risk levels,the companyforms an evaluation team including SQE and members from related departmentsto conduct on-site audits,using the "Supplier On-site Survey Scoring Sheet" to quantify the evaluation results. In principle, suppliers with scores below 60 points on the scoring sheetare not allowedto enter the company's supplier system.

Qualification Review and Contract Signing:Suppliers of Category 2 to 4 materialsmaybe exempt from on-site audits, and the companyneeds to collect and fill out the "Supplier Evaluation Survey" information, reviewing qualification documents such as business licenses and bank account information.After the supplier's sample is approved,the company proceeds to have the supplier sign the "General Terms of Procurement for Products and Services," "G-SA-2019-09-B Supplier Material Safety Commitment Statement (including RPP900Hand other requirements)," "Product Quality Agreement," "Supplier Code of Conduct," "Trade Security Supplementary Agreement," and otherdocuments.

Priority Cooperation for Certified Partners:According to the "Supplier Management Procedure",for suppliers involved in product safety,priority is given in the admission process to partners certified by GFSI-recognized schemes, ISO22000, GMP\HACCP, or those who can provide a declaration of conformity.

Supplier Assessment and Incentives

Assessment Mechanism:For qualified suppliers of Category One materials, the company has established a monthly assessment mechanism, evaluating batch pass rates, on-time delivery rates, quality incident feedback handling, and customer complaint penalty items.At the same time, the companyfollows the ISO9001Quality Management System standard, SA8000Social Responsibility Management System, and ISO14001Environmental Management System requirements to conduct annual supplier assessments, covering quality, deliverytimeliness, price competitiveness, innovation capability, social responsibility, environmental assessment, business ethics, and other aspects.

Holding an Awards Ceremony:On January 6, 2024, the company clarified the target requirements suppliers need to meet in 2024 at the "Strategic Supplier Awards Ceremony" and recognized suppliers who performed excellently in the past year,

Audit and Evaluation

Internal Audit:Conducted once a year,the internal audit comprehensively reviews supply chain management systems, processes, and measures,to ensure system compliance and effectiveness.

External Audit:With the help of external audits, during other system certification processes, third-party organizations and customers conduct in-depth assessments of the supply chain, providing objective professional opinions, helping to identify potential risks, and offering improvement suggestions.

Key Performance Indicator Setting:To quantify supply chain performance, the company requires suppliers to set a series of key performance indicators (KPIs), such as batch pass rate, OTD, quality feedback performance, innovative technologies, etc..

Quality Improvement Measures and Results for Suppliers of Qiaxing Group

Improvement Measures

Performance results

Supplier Qualification Review: At least one on-site audit is conducted annually for key suppliers

Reduce the proportion of non-conforming suppliers from the previous 5% to below 1% currently.

Incoming Material Inspection: All raw materials must undergo strict quality inspection before warehousing

The product defect rate caused by raw materials has decreased by approximately 60%.

Supplier Performance Evaluation:Monthly performance assessments are conducted for suppliers, requiring those rated C-level to respond with the company's quality improvement plan.

The overall KPI score of suppliers increased by 20%, with the product qualification rate improving by 15 percentage points.

Employee Training and Supplier Workshops:Regular professional training sessions are organized for the procurement team, along with periodic workshops held with suppliers.

The procurement team's ability to handle complex issues has significantly improved;

In April 2024, management experience was exchanged with 13 suppliers;

In September 2024, a third-party conducted specialized ESG training for suppliers,involving60 suppliers.

Conducted ESG specialized training for strategic cooperative manufacturers

In September 2024, the company held a supplier conference, invitingmore than 60strategic partners to attend, and invited experts from Carbon Trace Technology Co., Ltd. to provide training on “Core ESG Principles and Their Practical Application in Supply Chain Management.”Among these, “Scope 3 emissions”(indirect emissions generated throughout the entire value chain, which usually account for the majority of a company’s carbon footprint)became the focus of attention.

As one of the influential enterprises in the packaging industry, the company takes this training as an opportunity to strengthen consensus on supply chain ESG management and promote suppliers' understanding of the value connection between climate change response and emission control.

Caption: On-site specialized training session

Enhance Supply Chain Resilience

From material procurement and logistics transportation to the entire product delivery process, the company quickly responds to operational disruptions through flexible contingency plans and precise forecasting mechanisms, timely adjusting production and supply strategies to ensure business continuity. Enhancing supply chain resilience has become a key issue for corporate development, and a stable yet flexible supply chain is the core support for meeting challenges.

Qiaxing Group Resilient Supply Chain Management Initiatives

Category

Specific Measures

Diversified Supplier Base

To reduce the risks brought by reliance on a single supplier, the company actively expands a diversified supplier network. By sourcing from multiple suppliers, it not only disperses the risk of supply chain disruptions but also leverages cost advantages and resource characteristics from different regions to improve the overall stability and flexibility of the supply chain.

Establish strategic partnerships

The company establishes deep strategic partnerships with key suppliers, covering multiple aspects such as information sharing, joint investment in research and development, and jointly formulating emergency plans.

Develop Emergency Response Plans

The company has developed detailed emergency plans for sudden events that may affect the supply chain, such as natural disasters, political turmoil, and economic crises.The plans should include rapid response mechanisms, a list of backup suppliers, inventory strategy adjustments,to ensure quick response and operational recovery in emergencies.

Strengthen Inventory Management

The company uses an advanced inventory management system to ensure maintaining sufficient safety stock levels without affecting cash flow, in order to respond to short-term demand fluctuations or supply disruptions.

Continuous monitoring and evaluation

The company regularly conducts health checks on the supply chain to identify potential risk points and take preventive measures. At the same time, supply chain strategies are adjusted promptly according to changes in the external environment.

Indicators and Goals

The health and stable development of the supply chain isthe company'skey link in promoting sustainable development of the industrial chain.The companysets clear supply chain management goals andreviews them annually to ensure effective implementation of all measures.

Qiaxing Group 2024 Supply Chain ManagementRelatedGoals and Progress

Indicator

Unit

Target

2024 Progress

ESG contract approval rate for Category A suppliers

%

95

100

On-time delivery rate

%

>95

96.33

Batch pass rate

%

>98

98.13

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United in spirit, creating a beautiful home together

7.1 Human Rights and Labor Rights

【GRI 408: Child Labor 2016; GRI 409: Forced or Compulsory Labor】

EcoVadis Child Labor, Forced Labor and Human Trafficking; Social Dialogue; Working Conditions】

【SDGs 1: No Poverty; SDGs 8: Decent Work and Economic Growth】

The issue has significant impact importance

Human Rights Protection

Qiaxing Group strictly complies with the Labor Law of the People's Republic of China, the Labor Contract Law of the People's Republic of China, the Regulations on the Prohibition of Child Labor, the Law on the Protection of Minors of the People's Republic of China, and other relevant laws and regulations, as well as the legal requirements of overseas operating locations such as the United States and Mexico, along with the SA8000: 2014 Social Responsibility Management Standard and the principles of the United Nations Global Compact. It has established related policies such as the "Prohibition of Forced Labor Control Procedures" and the "Control Procedures for the Use of Child and Minor Female Workers," prohibiting any human rights violations such as forced labor, child labor, or the use of minor workers at any stage of work and labor processes.

Qiaxing Group Human Rights Protection Commitment

The use of child labor is prohibited, and suppliers or subcontractors who use child labor or forced labor or harm employees' health and safety are not accepted;

Respect employees' freedom and prohibit any form of forced labor;

Provide healthy and safe working and living conditions to ensure employees' operational safety and occupational health;

Promote labor-management cooperation, respect employees' freedom of association and collective bargaining rights;

Provide equal and fair work social responsibility, prohibiting any form of discrimination;

Respect employees' basic human rights, prohibiting any form of personal insult;

Reasonably arrange production plans, and reasonably arrange employees' working hours and rest periods;

Provide reasonable wages and benefits, at least meeting the basic needs of employees.

Qiaxing Group adheres to the spirit of the and the , actively responding to the global and strategic clients' Living Wage initiative, ensuring the basic quality of life for employees.The company ensures that employees receive reasonable and decent wages, providing basic security in food, medical care, education, housing, and other aspects.

Basic Living Security for Qiaxing Group Employees

Food

Employees can afford a diverse and nutritious three meals a day.

Medical Care

Employees can easily access basic medical care and afford medical services in emergencies.

Education

Employees not only have the opportunity to invest in their children's education but also have the chance to receive relevant training to challenge higher positions.

Housing

Enabling employees to enjoy decent, well-environmental housing.

During the reporting period:

Qiaxing Group has zero violations related to forced labor and child labor employment.

The proportion of security personnel receiving human rights training is100%.

Qiaxing Group is certified by LWP.

Qiaxing Group has joined the Living Wage Program (LWP), which aims to improve the quality of life for employees by providing sufficient wages to cover essentials such as food, housing, healthcare, and education. This initiative seeks to enhance employee satisfaction, strengthen corporate reputation, and promote sustainable development for the company.

In February 2024, the company obtained LWP certification and the certificate. The program currently covers all employees at the Kunshan factory, with plans to expand to the Mexico factory in 2025 and to other global factories by 2030. Additionally, the Living Wage project received the third prize in L'Oréal's Green Vibes global competition, demonstrating external stakeholders' recognition and support for the company's human rights protection efforts.

Note: The living wage is higher than the local minimum living wage standard.

LWP Certification Certificate

Employee compensation and benefits

Qiaxing Group strictly complies with the "Labor Law of the People's Republic of China," "Labor Contract Law of the People's Republic of China," and other relevant laws and regulations, formulates and continuously improves internal regulations such as the "Employee Handbook" and "Performance Bonus Assessment Measures," establishing a scientific, comprehensive, fair, and reasonable compensation and benefits system.

Regarding the salary structure, the company implements a diversified and incentive-based compensation model, with employee salaries mainly composed of fixed wages and performance bonuses. Among them, performance bonuses are issued on a quarterly and annual basis, closely linked to employees' work performance and achievements, fully stimulating employees' enthusiasm and creativity.

In terms of welfare and protection, the company complies with national regulations and pays the five social insurances and one housing fund on time for employees, ensuring that every employee receives basic social security. In addition, the company also provides employees with various additional benefits, such as birthday parties and holiday gifts, allowing employees to feel the company's care and warmth outside of work, striving to create a harmonious and positive working environment.

In terms of rest and leave,the companyfully respects and protects the legal rights and interests of employees, providing a variety of leave options including marriage leave, bereavement leave, prenatal check-up leave, maternity leave (including miscarriage leave), nursing leave (paternity leave), breastfeeding leave, sick leave, personal leave,,annual leave, and more, allowing employees to have enough time to handle personal matters and spend time with family amidst their busy work, achieving a work-life balance.

Employee Democratic Communication

Qiaxing Group values democratic management,legally establishes labor unions, holds employee representative meetings on time, promotes the improvement of labor relations coordination mechanisms, protects employees' labor rights, and builds harmonious labor relations. The company has established a widely connected and employee-serving union work system, closely connects with employees, listens to and reflects employees' opinions and demands, cares about employees' lives, and helps employees solve difficulties.

Qiaxing Group Labor Union Organizational Structure

Holding the 2024 Employee Representative Meeting

On the afternoon of November 28, 2024, the 6th Second Employee Representative Conference and the 3rd Fourth Member Representative Conference of Qiaxing Packaging were held simultaneously. This conference was attended by the company's Administrative & Operations Planning Director, Senior Manager of the Safety and Environmental Protection Department, as well asQiaxingPackaging Union Chairman and the Director of the Union Economic Audit Committee,and specially invited over 100 employee representatives and union member representatives from various departments to participate,listening to the Administrative Director’s "Business Management Work Report" and the Safety and Environmental Protection Manager’s "Safety Production Work Report",reviewing and approvingthe "Collective Wage Contract".In the future, the Qiaxing Packaging Union will better fulfill its basic duties of "safeguarding employees' legal rights and sincerely serving the employee community," contributing to the sustainable and healthy development of the enterprise.

Qiaxing Group 2024 Employee Representative Conference On-site

In order to better communicate and interact with employees in a timely and effective manner, the company has established a multi-dimensional information transmission and feedback mechanism, allowing employees to promptly understand company developments and express their views on daily work management, living facilities, anddietary matters.

Qiaxing Group Two-way Information Communication Channels

Company Announcement

Upward Feedback

Employee Messages

List of Important Policies

Key Information Notice

Corporate Culture Promotion

Supervisor Feedback

HR Department Supervisor Feedback

Union Feedback

Employee Representative Feedback

Listening Hotline

Website Messages

WeChat ID Message

Employee Suggestion Box Message

The company attaches great importance to employees' ideas and suggestions. After the leadership receives relevant opinions, they will respond or propose improvement measures within 24 hours. Meanwhile, the company also has an employee service window to help employees resolve issues promptly, allowing them to better focus on work and life.

Qiaxing Group "Listening Hotline"

Qiaxing Group Employee Service Window

Qiaxing Packaging (Kunshan) regularly conducts quarterly satisfaction surveys of the employee cafeteria and annual satisfaction surveys of the dormitories to promptly understand employee needs, improve the quality of cafeteria and dormitory services, and enhance employees' happiness in work and life.In 2024, the employee cafeteria satisfaction survey result was95.94%,and the employee dormitory satisfaction surveyresult was99.57% (responses of "acceptable" and above).

Qiaxing Packaging (Kunshan) Cafeteria and Dormitory Satisfaction Survey Questionnaire

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7.2 Diversity and Inclusion

【GRI 405: Diversity and Equal Opportunity; GRI 406: Non-discrimination 2016; GRI 413: Local Communities 2016】

[EcoVadis Diversity, Equality, and Inclusion]

【SDGs 5: Gender Equality; SDGs 10: Reduced Inequalities】

The issue has significant impact importance

Inclusive Work Environment

Qiaxing Group firmly believes that an equal, inclusive, and diverse workplace environment is the foundation for the mutual development of employees and the company. Based on the SA8000:2014 social responsibility management standard, the company has established management systems such as the "Anti-Discrimination and Disciplinary Measures Management Procedure" to resist discriminatory behaviors in hiring, remuneration, training, promotion, and dismissal processes. At the same time, the company advocates care and inclusion for vulnerable groups, promotes gender equality, and strives to provide equal job opportunities for all employees, creating inclusive workflows and a diverse workplace environment.

The company recruits vulnerable group personnel through various channels, continuously increasing the proportion of vulnerable group employees. By cooperating long-term with multiple special education colleges and universities, encouraging internal transfers and re-employment of elderly employees, and prioritizing the recruitment of ethnic minorities and veterans under equal conditions, the company helps address the social issue of employment difficulties faced by vulnerable groups.

During the reporting period, Qiaxing Group

Number of employees with disabilities is103, number of ethnic minorityemployees is152.

The employment rate of disadvantaged group employees reached 7.88%, achieving ahead of schedule the 2025 target of 5% employment proportion for disadvantaged groups.

[1] The company defines vulnerable group employees as employees with disabilities and ethnic minority employees.

The company fully considers factors such as physical conditions, ability compatibility, and customs to arrange suitable job positions for disadvantaged groups, helping them integrate into the team and feel respected and cared for.

Qiaxing Group Vulnerable Group Development Plan and Action Directions

Career Development and Personal Growth

Provide humanistic care

Help quickly integrate into the team

Providing diversified training (pre-job training, basic technical training, personal skills training)

Help master more skills and adapt to more positions

Equal treatment at work, care provided in life

Regularly organize discussion meetings, team-building activities, and follow-up visits

Establish a correct employment outlook and cultivate a sense of responsibility

Set up a dedicated hotline system with designated personnel responsible for management

In addition, the company also organizes various activities for employees from vulnerable groups, such as special cultural and sports events for vulnerable groups, group birthday parties, assistance in obtaining driver's licenses, and sign language classes, conveying warmth and care to them.

Birthday Party for Vulnerable Groups

Special Cultural and Sports Activities for Vulnerable Groups

Support hearing-impaired employees in obtaining driver's licenses

In March 2024, the company collaborated with Rongai Human Resources and Kunshan Jiaoyun to help hearing-impaired employees obtain driver's licenses, assisting them in better adapting to and integrating into society, while also providing more work and life opportunities, demonstrating the company's social responsibility and inclusiveness.

Training Activity Site

Held the first sign language class

In June 2024, the company successfully held the first sign language class at the 3F Employee Activity Center. More than thirty grassroots supervisors from Qiaxing Factories 1, 2, and 3, along with new trainers and the HRBP team, explored the charm of sign language and sincerely felt the warmth of the silent world, allowing participants to gain a deeper understanding of the lives and needs of the deaf and mute, thereby better providing help and support for them.

Sign Language Class Site

Qiaxing Group fully recognizes the value of women in the workplace, encourages and supports the development of female talent, and provides women with equal career development opportunities in recruitment, promotion, and other matters, continuously increasing the proportion of women in management, as well as offering female employees a series of leaves such as prenatal checkup leave, maternity leave, and nursing leave to help them better balance work and life, taking concrete actions to build an equal, diverse, and inclusive workplace environment.

During the reporting period, Qiaxing Group

Management1]female representation reaches36.28%.

Female employees account for49.01%.

[1]The company definesmanagementas employees with a rank of ≥4.

Organizing Holiday Celebrations for Female Employees

For International Women's Day 2024, the company prepared exclusive gifts for every female employee and organized outdoor celebration activities, includingplanting succulents, gathering around the stove to enjoy tea, making dumplings, and watching fire dance performances,inajoyfulatmosphere, they celebrated their special day together.

International Women's Day Event Site

Hosting Gender Equality Interview Activities

From April to May 2024, the company's HR department conducted interviews with dozens of female employees. The activity aimed to raise awareness of gender equality among all employees and express the company's attention to and emphasis on gender equality. In addition, the company continues to strengthen gender equality education and promotion through various channels and provides related help and support to employees via the "Listening Hotline."

Live Connection at the Event Site

Diverse employee activities

Qiaxing Group is committed to creating a positive, diverse, and inclusive corporate culture. It actively promotes the establishment and development of employee cultural and sports clubs, planning and organizing a variety of exciting cultural and sports competitions. In 2024, the competitions covered multiple fields including billiards, e-sports, basketball, music, table tennis, and chess. While enriching employees' leisure lives, these events also give every employee the opportunity to challenge themselves, showcase their talents, and shine in their own way.

Billiards tournament

E-sports Competition

Basketball Competition

Qiaxing "Good Voice"

Table Tennis Competition

Chess Competition

With the support of the Kunshan Economic and Technological Development Zone Federation of Trade Unions, the company established the Development Zone Activity Center (Qiaxing Packaging Sub-center). Since its establishment one year ago, the sub-center has become an important venue for employee leisure and entertainment, hosting over 40 events and attracting more than 1,000 visits.

Organizing the ESG Knowledge Competition

The month-long ESG knowledge competition culminated in the finals on May 29 at the 3rd-floor auditorium of the Qiaxing Packaging (Kunshan) office building. The venue was packed and the atmosphere was lively. As the competition reached its climax, the scores of the six participating teams—Factory 1, Factory 2, Factory 3 Building B, Comprehensive, Cixi, and Co-Polymer—remained neck and neck, with every buzzer-beater answer keeping the entire audience on edge.

In this contest of wisdom and speed, each team not only needed to demonstrate their deep understanding of ESG topics but also had to respond quickly under pressure, showcasing outstanding teamwork and adaptability. This competition highlighted the company’s commitment to implementing ESG principles and injected strong momentum into building a sustainable future.

Qiaxing Group ESG Knowledge Competition Finals Scene

Building the "Qiaxing Excellence"

In the 2024 mid-year management team-building event, each group faced clear tasks and goals:to collaborate and use limited resources and time to build a ship symbolizing team spirit and the company’s vision, the “Qiaxing Excellence.”

This required not only technical excellence but also seamless teamwork and efficient communication. After relentless effort, a magnificent “Qiaxing Excellence” finally appeared before everyone’s eyes.This event allowedeveryone to deepen their understanding and friendship in a relaxed and enjoyable atmosphere,and it is believed that in future work,everyone will jointlycontribute greater strength to the company’s development.

Participants pose for a photo with the "Qiaxing Excellence" ship

Additionally, the company follows the principle of “Glocalization,” flexibly adjusting activity content and formats according to the cultural background and employee needs of overseas operations,actively integratinglocal characteristics,and through holiday celebrations, displays of religious and cultural symbols,breaking down cultural barriers,and creating an inclusive work environment.

Qiaxing Co., Ltd. (Mexico) Employee Activities

Activity Type

Specific Content

Celebrate Local Festivals

Organize a Christmas celebration themed "Navidad en la Fábrica" for employees and their families, including factory tours, a Christmas dinner (Posada), gift exchanges, raffles, and invite "Santa Claus" to distribute candies on site.

Showcase Local Culture

Place a statue of the Virgen de Guadalupe in the factory's common area, allowing employees to place flowers during religious holidays.

Mexican employees can apply for time off on the Feast of Our Lady of Guadalupe (December 12) to participate in religious activities.

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7.3 Employee Training and Development

【GRI 404: Training and Education 2016】

【EcoVadis Career Management and Training】

【SDGs 4: Quality Education】

The issue has significant impact importance

Employee Training

Qiaxing Group has established a comprehensive training system and abundant training resources for employees, empowering their growth through training and helping employees and the company progress together.

The company established Qiaxing Academy, and the Human Resources Training Center continuously enriches the content of Qiaxing Academy. Through conducting internal trainer training, developing training materials and methods, building a training information platform, and configuring hardware facilities, it creates a comprehensive training system and framework for employees that integrates instructors, materials, and venues.

Qiaxing Academy

Academy Mission

Establish a corporate university rooted in cosmetic packaging design, development, and manufacturing, comprehensive, systematic, and professional, to become the company's incubator for talent, technological innovation, and management innovation.

College Positioning

Building a Knowledge Platform

Talent Development Pipeline

Quality and Specialized Skills Enhancement Training

Driving Management and Technological Innovation, Piloting and Incubation

Corporate culture communication

For new employees, the company has designed differentiated onboarding training based on different job levels to better help new employees integrate into the company environment, master job skills, understand corporate culture, and ensure that the training content accurately meets the actual needs of new employees at different levels.

Qiaxing Group New Employee Onboarding Training System

Training Programs

Training Content

Training Format

Participants

General Education

The training center arranges general education training courses within one week of new employees' onboarding, aiming to help new employees understand the company culture and regulations, and become familiar with the company's departmental structure.

On-site Training

Online Micro-lessons

Non-frontline Employees

Dojo Training

Before new employees officially start work, the department supervisor or experienced staff will provide instruction, introducing the necessary skills, operational standards, and safety and health regulations required for the job. This includes on-site practical demonstrations, allowing the new employee to perform the tasks themselves, aiming to establish correct work methods and attitudes to maintain a consistent quality level.

On-site Guidance

Theoretical Teaching

Frontline Employees

Key Position OJTTraining

Before the work process of newly hired key employees, the Training Center organizesrelevant department instructors to conduct training on product, materials, molds, processes, and other modules according to the plan.

Theoretical Knowledge

On-site Explanation

Key Special PositionEmployees

Three-Day Ramp-Up Mechanism

New frontline operators must undergo 2-3 days of ramp-up training and assessment before starting work. Training and personnel management are conducted by designated new employee trainers from each department, who also track and evaluate their job performance. Only those who pass can officially enter the workshop; those who fail will be eliminated.

Three-Day Ramp-Up Management Module

For current employees, the company develops an internal education and training plan on an annual basis. Based on the core technical requirements of each position, a combination of theoretical and practical training methods is used to help frontline technicians, key position personnel, and managers quickly adapt to job demands, improve job competence, and support the company’s operational needs.

In 2024, the company has set up and completed a total of 127in-house training courses,covering general knowledge, technical, management, and other fields, comprehensively supporting employee skill enhancement.

While continuously improving the internal training system, the company also provides external training opportunities for employees. Departments can submit external training requests to the training center based on their own training needs. After consolidating the relevant demands, the training center drafts plans to implement external training with designated institutions, regularly issues external training notifications, and arranges personnel to participate in the training.

Cool Academy Learning Platform

Company buildsCool Academy learning platformto betterintegrate companytrainingresourcesand establish a digital knowledge systemto provide employees with more flexible and convenient learning methods. The main functional modules of Cool Academy include knowledge base, training, talent development, and faculty, supporting the company’s internal daily training, learning, and examination needs.

By the end of 2024, Qiaxing Group’s Cool Academy learning platform had created a total of 1,071 courses and released 1,514 training programs (including 874 exams and 640 training courses), providing online training for a total of 3,230 learners.

Cool Academy Platform Page

5E Leadership Training

On March 22, 2024,QiaxingGroup held a two-day 5E leadership training, attended by 13 leaders from various factory buildings, business departments, quality control, design departments, and other units. The training aimed to help “Xing” leaders understand the full scope of 5E leadership, recognize themselves, discover their own strengths, and use what they have learned to identify the strengths of team members and inspire everyone’s self-motivation.

The course is based on two dimensions: intuition and evidence, with four colors helping participants understand their own and their team members' natural characteristics. Using the 3F method—listening to facts, feelings, and intentions—a "Angel Baby 3F Training Group" was formed to support each other in effective communication and enhance collaboration.

Note: 5E Leadership refers to self-awareness, thinking ability, motivation, collaboration, and execution.

Scene from the 5E Leadership Training event

For overseas employees, Qiaxing Co., Ltd. (Mexico) continues todeepen school-enterprise cooperation with local vocational technical schools (such as CONALEP, Tesco,IPN), higher education institutions, and government training agencies, carrying out internship programs, technical school cooperation projects, and dual-track (Dual Training System) education. Factory technical backbones participate in offering customized courses such as "CNC Machine Operation" and "mold maintenance" aimed at local colleges,achieving deep integration of “industry, academia, and research” to support local skilled talent reserves.In addition, Qiaxing Co., Ltd. (Mexico) also offers a series of training programs for the Chinese team employees in Mexico to help Chinese staff better adapt to overseas work environments and continuously improve their business capabilities.

Qiaxing Co., Ltd. (Mexico) Training Program Implementation Status

Training Name

Training Content

Participation

Internship Rotation Training

Recruit interns from partner schools and provide them with 3-6 months of rotational training. Training positions include production, quality inspection, procurement, etc., and offer outstanding interns opportunities for full-time employment.

Two Mexican employees obtained full-time positions through this program.

Special training on Mexican labor law

Training focuses on the core provisions of Mexico’s "Federal Labor Law" (Ley Federal del Trabajo), combined with common issues faced by Chinese employees, covering key points including: important considerations when signing Mexican labor contracts, statutory working hours, overtime and salary calculation rules, employee social security (IMSS, etc.) and welfare rights, dismissal compensation, and labor dispute resolution.

The training lasted 1.5 hours, with a total of 25 employees from the Mexico-China team participating, covering both management and technical positions.

Spanish Language Training

The course content covers basic conversations, workplace language, and common knowledge of Mexican culture to help employees smoothly integrate into the local team. The course design focuses on practicality, concentrating on common factory scenarios, while incorporating Mexican cultural customs to enhance the fun of learning.

Starting from August 2024, a fixed 2-hour training session is held every Saturday morning, with 18 employees from the Mexico China team participating, covering management and technical staff.

Employee Development

The company has established a clear and transparent career development pathway with opportunities for advancement and demotion, encouraging employees to continuously learn and improve, enhance production process capabilities and product quality levels, thereby providing human capital support for the company's long-term development and growth.

The company conducts regular talent assessments annually, evaluating employees' ranks based on their seniority, professional skill levels, career achievements, and other comprehensive factors, combined with a points system. The Human Resources Department is responsible for coordinating and executing matters related to employee rank evaluations, and has set up a dedicated review team to establish technical rank evaluation standards, complete data audits during the evaluation process, and supervise the results.

Qiaxing Group Career Development Pathway

Management Pathway

Technical Pathway

Functional Channel

Senior Manager

Section Chief/Supervisor

Senior Engineer

Engineer

Assistant

Senior Specialist

Specialist

In addition, the company has launched a key position transfer program, allowing employees in non-key positions to apply for transfers into key positions. This transfer program not only strengthens the company's talent reserve and talent pipeline for key positions but also provides more opportunities for employees' career development, fully stimulates employee potential, promotes internal talent mobility, and achieves a win-win situation for both individuals and the company.

Employee Incentives

Qiaxing Group encourages employees who practice the company’s business philosophy of “Honesty and Integrity, Customer First, Keeping Promises, Continuous Improvement, Teamwork” in their daily work through both material and spiritual incentives. The Production Operations Center is responsible for regularly issuing and updating the monthly employee performance incentive policy, clearly defining assessment criteria to ensure that outstanding employees and teams are recognized fairly and justly. Assessment criteria include performance target achievement rate, quality control rate, OTD reward items, and safety incident deductions.

In 2024, to recognize teams and individuals who have made outstanding achievements and excellent contributions in various business modules (such as safety management, quality control, cost reduction, efficiency improvement, site management, talent development, technological breakthroughs, management innovation, and business enhancement), the company conducted a two-month internal evaluation and selection process. Ultimately, 157 awards were granted, including special awards, technical innovation awards, management innovation awards, outstanding team awards, outstanding individual awards, and improvement proposal awards, along with material incentives.

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7.4 Health and Safety

【GRI 403: Occupational Health and Safety 2018】

EcoVadis Employee Health and Safety】

【SDGs 3: Good Health and Well-being】

The issue has dual significance

Governance

Qiaxing Group strictly complies with the "Production Safety Law of the People's Republic of China," the "Occupational Disease Prevention Law of the People's Republic of China," the "Fire Protection Law of the People's Republic of China," and other relevant laws and regulations. The company has established and continuously improved the occupational health and safety management system, constantly strengthening the company's safety management capabilities and production safety level.

The company has established an EHS Committee, composed of the company's main leaders, department heads, the Safety and Environmental Protection Department, and the labor union. It is responsible for coordinating and deciding on occupational health and safety strategic planning, formulating and implementing occupational health and safety-related policies, building a safety risk management mechanism, supervising occupational health and safety matters, and regularly organizing safety management meetings to ensure the company's long-term safe production.

The company has set up the Safety and Environmental Protection Department as the comprehensive management body for safety, environmental protection, and fire protection. It is staffed with 9 full-time safety personnel and 5 part-time safety managers from various factories, responsible for daily hazard identification and remediation, occupational health management, environmental protection management, sustainable development management, and EHS-related training.

Organizational Structure Chart of Qiaxing Group EHS Committee

The company has established systems such as the "Safety Risk Classification Control and Dual Early Warning Mechanism for Hidden Danger Investigation and Management," "Hazard Identification and Evaluation and Risk Control Management System," "Occupational Disease Hazard Prevention Responsibility System," and "Hidden Danger Investigation and Management System," building a comprehensive health and safety management mechanism.

In 2024, Qiaxing Packaging (Kunshan) maintained the title of a Level 2 Safety Production Standardization Enterprise. Qiaxing Packaging (Kunshan), Qiaxing Co., Ltd. (Mexico), and Gongjusheng Biochemical's ISO 45001:2018 Occupational Health and Safety Management System certifications are all currently valid.

Caption:Occupational Health and Safety Management System Certification

Strategy

Safety production management is of great significance for reducing accident risks, ensuring the company's stable operation, and protecting employees' health and safety. The company always adheres to the safety production policy of "safety first, prevention-oriented, and comprehensive management," while improving its own safety production management level, it also promotes upstream and downstream enterprises to jointly strengthen safety risk prevention and control, helping to build an industrial ecosystem that values both safety and efficiency.

Health and Safety Related Risks and OpportunitiesAnalysis

Risks:

The companymay generate some harmful substances or have hazard sources during the production process, such asrisks of leaks, fire, and explosions in production equipment. If not properly controlled, this could lead to property damage and casualties, harm the company's reputation, undermine customer trust, and result in reduced business revenue;

Long-term exposure to certain production materials or being in specific production environments, such asinadequate labor protection measures,may put employees at risk of occupational diseases,leading to damage to the company's reputation and administrative penalties.

Opportunities:

Providing employees with a healthy and safe working environment helps enhance their trust and sense of belonging to the company, promoting the company's sustainable and stable development.

Risk Management

Safety Risk Management and Control

In terms of safety risk management, the company has established management standards such as the "Hazard Identification and Risk Assessment Management Procedure." After identifying safety risks, relevant departments conduct risk assessments and classifications, and develop corresponding risk classification control mechanisms and prevention mechanisms to eliminate hidden dangers and reduce the occurrence of risks. At the same time, the company continuously summarizes experiences and refines methods to form a comprehensive closed-loop system for safety risk identification and control, effectively preventing and controlling various safety accident hazards.

Qiaxing Group Safety Risk Management Procedures

The company attaches great importance to the control of safety risks in the work environment and equipment facilities. It has formulated and revised the "Chemical Management Procedure," "Equipment and Facility Safety Production Management Procedure," and "Mechanical Protection Safety Management Procedure," strictly controlling the safety management and use of production equipment and facilities. Through scientific, systematic, and standardized methods, a safe production work environment is created to ensure employee operational safety.

Qiaxing Group Work Environment Safety Management Measures

Measures

Detailed Description

Automated Operations

In processes such as printing, spraying, and assembly, which have potential occupational disease hazards, automation is maximally employed to reduce employees' exposure to hazard sources.

Maintain good ventilation

The factory buildings primarily use mechanical ventilation to ensure good airflow. Local exhaust, smoke extraction, and dust collection facilities are installed at positions with potential occupational disease hazards.

Noise control measures

The factory layout is reasonable, vibration reduction solutions are implemented, noise sources are properly arranged, and regular maintenance and inspection of equipment are strengthened.

Chemical hazard reduction

Eliminatethe disinfection process of cotton pads and the use of the chemical ethylene oxide, preventing chemical hazards from the source.

Strengthen Personal Protection

Distribute labor protection supplies such as activated carbon masks, dust masks, and noise-canceling earplugs to employees, and remind and supervise employees to take personal protective measures at the work site.

The company has also effectively improved internal safety production levels by addressing hidden dangers, emergency management, and safety culture construction,enhancingthe emergency responseandsupport capabilities of each unit, raising employees' safety awareness and behavioral standards, and maximizing the protection of employees' life and health safety.

Qiaxing Group 2024 Safety Management Measures and Achievements

Type

Measures

Achievements

Hidden Danger Investigation and Rectification

The company continuously carries out hidden danger investigations and rectifications. The investigation methods include self-inspections by each unit and hidden danger inspections by the Safety and Environmental Protection Department, conducting comprehensive inspections and rectifications of potential safety risks in the production process.

The company identified a total of 3,573 safety hazards, completed rectification of 3,495, achieving a hazard rectification rate of 97.82%.

Emergency Management

The company has formulated emergency management measures such as the "Production Safety Accident Emergency Plan," "Emergency Preparedness and Response Control Procedures," and "Emergency Medical First Aid Management Measures" to help employees understand how to respond to these specific emergencies.

The company organized a total of 12 emergency drills covering various scenarios including fires, chemical spills, and mechanical injuries, effectively enhancing employees' proficiency in various emergency procedures and further strengthening the safety production defense line.

Safety Culture Construction

The company develops an annual safety education and training plan, providing corresponding safety production training for employees in different positions.

The company has posted safety signs related to facility and equipment safety, occupational health and safety, fire safety, environmental protection, and other areas inside the factory and office spaces.

The company also continuously strengthens the promotion of safety culture through methods such as distributing the "Safety Manual," publicly displaying safety responsibility systems on walls, and organizing safety skills competitions.

The company has conducted more than 10 types of safety training, including safety regulations education, safety production responsibility system, safety risk identification and control, and machinery safety.

The coverage rate of the company's three-level safety education training is 100%, the coverage rate of specialized safety training is 95%, with a total of 10,892 participants in safety training.

Summary of Safety Production Hazard Inspections

Summary of Emergency Drill Scenarios

Formulated the first edition of the "Safety Manual"

Public Display of Safety Responsibility System

Conducting Firefighting Skills Competitions

Qiaxing Co., Ltd. (Mexico) Fire Drill

Annual Equipment Safety Special Rectification

In 2024, the Safety and Environmental Protection Department conducted a comprehensive review and assessment of past work injury accidents, analyzing and finding that the hot stamping machine, turntable machine, and pneumatic press are the three types of equipment that have caused the most work injuries over the years, with the main causes being safety protection loopholes in the light curtain program, control buttons set inside the light curtain, and insufficient protective distance of some light curtains.By the end of 2024, the company has organized and completedspecial rectification workon therelated equipment.

In addition, the company collaborates with partners to jointly improve safety production levels. The company has formulated the "Contractor and Related Parties Management Procedure" to strengthen the management of occupational health and safety for contractors and related personnel.

During the selection phase of contractors and related parties, the company conducts compliance reviews and identifies historical EHS violation incidents to screen qualified contractors and related parties, and signs the "Safety Production and Environmental Protection Management Agreement" with them. In production and operation activities, the company has established a closed-loop management process covering the "before-during-after" stages of operations to continuously prevent, supervise, assess, and rectify potentially risky behaviors in the operation process.

Ensuring Employee Health

In terms of occupational health management, the company has formulated relevant policies such as the "Occupational Disease Prevention and Control Management Procedure" and the "Workshop Environment and Employee Dress Code Operation Specification" to strictly protect employees' occupational health. For new employees, the company issues the "Occupational Hazard Notification Card" in advance to make employees aware of potential occupational disease hazards and protective measures.

Qiaxing Group Employee Occupational Health Management Measures

Measures

Detailed Description

Occupational hazard factor detection

The company regularly invites third-party organizations to conduct occupational health evaluations and occupational hazard factor testing, always paying close attention to the physical and mental health and safety of employees.

The 2024 inspection report shows that all chemical hazardous factor test results for the company's tested positions comply with the requirements of the "Occupational Exposure Limits for Hazardous Agents in the Workplace Part 1: Chemical Hazardous Agents" (GBZ2.1-2019) standard.

Occupational Health Examination

The company regularly conducts pre-employment, on-the-job, and post-employment occupational health examinations for employees in positions with potential occupational hazards. The results of each examination are promptly communicated to the employees themselves, who sign to confirm, and their personal files are continuously preserved and maintained.

In 2024, the company arranged occupational health examinations for a total of 583 people, and no suspected occupational diseases were found in the health check results.

Occupational Contraindication Management

For employees found to have occupational contraindications during pre-employment health examinations, the company strictly prohibits assigning them to contraindicated positions. At the same time, the company promptly arranges job transfers for employees who develop occupational contraindications during on-the-job health examinations to ensure their safety and health.

In 2024, the number of employees detected with occupational contraindications during on-the-job examinations was 7, a 65% decrease compared to 2023.

Occupational Health Training

To enhance employees' awareness of occupational disease prevention, the company regularly conducts occupational health knowledge training for employees internally.

In 2024, the company organized 25 special occupational health safety training sessions for employees in positions involving occupational hazards (including retraining), training 1,817 participants. It also organized 240 occupational health training sessions for new employees, labor dispatch workers, and contractors, training 8,501 participants.

In addition, the company also cares about employees' mental health, inviting experienced psychological counselors to regularly provide psychological counseling services for employees, helping them relieve stress, anxiety, and other negative emotions from work and life, and assisting employees in improving self-awareness and psychological adjustment abilities.

Employee Mental Health Counseling Services

Indicators and Goals

The overall goal of the company's safety production work is: to prevent all safety accidents, to avoid harm to employees' health, and to protect the ecological environment. Adhering to the principle of people-oriented safety first, the company aims to establish and improve the safety production management system, comprehensively control safety risks in all aspects of production and operation activities, achieve systematic safety management, standardized job operation behaviors, inherently safe facilities and equipment, and fixed placement of tools and work environment, thereby improving the company's safety production management level.

Qiaxing Group 2024 Health and Safety Management Related Goals and Progress

Indicator

Unit

Target

2024 Progress

Number of EHS Penalty Incidents

0

0

Fatal Accidents

0

0

Injury rate per 200,000 working hours[1]

/

0.12

0.13

Safety Education Training Pass Rate

%

100

100

Hidden Hazard Rectification Rate

%

≥95

97.82

[1] Injury accident rate per 200,000 working hours = (number of lost-time injury accidents / actual working hours) * 200,000. This indicator's target covers Qiaxing Packaging (Kunshan).

15

7.5 Social Contribution

Neither material in terms of impact nor material in terms of finance

Qiaxing Group actively fulfills its social responsibilities and engages in public welfare activities, providing help and support to vulnerable groups such as elderly living alone and disabled persons, including donating 100,000 yuan to the Kunshan Charity Foundation, as well as donating 20,000 yuan to the Proya Public Welfare Foundation, contributing to the building of a harmonious society with the "Xing" power.

Jointly Held "Integration of Disabled and Healthy" Guandan Friendship Tournament with the Disabled Persons' Federation of the Development Zone

On August 24, 2024, Qiaxing Group, in collaboration with the Kunshan Economic and Technological Development Zone Disabled Persons' Federation, organized the "Integration of Disabled and Healthy, Harmonious Appointment" Friendship Guandan Competition for the Development Zone Disabled Persons' Federation, with 40 players participating. This social event allowed everyone to feel the care and warmth from enterprises and society, promoted mutual understanding and respect between disabled and able-bodied people, reflecting the company's social responsibility and humanistic care for disabled persons.

"Integration of Disabled and Healthy" Guandan Friendship Competition scene

"Warm the Heart" Care Activity for Elderly Living Alone

On December 7, 2024, the Qiaxing Group Volunteer Vanguard Team joined hands with the Kongxiang Trade Union to personally knit scarves for elderly people living alone and prepared lunch boxes, delivering care and warmth directly to their hands.

With the intensification of social aging, the number of elderly people living alone is increasing, and their daily lives face many challenges. This event not only provided material assistance to the elderly but also offered them spiritual comfort. This act of kindness highlights the company's sense of social responsibility and conveys positive energy to society.

Volunteer Vanguard Team at the Event Site

15

ESG Data Sheet and Notes

Economic Data Sheet

Module

Disclosure Item

Unit

Year 2024

Year 2023

Year 2022

Qiaxing Packaging
(Kunshan)

Qiaxing Packaging
(Cixi)

Co-polymer Biochemical

Qiaxing Plastics (Taiwan)

Qiaxing Co., Ltd.
(Mexico)

Qiaxing Packaging (Taizhou)

Qiaxing Group
Total

Economic Performance

Revenue Proportion of Sustainable Products【1】

%

16.44

14.18

8.23

【1】The company defines sustainable products as those with the following attributes: single material, replaceable parts, weight reduction, disassemblable, products made from PCR or bio-based materials.

EnvironmentalDataTable【1】

Module

Disclosure Item

Unit

Year 2024

Year 2023

Year 2022

Qiaxing Packaging
(Kunshan)

Qiaxing Packaging
(Cixi)

Co-polymer Biochemical

Qiaxing Plastics

(Taiwan)

2

Qiaxing Co., Ltd.
(Mexico)

Qiaxing Packaging

(Taizhou)

Qiaxing Group
Total

Environmental Management

Proportion of Employees Receiving Environmental Training

%

100.00

100.00

100.00

0.00

100.00

100.00

99.88

/

/

Proportion of Sites Covered by Environmental Risk Assessment

%

100.00

100.00

100.00

0.00

100.00

100.00

83.33

/

/

Coverage of locations with ISO14001 certification

%

100.00

100.00

100.00

0.00

100.00

100.00

83.33

80.00

66.67

Total Environmental Protection Investment3

Thousand US dollars

1,356.21

0.00

0.00

0.00

0.00

139.11

1,495.33

3,858.43

1,381.87

Addressing Climate Change

Natural gas consumption

Cubic meter

590,067.00

0.00

0.00

0.00

0.00

0.00

590,067.00

685,819.00

92,414.00

Diesel consumption

35,580.88

0.00

0.00

0.00

147,160.11

11,130.00

193,870.99

52,322.85

47,701.63

Gasoline consumption

28,945.85

0.00

0.00

0.00

8,362.84

0.00

37,308.69

32,679.90

31,630.18

Liquefied petroleum gas consumption

kilograms

8,600.00

0.00

0.00

0.00

0.00

0.00

8,600.00

8,850.00

8,850.00

Traditional power consumption

kilowatt-hour

89,108,105.00

823,341.00

1,179,912.00

0.00

2,060,046.00

4,445,519.00

97,616,923.00

97,487,805.00

106,216,377.40

Purchased green electricity

kilowatt-hour

1,756,000.00

0.00

0.00

0.00

0.00

0.00

1,756,000.00

0.00

0.00

photovoltaic power generation

kilowatt-hour

6,432,400.00

0.00

742,641.60

0.00

0.00

0.00

7,175,041.60

7,512,436.80

2,362,480

Steam Consumption4

0.00

0.00

0.00

0.00

0.00

5,415.00

5,415.00

0.00

1,492.70

Total Scope 1 Greenhouse Gas Emissions5

Metric Tons of CO2 Equivalent

1,705.84

/

/

0.00

427.82

29.54

2,163.20

2,091.82

441.84

Total Scope 2 Greenhouse Gas Emissions6

Metric Tons of CO2 Equivalent

48,757.68

441.80

633.14

0.00

823.38

3,981.81

54,637.81

55,405.98

60,950.40

Total Scope 3 Greenhouse Gas Emissions7

Metric Tons of CO2 Equivalent

110,401.53

/

/

0.00

/

/

110,401.53

121,237.58

/

Total Greenhouse Gas Emissions (Scope 1 + Scope 2)

Metric Tons of CO2 Equivalent

50,463.52

441.80

633.14

0.00

1,251.20

4,011.35

56,801.01

57,497.80

61,392.24

Total Greenhouse Gas Emissions (Scope 1 + Scope 2 + Scope 3)

Metric Tons of CO2 Equivalent

160,865.05

441.80

633.14

0.00

1,251.20

4,011.35

167,202.54

178,735.38

61,392.24

Greenhouse Gas Emission Intensity (Scope 1 + Scope 2) (by Output Value)8

Tonnes of CO2 Equivalent/Million USD

190.82

11.78

227.18

0.00

126.45

/

180.53

204.02

242.20

Comprehensive Energy Consumption Conversion

Ton standard coal

12,842.61

101.27

236.47

0.00

444.82

409.67

14,134.75

13,009.23

13,476.86

Comprehensive Energy Consumption Intensity (by Output Value)8

Tons of Standard Coal / Million USD

48.56

2.70

84.85

0.00

44.96

/

44.93

46.16

51.60

Water Resource Utilization

Water Consumption9

328,302.00

3,420.00

21,296.00

0.00

1,093.00

79,959.00

434,070.00

406,422.00

477,355.00

Water Consumption Intensity (by Output Value)8【9】

tons/million USD

1,241.43

91.22

7,641.34

0.00

265.11

/

1,379.63

1,442.12

1,830.00

Industrial wastewater discharge volume

0.00

0.00

0.00

0.00

/

55,000.00

55,000.00

/

0.00

Industrial Wastewater Reuse Volume

255,673.00

0.00

0.00

0.00

/

4,500.00

260,173.00

73,279.30

0.00

Treated Chemical Oxygen Demand (COD)

0.00

0.00

0.00

0.00

/

3.00

3.00

/

0.00

Atmospheric Pollutant Emissions

Total Atmospheric Pollutant Emissions

kilograms

2,096.00

0.00

0.00

0.00

/

101.00

2,197.00

/

/

Particulate matter emissions

kilograms

524.00

0.00

0.00

0.00

/

20.00

544.00

1.79

1,345.24

SOx Emissions

kilograms

252.00

0.00

0.00

0.00

/

79.00

331.00

308.58

1.23

NOx Emissions

kilograms

277.00

0.00

0.00

0.00

/

0.00

277.00

1,914.70

0.00

Waste treatment

General Waste Generation10

2,297.00

0.00

0.00

0.00

58.00

316.00

2,671.00

/

/

General Waste Generation Density (by Output Value)8【10】

tons/million USD

8.69

0.00

0.00

0.00

11.72

/

8.49

/

/

Hazardous waste generation

602.00

0.00

0.00

0.00

/

158.00

760.00

737.69

2,797.06

Hazardous Waste Generation Density (by Output Value)8

tons/million USD

2.28

0.00

0.00

0.00

/

/

2.42

2.62

10.97

Volatile Organic Compounds (VOCs)

kilograms

2,096.00

0.00

0.00

0.00

/

0.00

2,096.00

1,466.15

2,690.09

Waste Recycling Volume

2,289.00

0.00

0.00

0.00

/

0.00

2,289.00

/

/

【1】In this data sheet,“/” indicates that the relevant indicatorshave no valid statistical figuresfor the respective year. The company will continue to improve the ESG data statistical system and continuously enhance ESG data management and disclosure levels in the future.

2】The Taiwan factoryhas entered the closure phase,and in 2024there will be no related energy and resource usage.

3The environmental investment of Qiaxing Packaging (Kunshan) is RMB 9.749 million,Qiaxing Packaging (Taizhou)has an environmental investment of RMB 1 million,and the 2024 environmentalinvestment amountis converted using the RMB exchange rate midpoint of the interbank foreign exchange market on December 31, 2024, where 1 USD=7.1884RMB.

4In 2023, the companyclosed some factories due to internal business adjustments,and there was nosteamusage.

5The scope 1 greenhouse gas sources for domestic factories include greenhouse gases generated from the combustion of natural gas, gasoline, diesel, and liquefied petroleum gas, with related calorific values referenced from the "China Energy Statistical Yearbook" (2022).The factors usedto calculate the scope 1 greenhouse gas emissionsfrom domestic factoriesarethefollowing emission factors:natural gas greenhouse gas emission factor of 0.002176 tons CO2 equivalent per cubic meter, official vehicle diesel greenhouse gas emission factor of 0.002654 tons CO2 equivalent per liter, official vehicle gasoline greenhouse gas emission factor of 0.002215 tons CO2 equivalent per liter, and liquefied petroleum gas greenhouse gas emission factorof 3.10681tons CO2 equivalent per ton.The Mexico factory calculates scope 1 greenhouse gas emissions based onmobile andstationary sources. Mobile sources refer to emissions from gasoline used by vehicles, and stationary sources refer to greenhouse gas emissions from diesel used by diesel generators.The related factors come from the United Nations Framework Convention on Climate Change (IPCC),and the factors used to calculatescope 1 greenhouse gas emissions for the Mexico factory are gasoline (mobile source) greenhouse gas emission factor of 2.24 kg CO2 equivalent per liter, and diesel (stationary source) greenhouse gas emission factor of 2.73 kg CO2 equivalent per liter.

6Factors used for calculating Scope 2 greenhouse gas emissions of domestic factories based on locationare the national average grid emission factor of China at 0.5366 tons CO2 equivalent/MWh, and the purchased steam emission factor at 0.11 tons CO2 equivalent/GJ,while the factor used for calculating Scope 2 greenhouse gas emissions of the Mexico factory comes fromIEA2020, which is 0.3997tons CO2 equivalent/MWh. Additionally, in the process of converting steam usage to calorific value, it is assumed that the steam used is saturated steam (pressure at 1 standard atmosphere, temperature at 100℃).

7The Scope 3 greenhouse gas accounting scope includes Qiaxing Packaging (Kunshan).

8The intensity data (by output value) disclosed in this data table does not include Qiaxing Packaging (Taizhou).

9The water consumption of the Mexico factory is the value from January to May of the year,therefore the water consumption intensity (by output value) of Qiaxing Co., Ltd. (Mexico)= water consumption / (output value * 5/12).

10General waste from Mexican factories is data from July to December of the year, therefore, the general waste generation density of Qiaxing Co., Ltd. (Mexico) = general waste generated / (output value * 6/12).

EmployeeDataTable【1】

Module

Disclosure Item

Unit

Year 2024

Year 2023

Year 2022

Qiaxing Packaging
(Kunshan)

Qiaxing Packaging
(Cixi)

Co-polymer Biochemical

Qiaxing Plastics (Taiwan)

Qiaxing Co., Ltd.
(Mexico)

Qiaxing Packaging

(Taizhou)

Qiaxing Group
Total

Employee Employment【2】

Number of Employees

2,719

102

18

4

259

134

3,236

3,717

4,139

By Employment Type: Number of Full-time Employees under Labor Contract

2,423

67

18

3

259

134

2,904

2,980

3,138

Number of Full-time Employees under Labor Dispatch

296

35

0

1

0

0

332

737

1,001

Proportion of full-time labor contract employees

%

89.11

65.69

100.00

0.00

100.00

100.00

89.74

80.17

75.82

Proportion of full-time labor dispatch employees

%

10.89

34.31

0.00

0.00

0

0.00

10.26

19.83

24.18

By nationality: number of employees from Mainland China and Hong Kong, Macau, Taiwan

2,719

102

18

4

20

134

2,997

/

/

Number of foreign employees

0

0

0

0

239

0

239

/

/

Proportion of employees from Mainland China and Hong Kong, Macau, and Taiwan

%

100.00

100.00

100.00

0.00

7.72

100.00

92.61

/

/

Proportion of foreign employees

%

0.00

0.00

0.00

0.00

92.28

0.00

7.39

/

/

Number of employees under 30 years old (excluding 30)

499

37

2

/

95

18

651

892

1,505

Number of employees aged 30 to 50

1,970

59

13

/

147

90

2,279

2,612

2,537

Number of employees over 50 years old (excluding 50 years old)

250

6

3

/

17

26

302

213

97

Proportion of employees under 30 years old (excluding 30 years old)

%

18.35

36.28

11.11

/

36.68

13.43

20.14

24.00

36.36

Proportion of employees aged 30 to 50

%

72.45

57.84

72.22

/

56.76

67.17

70.51

70.27

61.29

Proportion of employees over 50 years old (excluding 50 years old)

%

9.20

5.88

16.67

/

6.56

19.40

9.35

5.73

2.34

Number of male employees

1,399

39

7

2

138

65

1,650

1,889

2,082

Number of female employees

1,320

63

11

2

121

69

1,586

1,828

2,057

Proportion of male employees

%

51.45

38.24

38.89

50.00

53.28

48.51

50.99

50.82

50.30

Proportion of female employees

%

48.55

61.76

61.11

50.00

46.72

51.49

49.01

49.18

49.70

Number of disabled employees among vulnerable groups3

102

0

0

0

1

0

103

83

92

Proportion of Employees with Disabilities

%

3.75

0.00

0.00

0.00

0.39

0.00

3.18

2.23

2.22

Number of Minority Employees

129

16

0

0

0

7

152

242

130

Proportion of ethnic minority employees

%

4.74

15.69

0.00

0.00

0

5.22

4.70

6.51

3.14

Number of management employees4

475

6

9

1

18

23

532

/

/

Number of Female Employees in Management

176

6

4

1

2

4

193

/

/

Proportion of Females in Management

%

37.05

100.00

44.44

25.00

11.11

17.39

36.28

/

/

Number of Discrimination and Harassment Incidents

0

0

0

0

0

0

0

0

0

Number of Child Labor Hires

0

0

0

0

0

0

0

0

/

Living Wage Survey Employee Coverage5

%

100.00

/

/

/

/

/

100.00

/

/

Proportion of employees earning below the living wage

%

0.00

/

/

/

/

/

0.00

/

/

Number of employees participating in the union

123

4

2

0

/

6

135

/

/

Proportion of employees participating in the union

%

4.52

3.92

11.11

0.00

/

4.48

4.17

/

/

Employee Turnover

【6】

Number of Employees Leaving

750

29

1

0

16

23

819

942

/

Employee Turnover Rate

%

27.58

28.43

5.56

0.00

6.18

17.16

25.31

25.34

/

By Age Group: Number of Employees Under 30 Leaving

322

21

1

0

/

7

351

/

/

Number of employee turnovers aged 30 to 50

401

8

0

0

/

13

422

/

/

Number of employee turnovers aged over 50

27

0

0

0

/

3

30

/

/

Turnover rate of employees under 30

%

64.53

56.76

50.00

0.00

/

38.89

53.92

/

/

Turnover rate of employees aged 30 to 50

%

20.36

13.56

0.00

0.00

/

14.44

18.52

/

/

Employee turnover rate over 50 years old

%

10.80

0.00

0.00

0.00

/

11.54

9.93

/

/

Turnover number of male employees by gender

413

11

0

0

/

14

438

424

/

Turnover number of female employees

337

18

1

0

/

9

365

518

/

Turnover rate of male employees

%

29.52

28.21

0.00

0.00

/

21.54

26.55

22.45

/

Female Employee Turnover Rate

%

25.53

28.57

9.09

0.00

/

13.04

23.01

28.34

/

Employee Training and Development7

Total Training Hours for Employees

Hours

39,009.45

2,335.00

72.67

0.00

1,822.00

846.00

44,085.12

39,920.62

59,094.50

By Gender: Total Training Hours Received by Male Employees

Hours

20,160.08

888.00

28.34

0.00

/

412.17

21,488.60

21,421.26

39,141.60

Total Training Hours for Female Employees

Hours

18,849.37

1,447.00

44.33

0.00

/

433.83

20,774.52

18,499.36

19,952.90

Average Training Duration for Employees8

Hours

14.35

22.89

4.04

0.00

10.78

6.31

13.62

10.64

14.30

By gender: Average training duration for male employees

Hours

14.41

22.77

4.05

0.00

/

6.34

13.02

11.34

18.80

Average training duration for female employees

Hours

14.28

22.97

4.03

0.00

/

6.29

13.10

10.12

9.70

Employee vocational skills training hours

Hours

34,668.00

2,157.00

72.67

0.00

/

688.00

37,585.67

/

/

Percentage of employees who have undergone performance and career development evaluations out of total employees

%

100.00

100.00

100.00

0.00

100.00

100.00

99.88

/

/

【1】In this data table“/” indicates that there are no valid statisticsfor the relevant indicatorin the given year. The company will continue to improve the ESG data collection system and continuously enhance ESG data management and disclosure levels.

【2】Employee data by employment type excludes Qiaoxing Co., Ltd. (Mexico), and employee numbers by age exclude Qiaoxing Plastics (Taiwan).

【3】Vulnerable employee groups as defined by the company include employees with disabilities and ethnic minority employees.

4Managementdefined by the company refers toemployees with a rank of ≥4.

5Currently,the Kunshan factory is carrying out a maintenance salary project, planned to be promoted to the Mexico factory in 2025, and to other global factories before 2030.

【6】Employee turnover rate = number of employees who left / total number of employees; turnover rate for each subsidiary = number of employees who left the subsidiary / total number of employees in the subsidiary.

【7】The duration and average duration of employee training by gender do not include Qiaxing Co., Ltd. (Mexico).

8】Qiaxing Co., Ltd. (Mexico) had 169 actual participants in training in 2024,due tothe factory relocation from Phase 1factory (located in Cuautitlán - Izcalli (Cuautitlán Izcalli)) toPhase 2factory (located in Coacalco (Coacalco)),training was suspended, so the base number of trained employees is lower than the current number of employees at Qiaxing Co., Ltd. (Mexico).

Health and SafetyDataTable【1】

Module

Disclosure Item

Unit

Year 2024

Year 2023

Year 2022

Qiaxing Packaging
(Kunshan)

Qiaxing Packaging
(Cixi)

Co-polymer Biochemical

Qiaxing Plastics (Taiwan)

Qiaxing Co., Ltd.
(Mexico)

Qiaxing Packaging (Taizhou)

Qiaxing Group
Total

Health and Safety

Coverage of sites assessed for health and safety risks

%

100.00

100.00

100.00

0.00

100.00

100.00

83.33

/

/

Coverage of sites obtaining ISO45001 certification

%

100.00

100.00

100.00

0.00

100.00

100.00

83.33

80.00

50.00

Work injury rate per 200,000 working hours2

/

0.13

0.00

0.00

0.00

4.34

0.80

/

0.13

/

Number of work-related accidents

11

0

0

0

10

2

23

8

12

Workdays lost due to occupational injury accidents

371.00

0.00

0.00

0.00

288.00

158.00

817.00

231.75

772.50

Number of occupational injury deaths

0

0

0

0

0

0

0

0

0

Hours lost due to occupational injuries

Hours

2,968.00

0.00

0.00

0.00

2,304.00

896.00

6,168.00

1,854.00

6,180.00

Number of fire drills

6

2

2

0

1

2

13

8

10

Number of Participants in Fire Drill

Participants

2,786

210

18

0

34

199

3,247

3,700

4,857

Number of Hazardous Chemical Spill Drills

2

0

0

0

0

1

3

1

3

Number of Participants in Hazardous Chemical Spill Drills

Participants

56

0

0

0

0

5

61

23

48

Total number of people receiving safety education and training

Participants

4,765

210

18

0

403

213

5,609

3,995

4,800

Total hours of safety training received by employees3

Hours

312,203.00

5,145.00

450.00

0.00

1,151.00

2,465.50

321,414.50

46,266.00

66,532.00

Average safety training hours per person3

Hours/person

114.82

50.44

25.00

0.00

4.01

18.40

99.32

11.58

13.90

Safety education training coverage rate

%

100.00

100.00

100.00

0.00

100.00

100.00

99.88

/

/

Employee Health Checkup Coverage Rate

%

100.00

100.00

100.00

0.00

0.00

100.00

91.87

/

/

【1】In this data table“/” indicates that the relevant indicatorhas no valid statistical datafor the given year.

2The injury rate per 200,000 working hours = (number of lost-time injury accidents / actual working hours) * 200,000. Each operating entity of Qiaxing Group independently conducts the statistics for this indicator,thereforeno weighted statisticsareperformed across all factories.

3In 2024, the frequency of training increased, with at least one specialized training session conducted each month,resulting in a significant increasein both total safety training hours and average safety training hours per person.

Product ResponsibilityDataTable【1】

Module

Disclosure Item

Unit

Year 2024

Year 2023

Year 2022

Qiaxing Packaging
(Kunshan)

Qiaxing Packaging
(Cixi)

Qiaxing Packaging (Taizhou)

Co-polymer Biochemical

Qiaxing Plastics (Taiwan)

Qiaxing Co., Ltd.
(Mexico)

Qiaxing Group
Total

Product Responsibility

Customer Complaint Rate

%

0.69

0.51

0.55

Customer First Inspection Rejection Rate

%

1.48

1.64

5.51

Customer Return Rate

%

0.71

0.96

0.68

Violation Incidents Involving Product Health and Safety Impact

0

0

0

[1]The company's products and customer services are managed uniformly by the Qiaxing Group headquarters, so the relevant indicators are disclosed according to the Qiaxing Group entity.

Intellectual PropertyDataTable[1]

Module

Disclosure Item

Unit

Year 2024

Year 2023

Year 2022

Qiaxing Packaging
(Kunshan)

Qiaxing Packaging
(Cixi)

Co-polymer Biochemical

Qiaxing Plastics (Taiwan)

Qiaxing Co., Ltd.
(Mexico)

Qiaxing Packaging (Taizhou)

Qiaxing Group
Total

Intellectual Property Protection

Number of New Patents (Granted)

125

67

/

Number of New Patents (Pending)

100

57

/

Number of Product Design Patent Applications

30

34

/

Number of Patent Applications (Domestic)

35

34

/

Number of Patent Applications (International)

65

23

/

Cumulative Number of Granted Invention Patents (Domestic and International)

75

/

/

Cumulative Number of Granted Utility Model Patents (Domestic and International)

233

/

/

Cumulative Number of Design Patents Granted (Domestic and International)

80

/

/

Cumulative Number of Patents Obtained(Domestic and International)

388

288

/

[1] The company's intellectual property management is carried out uniformly by the Qiaxing Group headquarters, so the relevant indicators are disclosed according to the Qiaxing Group entity.“/” indicates that there are no valid statistics for the relevant indicatorsin the respective year.

Sustainable ProcurementDataTable【1】

Module

Disclosure Item

Unit

Year 2024

Year 2023

Year 2022

Qiaxing Packaging
(Kunshan)

Qiaxing Packaging
(Cixi)

Qiaxing Packaging (Taizhou)

Co-polymer Biochemical

Qiaxing Plastics (Taiwan)

Qiaxing Co., Ltd.
(Mexico)

Qiaxing Group
Total

Sustainable Procurement

Total Number of Suppliers

472

488

468

Number of Domestic Suppliers

440

456

422

Number of Overseas Suppliers

32

32

46

Number of Strategic Suppliers

60

61

/

Proportion of Outstanding Suppliers

%

5.93

6.00

10.00

Number of Deregistered Suppliers

16

302

2

Proportion of Deregistered Suppliers

%

3.39

38.00

0.40

Number of Suppliers Certified by ISO14001 System

160

156

65

Percentage of suppliers who have signed the Supplier Code of Conduct

%

100.00

100.00

100.00

Percentage of suppliers with social responsibility clauses in procurement contracts

%

100.00

/

/

Percentage of suppliers who passed the social responsibility questionnaire

%

93.43

/

/

Percentage of suppliers who have passed the on-site social responsibility assessment

%

90.04

/

/

Proportion of all purchasers who have received training in sustainable procurement

%

100.00

100.00

100.00

Proportion of suppliers participating in improvement actions or capacity building

%

100.00

/

/

【1】The company's procurement-related work is uniformly managed by the headquarters of Qiaxing Group, so the relevant indicators are disclosed according to the Qiaxing Group entity.“/” indicates that the relevant indicatorhas no valid statistical datafor the year.

Social ContributionDataTable

Module

Disclosure Item

Unit

Year 2024

Year 2023

Year 2022

Qiaxing Packaging
(Kunshan)

Qiaxing Packaging
(Cixi)

Qiaxing Packaging (Taizhou)

Co-polymer Biochemical

Qiaxing Plastics (Taiwan)

Qiaxing Co., Ltd.
(Mexico)

Qiaxing Group
Total

SocialWelfare

Total Funds Invested in Community Activities【1】

USD

13,911.30

0.00

0.00

0.00

0.00

0.00

13,911.30

31,673.91

1,485.90

Volunteer Activity Participantstimes

Participants

2,593

0

0

0

0

0

2,593

2,486

3,640

Total Volunteer Service Hours

Hours

9,713.00

0.00

0.00

0.00

0.00

0.00

9,713.00

10,243.00

19,989.00

1】The amount invested in community activities in 2024 is 100,000 RMB, converted using the central parity rate of RMB to USD in the interbank foreign exchange market on December 31, 2024, where 1 USD=7.1884RMB.

Business EthicsDataTable【1】

Module

Disclosure Item

Unit

Year 2024

Year 2023

Year 2022

Qiaxing Packaging
(Kunshan)

Qiaxing Packaging
(Cixi)

Qiaxing Packaging (Taizhou)

Co-polymer Biochemical

Qiaxing Plastics (Taiwan)

Qiaxing Co., Ltd.
(Mexico)

Qiaxing Group
Total

Business Ethics

Coverage of venues audited internally for business ethics issues

%

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

Coverage of Locations Obtaining ISO37001 Certification

%

100.00

100.00

0.00

0.00

0.00

0.00

33.33

40.00

16.67

Proportion of employees receiving business ethics training

%

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

Proportion of employees who have signed the Code of Business Ethics

%

100.00

100.00

100.00

100.00

100.00

100.00

100.00

/

/

Number of confirmed incidents of embezzlement, corruption, and bribery

0

0

0

0

0

0

0

0

0

Number of confirmed incidents of conflicts of interest

0

0

0

0

0

0

0

0

0

Number of confirmed incidents of commercial fraud

0

0

0

0

0

0

0

0

0

Number of confirmed unfair competition incidents

0

0

0

0

0

0

0

0

0

Number of confirmed reports and complaints related to business ethics

0

0

0

0

0

0

0

0

0

[1]In this data table“/” indicates that the relevant indicatorhas no valid statistical datafor the respective year.

Reporting StandardsIndex Table

Instructions for use

Qiaxing Groupprepared the report in accordance with GRI standards from January 1, 2024 to December 31, 2024.

GRI 1 used

GRI 1: Foundation 2021

GRI Standards

Disclosure Item

ReportSection

GRI 2: General Disclosures 2021

2-1

Organization Details

About Qiaxing Group

2-2

Entities Included in the Organizational Sustainability Report

Report Preparation Instructions

2-3

Reporting Period, Reporting Frequency, and Contact Person

Report Preparation Instructions

2-4

Information Restatement

Green Packaging and Materials

2-5

External Verification

Inspection Report

2-6

Activities, Value Chain, and Other Business Relationships

About Qiaxing Group

2-7

Employees

ESG Data Tables and Notes

2-8

Workers Other Than Employees

Supply Chain Management

2-9

Governance Structure and Composition

ESGGovernance System

2-11

Chairperson of the Highest Governing Body

2-12

The Supervisory Role of the Highest Governing Body in Managing Impacts

2-13

Delegation of Responsibility for Managing Impacts

2-14

The Role of the Highest Governing Body in Sustainability Reporting

Report Preparation Instructions

ESGGovernance System

2-15

Conflict of Interest

Compliance and Risk Management

2-16

Communication on Key Concerns

Stakeholder Communication

2-18

Performance Evaluation of the Highest Governance Body

Corporate Governance

2-19

Compensation Policy

Corporate Governance

2-22

Statement on Sustainable Development Strategy

CEO Message

2-25

Procedures for Remediating Negative Impacts

Business Ethics

Customer Service

Human Rights and Labor Rights

2-26

Mechanisms for Seeking Advice and Raising Concerns

Customer Service

Human Rights and Labor Rights

2-27

Compliance with laws and regulations

Compliance and Risk Management

2-29

Approaches to Stakeholder Engagement

Stakeholder Communication

2-30

Collective Bargaining Agreement

Human Rights and Labor Rights

GRI 3: Material Topics 2021

3-1

The Process of Determining Material Issues

Analysis of Issue Importance

3-2

List of Material Issues

3-3

Management of Material Issues

GRI 201: Economic Performance 2016

201-1

Directly Generated and Distributed Economic Value

ESG Data Tables and Notes

201-2

Financial Impacts and Other Risks and Opportunities from Climate Change

Addressing Climate Change

GRI 203: Indirect Economic Impacts 2016

203-1

Infrastructure Investment and Support Services

Social Contribution

GRI 205: Anti-corruption 2016

205-1

Operational sites where corruption risk assessments have been conducted

Business Ethics

ESG Data Sheet and Notes

205-2

Communication and training on anti-corruption policies and procedures

205-3

Confirmed Corruption Incidents and Actions Taken

GRI 206: Anti-competitive Behavior 2016

206-1

Legal Actions Regarding Anti-competitive Behavior, Antitrust, and Monopoly Practices

Compliance and Risk Management

GRI 301: Materials 2016

301-1

Weight or volume of materials used

Waste management
Green Packaging and Materials

301-2

Input materials used for recycling

301-3

Recycled products and their packaging materials

GRI 302: Energy 2016

302-1

Energy consumption within the organization

Energy management
ESG Data Sheet and Notes

302-2

Energy Consumption Outside the Organization

302-3

Energy Intensity

302-4

Reduce energy consumption

302-5

Decrease in energy demand for products and services

GRI 303: Water and Effluents 2018

303-1

Organization's interaction with water as a shared resource

Water resource management
ESG Data Sheet and Notes

303-2

Management and Impacts Related to Drainage

303-3

Water Intake

303-4

Drainage

303-5

Water Consumption

GRI 305: Emissions 2016

305-1

Direct (Scope 1) Greenhouse Gas Emissions

Addressing Climate Change
ESG Data Sheet and Notes

305-2

Energy Indirect (Scope 2) Greenhouse Gas Emissions

305-3

Other Indirect (Scope 3) Greenhouse Gas Emissions

305-4

Greenhouse Gas Emission Intensity

305-5

Greenhouse Gas Emission Reduction Amount

305-7

Nitrogen Oxides (NOx), Sulfur Oxides (SOx) and Other Significant Gas Emissions

GRI 306: Waste 2020

306-1

Generation of waste and significant waste-related impacts

Waste management
Green Packaging and Materials

306-2

Management of Significant Impacts Related to Waste

306-3

Generated Waste

306-4

Waste diverted from disposal

306-5

Waste Entering Disposal

GRI 308: Supplier Environmental Assessment 2016

308-1

New suppliers selected based on environmental assessment criteria

Supply Chain Management

308-2

Negative environmental impacts in the supply chain and actions taken

GRI 401: Employment 2016

401-1

New Employee Hiring Rate and Employee Turnover Rate

ESG Data Sheet and Notes

401-2

Benefits Provided to Full-Time Employees (Excluding Temporary or Part-Time Employees)

Human Rights and Labor Rights

401-3

Parental Leave

GRI 403: Occupational Health and Safety 2018

403-1

Occupational Health and Safety Management System

Health and Safety

ESG Data Sheet and Notes

403-2

Hazard Identification, Risk Assessment, and Accident Investigation

403-3

Occupational Health Services

403-4

Occupational Health and Safety Affairs: Worker Participation, Consultation, and Communication

403-5

Occupational Health and Safety Training for Workers

403-6

Promoting Worker Health

403-7

Preventing and Mitigating Occupational Health and Safety Impacts Directly Related to Business Activities

403-8

Workers Covered by the Occupational Health and Safety Management System

403-9

Work-related Injury

403-10

Work-related health issues

GRI 404: Training and Education 2016

404-1

Average hours of training per employee per year

Employee Training and Development

ESG Data Sheet and Notes

404-2

Employee Skill Enhancement Program and Transition Assistance Program

404-3

Percentage of Employees Regularly Assessed for Performance and Career Development

GRI 405: Diversity and Equal Opportunity 2016

405-1

Diversity of Governance Bodies and Employees

Diversity and Inclusion

ESG Data Sheet and Notes

GRI 406: Non-discrimination 2016

406-1

Discrimination Incidents and Corrective Actions Taken

GRI 413: Local Communities 2016

413-1

Operational Sites with Local Community Engagement, Impact Assessments, and Development Programs

Social Contribution

GRI 414: Supplier Social Assessment 2016

414-1

New suppliers screened using social standards

Supply Chain Management

414-2

Negative Social Impacts in the Supply Chain and Actions Taken

GRI 416: Customer Health and Safety 2016

416-1

Assessment of health and safety impacts of product and service categories

Green Packaging and Materials

ESG Data Sheet and Notes

416-2

Incidents of Non-Compliance Related to Health and Safety Impacts of Products and Services

GRI 417: Marketing and Labeling 2016

417-1

Requirements for Product and Service Information and Labeling

Product Liability

GRI 418: Customer Privacy 2016

418-1

Confirmed complaints involving infringement of customer privacy and loss of customer data

Information Security

Inspection Report