We publish the Sustainability Report annually to enhance transparency regarding key ESG-related topics, thereby effectively communicating with our stakeholders.
Based on the principles of AA1000 SES (dependency, responsibility, influence, diverse perspectives, and tension), we identified six internal and external stakeholders related to Zhen Ding’s actual operations, including employees, customers, suppliers, investors, competent authorities, and society (note). Stakeholder groups that have an economic, environmental, or social impact on Zhen Ding are confirmed through discussions during work meetings of the ESG Execution Committee. With consideration to the correlation between the development trends of domestic and overseas sustainability topics and the Group’s core business, as well as the impact of the Company’s overall operating activities on stakeholders, in principle, we review material topics on an annual basis, engage with internal and external stakeholders through discussions or questionnaires once every two years, and conduct materiality analysis on this basis. Considering both impact materiality and financial materiality, we further combined material topics with Enterprise Risk Management (ERM) to identify risk factors, their severity, and the probability of occurrence. The previous engagement with external stakeholders was in 2024, and a total of 952 internal and external stakeholders participated in the survey . In the end, we identified 21 sustainability topics (including 14 material topics and 7 general topics), and reported them to the Chairman after confirmation by the Chief Sustainability Officer. The results were submitted to the Board of Directors on December 26, 2024. The next stakeholder engagement is expected to begin at the end of 2026.
Note: Society is a combination of "public associations and industrial management centers", "NGO and NPO", "media" and "academic institutions and research institutes" into a single stakeholder.
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STEP 1: Collecting Related Sustainability Topics
With the assistance of external experts and following discussions internally, we followed global sustainability standards and guidelines (GRI Standards, SDGs, SASB, TCFD, UN Global Compact) and referenced sustainability assessment organizations (CDP, Global S&P Corporate Sustainability Assessment,MSCI, Corporate Governance Assessment), industry characteristics and practices of benchmark enterprises. After referring to the previous external stakeholder concern survey and other relevant inputs, we broadly gathered and incorporated stakeholder expections.
Based on the overall business environment and risk development strategies, we ultimately compiled 21 sustainability issues across the four key dimensions of governance, environment, society and products.
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STEP 2: Evaluating the Double Materiality of Sustainability Topics
Impact materiality: From an inside-out perspective, assessments were conducted to determine whether the Company's operations will have significant actual or potential positive or negative impacts on the environment, the economy, and society (including human rights).
Material financial impact: From an outside-in perspective, we assessed whether there were opportunities and risks in society and the environment that could have significant actual or potential material financial impacts on Zhen Ding.
Finally, the scale and likelihood of the positive and negative impacts of the sustainability topics were evaluated.
We gathered department representatives who interact directly with each stakeholder group and conducted questionnaire survey internally to assess the level of concern that the stakeholders have over each topic. 952 valid questionnaires were collected, comprising 32 from internal senior management and sustainability team, 526 from employees, 72 from customers, 256 from suppliers, 16 from investors, 17 from regulatory authorities, and 33 from members of the general society.
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STEP 3: Ranking Material Topics in order of Priority and Confirm Material Topics
After review and analysis, a total of 14 material topics and 7 general topics were identified.
The scope, boundary and collection period of the impact of each topic were further evaluated to present relevant data and performance.
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STEP 4: Inspection and Review
We integrated sustainability financial information in 2025:
1) Adjusted the names of some material topics and general topics, including: "Compliance" was adjusted to "Legal Compilance / Sustainability Financial Information", "Climate and Energy" was adjusted to "Climate (including Adaption) and Energy", "Occupational Health and Safety" was adjusted to "Occupational Health and Safety (Employee Safety)", "Employee Salary and Benefits" was adjusted to "Compensation and Benefits", and "Social Engagement" was adjusted to "Susbainable Care (six assistance) and Sustainability Commitment (six loves)".
