Luxshare Precision's Journey Towards Sustainable Development and Excellence

As early as July 2020, Apple committed to achieving 100% carbon neutrality for its products and supply chain by 2030. With the launch of Apple's first carbon-neutral Apple Watch lineup this season, significant progress has been made towards the company's climate goal. It is said that at least a 75% reduction in product emissions for each carbon-neutral Apple Watch model has been achieved, resulting from 100% clean electricity for manufacturing and product use, 30% recycled or renewable material by weight, and 50% of shipping without the use of air transportation.

As of April 5, 2023, 68 suppliers of Apple in China committed to 100% renewable electricity for all of their Apple production by 2030, including Luxshare Precision. Luxshare Precision's Chairman Grace WANG also expressed the commitment in a recent media interview, "Green and low-carbon initiatives, along with sustainable development, are crucial issues in Luxshare Precision's high-quality development process. Luxshare Precision has made a lot of efforts to balance the relationship between green practices and efficiency. Green transformation is a necessary path and, in the long run, can bring positive economic and social benefits to the company."

According to data, Luxshare Precision has disclosed social responsibility reports/sustainability reports for nine consecutive years since 2014. Through active ESG practices, Luxshare Precision has contributed to the sustainable development of the industry and society as a whole.

Great importance attached to addressing climate change and increasing the proportion of clean energy use

According to the company's sustainability report, Luxshare Precision references the internationally recognized TCFD (Task Force on Climate-related Financial Disclosures) framework and has established a carbon neutrality working group responsible for climate change affairs. The company also plans to achieve carbon reduction targets in line with the SBTi (Science-Based Targets initiative) 1.5°C pathway by 2030, clean energy transformation by 2050, and a 50% proportion of clean energy use by 2025.

To provide customers with more efficient and energy-saving product solutions, Luxshare Precision invested RMB75.3 million in energy conservation and carbon reduction throughout the year 2022. Additionally, the company invested RMB260 million in clean technology R&D and plans to invest more than RMB300 million in 2023.

Chairman Grace WANG stated that Luxshare Precision has actively promoted energy efficiency upgrades and structural transformation in recent years. On the one hand, the company has vigorously introduced new technologies and smart energy management platforms to optimize the energy efficiency of various facilities and equipment, reduce energy consumption, and achieve energy conservation and carbon reduction. On the other hand, Luxshare has taken the lead in implementing rooftop photovoltaic projects in major production bases such as Kunshan. Furthermore, the company has explored the possibilities of using other types of renewable and clean energy through initiatives such as direct purchase of green electricity, green energy investments, and procurement of products with green certificates.

Employee safety first to ensure a responsible supply chain management system

As a leading company in the industry, Luxshare values the occupational health and safety (EHS) of its employees. The company has carried out various occupational health and safety training to enhance the overall safety awareness of all employees. In terms of work-related injury management, Luxshare has formulated a series of policies and procedures and actively carried out the formulation and drills. The company has set up a 24-hour clinic in each production base to ensure that the employees in need can receive timely help.

Luxshare follows the OECD (Organization for Economic Cooperation and Development) framework in its supply chain management. The company annually conducts due diligence on conflict minerals for its suppliers to ensure that the metals used in the products supplied to Luxshare Precision do not originate from conflict minerals. Luxshare is committed to building a green supply chain and released its first Green Supply Chain Project Periodic Report in August 2022. The company collaborated with IPE (the Institute of Public and Environmental Affairs) to provide regular special training for subsidiaries and suppliers, answering questions on a one-to-one basis to build a responsible supply chain management system.

Responsible governance to promote sustainable development Luxshare Precision has implemented a three-level sustainability governance structure featuring "decision-making - planning - execution", which consists of the Board of Directors, the Sustainable Development Center and the Sustainability Implementation Team. The Board of Directors shall review the company's reports on sustainable development strategies, implementation plans, objectives and performance through regular and ad hoc meetings.

As a publicly listed company, Luxshare places great importance on communication with global investors via actively responding to their concerns. The company is dedicated to enhancing investors' understanding of its business, strategies and planning, and industry development trends and protecting the interests of minority investors.

Sustainable development has run through Luxshare's strategy and business, and remarkable results have been achieved. Earlier this year, Luxshare Precision was successfully included in the Forbes China 2022 Top 50 Sustainable Development Industrial Enterprises, showing its outstanding performance in green manufacturing and carbon neutrality.

Luxshare achieved fruitful accomplishments in ESG in 2022, including being awarded the 2022 Bloomberg Green ESG Pioneers - Enterprises, a BB rating in the widely recognized MSCI ESG rating evaluation, a B rating from CDP (Carbon Disclosure Project) for both the climate change questionnaire and the water security questionnaire, and the Bronze Certification by world's largest CSR (Corporate Social Responsibility) rating provider EcoVadis,

Chairman Grace WANG remarked that: "Luxshare has made it very clear that we must grow together with the most top-notch enterprises to grasp the cutting-edge technology and development trends since entering the electronics industry." Over the past few years, Luxshare has kept practicing the concept of sustainable development and has achieved significant results in ESG. It is believed that Luxshare will continue to play a valuable role in social responsibilities to promote its development in the capital market positively.