2023 Environmental, Social, and
Governance ReportWriting a Sustainable Business Future
Shanghai M&G Stationery Inc.Stock Code: 603899
Contents
Opening
Sustainable DevelopmentStrategy and Management
Focus: DevelopingSustainable Products
Environmental Development
Performance Data and Index
Social Responsibility
Governance andBusiness Growth
About this ReportPresident's MessageSustainability Highlights of the YearAbout the Company
Sustainable Products of the YearSustainable Design ConceptSustainable MaterialsGreen Product PackagingChemical Safety Management
Responding to Climate ChangePracticing Green Operations
Environmental PerformanceSocial PerformanceGovernance and Economic PerformanceGRI Standards (2021) Content Index
Sustainable Supply ChainEmployee Rights and BenetsEmployee Cultivation and DevelopmentOccupational Health and SafetyProduct and Service QualitySocial Philanthropy
Corporate GovernanceRisk ManagementBusiness Ethics and Anti-CorruptionInformation Security ManagementTechnological Innovation and Digitalization
Sustainable Development ManagementIdentication and Analysis of Material TopicsStakeholder Communication
About this Report
Basis of Preparation
Statement
Feedback and SuggestionsScope of Report
This report is the third Environmental, Social, and Governance Report (hereinafter referred to as "ESG Report" or "this Report")released by Shanghai M&G Stationery Inc. (hereinafter referred to as "M&G Stationery", "M&G", "we", or "the Company"),focusing on the disclosure of M&G Stationery's concepts, progress, and highlights in environmental protection, socialresponsibility, and corporate governance in 2023.
This report is prepared with reference to the Sustainable Development Goals (SDGs), the GRI Sustainability Reporting Standardsissued by the Global Sustainability Standards Board (GSSB) (hereinafter referred to as the "GRI Standards"), and the GuidelinesNo. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial) (Draft for Comment).
Data used in this report is sourced from the Company's o?cial documents, related reports, and statistical reports.This report was reviewed and approved by the Company's 5th meeting of the 6th Board of Directors, the 1st meeting of StrategyCommittee in 2024, and the 5th meeting of the 6th Board of Supervisors on March 28, 2024.
Report Access
This report is available in both Simplied Chinese and English. It is released in both paper and electronic versions. This English
version is converted from the Chinese version. In case of any discrepancy between the Chinese version and the English version,
the Chinese version shall prevail.
The electronic version of the report can be viewed and downloaded on the Shanghai Stock Exchange website (www.sse.com.cn),
China Securities Information Service Platform website (www.cninfo.com.cn), and M&G Stationery's corporate o?cial website (www.
mg-pen.com).
If you have any questions or feedback on this report, please feel free to contact us through the following channels:
Address: No. 5, Lane 288, Qianfan Road, Xinqiao Town, Songjiang District, Shanghai
Email: ESG@mg-pen.com
This report covers the sustainable development practices and progress of M&G Stationery and its subsidiaries from January 1,2023, to December 31, 2023 (hereinafter referred to as "this year" or "reporting period"), with some content and data appropriatelytraced back or extended to other years. Unless specically stated, all amounts involved in this report are in RMB.
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Strengthening corporate governance andconsolidating the foundation for steady growthWe continuously optimize our corporate governance structureand composition, and strive to build a robust and e?cientgovernance model, which is vital for us to operate and grow ina benign way. In 2023, we established the Risk Managementand Compliance Committee to enhance risk management,compliance management, and internal control management ofthe Company, ensuring continuous improvement of compliancestandards in our operations. We also integrate ESG conceptsinto corporate governance and strive to build a robust motivationmechanism for ESG management by linking ESG performancewith executive compensation.The only viable way to achieve true sustainable economic,environmental, and social development in the new era is byfully integrating sustainable considerations into all aspectsof business operations. This is the fundamental logic behindour sustainable development vision of "writing a sustainablebusiness future". We will adhere to long-termism, keepon innovating, overcome di?culties to do the right things,provide "quality stationery for everyone", and respond to theexpectations of stakeholders with concrete actions, instilling theworld with the positive energy of a Chinese brand.
President's Message
Building a sustainable supply chain and urgingsuppliers to enhance responsibility management
We attach great importance to a stable, secure, and sustainablesupply chain, and have been vigorously integrating ESGconsiderations into supply chain management. In 2023,we optimized and upgraded our supplier ESG evaluationmechanism, comprehensively incorporating indicators in laborand employment, environmental protection, health and safety,business ethics, and management system into the evaluationcriteria. We completed the ESG evaluation of 71 key suppliersduring the year. To enhance supply chain capacity building,we o?ered trainings on the supplier ESG evaluation systemfor both our procurement sta? and suppliers, and launched the"ESG Progress Award" at the annual supply chain conferenceto recognize suppliers with outstanding ESG performance.We will continue to work together with our suppliers to build asustainable supply chain.Empowering employees and communities, andjoining hands with partners to do goodWe are committed to building a people-oriented, open, andinclusive corporate culture. We provide employees with richtraining resources to support their career development, andcontinuously optimize the compensation and benets system,allowing our employees to realize their career dreams at M&G.Over the years, through the Shanghai M&G Charity Foundation,we have been actively participating in rural revitalization as wellas other charitable undertakings. We have carried out a seriesof long-term charitable programs with increasing impact, suchas the "Golden Seed Plan" education assistance program, the"Art Education Plan" program, and the Autism Support Program.As of the end of 2023, close to 1 million students and more than3,000 teachers have beneted from the M&G public welfareprojects. Meanwhile, we engage senior executives, employees,channel partners, and other internal and external stakeholdersof M&G to participate in charitable donations and providevolunteer services, further expanding the scope and inuence ofour public welfare undertakings.
President of Shanghai M&G Stationery Inc.
M&G celebrated its 34th anniversary in 2023. Thisyear is also the second year since the launch of M&GStationery's sustainable development strategy. Amidstthe global wave of sustainable development and withthe trust and support of our stakeholders, we have beenforging ahead, seizing development opportunities in thisuncertain era. We have been vigorously acceleratingour sustainable development process focusing on thefour strategic pillars of "sustainable products", "responseto climate change", "sustainable supply chain", and"empowering employees and communities". We arecommitted to integrating sustainability into every aspectof our operations, laying a solid foundation for theCompany's long-term success.
Focusing on quality and expanding our sustainableproducts portfolioWe have been increasingly incorporating sustainability conceptsinto the full lifecycle of products. Our innovative sustainableproducts, such as the carbon-neutral stationery series, arehighly recognized by consumers, customers, media, andprofessional partners. We are encouraged to continuouslyinnovate on more sustainable product possibilities. We alsoactively explore more sustainable material choices regardingkey material categories. Our industry leading PVC phasingout program has already eliminated PVC plastic from morethan 1,700 products and/or packaging. In order to further growour sustainable products lineup, we have formulated our rstsustainable products corporate standard, and are committed tofully integrating sustainable concepts into the development of allproduct categories.Over 600 Jiumu Stores nationwide have set up a dedicatedsection for sustainable products. M&G sustainable products aregaining greater attention on major events home and abroad,such as the Consumer Products Expo, the Boao Forum for Asia,and the 28th Conference of the Parties to the UN FrameworkConvention on Climate Change (COP28). We want to shareour sustainable concept of "writing a greener future" with anincreasing number of consumers and communities, contributingto making sustainable consumption a new trend of the era.
Chen Huxiong
Addressing climate change and focusing on fullvalue chain energy conservation and carbonreduction
We actively respond to the carbon peaking and carbonneutrality goals of China, steadily moving forward towards ourgoal of "to be carbon neutral by 2050". In 2023, we conducteda company-level Scope 1 and Scope 2 greenhouse gas (GHG)emissions accounting to understand the baseline emissionsdata of our operations. In addition, we also initiated the e?ortsto calculate our Scope 3 emissions. With the rapid deploymentof photovoltaic power generation units in our production bases,our installed capacity of photovoltaic power generation furtherexpanded to 15,700 kilowatts. M&G Shanghai base achievedsignicant energy-saving results through a series of energy-saving projects. We focused on green logistics and haveachieved greater results in resource conservation and energyconservation in the logistics process with measures suchas packaging reduction, packaging reuse, intelligent routeoptimization, etc. In 2023, we were honored to be recognizedas a "Shanghai Five-Star Green Factory". In the future, we willcontinue to reduce our environmental footprint in production,operation, and supply chain, contributing to the green and low-carbon transformation of the industry.
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Sustainability Highlights of the Year
? Developed and launched a number of innovative sustainable products, such as the carbon-neutral
series, the "Carbon Emission Reduction Plan" series, and the "Endangered Animals: Wetland" series? Raising consumer awareness about climate change and biodiversity through multiple product promotionactivities online and o?ine
? Eliminated PVC plastic from over 1,700 products and/or packaging cumulatively? Developed M&G's 1st sustainable products corporate standard, covering the new product development
process for all product categories? Jiumu Store created a sustainable products section in over 600 stores nationwide, and a total of 166,000
consumer membership points were redeemed for donations of over 1,600 stationery sets? Established the Chemical Management Committee, revised the Company's Chemical Management
Policy, and updated the list of chemicals to be phased out by referencing the REACH regulation? Completed company-level Scope 1 and Scope 2 GHG emissions accounting, and conducted
preliminary calculation of Scope 3 emissions to identify carbon emission sources and reduction potentials? Implementing multiple energy-saving measures: air compressor energy saving, waste heat recovery,
injection molding machines upgrade, and water pump motors optimization? Increased the total installed capacity of photovoltaics to 15,700 kilowatts? Promoted greener packaging options and packaging reduction for the logistics process, with 330,000
cardboard boxes saved and 640,000 cardboard boxes recycled cumulatively? Reduced 48,840 kilograms of carbon dioxide equivalent in 2023 through electricity, water, and paper
conservation campaigns in the M&G headquarters o?ce building
? Optimized the supplier ESG evaluation standard, focusing on labor and employment, environmental
protection, health and safety, business ethics, and management systems? Evaluated 71 suppliers and conducted 27 on-site audits, with a rectication pass rate of over 80%? Incorporated ESG indicators into the annual performance evaluation of suppliers and the new supplier
introduction process
? The rst "Supplier ESG Progress Award" was presented at the annual Supply Chain Conference? 100% procurement, service, and engineering suppliers and contractors signed the Transparent
Procurement & Integrity Convention
? Released ESG report for the 3rd consecutive year? Linking ESG performance to executive compensation, including ESG factors in the annual performanceevaluation system for 8 department heads? Established the Risk Management and Compliance Committee chaired by the Company president, further
optimizing the Company's risk management structure and policy system? Launched an online training course on the M&G Code of Business Conduct as a mandatory course for allemployees? Conducted internal control audits against non-compliance with business ethics, covering 22 operating locationsthat represent 100% of M&G's operational sites
Awareness andParticipation
ESG Ratings and ExternalRecognitions
Sustainableproducts
Response toclimate change
? Revised the Employee Handbook in accordance with international human rights conventions, and addedmulti-dimensional employee communication channels to ensure the e?ective protection of employee rights? Optimized the remuneration system, providing all employees with performance-based variable compensation? Introduced comprehensive health insurance for all employees, upgraded the living conditions in factorydormitories, and achieved an overall employee satisfaction score of 92% for o?ce environment? Average training time per employee increased to 11.8 hours, with an employee training coverage rate of 93%? Launched the M&G online learning platform, o?ering 85 courses covering workplace skills, managementskills, corporate culture, and business knowledge; the cumulative online learning time over the platformreached 10,000 hours? Charitable donations totaling RMB6.08 million? M&G Charity carried out educational public welfare initiatives in 42 cities in 19 provinces, beneting nearly1 million students and over 3,000 teachers
Empoweringemployees and
communities
Sustainable
supply chain
Responsible
corporategovernance
? Leveraged M&G's business advantages to organize a painting competition for rural students that participated
by close to 120,000 children? Enlarged the scope of the Autism Support Program to support adults with autism by integrating resources
from multiple parties to provide employment and social inclusion opportunities
?1,000+
employees from 36 departments participated in trainings on M&G's sustainable development strategy?
sustainability themed events and activities organized internally?
employees selected as Sustainability Ambassadors to promote sustainability concepts within their own departments?3,787 employees participated in public welfare activities, including all M&G executives
?RMB280,000 charitable donations raised through activities such as the "E.G.G Walkathon" charity walk and the "99
MSCI ESG rating upgraded from BB toBBB"Social Value 99" ranking improved from 42nd to 17th"ESG Best Practice Case for Listed Companiesin 2023" by China Association for Public Companies2023"China Green Point" Case of the YearbyChina Business Network (Yicai)"GoldenKey—SDG Forerunner" by China Sustain-ability Tribune Magazine2023 GoldenBee CSR China Honor Roll—ESG Competi-tiveness · Sustainable Product & Service AwardThe 8th"Value Co-creation" 2023 SustainabilityCase of Chinese Enterprises—Sustainable ProductAward
2023"Top Human Resources ManagementAwards—Outstanding Employer" by 51jobThe 18th "People's Corporate Social Re-sponsibility Award" by People.cn"Shanghai Five-Star Green Factory"Axus Stationery was awarded the title of"ShanghaiIndustrial Product Green Design Demon-stration Enterprise"M&G Colipu achieved"2022 Social Responsibil-ity Award"from Shanghai Federation of Industry andCommerce
Giving Day" events with the participation of consumers, employees, and partners of M&G
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About the Company
Business Overview
M&G Cultural Concept System
2023 Business Performance
As one of the world's largest stationery manufacturers, Shanghai M&G Stationery Inc. is a comprehensive stationery supplier and o?ceservicer. The Company integrates the value of creativity into its products and service advantages, advocates a fashionable stationerylifestyle, and provides solutions for study and work, committed to making study and work more joyful and e?ective. M&G's productsmainly include writing instruments, student stationery, o?ce supplies and other related products. On January 27, 2015, M&G Stationerywas o?cially listed on the Shanghai Stock Exchange A shares under stock code 603899.
M&G is present in nearly 70,000 retail stationery shops nationwide, including 659 large retail stores—M&G Life and Jiumu Store.In addition, due to market demand, thousands of new products are launched by M&G every year, and its products are exported toworldwide partners. M&G has maintained annual double-digit growth over the past decade, with a total revenue of RMB23.3 billion, anincrease of 16%.
Retail shops nationwide: Nearly
Revenue: RMBbillion
23.3
Total number of employees:
5,839
70,000
Values
:
Co
n
su
mer-ce
n
tric
mindset,
o
penness
and
inclusiveness,
sinc
erity,
focus,
and
win-win
mindsetPrioritizing the well-being of others beforeour own
Core Culture
Mission:
Make
study
and
work
more
jo
y
f
ul
and
e?
ective
Vision:
World-class
M
&
G
Headquartered in Shanghai, China, M&G owns the M&G Stationery Industrial Park, which covers a total area of 550 mu. In 2023, M&Gsped up the expansion of overseas markets. Based on local characteristics, the Company developed localized products to enhanceoverseas competitiveness of its products, and sorted out the product development process and improved product managemente?ciency for prompt satisfaction with consumers' needs in overseas markets. Shouldering the mission of "providing a?ordable stationeryfor local students", the Company continued to explore the African market, and carried out product promotion activities and madedonations to schools, enabling more students to use cost-e?ective products of M&G. In the Southeast Asian market, the Companymade positive channel arrangements, improved operation quality, and further enhanced the inuence of M&G brand. Amid the changingexternal environment, the Company saw rapid growth of overseas sales and continuously improving product competitiveness, brandinuence and channel development capability, with the overall operation, management and team-building capabilities in overseasmarkets signicantly boosted.
M&G focuses on the development of four major product categories—mass market stationery segment, premium stationery segment,arts and kids drawing segment, and o?ce stationery segment. The Company also vigorously innovates on developing new channels,including large retail store business such as Jiumu Store and M&G Life, the direct o?ce supplies business—M&G Colipu, and theindependent trendy cultural and creative brand, More-Than-Fun (Qizhihaowan). With the acquisitions of Axus Stationery (which ownsthe well-known wooden pencil brand MARCO) and the Norwegian high-end ergonomic backpack brand Beckmann, M&G is expandingits international market and continuously strengthening its brand portfolio.
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1989
19992002
201720082005
2015
20232019
2021
20201997
2022
As the rst step in start-up theCompany was built in two smallbungalows in Hengshan Village,Gurao Town, Shantou.
M&G settled in Liuli, Pudong, withmore than 100 employees. It hassuccessively established mold,injection, printing and assemblyworkshops, and the production systemhas begun to take shape.
K35, the rst press gel pen inChina, came out after 180 days ofprocess debugging and 17 processoptimization, creating M&G classicproducts with ingenuity.
M&G Stationery explored newretail in the industry and startedthe strategic transformation of"taking brand as the core andtransforming from stationery tocultural and creative life"; M&GColipu successfully acquired O?ceDepot (China).
The rst "franchise chain" projectwas launched in the stationeryindustry. At the same time, theGuangming Park was completed,and China Writing Instrument Centerand China Writing InstrumentIndustrial Base were established,establishing the Company's leadingposition in the stationery industry.
Selected as the designatedstationery supplier of BoaoForum for Asia and hasprovided support for BoaoForum for Asia for more thanone decade.M&G Stationery o?cially listed on theShanghai Stock Exchange A shares(stock code: 603899).
M&G Stationery collaborated with Meituan's"Lush Mountain Plan" and launched its rstcarbon-neutral stationery series, anotherencouraging step of the industry towards amore sustainable future.
M&G Stationery acquired AxusStationery as its subsidiary.Brought Italian painting brandCARIOCA to attend CIIE.
M&G Stationery formulated a newve-year strategy; held a cloudsigning ceremony with the Norwegianschoolbag brand Beckmann.
Brought Israeli design
brand Peleg Design to
attend CIIE, announced
establishment of Israel
office of its global design
center.
The "M&G" trademark was o?cially launched,establishing the development path of the brand.The Company cooperated with stationery agentsacross the country and established partnerships.
M&G Stationery released the "2021Environmental, Social, and GovernanceReport", becoming the rst listedcompany in the Chinese stationeryindustry to release an ESG report,leading the industry in sustainabledevelopment.
First step
Production system hasbegun to take shapeCreating M&G classicproducts with ingenuity
Started strategictransformationGained leading positionin the stationery industryDesignated stationerysupplier of Boao
Listed on the ShanghaiStock Exchange A shares
Launched M&G's rst carbon-neutral stationery seriesAcquired Axus Stationery
A new ve-year strategy
Established global
design centerLaunched the "M&G" trademark
Leading the industry insustainable development
History of M&G Stationery
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Sustainable Development Strategy andManagement
Sustainable Development Management
Sustainable Development Governance Framework
Sustainable Development Vision and Strategy
M&G Stationery's Governance Framework for Sustainable Development
M&G Stationery Sustainable Development Strategy
As the rst listed company in China's stationery industry to release an ESG report, M&G Stationery has been paying close attention tosustainability-related topics in recent years, and has formulated its governance framework and strategy for sustainable development.With a strong focus on sustainability culture, the Company strives to continuously improve its sustainable development governance, andopenly responds to stakeholders' concerns, dedicating itself to writing a sustainable business future.
M&G's Board of Directors and the Strategy Committee are responsible for the overall management and supervision of the Company'ssustainability risks, reviewing and approving company sustainable development strategies, goals, and information disclosure, andsupervising and self-assessing sustainability-related policies, management approaches, performance, and goals and targets.Under the supervision of the Board of Directors and the Strategy Committee, the Company has established a dedicated SustainabilityO?ce. With the Chief Sustainability O?cer in charge, and equipped with professional talents with expertise and work experience insustainability-related elds, the Sustainability O?ce is responsible for coordinating environmental, social, and governance goals and workplans in business operations, ensuring the e?ective implementation of the sustainable development strategy, and conducting internaland external communication on sustainability-related content. The Sustainability O?ce regularly reports to the Strategy Committee onsustainability-related risks and opportunities, as well as the implementation progress of the strategic goals.Focusing on the four strategic pillars of M&G's sustainable development strategy, the Sustainability O?ce collaborates with relevant unitsof the Company to form cross-business unit, cross-department ESG taskforces. With each business unit, functional department, andsubsidiary responsible for the specic implementation, all parties work together to ensure the realization of the Company's sustainabledevelopment goals. To motivate the Company's management to focus more on sustainability, M&G has included ESG-related factors in theannual performance evaluation of the executives in charge of core strategic departments for two consecutive years.
In 2021, M&G formulated its 2022–2025 Sustainable Development Strategy around the vision of "writing a sustainable business future"based on its development focus and business strategy in combination with industry trends. Focusing on four strategic pillars: sustainableproducts, response to climate change, sustainable supply chain, and empowering employees and communities, the Company iscommitted to leading the industry's sustainable development with continuous e?orts in developing environmentally friendly products,ensuring sustainable procurement of raw materials, conserving energy and reducing carbon emissions, safeguarding employee rights,promoting employee development, and conducting community activities to promote the concept of sustainable development.
Board of DirectorsBoard Strategy CommitteeSustainability O?ce
Sustainableproducts
Response toclimate change
Sustainablesupply chain
Decision-making
Execution
Coordination
Cross-business unit, cross-department ESG taskforcesEach business unit, functional department, and subsidiary
Writing a SustainableBusiness FutureBecoming an industry leader of sustainable development, including:
sustainable consumption, green production, responsible procurement, focus on employee
growth, and promoting equal education
Responsible corporate governance:
building a top-down corporate management and governance system
Producing sustainableproductsSustainable designconceptSustainable raw materialselectionChemical managementsystem
Group-level carbonemission reduction targetsImproving energye?ciency, energyconservation, andconsumption reductionOptimizing energyconsumption structureGreen logisticsGreen o?ce operation
Supply chain manage-ment systemAnti-corruption manage-ment of supplierSupplier capacity buildingSupply chain traceability
Management system ofoccupational health andsafetyEmployee training andcareer developmentsystemEmployee benetsDiverse and inclusive workcultureInternal social supportmechanismFeatured communityactivities
VisionStrategicPositioning
Four
Pillars
SystematicFoundation
SustainableResponse toSustainableEmpowering employees
productsclimate changesupply chainand communities
Empoweringemployees and communities
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Sustainability Ambassadors Ensuring the Implementation ofSustainable Development Strategy
M&G Stationery's Strategic Goals for Sustainable Development
Fostering a Culture of SustainabilityIn 2023, M&G actively carried out activities and events to promote the concept of sustainable development, aiming to enhancing theunderstanding of sustainable development among all employees. A total of 18 sessions were delivered on the Company's sustainabledevelopment strategy, with 1,000 employees from 36 departments participated. The Company also established a team of SustainabilityAmbassadors to promote sustainability concepts internally, ensuring that each department integrates the sustainability concept intopractical actions.
M&G is committed to ensuring the group-wide implementation of its sustainable development strategy. In July 2023,the Company established a team of Sustainability Ambassadors, with a total of 23 employees serving as ambassadorsfor their respective business units/departments. The Company has also established the Charter of SustainabilityAmbassadors to clarify the responsibilities, objectives, operation mechanisms, requirements and disciplines ofSustainability Ambassadors.
The Sustainability Ambassadors play animportant role in ensuring the implementationof the Company's sustainable developmentstrategy. They convey the concept of sustainabledevelopment across various departments throughstrategy communication, employee volunteering,and low-carbon o?ce practices. With their e?orts,sustainability concepts become more tangibleand the Company's sustainable developmentstrategy also becomes better understood amongemployees, making valuable contribution tobuilding a sustainable corporate culture.
Responsibilities of Sustainability Ambassadors
M&G Sustainability Ambassadors
? To provide consumers with safe, environmentally friendly, and low-carbon products, formulate
sustainable design concepts, create sustainable products, adhere to sustainable materialselection, and establish principles for ensuring the safe use of chemicals.
? To achieve sustainable selection of some key raw materials by 2025
? To measure carbon footprints regularly, set group-level emission reduction targets, further reduce
energy consumption, optimize energy consumption structure, and promote green logistics andgreen o?ce.? To be carbon neutral by 2050.
? To implement responsible procurement, keep optimizing supply chain management, raiseawareness about sustainable supply chain, and optimize the management of chemicals in thesupply chain.? To meet M&G ESG guidelines by 2025 for 100% key suppliers.
? To attach great importance to employee growth and promote education equality.? To extend the benets of charity and community investment to 10 million people by 2030.
KnowledgeDissemination
Sustainability
Advocacy
Low-carbon
O?ce
To understand and disseminate knowledge of sustainable development, assist inbuilding the Company's sustainability knowledge base, and support the SustainabilityO?ce to implement training at each department.To promote M&G's sustainable development concepts and actions to employees,and support the recruitment and promotion of group initiated activities within eachdepartment.To promote the concept and support of the implementation of low-carbon o?ceinitiatives, in order to achieve annual low-carbon o?ce goals.
M&G has set up sustainable development goals around the four pillars of its sustainable development strategy to ensure theimplementation of the strategy and planning.
Sustainableproducts
Empoweringemployees and
communities
Sustainable
supply chain
Response toclimate change
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Identication and Analysis of Material Topics
In 2023, the Company continued to identify, assess, and select ESG material topics based on the GRI Standards as well as referringto state regulations and guidelines, and the best practices of industry peers. The Company conducted extensive questionnaire surveysamong various stakeholders and analyzed material topics based on survey results. In 2023, a number of key material topics have beenrevised accordingly, including "business ethics", "risk management", "response to climate change", "information security and privacyprotection", etc.
M&G Stationery's 2023 Sustainable Development Material Topic Matrix
Importance to corporate development
Importance to stakeholders
Environmental DimensionSocial DimensionGovernance Dimension
Based on the 2022 material topics matrix, M&G closely studied key state policies andindustry policies and benchmarked ESG disclosure standards and guidelines as well asindustry best practices home and abroad to identify 24 sustainable development topicsof interest to stakeholders.
M&G developed its sustainable development material topics matrix by constructinga two-dimensional model ranking the importance of issues based on "importance tocorporate development" and "importance to stakeholders".
Using questionnaire surveys, a total of 976 valid questionnaires were collected frominternal and external stakeholders, including shareholders and investors, the Board ofDirectors, senior management, employees, consumers, corporate customers, suppliers,distributors, media, NGOs, and professional institutions, to comprehensively understandthe focus of stakeholders on M&G's sustainable development topics.
Based on the evaluation results, M&G selected material topics with higher importanceas the areas of focus which were later reviewed and conrmed by the Company'sSustainability O?ce and senior executives. There were 24 material topics identiedthrough this process, and their relevant management and practices became the focusof this report.
TopicIdentication
TopicAssessment
TopicInvestigation
Review andConrmation
BiodiversityCarbon emissions and energy management
Corporate governance
Responsible marketingSustainable materials
Occupational health and safety
Information security and privacy protection
Product quality
Education and training
TechnologicalinnovationBusiness ethicsSocial welfare
Community support
Response to climate change
Human rights protection
Employee benets
Water resources and e?uents
Consumer health and safety
Wastemanagement
Packaging materials
Risk managementDiversity and equal opportunities
Chemical safety
Supplier chain management
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Stakeholder Communication
M&G continuously strengthens communication with customers, employees, investors, and other stakeholders, and has establishedvarious communication channels to better understand and respond to the demands and expectations of stakeholders in a timely manner.
StakeholdersMost Concerned Material Topics
Communication Mechanisms and
Methods
? Corporate governance? Carbon emissions and energy
management? Product quality
? Special reports? Participation in government
meetings? Supervision and assessment? Field research? Information disclosure? Response to climate change? Carbon emissions and energy
management? Waste management
? Shareholder meetings? Investor meetings? Performance briengs? Information disclosure
? Product quality? Consumer health and safety? Chemical safety? Information security and privacy
protection
? Product sales and promotion? After-sales service? Consumer survey? Customer satisfaction survey? Exhibition events? O?cial website and corporate
WeChat account
? Product quality? Chemical safety? Occupational health and safety
? Bidding? Supply chain conference? Contract signing and execution? Daily business communication? Supplier training? Supply chain ESG assessmentand on-site audit
StakeholdersMost Concerned Material Topics
Communication Mechanisms and
Methods
? Product quality? Business ethics? Information security and privacy
protection
? Channel cooperation conference? Marketing conference? Market visits? Daily business communication
? Employee benets? Product quality? Information security and privacyprotection
? WeCom? Internal email? Performance interview? Employee satisfaction survey? Training and workshop? Employee clubs and activities? Annual company meeting? Internal corporate cultureplatform? Employee suggestion platform? Social welfare? Waste management? Sustainable materials? Packaging materials
? Cooperation and dialogue? Public welfare projects andactivities? O?cial website and corporateWeChat account? Consumer health and safety? Product quality? Responsible marketing? Sustainable materials
? O?cial website and corporateWeChat account? Media interview and cooperation? Forums and seminars? Information disclosure? Technological innovation? Consumer health and safety? Product quality
? Forums and seminars? Participation in industry standardformulation? Project collaboration? Visit and communication
Based on the results of our daily communication with our stakeholders and the annual materiality survey, we have identied the material topics that are ofgreatest concern to each stakeholder groups.
Government andregulatory authorities
Shareholders andinvestors
Suppliers
NGOs/Philanthropic
organizations
Employees
Industry associations
Media
Distributors
Consumers and
customers
1817
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Focus: DevelopingSustainable Products
M&G Stationery actively responds to the trends of green consumption andsustainable development at home and abroad. Focusing on "sustainable products" asone of its strategic pillars for sustainable development, M&G continuously innovatesand develops products with sustainable attributes based on the insights of consumerneeds. M&G leverages these sustainable products to engage more young consumersto start with small things in daily life and practice the sustainable concept of "writing agreener future". The Company has established a sustainable products developmentteam, and actively explores the denition of "sustainable products" in the stationeryindustry, gradually forming a systematic process for the design, development, andmarketing for sustainable products. Adhering to the principle of "only with highquality can we achieve sustainability", M&G is committed to implementing stringentquality requirements, and continuously enhancing the green and healthy attributes ofproducts, strengthening the control of chemical safety of products, so as to provideconsumers with safe and reliable products.
Addressing Sustainable Development Goals (SDGs):
This chapter responds to the Sustainable Products pillar of M&G Stationery'ssustainable development strategy.
? Developed and launched a number of innovative sustainableproducts, such as the carbon-neutral series, the "Carbon EmissionReduction Plan" series, and the "Endangered Animals: Wetland" series? Eliminated PVC plastic from over 1,700 products and/or packaging
cumulatively? Developed M&G's 1st sustainable products corporate standard, covering
the new product development process for all product categories? Jiumu Store created a sustainable products section in over 600 stores
nationwide, and a total of 166,000 consumer membership points were
redeemed for donations of over 1,600 stationery sets? Established the Chemical Management Committee, revised the
Company's Chemical Management Policy, and updated the list of
chemicals to be phased out by referencing the REACH regulation
2023 Performance Highlights
2019
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Sustainable Products of the YearIn recent years, M&G has formed two sustainable product series, the Huanbaoji series and the "Endangered Animals" series, focusingon lowering carbon emissions, reducing plastic waste, and protecting biodiversity, guiding the public to have a better understanding ofsustainability issues in a fun way. In 2023, M&G launched its rst carbon-neutral stationery series and the "Carbon Emission ReductionPlan" gel pen series featuring quantiable carbon reduction data. The Company also collaborated with the Mangrove WetlandsConservation Foundation (MCF) and developed the "Endangered Animals: Wetland" stationery series to raise consumer awareness ofgreen, low-carbon living and biodiversity conservation.M&G teamed up with Meituan's "Lush Mountain Plan"program and jointly launched M&G's rst carbon-neutralstationery series. This series of products is carbonneutral throughout its life cycle, from raw materialsourcing, production and processing, transportationand distribution to use and disposal. Each barrel of thepen, made from recycled plastic food containers, canreduce the use of 2.3 grams of plastic and the relatedcarbon emissions. This product series has passedthird-party carbon footprint accounting and o?setting inaccordance with ISO 14067 and PAS 2050 standards,and obtained carbon-neutral certication.
Optical grade acrylic sheet from discarded LCD TVsand displays can be used as materials for recycleand reuse. Made with recycled acrylic from usedhousehold appliances, each "Carbon EmissionReduction Plan" gel pen can help reduce the emissionof about 49 grams of carbon dioxide equivalent.
This product series is made of PLA biodegradablematerials or recycled materials. Using ve endangeredwetland animals as the inspiration for its packaging design,this series of eco-friendly products aims at educatingconsumers about endangered animal conservation.Information about endangered animals was also displayedin Jiumu Stores in various formats, such as in-storeeducation, interactive H5, VR experiences, etc., allowingmore people to learn about endangered animals. We alsoinvited consumer families to visit wetland conservationareas for bird watching, to gain a rst-person view ofwetland environments and endangered animals.
Carbon-neutral stationery series
"Carbon Emission Reduction Plan" gel pen series
"Endangered Animals: Wetland" stationery series
M&G Launching its First Carbon-neutral Stationery Series
In February 2023, M&G launched its rst carbon-neutralstationery series in China, including eight productcategories such as gel pens, highlighters, markers,staplers, pen holders, and pencil cases, etc.This series of stationery is an innovative attempt by M&Gin collaboration with Meituan's "Lush Mountain Plan"program. It uses recycled plastic made from discardedfood containers to reduce the use of virgin plastic. Thecarbon footprint data collected during this project allowsthe Company to evaluate the carbon emission sourcesand emissions data of its product life cycle, laying a solidfoundation for further carbon reduction e?orts.Adhering to the concept that "green products are rstand foremost good products", M&G conducted technicalresearch and experiments. From initial trials, pilot tests,to large-scale continuous production tests, the productiontesting of the product series took 50 days, undergoing20 mold structure adjustments, product performanceand process verications, showcasing M&G's strongcommitment to product quality.After its launch, the M&G carbon-neutral stationery series was exhibited in a dozen high-prole sustainability-related venueshome and abroad, such as the China International Consumer Products Expo, the Shanghai International Carbon NeutralityExpo, and the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28),playing a pioneering role in the low-carbon and green development of the stationery industry. Based on this product series,M&G Colipu also launched a green product procurement program for corporate customers to choose greener stationeryproducts, engaging customers with greater cooperation in sustainability-related opportunities.
Closed-loop environmental impact of the carbon-neutral stationery series
M&G's Huanbaoji carbon-neutral stationery series won the "2023 Stationery · China Culture
and Education O?ce Supplies Innovation Award (Student Stationery)"—Green Award
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2023 Red Dot AwardWinning Products of M&G
Jiumu Store's Advocacy for Sustainable Consumption
Jiumu Store developed a store point charity platform for store members to promote consumer awareness and encourage sustainableconsumption. By 2023, consumers donated 166,000 store points, which were matched with over 1,600 donated stationery sets. JiumuStore donates 5% of the sales proceeds of the "Carbon Emission Reduction Plan" gel pen series to "One Planet Foundation", engagingconsumers to jointly support climate action.
With the deepening of China's carbon dioxide peaking and carbonneutrality strategy, the demand for green and sustainable productsfrom corporate customers increases rapidly. In 2023, M&G Colipudeveloped a green product catalogue, o?ering a rich selection ofsustainable products to meet the growing green procurement needsof customers. This catalogue includes products dened as greenproducts in multiple aspects, including using recycled materials,obtaining green certications, adopting environmentally friendlymanufacturing processes, using green packaging or low-impactlogistics, sourcing from certied manufacturers, and promotinglow-carbon concepts, etc. Typical green products include ForestStewardship Council (FSC)-certied printer paper, zero carbonpaper towel with carbon neutral certication, and toner cartridgewith environmentally friendly packaging.
In 2023, M&G's subsidiary More-Than-Fun launched a charitable campaign incollaboration with Alipay and the "Genshin Impact" IP of miHoYo. With the launchof a series of environmentally friendly IP products and fun gameplays such aspoint redemption and lucky draws, the campaign reached out to consumers andcalled on them to choose green travel and other low-carbon lifestyles. Amongthe environmentally friendly products launched, there were a vintage eco-friendly laptop sleeve with washable kraft paper cover and wool felt lining, and anenvironment-friendly notebook with high strength spruce paper pages and fabric-bound edges. All of these products were made with bio-degradable materials andhad obtained FSC certication and Green Product Certication issued by third-party organization.
Jiumu Store, an independent brand of cultural and creative products under M&G, is an important channel for the Company to directlyreach consumers. Jiumu Store is committed to actively raising the awareness of sustainability concepts among consumers throughmeasures such as o?ering sustainable products, integrating sustainable consumption factors into its membership store point platform,and organizing sustainability themed activities.
Advocated green consumptionconcept with sustainabilitythemed seasonal activities,such as a city walk campaignto encourage green walkinglifestyle.
By 2023, over 600 Jiumu Storesnationwide set up a sustainableproduct section for sustainableproducts such as the"Huanbaoji" and "EndangeredAnimals" stationery series,directly promoting sustainabilityconcepts and green lifestyle toconsumers.
More-Than-Fun environment-friendly notebookSustainable Design Concept
In 2023, M&G continued to apply sustainable design concepts in new product development and launched anumber of products with sustainable attributes:
Sustainable products o?ered by M&G Colipu
M&G's Green Logo for sustainable products
M&G's sustainable innovation is not limited to the development of new products.Instead, the Company is dedicated to expanding the concept of sustainable designto other product categories and continuously expanding its pipelines of sustainableproducts with various sustainable attributes in all product categories.In September 2023, the M&G Sustainability O?ce, the Sustainable ProductsDevelopment Team, and the Technical Center collaborated with other departmentsto jointly develop its rst sustainable products corporate standard, after studyingdomestic and international standards and certication requirements for green productsand recycled materials. In alignment with the strategic focuses of M&G's sustainableproducts development, this standard species the denition of sustainable productsfrom four aspects: material, functionality, safety, and packaging. The standard alsospecies the procedures for the development of new products with sustainableattributes. Besides formally applying this standard to the assessment process ofproduct development, M&G also designed a dedicated green logo for sustainableproducts for future use, highlighting the sustainable attributes of the products forconsumers to draw greater attention towards green production and consumption.
M&G Steel Tape Pro "Contemporary Good
Design – Gold Winner 2023"
M&G Utility Knife Pro "Contemporary Good
Design Award – Winner 2023"
The new metal gel pen has 20% more ink compared to previous models.
M&G optimized the structure of a vacuum sealer product, reducing the number of screw specications from8 to 3 and making it easier for production and assembly.By modifying the shape of sheet metal parts, such as nail tracks and guide rails, of a single-handed staplerproduct designed for the food delivery business,the utilization rate of sheet metal has been greatly improved.
The quick-drying stamp pad and rell ink can last as long as ve years with the new ink formula.The design of a utility knife box product was optimized by reducing unnecessary clamps, which resulted insimpler mold, shorter molding time, and reduced material use.
Larger capacity
Generic designMore e?cientmaterial use
Longer product
lifeSimpler design
O
f
ering
su
stainable
product
sCarrying
out
sustainability
themed
activities
Redeeming
membership
points
for
charity
donation
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Sustainable CerticationCertied ProductsEU toy safety standard EN71-3Certication
Arts and kids drawing products, such as clay, markers, oil paint stick, watercolor pens,glue stick, etc.EU Restriction of HazardousSubstances (RoHS) Certication
Smart calculating device, smart spelling device, smart large screen microscope, andtoner cartridges for laser printerGlobal Recycled Standard (GRS)Certication
Carbon-neutral stationery series, "Carbon Emission Reduction Plan" gel pen series, andnotebooks customized for Boao ForumGerman IGR Ergonomics CerticationM&G spine protection schoolbagsChina Environmental LabelingProduct Certication (Ten RingCertication)
Toner cartridges for laser printer and multifunctional printer paper
China Energy Conservation ProductCertication
Laser printer and dot matrix printerForest Stewardship Council (FSC)Certication
Red M&G multifunctional printer paper, and M&G Colipu 3-Star and 5-Star printer paper
Programme for the Endorsement ofForest Certication Schemes (PEFC)Certication
M&G Colipu 2-Star printer paper
Development of Food-grade Cat Paw Easy-grip Crayon
Sustainable Materials
Using Certied Environmentally Friendly Materials
M&G Products with Sustainable Certications
M&G pays great attention to the sustainability of materials and continuously strengthens the use of certied environmentally friendlyand safer materials, aiming to bring more green and safe products to consumers. M&G is committed to using sustainable materials forcertain key material categories by 2025.
M&G actively sources raw materials for multiple product categories that have passed environmental and health-related certication,aiming to improve the environmental attributes of its products from the source. M&G Colipu also actively sources printer paper productswith sustainable forest certications to support the protection of forest resources.
In 2023, M&G launched the food-grade Cat Paw Easy-grip crayon. Theproduct is made of food-grade para?n, which meets both Chinese nationalmandatory safety standards and the stricter EU EN71-3 safety standard.Besides being safer, harmless, and environmentally friendly, this product alsofeatures a three-point grip design to guide children in developing the correctgripping posture. This product has won the "Green Stationery Award" (Artsupplies).Food-grade Cat Paw Easy-grip crayon
Developing products using food-grade materials
Material safety is a key focus of M&G regarding arts and kids drawing products. All products developed for children fully comply withmandatory safety standards in China. Among these products, food-grade crayon, food-grade markers, and food-grade rice color clayseries products also meet the requirements of the EU standard Safety of toys - Part 3: Migration of certain elements (EN71-3). TheCompany has formulated detailed inspection standards on health and safety regarding the three major categories of arts and kidsdrawing products: painting products, handicraft products, and puzzles, covering product categories such as acrylic markers, clay, andboard games. Product development is also implemented in strict accordance with these above-mentioned standards. In 2023, M&Gintensied the development of food-grade, antibacterial, and easy-to-clean products to further expand the food-grade product lineup.New food-grade materials have been used in a greater variety of product sub-categories, such as color pencil, outline pens, markers,watercolor pens, oil paint stick, clay, crayon, etc.
Ensuring the Safety and Harmlessness of Materials
M&G always prioritizes the safety and quality of its products. The Company attaches great importance to the safety and harmlessnessof materials in product development and material procurement, strictly adhering to Chinese national mandatory safety standards andreferring to international standards. M&G has formulated targeted chemical control policies regarding di?erent consumer age groups,and conducts thorough internal testing and third-party inspections to ensure that its products fully meet the requirements of relevantsafety standards.
Phasing-out Harmful ChemicalsM&G actively promotes the phasing-out of harmful materials in products. In 2023, we focused on phasing-out PVC and replacingnitrocellulose paints with water-based paints, further enhancing the safety and harmlessness of our products.PVC Phasing-out Project
PVC plastic may contain potential health and safety hazards, such asbenzene, lead, and mercury. PET plastic, which is more environmentallyfriendly than PVC and does not contain plasticizers, can be used asalternatives to PVC. In August 2023, M&G o?cially launched the PVCphasing-out project, with the goal to completely eliminate the use of PVC inthe future.As of the end of 2023, PVC plastic was not allowed to be used in packagingmaterials such as blister packs, bases, and trays, meaning that packaging ofnew products contains no PVC, while PVC packaging for existing productswill gradually switch with alternative materials. Replacement plans for PVCbags are currently in development. For products with PVC as the mainmaterial, we will strengthen the safety supervision and explore replacementplans in the future. As of the end of 2023, the Company has already phasedout PVC plastic from over 1,700 products and packaging materials.
Products that have eliminated PVC plastic
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Paint Replacement for Wooden Pencil
Wooden pencil used to have a coating of nitrocellulose paint. Withnitrocellulose, as well as alkyd resin, rosin modied resin, and othersoft and hard resins as its main lm-forming material, nitrocellulosepaint usually not only has an odor, but also contains some organicsolvents.Axus Stationery actively pushes for the replacement of nitrocellulosepaint with the safer and more environmentally friendly water-basedpaint in the production of wooden pencil. With the new paint, thesafety of product is further enhanced with the reduction of harmfulsubstances in its paint coating. Water-based paint mainly consistsacrylic resin emulsion, pigments, llers, solvents, and water. Itdoes not contain organic substances such as benzene, aromatichydrocarbon, as well as curing agents or plasticizers, thus noodor is produced. As of the end of 2023, 50% of Axus Stationery'swooden pencil products have switched to water-based paints.
Axus Stationery's MARCO water-based paint professionalart charcoal
Exploring Plastics Recycling Solutions
Plastics is a major material for the manufacturing of stationery products. M&G has been focusing its innovation e?orts forenvironmentally friendly products on plastics, identifying reduction possibilities, researching on biodegradable materials, and exploringinnovative replacement solutions in order to contribute to the development of circular economy.
Green Product PackagingM&G regards green packaging as one ofthe core elements of sustainable products.The Company vigorously promotes thegreen transformation of product packagingto reduce the negative impacts on theecological environment, prioritizing the useof more environmentally friendly packagingmaterials, and advocating for using paperpackaging instead of plastic packaging. Forexample, the packaging box of the carbon-neutral stationery series set is made fromrecycled pulp, and the display shelf of the"Endangered Animals: Wetland" series ismade using paper material instead of plasticmaterial. Axus Stationery has developed pulpmolding packaging to replace the traditionaltin box packaging of gift sets.
Biodegradable PLA material gel pen
Plant-based gel penFaux ceramic gel pen
Eco-friendly packaging of the carbon-neutral stationery series
M&G also vigorously explores "packaging reduction" following the principles of "simplicity and practicality", minimizing the use of packagingmaterials without compromising on product quality. By using new packaging materials and processes, we eliminated the inner boxes forsome o?ce supply products, reducing both the use of cardboard boxes and the amount of work for packaging operations. We are workingon a compact packaging for the M&G large screen microscope series products, which is expected to be launched in 2024 to accelerate thereduction of product packaging.
Chemical Safety ManagementTo reduce the impact of chemicals in products on the environment and human health, M&G has established a comprehensive chemicalmanagement system and continuously optimizes its chemical safety management in accordance with stricter standards than themandatory regulatory requirements in China.Chemical Management SystemM&G closely adheres to the requirement of national chemical management standards. Inaccordance with the Inventory of Severely Restricted Toxic Chemicals, the Regulation of thePeople's Republic of China on the Administration of Controlled Chemicals—Various MonitoredChemicals List, the Request in Common Use of Security for Student's Articles (GB 21027-2020),the Company forbids the use of any of the listed chemicals in product development, and requiresthat all purchased chemicals must be sourced from qualied suppliers.M&G has formulated the Chemical Management Policy
to ensure centralized and standardizedmanagement of chemical use in the Company. The policy clearly species the main objectivesof chemical management, the prohibition and phasing-out of chemicals, safety standards andcertication requirements, product audits and penalties, and the management of chemical suppliersand related parties. To comprehensively ensure the chemical safety of products, the Company hasalso formulated strict chemical risk assessment and inspection control procedures covering the fulllifecycle of products, including material procurement, storage, product development, production,acceptance, and sales.The "Endangered Animals: Wetland" stationery series uses biodegradable PLA materialmade from biomass such as corn. This material has excellent biodegradability. After 180days of industrial composting, the degradation rate can reach over 95%.
Plastics reduction
Biodegradable materials
The M&G Stationery Chemical Management Policy can be accessed from the Company's website under the section "Investor Relations - ESG".
The Company developed a gel pen made with plant-based materials,replacing the plastics in pen body with plant-based materials producedfrom plant residues such as sugarcane, wheat, and r, which have goodbiodegradability and biocompatibility.The faux ceramic gel pen uses a self-developed faux ceramic materialcontaining 80% of zirconia and 20% of plastics. Using zirconia toreplace plastics can signicantly reduce the amount of plastics usedwithout compromising on product quality and performance.
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In early 2024, M&G established the Chemical Management Committee to coordinate the management of chemical safety in products andproduction processes. The committee consists of representatives from the Sustainability O?ce, the Procurement Center, the ProductionCenter, the Technical Center, and the Quality Center. Aiming to ensure the compliance of the Company's chemical management, thecommittee's responsibilities include the regular review of the list of chemicals-related issues, establishing performance assessmentcriteria, and ensuring the implementation of improvement measures. The Company also focuses on chemicals prohibited or restrictedby regulations to make phase-out lists and plans, and ensures the implementation of the phase-out plans. The committee also works toimprove information transparency to better communicate about M&G's management of chemical safety externally.For products containing substance of very high concerns (SVHC), M&G strictly monitors and manages their environmental, health,and safety attributes based on the requirements of relevant national and industry standards. For example, student supplies and toysfor children under 14 years old are managed in accordance with the EU EN71-3 standard; the inks used in all writing instruments aremanaged in accordance with the EU EN71-3 standard, among which the black gel pen ink also refers to the restricted substances listin Appendix XVII of the EU REACH regulation; and soft modeling products such as modeling clay are managed in accordance with theEN71-3, EN71-9, and T/CSSGA 1006 Student Modeling Clay standards.M&G's European subsidiary, Beckmann, has developed a dedicated chemical compliance guide in accordance with local regulatoryrequirements, which also applies to all suppliers in terms of chemical management. For certain chemicals, this guide has stricterrequirements than the EU REACH regulation. As a member of the Research Institute of Sweden (RISE) Chemicals Group, Beckmannregularly communicates with industry experts to closely follow the latest updates and trends of relevant laws and regulations in thechemical and environmental sectors.
Key Chemical Safety Standards Referenced by M&G
China
? Inventory of Severely Restricted Toxic Chemicals? The Regulations of the People's Republic of China on Administration of Controlled Chemicals—VariousMonitored Chemicals List? Request in Common Use of Security for Student's Articles (GB 21027-2020)? Gel Ink Ball Pens and Rells (GB/T 37853-2019)? National Safety Technical Code for Toys (GB 6675-2014)? Student Modeling Clay (T/CSSGA 1006)? Book Cover and Slipcase (T/CSSGA 1001-2017)? Technical Requirements for Environmental Labeling Products Cultural Paper (HJ 410-2017)? Requirements of Concentration Limits for Certain Restricted Substances in Electrical and ElectronicProducts (GB/T 26572-2011)? Hygienic Requirements of Study Products for Myopia Prevention and Control in Children and Adolescents(GB 40070-2021)
EU
? Safety of Toys - Part 3: Migration of Certain Elements (EN71-3)? Safety of Toys - Part 9: Organic Chemical Compounds Requirements (EN71-9)? Registration, Evaluation, Authorization and Restriction of Chemicals (REACH Regulation)
Chemical Management Committee
ProcurementCenter
Sustainability
O?ceQualityCenter
ProductionCenter
TechnicalCenter
M&G Chemical Safety Management Structure
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Phasing-out Harmful Elements in Clay Products
Boron-free clay product with M&G's proprietary formula
Awareness Raising on Chemical Safety
M&G actively disseminates knowledge about chemicals to the public. With moretransparent communication with consumers, the Company aims to enhance consumers'awareness of the safety of children's stationery. We use platforms such as corporateWeChat account, Xiaohongshu, and Douyin live streaming to provide consumers withchemical safety information of stationery products such as food-grade clay and bookcovers. These initiatives intend to guide consumers to pay attention to chemical safetyand make informed choices about stationery products that have good performance, highquality, and dependable safety.
Pop science short videos on productchemical safety
M&G actively promotes the control and elimination of boron in products. In June 2023, the Company launched a boron-freeclay with its proprietary formula. The product has passed the 3C quality certication as well as the EU EN71-3 and EN71-9standards certications.In 2018, M&G took the lead in formulating the association standard T/CSSGA 1006-2018 Student Modeling Clay for the ChinaStationery & Sporting Goods Association, which sets higher safety requirements than the industry standard. Safety indicatorsregarding boron, harmful aromatic amines, and other limited substances that consumers are concerned with were includedin the standard. After ve years, this standard has been adopted by many companies in the industry voluntarily, as well asvarious third-party testing agencies and market supervision authorities, using the standard in their evaluation of clay products.This standard has been awarded the 2020 Ministry of Industry and Information Technology's Demonstration Project for theApplication of One Hundred Association Standards.Furthermore, in 2023, M&G proposed a revision plan of the Modeling Clay industry standard to the National TechnicalCommittee on Stationery and Sporting Equipment Standardization Administration of China. The revision plan calls for stricterlimits on migratory elements such as boron, free formaldehyde, and preservative, in order to further improve the safetystandards of modeling clay products. The proposal has been submitted to the Ministry of Industry and Information Technologyfor review and approval.
Chemical Control and Phasing-out
M&G has established a comprehensive chemical control list, and is committed to implementing a strict phasing-out list to eliminatecertain chemicals from its products. The number of product categories covered by the chemical control list and the phasing-out plancontinues to grow. In 2023, M&G added the EU REACH Regulation to the testing standards for black gel pen ink, further raising thechemical control requirements for inks. M&G also actively participates in the development of industry standards regarding the controlof hazardous substances, making positive contributions to the green and healthy development of the industry. In 2023, the industrystandard, GB/T 42822-2023 Determination of Primary Aromatic Amines in Art Articles, was o?cially released. M&G has participated inthe development of this standard, which is applicable to the determination of primary aromatic amines in art supplies (including crayon,oil paint stick, gouache paint, oil paint, and acrylic paint), lling the gap in the testing methods for harmful aromatic amines in relatedcategories.In terms of the phasing-out and upgrading of chemicals, M&G has innovatively developed thermoplastic elastomer (TPE/TPR) materials,which were used to make TPE erasers, providing an e?ective solution to phase out PVC materials in traditional erasers. The Companyhas also developed safer boron-free clay products, and developed a PVC phasing-out plan, continuously promoting the improvementof production processes and the development of alternative chemical choices. To further enhance product safety, M&G will continue tostrengthen the control of chemicals to comply with increasingly stringent domestic and international standards and regulations.Developing More Environmentally Friendly TPE Erasers
In 2023, M&G developed and launched a benzene-free TPE eraser, making another step to gradually phase out PVCmaterials. Ordinary erasers are made mainly of PVC materials, whose processing often needs various additives, includingbenzene plasticizers. TPE is an environmentally friendly material. It does not produce irritating odors during processing, andis non-toxic and harmless to the human body. TPE can also be recycled and reused. In addition, TPE erasers have greatersafety attributes because that the material is free of chemicals such as heavy metal, halogen, polybrominated biphenyls,polychlorinated biphenyls, organic tin, etc.
TPE erasers
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Governance andBusiness Growth
M&G Stationery has established a robust corporate governance system.The Company continuously optimizes its corporate governance,strengthens risk management, and implements compliance managementwith business ethics and anti-corruption management at the core,aiming at laying a solid foundation for the healthy and sustainabledevelopment of the Company. We continue to strengthen informationsecurity management and strive to protect data security and customerprivacy with e?ective measures. Relying on technological innovation asthe driving force for our growth, we commit to contributing our expertiseto the development of the industry and providing continuous support toachieve a sustainable and shared future.
Addressing Sustainable Development Goals (SDGs):
This chapter responds to the Responsible Corporate Governance of M&GStationery's sustainable development strategy.
? Linking ESG performance to executive compensation, including
ESG factors in the annual performance evaluation system for 8department heads? Established the Risk Management and Compliance Committee
chaired by the Company president, further optimizing theCompany's risk management structure and policy system? Launched an online training course on the M&G Code ofBusiness Conduct as a mandatory course for all employees? Conducted internal control audits against non-compliance withbusiness ethics, covering 22 operating locations that represent100% of M&G's operational sites
? Filed 2,612 patent applications cumulatively, with 2,407 patents
granted and 1,211 valid patents? Member of 22 industry associations, and participated in theformulation of 25 standards in 2023
2023 Performance Highlights
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Corporate Governance
Board of Directors
Efectiveness of Board of Directors
M&G has established a sound corporate governance structure and strives to build a robust modern enterprise system, so as tobuild a top-level design that ensures the orderly and e?cient operation of the Company.
M&G strictly follows the requirements of the Company Law of the People's Republic of China, the Securities Law of the People's Republicof China, the Code of Corporate Governance for Listed Companies, and the relevant laws and regulations promulgated by China SecuritiesRegulatory Commission and Shanghai Stock Exchange. The Company continuously improves its corporate governance structure, ensurese?ective division of responsibilities and checks and balances mechanism at the Board of Directors, and standardizes corporate operations,laying a solid foundation for the sustainable and healthy development of the Company, as well as the e?ectively protection of the legitimaterights and interests of investors and other related parties.The General Meeting of Shareholders is the highest authority of M&G Stationery and decides on signicant matters of the Company'soperation and management. The Board of Directors is elected by the General Meeting of Shareholders in accordance with the law and isthe standing executive body of the Company. The Board of Directors has four specialized committees: the Strategy Committee, the AuditCommittee, the Remuneration and Appraisal Committee, and the Nomination Committee. When appointing members of the Board of Directors,the Company takes into account diversity factors such as professional experience, cultural and educational background, age, and gender toensure the competency of the Board of Directors to make scientic decisions. The Board of Directors consists of seven directors, including fournon-independent directors and three independent directors, with female directors accounting for 14.3%.Each board committee is composed of three directors, who fully leverage their expertise to support the functioning of each committee. Alldirectors conscientiously fulll their duties as directors, providing e?cient and professional decision-making advice for major corporate mattersin accordance with the Rules of Procedure of the Board of Directors as well as other governance policies.
The Company has made specic provisions on the powers, authorities, and meeting arrangement of the Board of Directors in the Rules ofProcedure of the Board of Directors. In 2023, the Company convened a total of ve Board of Directors meetings, all of which with a 100%attendance rate of all directors.
The nominated directors are rst reviewed and approved by the Board of Directors, andthen submitted to the General Meeting of Shareholders for election and approval. Theterm of o?ce for directors is three years, and they can be re-elected for consecutive termsupon expiration of their term. Independent directors shall not serve for more than 6 yearsconsecutively. As of the end of 2023, the average tenure of M&G's board members is 5.4years, calculated from the starting date of their terms. In 2023, the Company re-electedits Board of Directors. The relevant information regarding the re-election and election ofdirectors and election of independent directors can be accessed from the Company'scorporate website under the section "Investor Relations - Interim Announcement Reports"and on the Shanghai Stock Exchange website as public information.
M&G Stationery’s Corporate Governance Structure
General Meeting of Shareholders
Business activities
Board of DirectorsElectionAppointment
ReviewReview
Management/guidance
Management/monitoring
Employment
ElectionSupervisionAccountabilityAccountability
AccountabilityAccountability
AccountabilitySupervision
Accountability
Accountability
Management
Accountability
External audit
Board of Supervisors
Internal auditManagement
In 2023, number of board meetingsconvened by the Company
As of the end of 2023, the averagetenure of M&G's board members
years
5.4
In order to ensure that independent directors have su?cient time and energy to fulll their duties, the China Securities Regulatory Commissionreleased the Measures for the Management of Independent Directors of Listed Companies (hereinafter referred to as the Measures) in 2023,which stipulates that "in principle, independent directors can serve as independent directors in a maximum of three domestic listed companies,and should ensure that they have su?cient time and energy to e?ectively fulll their duties as independent directors". The Company will reviseits Independent Director Working System in accordance with the Measures. In fact, the three independent directors of the Company alreadymeet the requirements of the Measures, each holding less than three independent director positions in domestic listed companies. TheCompany's three independent directors have professional experience in law, accounting, and management consulting respectively, as well asexpertise in strategic development, corporate governance, and risk management, allowing them to provide e?ective advice for decision-makingin various dimensions of the Company's development. An independent director also has experience in the manufacturing industry.
Regarding the performance evaluation of the Board of Directors, the Company's annualwork report of the Board of Directors also needs to be reviewed and approved by the Boardof Directors before being submitted to the General Meeting of Shareholders for review.The Company's 2022 Annual Work Report of the Board of Directors was approved by the19th meeting of the 5th Board of Directors and 2022 General Meeting of Shareholdersrespectively.
Responsible for formulating the assessment criteria for directors and seniorexecutives and conducting assessments; formulating and reviewing the remunerationpolicies and plans for directors and senior executives with the authorization of theBoard of Directors.Responsible for researching, reviewing, and providing recommendations on theselection criteria and procedures for candidates for the Company's directors,president, and other senior management positions that need the appointment of theBoard of Directors.Responsible for the communication, supervision, and verication of internal andexternal audits of the Company.
Responsible for studying and providing recommendations on the Company's long-term development strategy and major investment decisions.
Strategy Committee
Nomination CommitteeAudit Committee
Remuneration andAppraisal Committee
Committees of the Board of Directors
StrategyCommittee
AuditCommittee
NominationCommitteeRemuneration andAppraisal Committee
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Independence of Board of Directors
Remuneration and Appraisal of Directors and Executives
The Company has specic provisions regarding the number and qualication, nomination,election and re-election of independent directors in the Rules of Procedure of the Boardof Directors and the Independent Director Working System, which also clearly dene theauthorities and responsibilities of independent directors. The Company stipulates thatthe Board of Directors shall include at least one-third independent directors, with at leastone of them being an accounting professional, to ensure that the Board of Directors canexercise its powers independently from management and has su?cient risk managementcapabilities. As of the end of 2023, independent directors accounted for 43% of theBoard of Directors, higher than the 33% required by the China Securities RegulatoryCommission.The nominators of independent directors need to provide a statement that there is norelationship that a?ects their independence with the Company, while the nominees alsoneed to make a public statement that they meet the independence requirements andother conditions for serving as independent directors. The independence statements of thethree independent directors and their nominators can be accessed from the Company'scorporate website under the section "Investor Relations - Interim Announcement Reports"and on the Shanghai Stock Exchange website as public information.
According to the M&G Stationery Articles of Association, the remuneration for directors and supervisors shall be approved by theGeneral Meeting of Shareholders, and the remuneration for senior executives shall be approved by the Board of Directors. Theallowances for independent directors shall be approved by the General Meeting of Shareholders. Senior executives are assessedbased on annual operational performance, and receive monthly prepayments of their basic salary and an annual settlement of theirannual remuneration after the completion of the Company's annual operational goals. The Company approved the Proposal on the 2023Remuneration Standards for Directors and the Proposal on the Independent Director's Allowance of the 6th Board of Directors at the2022 General Meeting of Shareholders.M&G establishes a comprehensive compensation and incentive system for all employees. Compensation of functional departmentemployees has a xed salary part and a variable compensation part, which is determined by the annual performance of employees.The Company has implemented equity incentives as a long-term incentive plan for middle and senior executives. To further promotethe achievement of the Company's sustainable development goals, sustainability related performance has been incorporated into thevariable compensation part for certain senior executives.M&G clearly states in its Employee Handbook that the Company reserves the right to reclaim employee compensation due to companyproperty damage or loss caused by employees and rights of other recovery of payment authorized by employees. This clawbackprovision also applies to senior executives.
As of the end of 2023, independentdirectors in the Board of Directorsaccounted for43%
Board of SupervisorsThe Board of Supervisors of the Company is a standing supervisory institution under theleadership of the General Meeting of Shareholders, coexisting with the Board of Directorsand independently exercising the supervisory power over the Board of Directors, seniorexecutives, and the entire company management. Upholding its responsibility to theCompany and all shareholders, the Board of Supervisors strictly complies with the relevantprovisions of the Company Law of the People's Republic of China, and the Articles ofAssociation and the Rules of Procedure of Board of Supervisors of M&G Stationery,attends the General Meeting of Shareholders and Board of Directors meetings, convenesthe Board of Supervisors meetings, and exercises its supervisory powers in strictaccordance with laws and regulations. The Board of Supervisors supervises the legitimacyand compliance of the Company's governance, nancial condition, and the performance ofduties by the Company's directors and senior executives, playing an active and importantrole in safeguarding the Company's compliance management. The Chairman of the Boardof Supervisors has extensive experience in nancial risk control and internal control.The Board of Supervisors has three members, including an employee supervisor and twoexternal supervisors. In 2023, the Board of Supervisors convened a total of ve meetings,with a 100% attendance rate for the supervisors.
In 2023, the Board of Supervisorsconvened a total of
meetings
Attendance rate of supervisors
100%
Risk Management
In order to e?ectively respond to external risks and further enhance the Company's stability and sustainable development capabilities,the Risk Management and Compliance Committee was established in July 2023 with the approval of the Company president. Aiming atthe goals of "optimizing operations, preventing corruption, and controlling risks", M&G's risk management system is divided into threemajor components: risk management, compliance management, and internal control management.
To review and rene the riskmanagement process, andformulate contingency plansand response mechanisms toensure the smooth operationof the Company.
Please refer to section "Business Ethics and Anti-Corruption" for more content on compliance management.
To formulate and standardizepolicies and regulations,and optimize complianceprocedures to ensurecompliant operation of theCompany.
To optimize internal controltools, strengthen mechanismconstruction, and ensurethe e?ective operation of thethree lines of defense, soas to continuously rene theinternal control managementof the Company and reduceoperational risks.
M&G Risk Management System Framework
Risk Management System
Compliance Management
Internal Control ManagementRisk Management
In order to fully leverage the role of independent directors, in addition to the powers granted by the Company Law of the People'sRepublic of China and the M&G Stationery Articles of Association, the independent directors of the Company are also authorized tomake judgments on major related-party transactions, propose the appointment or dismissal of accounting rms, propose the conveningof interim General Meeting of Shareholders and Board of Directors meetings, independently engage external audit rms and consultingrms, and publicly solicit voting rights from shareholders.
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Deepening Risk ManagementStrengthening Internal Control Mechanism
The Company's Board of Directors is responsible for planning and establishing the Company's risk management framework,formulating risk management policies and related guidelines, and supervising the execution of risk management measures. The Boardof Supervisors supervises the establishment of internal control systems and the implementation of internal control measures by theBoard of Directors, and the management is responsible for coordinating the daily operation of internal controls in the Company. TheRisk Management and Compliance Committee operates under the leadership of the Company president. Committee members includedirectors of the Sustainability O?ce, the Human Resources Center, the Audit Department, the Legal A?airs Department, and the FinanceCenter. The Committee functions independently of the operational departments to ensure the independence and objectivity of theCompany's risk management function. Senior executives of the Company were briefed about the optimized risk management system inSeptember 2023.
Responsible for presiding over committee work,coordinating member departments, and ensuring theimplementation of relevant tasks.
The Company has established an internal control framework based on the understanding of the concept of the "three lines of defense",and has adopted a series of tools, including compliance testing (CT), proactive review (PR), and semi-annual/annual assessment (SACA),to evaluate the e?ectiveness of the "three lines of defense" management model.
M&G Risk Management and Compliance Committee Structure
The Company has identied three major risk categories, including strategic risks, operational risks, and nancial risks. In 2023, theCompany conducted risk mapping assessment, and is expected to develop a complete risk mapping next year with targeted riskmanagement action plans.The Company has formulated the Tax Management Policy and the Tax Self-Inspection Procedures to regulate its tax management. Toensure strict tax compliance, the Company requires that all tax-related data shall have the conrmation of dedicated personnel during itstax declaration process. In 2023, the Company carried out focused self-inspections on VAT deduction ratios and other tax-related risks,and made these measures into standardized management procedures. In addition, the Company organized a series of themed trainingson tax risk self-inspection, tax planning, and interpretation of the latest tax policies for employees engaged in tax-related work to furtherenhance the tax management of the Company.
A sound process alone constitutes an e?ective internal control line of defense. In 2023, the Company reviewed 766 policies andregulations from 20 departments, issued standards for policy document, and compiled the M&G Document Management Regulation,to e?ectively standardize the internal business processes and code of conducts within the organization. The Company carried out pilotoptimization projects focusing on high-risk processes, streamlining the "three lines of defense" with comprehensive improvement ofpolicies, processes, and systems, evaluating the maturity levels of the internal control for pilot projects, and continuously following up theresults of the improvement measures.Each year, the Audit Department conducts regular audits of the authenticity, accuracy, and timeliness of key nancial data included in theconsolidated nancial statements to ensure the timely detection of signicant potential internal control risks. During the reporting period,the Audit Department carried out a series of audit projects to comprehensively examine the Company's risk management proceduresand promote the optimization and improvement of various processes and policies, such as the management systems of the direct salesbusiness and the store management systems of Jiumu Store. These audits included internal control audits of 18 key business processessuch as sales, procurement, fund management, and information system management, internal control audits of nancial statementsof subsidiaries, audits of procurement prices, monthly audits of fund expenditures, quarterly reviews of information security, audits ofexecutive departures, and other special audits based on specic risks.Audits of business ethics has been incorporated in the Company's internal control audits, covering audits for fraudulent activities, falseexpense reporting, and misappropriation of funds/assets, etc. In 2023, the Company conducted internal control audits on 22 operatinglocations, achieving 100% coverage of M&G's operational sites.In addition, the Company actively carries out internal communications to raise the awareness of internal control among employeesthrough monthly meetings on the "three lines of defense", the internal publication "M&G Internal Control", and relevant capacity buildingtrainings. By incorporating risk management culture and internal control concepts into M&G's corporate culture, the Company is buildinga strong risk control culture, laying a solid foundation for ensuring stable growth.
Positioning of the "Three Lines of Defense"Line of DefenseDepartmentResponsibility
First line of defense
Business units/functionaldepartments
? Each business unit is the primary responsible party for internalcontrol, responsible for resolving over 95% of issues.? Developing business process standards.? Developing relevant processes.Second line ofdefense
Internal Control Department
? Formulating internal control strategies.? Monitoring activities and conducting inspections.? Providing coaching on internal control system.? Carrying out inspections to ensure sound internal control of high-risk businesses.Third line ofdefense
Audit Department
? Carrying out special audits.? Carrying out internal control audits.? Carrying out audits for corruption and fraudulent incidents.? Carrying out spot inspections as a deterrent.
President
Vice Director, Finance Center
Risk Management and Compliance Committee
Responsible forestablishing internalcontrol mechanisms,developing therisk map, andcoordinating riskmanagement actionplans.
Responsible for theassessment, audit,and investigationof whistleblowingincidents related tointernal control andbusiness ethics.
Responsible forformulating, updating,announcing, andimplementing policiesrelated to businessethics, anti-corruption,and compliance, andensuring operationalcompliance.
Responsible for thecommunication ofrisk management andcompliance culture,and related employeetraining and discipline.
Responsible forthe identicationand assessment ofsustainability risks,and integrating theidentied risks intothe risk managementsystem of theCompany.
Finance Center
AuditDepartment
Legal AfairsDepartment
Human ResourcesCenter
SustainabilityO?ce
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Business Ethics and Anti-Corruption
M&G Stationery strictly adheres to the relevant laws and regulations on business ethics, such as the Anti-Monopoly Law of the People'sRepublic of China, the Anti-Unfair Competition Law of the People's Republic of China, and the Interim Provisions on ProhibitingCommercial Bribery, continuously strengthens business ethics and anti-corruption management, and adheres to the bottom line ofcompliance. In 2023, while strengthening the awareness education of business ethics and anti-corruption among employees, theCompany also developed an online compliance management platform. In addition, M&G formulated the Supplier Code of Conduct,and actively conducted supplier surveys in order to deepen supply chain compliance management and build an honest businessenvironment.The Risk Management and Compliance Committee is in charge of all compliance and business ethics-related work of the Company.The Audit Committee of the Board of Directors is responsible for internal audit supervision of the nancial management and internalcontrol systems of both the Company and its subsidiaries. Under the guidance of the Audit Committee, the Audit Department conductsaudits independently. It is also responsible for establishing of robust anti-fraud mechanisms within the Company covering the key areas,processes, and content of anti-fraud operations, and monitoring and preventing possible fraudulent activities during the internal auditprocess to strictly prevent fraud risks.Compliance Management of Business Conduct
Supplier Compliance Supervision
Compliance management is one of the core components of the M&G riskmanagement system. The Company has been continuously optimizing itscompliance system and formulated a series of policies in recent years, suchas the Guidelines of Anti-trust Compliance, the Management System AgainstFraudulence, the Whistleblower Protection and Non-retaliation System, theInternal Investigation and Handling System for Employee Misconduct, the M&GCode of Business Conduct, the Supplier Code of Conduct, and the EmployeeConict of Interest Management System
. These policies both ensure that theCompany's compliance system fully complies with national laws and regulations,and provide a viable guidance for regulating the compliance behaviors ofemployees and suppliers.In the 2022 revised version of the M&G Code of Business Conduct, the Companydedicated a full chapter to focusing on "Upholding Integrity and Legal ComplianceBottom Line", laying out specic requirements for various compliance behaviorscovering compliance with laws and regulations and business ethics, faircompetition and anti-trust, anti-fraud, probation of insider trading, use of privacydata, record transparency, anti-money laundering, etc. In 2023, the Companyincorporated these requirements into the revised version of the EmployeeHandbook to further enhance the awareness of compliance among employees.
M&G has signed the Transparent Procurement & Integrity Convention with all procurement, service, and engineering suppliers and contractors,urging them to commit themselves to business integrity. The Company opens its whistleblowing channels to suppliers and encourages themto report any unethical behavior, such as embezzlement, fraud, solicitation or acceptance of bribes by M&G employees in a timely manner. In2023, the Company formulated the M&G Supplier Code of Conduct, specifying requirements and expectations for suppliers in ve aspects:
business ethics, labor and employment, health and safety, environmental protection, and intellectual property. This document has already beeno?cially attached to the processing contracts of the Supply Chain Management Center and the O?ce Business Division, as well as the annualprocurement contracts of the Procurement Center. Suppliers are required to sign this document together with the contract. In addition, theCompany has formulated dedicated management policies regarding supply chain integrity risk prevention with detailed provisions on codes ofconduct and relevant disciplinary actions for various violations, further strengthening the integrity of the supply chain and related personnel inthe o?ce business line.
In 2023, M&G further strengthened the compliance management of its social media platforms. Based on national laws and regulationssuch as the Advertising Law of the People's Republic of China and the Copyright Law of the People's Republic of China, as well as theM&G Intellectual Property Compliance Management Provisions, the Company formulated the M&G Social Media Platform OperationGuidelines, comprehensively enhancing risk control by requiring stricter content review and conrmation across its social media outlets.
Guidelines of Anti-trust ComplianceM&G's Compliance DocumentsManagement System AgainstFraudulenceWhistleblower Protection and Non-retaliation SystemInternal Investigation and HandlingSystem for Employee MisconductM&G Code of Business ConductSupplier Code of Conduct
M&G Supplier Code of Conduct Requirements on Business EthicsSuppliers must comply with the laws and regulations of where they operate and adhere to the highest ethical standards.Suppliers must comply with all applicable anti-corruption and anti-bribery laws and regulations, adhere to M&GStationery's Transparent Procurement & Integrity Convention and the Management System Against Fraudulence, andprohibit any form of bribery, corruption, extortion, and embezzlement.Suppliers are prohibited from providing any cash or cash equivalents, gifts, or entertainment to M&G employees,agents, and their family members beyond reasonable limits.
M&G has set up whistleblowing channels to ensure e?ective supervision of its compliance management. Both employees and externalparties can report any incident of violations through hotline, email, WeCom, and other means. Upon receiving the complaint, dedicatedpersonnel from relevant departments shall contact the whistleblower within three working days to obtain more details and follow-upaccordingly. To ensure the due process of the investigation of reported cases and protect both the whistleblowers and the investigationpersonnel, the Company has formulated the Whistleblower Protection and Non-retaliation System that requires strict condentiality ofthe whistleblower's privacy information. Employees who intentionally disclose such information or engage in retaliatory actions againstthem shall face disciplinary actions accordingly, ranging from warnings, demerit, and termination of employment to legal consequencesdepending on the severity of misconducts. In 2023, the Company received a total of 42 complaints, all of which were promptly recordedand properly handled.
Starting from 2022, the Audit Department has been conducting surveys among suppliersof the Procurement Center, the Supply Chain Management Center, and the O?ceBusiness Division, using questionnaires and phone interviews to identity improvementopportunities in procurement, quality inspection, logistics, and other related processesof the Company and reect on the business conducts of M&G employees. For suppliers,the surveys also serve both as a brieng about the Company's anti-fraud and complaintmechanisms, and an opportunity to report possible misconducts, ensuring a strongeranti-fraud environment. The Audit Department regularly issues audit reports on supplierfollow-up visits based on the survey results. In 2023, a total of 305 suppliers participatedin the survey.
Number of suppliers participated in thesurvey in 2023
The Management System Against Fraudulence and the M&G Code of Business Conduct are released publicly and can be accessed from the Company'scorporate website under the section "Investor Relations-ESG".
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Compliance Culture Cultivation
M&G has been focusing on the cultivation ofcompliance culture and building an integrityand fair business environment as an importantpart of business ethics work for years. Oncethe Company's compliance policies, such asthe Management System Against Fraudulenceand the M&G Code of Business Conduct, wereapproved by Company president, they wouldbe directly communicated to every employeevia o?ce email and posted on the OA platformat the same time. In February 2024, theCompany launched an online training courseon the M&G Code of Business Conduct, whichwas made mandatory for all employees, toensure the full coverage of employee trainingon the code of conduct.The Company sends monthly email reminderson anti-fraud reporting channels to allemployees. "Anti-fraud, Prioritizing Integrity"posters were also put up in o?ces, factories,retail stores, and warehouses. New employeesmust sign the Letter of Commitment on Integrityand Self-Discipline upon joining the Company,pledging to jointly maintain a transparent andhonest working environment.
In 2023, the Company carried out a series of anti-fraud training, covering the denition and causes of fraud, anti-fraud focuses,relevant policies and requirements, common forms of frauds and their consequences, aiming to create a culture of integrity whereemployees "do not want, cannot, and dare not" engage in fraud activities. Over 420 employees participated in the anti-fraud training,including Company executives as well as front-line employees on key sensitive posts such as procurement, retail store operations,manufacturing, quality inspection, logistics, and administration. The course was included in the mandatory orientation training fornew employees. Over 80% of the Company's procurement personnel have completed in-person training of this course. In 2023, M&GColipu also carried out online anti-corruption trainings covering 100% of its employees.In 2023, M&G organized 25 compliance training sessions, covering topics of anti-fraud, personal information protection, intellectualproperty management, marketing promotion with product style book, Labor Law, intellectual property issues in social media platformoperations, etc. A total of 949 participants e?ectively enhanced their compliance awareness with the take-aways of these trainings.In March 2023, M&G o?cially joined the Trust and Integrity Enterprise Alliance as a member, pledging to operate with integrity andembarking on a new journey of building a corporate culture of integrity. The Alliance was initiated jointly by a number of well-knownenterprises and the Criminal Law Science Research Center of Renmin University of China. M&G joined the Alliance with a shared
Notice of the training on the M&G Code of Business Conduct
M&G joining the Trust and Integrity Enterprise Alliance
Number of participants in anti-fraudtraining
420+
Number of compliance trainingsessions conducted
Number of participants incompliance training (person-times)
vision for a business environment that is honest, transparent and trustworthy, andstriving to work together with like-minded organizations to advocate for a culture ofintegrity and compliance. During the year, M&G participated in seminars, forums, andexchange meetings organized by the Alliance, covering topics such as compliancesystem construction, integrity and compliance in the internet industry, anti-fraudcompliance construction, audit and supervision methods, business data management,fraud investigation experience sharing, integrity culture construction, etc.
Code of Business Conduct
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Information Security Management
M&G established the Information Security Management Working Group in July 2022 to take full charge of the information and networksecurity of the Company. The Company has formulated a series of relevant policies and regulations to ensure the condentiality, integrity,and availability of its information system, including the Information Security Management Manual, the Information Security Policy, theInformation Security Management Framework, the System Construction Security Management Policy, the Information Classication andGrading Labelling Management Policy, the Information Security Incident Management Policy, etc. The Company continuously optimizesthese management policies, and takes active measures to ensure their implementation following the principles of "active prevention,coordinated planning, focusing on both technology and implementation, and all-in participation". In 2023, the Company did not receiveany complaint on information security and privacy protection and had no information security incident such as information leaks or lossof customer information.Information System Construction
Data Security and Privacy Protection
In 2023, the Company established an information security self-inspection taskforceto conduct monthly information security inspections and threat simulations of theinformation systems of M&G Alliance, OA, and Jiumu Store. The M&G Alliance Systemand Jiumu Store Membership System have passed the Level 3 certication of theSecurity Classied Protection for Information System Registration, and the Company'semail system has passed the Level 2 certication of the same standard.The Company has formulated information security emergency plans and incidentresponse procedures, and conducts business continuity tests at least once a year. TheCompany also uses third-party tools of Alibaba Cloud and Huawei Cloud to conductvulnerability scanning and analysis of relevant hosts and sites, and carries out thesuggested security repairs or updates accordingly. In 2023, the Company did notdiscover any information security vulnerabilities. In addition, the Company carried outtwo high-tra?c access attack simulation drills and a data injection simulation drill on theJiumu Store Membership System UAT environment during this year.
The Company requires the secure management of data in various business systems, with a focus on the identication of data thatrequires special security management. Employees are required to prioritize using the Company's domain to login the system to ensurethe timeliness of access information. The login records are required to be archived for at least six months for reference. For sensitiveinformation containing personal data, including but not limited to name, address, ID number, phone number, and WeChat ID, is requiredto be desensitized. Other sensitive information, including but not limited to pricing, costs, formulas, mold information, etc., is alsorequired to be isolated and stored with encryption as much as possible. The authorization of access to information follows the principlesof "traceable access, reasonable scope, and appropriate permission", and is managed as a closed loop process. When an employeeleaves or changes position, his/her access permission shall be promptly termination or changed accordingly. Permissions of operationsand export of core data are strictly controlled, and the records of such operations shall also be archived for reference.In terms of customer information collection, the Company requires that the targeted customers shall be informed of the purpose,scope, methods, use, sharing, etc. publicly and transparently and asked for their consent. In 2023, the Company further strengthenedits privacy protection measures by following the principle of "minimum and necessary only" regarding collecting customer information.Jiumu Store optimized its membership information collection process and platform interfaces following the principle of "collecting onlywhen necessary, using only when necessary, and displaying only when necessary".
M&G Information Security Incident Response Procedures
Response Procedures for Customer Information Leak Incident
The M&G Alliance System and JiumuStore Membership System have passedthe Security Classied Protection forInformation System Registration with
The Company's email system has passedthe Security Classied Protection forInformation System Registration with
certication
certication
Immediately report the incident to the Information SecurityManagement Working Group and relevant departments.Diagnose, identify, and analyze to nd the cause of theproblem, create initial assessment of the urgency andproblem spot of the incident, and evaluate the approximatetime for incident resolution and system recovery.
Determine the a?ected systems and carry out emergencyrepairs, such as system isolation, setting rewall androuter rules, updating system patches, etc., and collectand preserve evidence of inltration for future reference.Make sure the security incident is solved and the a?ectedsystem service and data are recovered, conduct analysis ofsystem with similar vulnerabilities to develop correspondingsolutions such as security reinforcement or securityprotection, which will be implemented by the informationsecurity administrators.
Report the cause of the incident and the relevant follow-up optimization measures to the relevant departmentsand senior management of the Company.
Promptly determine the scope of the incident, including the specic time, location, types and quantities of leaked data, andthe customer groups a?ected.
Promptly notify relevant parties, including a?ected customers, regulatory authorities, and other potentially a?ected thirdparties.
Take remedial measures based on the investigation results to minimize the impact of the incident on customers.
Take measures to contain the incident and prevent further losses, with measures including but not limited to: isolating a?ectedsystems or devices, closing vulnerabilities that may be exploited by attackers, and cleansing leaked or tampered data.
Conduct an investigation to determine the specic cause of the incident, the technical methods used by the attackers, andthe impact on customers, in order to take measures to prevent similar incidents from happening again.
LeveL 3
LeveL 2
Jiumu Store Membership Information Management ProceduresCollection of member
informationUse of member
information
Protection of member
information
Collect member information based on the principles of lawfulness, openness, and transparency.Clearly inform members of the scope and purpose of information collection and obtain their consent.Collect member information through secure channels and take reasonable technical and managementmeasures to protect the security of member information.Use member information strictly for its intended purpose, and ensure not to use it beyond the intendedscope.Use member information reasonably and in compliance with agreements with members.Take reasonable measures to protect the security of member information and prevent information leak,damage, or loss.Regularly back up and encrypt member information to prevent unauthorized access or use of theinformation.Strictly limit the permissions for accessing member information to those with proper authorization.
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Information Security Awareness TrainingProduct Research and DevelopmentM&G regularly conducts information security awareness education and training activities to continuously improve both the awarenessand risk response capabilities of employees regarding information security. The Company developed and launched the M&G EmployeeInformation Security Training online lectures, which allows its employees to learn about the importance of information security andcommon information security case studies through the online learning platform.Employees are required to report suspicious information security incidents to relevant personnel of the Company's Digitalization Center.Reported incidents are handled by personnel with di?erent security clearance levels based on the type and severity of the incidents.Employees can also directly report the incidents to the Information Security Management Working Group. Upon receiving an incidentreport, the information security management personnel and supervisors need to promptly handle the incidents or report them to higher-level supervisors based on the severity of the incident.For information security incidents and violations discovered during information security inspections, the Company will take disciplinaryactions towards the individuals involved in accordance with the relevant provisions of the Employee Handbook and the PerformanceEvaluation System. Former employees who violate their security responsibilities and leak sensitive information of the Company will alsobe held liable. The Company will pursue their legal responsibilities in accordance with relevant regulations and agreements. Incidents ofsevere violations will be compiled into internal awareness education cases to prevent similar issues from happening again.
In 2023, M&G formulated the Technology Development Project Management Process and the R&D Process Management—NewTechnology Development, to standardize the process for new technology development, accumulate and consolidate project experience,and enhance the technical and project management capabilities of developers. The Company achieved a series of key technologicalbreakthroughs during the year focusing on product functionality, core consumer needs, and environmental friendliness, and developeda series of new products, including the development of easy-to-wash marker ink formula and the full series of Pickering emulsion ink, aswell as the development of food-grade painting stick, boron-free ultralight clay, large screen microscopes, smart calculating device (2ndgeneration), smart spelling device, smart reader, color timer, etc.As of the end of 2023, M&G had led 2,612 patent applications cumulatively, with 2,407 patents granted and 1,211 valid patents. In2023, M&G further enhanced its product competitiveness with the completion of 32 product certications in various product categories.
Technological Innovation and Digitalization
M&G is committed to achieving innovative-driven development and innovation forgood causes. As a champion of the sustainable development of the industry, M&Gcontinuously enhances research and development and innovation capabilities,and integrates green and environmental factors in research and development.The Company also vigorously uses digitalization to promote the transformationof operational and development models to achieve greater win-win economic,environmental, and social benets. In 2023, the Company invested RMB170 million intechnological improvements, technological innovation, and R&D.
millionInvestment in technologicalimprovement and innovation, andR&D in 2023RMB170
M&G Colipu Enhancing Information Security Risk Prevention and Control
To protect against network attacks and malware, M&G Colipu has formulated a series of information security managementpolicies, including the Information Content Security Management Policy, the Information Assets and Equipment ManagementPolicy, the General Emergency Plan for Major Emergencies, and the Personnel Security Management Policy. It hasdeployed cloud rewalls, cloud WAF, and cloud security centers. In 2023, M&G Colipu initiated the third-party networksecurity classication evaluation of its e-commerce platform, and received a "Level 3 (S3A3)" security protection rating. TheTechnical Department conducts security training every month, and produces a series of information security risk preventionknowledge posters for employees.For any form of leaks of condential information, whether intentional or due to negligence, M&G Colipu will require theresponsible personnel to pay a compensation based on the severity and harm of the incident, with possible termination ofthe labor contract. If such behavior leads to serious consequences, M&G Colipu may pursue legal liability following dueprocesses.
Number of Patent Applications and Grants Owned by M&G Stationery
2023 M&G Product R&D Innovation Awards
202120222023Cumulative patent lings (item)
2,116
2,391
2,612
Cumulative patents granted (item)
1,923
2,235
2,407
"Q31/0120000003C163 Gel Ink Ballpoint Pens and Rells" was awarded the honor of "Shanghai Standard""Stainless Steel Pen Tip Preparation Technology Development and Application" won the "Private Sector
Technology Development Contribution Award—Second Prize""Pen Manufacturing Intelligent Detection Technology Development and Application" won the "ShanghaiScience and Technology Award—Third Prize""Key Technology and Industrialization of New Environmentally Friendly Materials for Pen Manufacturing"won the "Shanghai Science and Technology Award—Second Prize"The project "Key Technologies and Industrialization of High-performance and Environmentally Friendly Ink"won the "2023 China National Light Industry Council Science and Technological Innovation Award—First Prize"
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DigitalizationDigital transformation is the strategic path for enterprises to achieve high-quality development. M&G has built a digital vision of "DigitalM&G, Internet M&G", focusing on the digitalization of core businesses (marketing and consumer operations, channels and salesterminals, and R&D, production, and supply chain), organizational and collaborative digitalization, and digital infrastructure, continuouslygrowing its digital capabilities.In 2023, with the launch of projects such as the JuBaoPen App, the M&G Alliance, and the Sales and Inventory System, the Companyhas initially built a complete digital sales and marketing system. The channel management App JuBaoPen provides digital supportto sales personnel in three dimensions: People (task follow-up, decision-making support), Product (category opportunity exploration,accurate order copying), and Place (store operation analysis). These measures can e?ectively improve sales operation e?ciency,and have been widely used by frontline and channel personnel. In terms of logistics, the Company has successively launched digitalsystems such as the visitor appointment system, the electronic release form system, and safety inspection system, which not only resultin simpler processes and higher e?ciency, but also e?ectively reduce the use of paper documents, implementing the green and low-carbon principles in practice.
Improving Performance and User Experience of ProductsAdvanced Pen Production Intelligent Factory
M&G Colipu Enhancing Digital Capabilities
In 2023, the Company focused its improvement e?orts on gel pen and correction tape products, aiming to comprehensivelyimprove overall user experience in terms of user perception, quality, and functional performance of the products. Theimprovement measures covered product planning and design, supply chain improvement, and technological breakthroughs.As the result, the user experience of core category consumers has been comprehensively improved. The gel penperformance improvement project included 16 sub-projects on the soft rubber feel, plug-in force of pen cap, adhesion of theprotective cover, texture standardization, printing positioning, etc. The correction tape performance improvement projectincluded 6 sub-projects on mold structure, wrinkling and damage in re-writing, gear structure and parameter design, etc.
Established in 2021, the M&G Stationery Advanced Pen Production Intelligent Factory mainly manufactures the liquid-inkballpoint pens, student fountain pens, retractable ballpoint pens and other mainstream products with intelligent productionoperations. The factory has developed a series of application systems in equipment intelligence, production processintelligence, product and service intelligence, and software system application, topping industry peers in per capita outputvalue with its lean production management mode. Some of the systems, such as the independently developed intelligentwaterway system, the mold precision maintenance system, the line marking detection system, and the Andon system, are allpioneering in the stationery industry.After the intelligent manufacturing transformation, the Factory has achieved signicant improvements in all major indicators:
Per capita annual output value increased by
millionAnnual cost reduction Product defect rate reduced byEnergy consumption reduced byWorkshop noise reduced by
M&G Colipu is a B2B integrated digital e-commerce platformbuilt by M&G Group. M&G Colipu continuously promotesthe digitalization of the industry focusing on four areas:
expanding product lines, promoting the e?cient operation ofthe platform ecosystem, upgrading intelligent warehousingsystems, and optimizing the platform through digitaltechnology iteration. With a strong R&D team consisting of100 personnel, M&G Colipu has independently developeda number of core systems, such as business rule engines,workow engines, information collection engines, pricemonitoring engines, and auxiliary quotation systems, whichhave been widely used in digital business scenarios such asprice comparison, data retrieval, and information collectionand accumulation.
Fully intelligent warehouse of M&G Colipu
M&G Colipu deployed multiple intelligent processing systems in its new intelligent warehouse, such as dense storagesystem. The warehouse deploys various intelligent systems across the full warehousing process, such as the advancedAS/RS automated warehouse system, information transmission through the EIP system, order allocation through theWMS system, picking by the AGV system, robot scheduling by the RCS system, and order dispatching and control by theTMS system. These systems have signicantly improved the throughput e?ciency of the warehouse, topping intelligentwarehousing and logistics peers with a daily throughput capacity of 80,000 boxes.With its outstanding digital capabilities, M&G Colipu has won a number of awards in digitalization in 2023, such as the ChinaGovernment Procurement Award "Excellent Supplier Award", "2023 China Industrial Digitalization Pioneer Award" and "2023China Industrial Digitalization Top 100 Enterprises" by Toby.com, and "Dingge Award" Digital Transformation Pioneer List"Annual Industry Platform Award".
30%
75%13%
38%RMB5
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M&G attended the United Nations Sustainable Development Goals Summit and signed the "Business in Action: Sustainable IndustrialDevelopment Consensus" initiative
Intellectual Property ProtectionM&G has formulated more than 20 policies regarding the protection of intellectualproperty, including the Intellectual Property Handbook, the Intellectual PropertyManagement Method, the Intellectual Property Risk Management Control, theReward System of Intellectual Property, the Patent Management Method, theCopyright Management Method, the IP Licensing Product Risk Control System, etc.In 2023, the Company formulated the Trademark Application Management Methodto comprehensively protect intellectual property rights. The Company obtained thecertication of the Intellectual Property Management System (GB/T 29490-2013) in2021, and completed the periodic audits in 2022 and 2023 respectively. The certicationprocess has helped the Company monitor and evaluate the e?ectiveness of intellectualproperty management in various business processes, which is conducive to thecontinuous improvement of the intellectual property management and the formulationof a positive mechanism in support of technological innovation. In 2023, the Companycooperated with law enforcement authorities in the crackdown of 121 intellectualproperty piracy cases.Maintaining Legitimate Market OperationsIn March 2023, M&G identied three online stores selling counterfeit M&G brand gel pens and rells, with a signicantamount of sales. The Company promptly collected information and reported the case to the regulatory authorities. Afterinvestigating the sales volumes and operating locations of these illegal vendors, law enforcement authorities arrested thethree suspects in July.M&G has always adopted a "zero tolerance" attitude towards infringement. With a strong determination, the Companyvigorously protects the legitimate rights and interests of consumers, channel partners, and M&G itself, safeguarding theCompany's brand and reputation.
Supporting the Development of Sustainability Standards
In 2023, M&G formulated its rst corporate sustainability standard, the M&G Sustainable Products, which clearly denesthe Company's sustainable products from the aspects of material, functionality, safety, and packaging, and promotesthe development of sustainable products throughout the Company. The Company is also committed to promoting itssustainability concept in the industry, and participated in the formulation of the association standards "Carbon FootprintAccounting Methodological Guidelines for Cultural and Sport Products" and the "General Principles for Evaluation of theReusability and Recycling and Reuse Rate of Cultural and Sport Products", as well as the industry standard "GeneralRequirements for Recyclable and Recyclable Design of Plastic Products".
Promoting Industry DevelopmentM&G has been actively involved in the development of the industry. The Company has successively participated in initiatives suchas the "Global Sustainable Consumption Initiative", "Decarbonizaition-Friendly Actions", "Sustainable Solutions", and "SustainableIndustrial Development Consensus", working together with ecosystem partners to vigorously promote sustainable consumption andthe green and low-carbon development of the industry. M&G has participated in 22 industry associations, with annual membershipfees totaling RMB420,000. As a member of the China Writing Instrument Association and the China Culture, Education and SportsIndustry Standardization Expert Committee, M&G actively participates in the formulation of relevant national, industry, and associationstandards, contributing our experience in product research and development into industry standards. In 2023, the Company participatedin the formulation of 25 standards, including 5 national standards, 16 industry standards, and 4 association standards, expanding itsprofessional inuence in pen production to a broader scope of stationery, sporting goods, "the four treasures of the study" (brush, ink,paper, inkstone), etc.
Number of cases of crackdown onintellectual property piracy in 2023
National standardsIndustry standardsAssociation standardsIn 2023, number of standardsformulation the Company participated in
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Environmental Development
Addressing Sustainable Development Goals (SDGs):
This chapter responds to the Response to Climate Change pillar of M&G Stationery's sustainable development strategy.
2023 Performance Highlights
As one of the largest stationery manufacturers in the world, M&GStationery is highly concerned about the environmental impact of itsoperations and vigorously takes on the responsibility of environmentalprotection. The Company actively implements its climate strategy andcontinuously strengthens the management of its environmental footprint.In 2023, M&G was awarded the title of "Five-Star Green Factory" by theShanghai Municipal Commission of Economy and Informatization and theShanghai Municipal Development and Reform Commission. In the future,M&G will fully leverage the exemplary role as a "Green Factory" andcontinue to integrate the concept of green and low-carbon developmentin every aspect of production and operation processes.
? Completed company-level Scope 1 and Scope 2 GHG emissionsaccounting, and conducted preliminary calculation of Scope
3 emissions to identify carbon emission sources and reductionpotentials? Implementing multiple energy-saving measures: air compressorenergy saving, waste heat recovery, injection molding machinesupgrade, and water pump motors optimization? Increased the total installed capacity of photovoltaics to 15,700
kilowatts? Promoted greener packaging options and packaging reduction forthe logistics process, with 330,000 cardboard boxes saved and640,000 cardboard boxes recycled cumulatively? Reduced 48,840 kilograms of carbon dioxide equivalent in 2023
through electricity, water, and paper conservation campaigns in
the M&G headquarters o?ce building
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Responding to Climate Change
Governance Structure
Climate Risks and Opportunities
Climate-related Risks
M&G regards "response to climate change" as a key pillar of its sustainable development strategy. The Company closely followsgovernment climate policy trends and the related dynamic development, strives to take targeted actions to manage climate change risks,and actively explores climate-related innovative solutions, so as to fully grasp the development opportunities under the background ofthe carbon peaking and carbon neutrality policy.
M&G has established a top-down sustainable development governance structure with four strategic pillars, including response to climatechange. The Board of Directors and the Strategy Committee are responsible for supervising the Company's response to climate changerisks, reviewing and approving climate-related goals and policies, and ensuring the implementation of key climate response projects.The Sustainability O?ce is responsible for coordinating the implementation of climate strategies, including assigning goals and tasks,coordinating and formulating cross-department working mechanisms, following up on implementation progress toward the goals, andclimate-related information disclosure.In 2023, M&G established a Risk Management and Compliance Committee that directly reports to the Company president. Climate riskswill be gradually incorporated into the Company's comprehensive risk management system in the future, which will generate a moresystematic climate change response action plan.
Identifying climate-related risks and opportunities allows us to better understand climate issues and their relevance to M&G, and laya solid foundation for deepening our climate action. M&G evaluates the impact of climate risks and opportunities in the following timeframes: short-term (1-3 years), medium-term (3-10 years), and long-term (10-50 years).
Physical
risk
Physical
risk
Transition
risk
TransitionriskAcute risk
Chronic risk
Policy andlegal risk
Technologyrisk
Medium-to long-term
Short-,medium-,and long-term
Medium-term
Short- tomedium-term
Risk Type
Risk Type
ImpactTime
ImpactTime
? Upgrade equipment performance andextend equipment service life, and graduallyincorporate climate risk considerations intoinfrastructure construction and future businessplanning.? Strengthen the prevention and control offorest risks such as re and wind disasters,pests, and diseases, and gradually deepen thesustainable management of forests.? Closely follow the physical risks caused byclimate change, and continuously improveemployee health, safety, and benets.
? Establish training and sharing mechanismsto ensure that relevant departments ofthe Company have a comprehensiveunderstanding of the latest policies andpromptly integrate policy requirements intodaily work plans for implementation.? Continuously improve carbon managementcapabilities, and promote the energytransformation; meanwhile, continue to carryout carbon emission assessment and graduallypromote carbon reduction in the value chain.
? Actively explore carbon reduction potential andimplement energy conservation and carbonreduction projects; optimize energy structureand continuously increase the proportionof renewable energy in the overall energystructure.? Vigorously promote the construction ofintelligent factories to ensure greater synergyof energy conservation and carbon reduction.
Risk Description
Risk Description
Main Response Measures
Main Response Measures
? Frequent extreme weather events such as hightemperatures, typhoons, heavy rains, etc. mayresult in risks such as damage to Company'sproduction equipment, logistics disruptions, anddamage to product inventories, which may havenegative impact on the Company's operationalcapacity, and result in higher operating costs.? Extreme weather events such as hightemperatures and thunderstorms may poserisks to the health and safety of employees.
? Rising sea levels may lead to greater instabilityin the operation of the Company's facilitieslocated in coastal areas, thereby increasingoperating costs.? Climate change may exacerbate thevulnerability of ecosystems, which may a?ectAxus Stationery's own forest land, as well asM&G's supply chain stability regarding wood,pulp, and other supplies.? In the long run, continued high temperaturemay increase the possibility of virustransmission and outbreak, which may a?ectthe health and safety of employees.? Under the context of the carbon peakingand carbon neutrality policy, companies faceincreasingly stringent energy-saving andcarbon reduction regulatory requirements, andmay need to increase e?orts and investment inorder to meet compliance requirements.? With the expansion of the national carbontrading market, an increasing number ofcompanies will be required to fulll the GHGemission allowance surrendering obligation,which also needs more rened management oftheir carbon assets.? As EU's carbon border tax policy graduallyexpands its scope, high-emission companiesmay face increased export costs and bordertaxes in the future.? Increasingly strict carbon reduction policiesrequire companies to continue to increaseR&D investment in renewable energy,energy conservation, and emission reductiontechnologies. However, the implementationof carbon reduction measures can achievee?ective cost reduction in the long run, and thecost of using renewable energy will continueto decrease in the future, lowering the overalltechnology risks for the Company in future.
? Regularly inspect and upgrade production,operation, and storage facilities to enhance thelevel of protection against natural disasters.? Develop customized emergency response planfor each factory, regularly conduct emergencydrills, purchase accident insurance, and ensureadequate inventory of disaster prevention andcontrol supplies.
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Climate-related Opportunities
Short-,medium-,and long-term
Medium- tolong-term
Strategic Goals and Actions
Climate Goals
Climate Action Progresses
M&G actively responds to the national carbon peaking and carbon neutrality strategic goals, and has identied "response to climatechange" as one of the key pillars of its sustainable development strategy. The Company has set the goal of "to be carbon neutralby 2050", and is currently working on the breakdown of emission reduction targets by phase to create an e?ective implementationmechanism to achieve the goal.
In 2023, M&G conducted a systematic accounting of Scope 1 and Scope 2 GHG emissions at the company level, covering M&GStationery Shanghai production and distribution center, Shanghai headquarters o?ce building, South China production and distributioncenter, North China distribution center, Axus Stationery, M&G Colipu, and Jiumu Store. The accounting methodology was based on ISO14064-1:2018 Specication with Guidance at the Organization Level for Quantication and Reporting of Greenhouse Gas Emissions andRemovals, relevant Chinese standards such as the General Guidelines of the Greenhouse Gas Emissions Accounting and Reporting forIndustrial Enterprises (GB/T 32150-2015), the 2019 Renement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories,as well as other international and domestic standards and specications. According to the accounting results, in 2022, Scope 1 emissionsaccounted for 4.4% of M&G's total emissions, mainly from the combustion of fossil fuels such as diesel and gasoline, while Scope 2emissions accounted for 95.6%, mainly from various forms of electricity consumption.The Company also made preliminary attempts to calculate Scope 3 emissions in accordance with the GHG Protocol: Corporate ValueChain (Scope 3) Accounting and Reporting Standard. During the process, the Company dened 11 applicable categories of Scope 3emissions, and conducted a pilot collection of emission data from 66 suppliers. In the future, M&G will continue to optimize the calculatingmechanism and data quality for Scope 3 emissions.
M&G GHG Emissions Data
IndicatorUnit202120222023
Scope 1 GHG emissionstCO
e2,481 2,1702,115
Scope 2 GHG emissionstCO
e88,876 46,66845,940Total GHG emissions (Scope 1 + Scope 2)tCO
e91,357 48,83848,055GHG emission intensitytCO
e/million RMB of revenue5.2 2.42.1
OpportunityType
ImpactTimeOpportunity DescriptionMain Response Measures
Opportunitiesfor greenproductinnovation
Opportunitiesfor energyand resourcee?ciency
The data scope covers M&G Stationery Shanghai production and distribution center, Shanghai headquarters o?ce building, South China production anddistribution center, North China distribution center, Axus Stationery, M&G Colipu, and Jiumu Store.
Transition
risk
Transitionrisk
Market risk
Reputationrisk
Medium-term
Short- tomedium-term
Risk TypeImpact
TimeRisk DescriptionMain Response Measures? Consumers and customers are increasinglyconcerned about the carbon footprint ofproducts, and have greater demand for low-carbon and environmentally friendly products.To better compete in such a market, companiesneed to focus their carbon reduction actionsfrom the perspective of the entire value chain.? The gradual phasing out of fossil-basedmaterials may lead to price increases formaterials such as plastics, which couldincrease the operational costs of the Company.
? With the increasing awareness of green andlow-carbon among consumers, their demandfor quality sustainable products is also growing.Strengthening the development and supply ofgreen products can meet consumers' diversiedconsumption needs and help the Companyenhance its competitiveness.
? Companies need to strengthen themanagement of energy and resources torealize their carbon reduction goals. Theimplementation of relevant measures willincrease costs in the short term, but achievecost reduction in the medium and long term,thus realizing a win-win situation for economicand environmental benets.
? Media, professional institutions, industryassociations, and other stakeholder groups areincreasingly concerned about global warmingand its various impacts, and have higherexpectations for companies to set positivegoals and take actions.
? Increase R&D investment of sustainableproducts, continuously develop green and low-carbon products, and communicate M&G'ssustainability concept to consumers, engagingthem to participate in joint climate action.? Gradually promote carbon reduction throughoutthe value chain to reduce product carbonfootprint.
? Enhance the R&D of green products, andhave successively launched a series of greenproducts, such as the carbon-neutral stationeryseries, the "Carbon Emission Reduction Plan"series, and the "Endangered Animals" series.? M&G has gradually formulated its owndenition of sustainable products focusing ongreen design, sustainable materials, greenpackaging, and green advocacy. It plans toapply the concept to more product categoriesand develop a larger sustainable productsportfolio.? Strengthen the utilization of renewable energy;implement a series of energy-saving renovationprojects, such as equipment optimizationand upgrading, waste heat recovery, etc., toimprove energy e?ciency.? Actively promote green logistics and greeno?ce, and strengthen energy conservationand emission reduction e?orts in various keyoperational processes.
? As the rst listed company in the Chinesestationery industry to release an ESG report,M&G has long attached great importance togreen and low-carbon development. Listing"response to climate change" as a key strategicpillar for sustainable development, M&Gresponds to stakeholders' expectations withpractical actions and has adopted positive carbonreduction measures in product R&D, productionand operation, daily o?ce work, and warehousingand logistics.
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In 2023, the Company continued to advance theconstruction of photovoltaic power generationat production bases, including the expansionof photovoltaic power generation capacity, andswitching some of the street lights into solarpowered lights, further increasing the proportionof renewable energy. As of the end of 2023, thetotal installed capacity of photovoltaic powergeneration capacity of M&G Shanghai productionand distribution center and Axus Stationery reached15,700 kilowatts, and the total consumption ofphotovoltaic electricity was 35.24 million kilowatt-hours, which is equivalent to the reduction ofapproximately 13,000 tons of carbon dioxideemissions.
In 2023, M&G joined the "Decarbonization-Friendly Actions" andthe "Sustainable Solutions Alliance", collaborating with like-mindedcorporates in promoting carbon reduction in the value chain. TheCompany also actively participated in a number of events and activities,such as the China International Consumer Products Expo, the UnitedNations Sustainable Development Goals Summit, the 28th Conferenceof the Parties to the United Nations Framework Convention onClimate Change (COP28), etc., using these occasions to share M&G'sinnovative solutions and engage in in-depth discussions with regard toclimate change and other sustainability topics.
M&G actively responds to the government initiative for ecological and environmental protection and the carbon peaking and carbonneutrality policies, continuously improving energy management and the management of emissions, e?uents, and waste in its productionprocess, accelerating the implementation of green logistics and green o?ce practices, and increasingly strengthening its focus onbiodiversity.
M&G strictly complies with the requirements of the Environmental Protection Law of the People's Republic of China and otherlaws and regulations, and continuously optimizes its environmental management system. The Company has formulated a numberof environmental management policies, such as the Environmental and Safety Management Operation Control Procedures, theEnvironmental Factor Identication and Control Procedures, and makes continuous e?orts to strengthen the identication, evaluation,and risk control of key environmental factors in the production process. M&G Shanghai production base has passed the ISO 14001Environmental Management System certication, and will receive a renewal audit in 2024.In September 2023, the Company conducted an internal audit of its environmental management system, focusing on the initiatives,operational processes, and implementation measures, and emergency preparedness related to environmental management, coveringproduct design, development, production, and services. The internal audit identied two incidents of minor non-conformity, and both hadbeen rectied with timely improvement measures.Axus Stationery has established and continuously optimizes the Environmental, Health, and Safety (EHS) management system, andformulated the EHS Management Manual and the EHS Social Responsibility and Management Policy to provide specic guidelines in allaspects, including the identication, evaluation and control of environmental factors, legal and regulatory requirements, objectives andtargets setting, training and capacity building, emergency preparedness and response, inspection and rectication, EHS managementsystem audit, etc.
M&G has summarized its energy management principles as "standardized management,compliance with regulations, technological innovation, green research and development,energy conservation and emission reduction, and shared responsibility". Adhering tothese principles, the Company has formulated the M&G Stationery Energy ManagementManual in accordance with the ISO 50001:2018 Energy Management Systems -Requirements with Guidance for Use as well as relevant laws and regulations, aimingto establish a measurable, traceable, assessable, and continuously improving energymanagement mechanism. The Company's energy management system has passed theISO 50001 certication.In 2023, the Company further explored the potential for energy conservation and carbonreduction with the implementation of 11 projects in various aspects, such as photovoltaicpower generation, air compressor energy saving, waste heat recovery, injection moldingmachines upgrade, and water pump motors optimization. All of these projects haveachieved signicant energy-saving results.Ms. Poppy Chen, Chief Sustainability O?cer of M&G,making a speech at COP28
Practicing Green Operations
Environmental Management System
Energy Management
Number of energy-saving projectsimplemented in 2023
2020-2023 Photovoltaic Electricity Consumption of M&G
Annual photovoltaic electricity consumption (10,000 kWh)Cumulative photovoltaic electricity consumption (10,000 kWh)
The data scope of photovoltaic electricity consumption includes M&G Stationery Shanghai production and distribution center and Axus Stationery.
2020202120232022
1,291
2,202
3,524
1,322
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Optimizing Energy Structure with Photovoltaic Power Generation
Achieving Cost and E?ciency Benets with Air Compressor Energy-saving Upgrades
E?cient Utilization of Plastic Materials
Using photovoltaic power is a key measure for optimizing energy structure. M&G started constructing photovoltaic powergeneration facilities in Guangming and Qingcun production parks of its Shanghai base in 2020. In 2023, the Companyexpanded the installation of photovoltaic power generation facilities in the distribution center, with an installed capacityof 5,700 kilowatts and an expected annual power generation of 6 million kilowatt-hours. As of the end of 2023, the totalinstalled capacity within the Company reached 15,700 kilowatts. In addition, the Company replaced traditional lighting inQingcun park with 86 solar powered lights, which could save 86,000 kilowatt-hours of electricity, equivalent to reducingcarbon dioxide emissions by 36 tons.Axus Stationery started installing distributed rooftop photovoltaic power generation facilities in 2021. In 2023, these unitsgenerated a total of 1.91 million kilowatt-hours of electricity, equivalent to reducing carbon dioxide emissions by 802 tons.Axus Stationery is planning to expand photovoltaic power generation facilities to cover the rooftops of o?ce buildings withan expected installed capacity of 2,464 kilowatts.
A key measure for energy saving and carbon reduction at M&G Shanghai base is reducing the energy consumption of aircompressors, which used to consume 17.8% of the total energy consumption of the base. After conducting in-depth researchon the working conditions of the air compressor systems, we developed a series of optimization plans focusing mainly onreducing air duct operating pressure and reducing waste due to small leaks. With nearly three years of continuous e?orts,the energy consumption of air compressor systems was reduced to 12.6% of the total energy consumption of the base, adecrease of about 5% compared to 2021. This signicant energy saving also generated a cost reduction of RMB4.23 million.
With a consistent dedication to reducing plastic waste and promoting plastic recycling in the production process, M&Gfocuses its research and testing e?orts on plastic materials with recycling potentials in order to maximize the reuse of plasticmaterials while ensuring product quality and safety.The Company recycles and reuses plastic scraps from the injection molding process of M&G K35 gel pens. The newmaterial to recycled material ratios have reached 1:1 for pen neck, 1:2 for rell and pen barrel, and 1:3 for pen clip,protective sleeve, and rotating wheel, achieving both higher material reuse rate and lower waste generation.
Rooftop photovoltaic power generation units at M&G Shanghai base
M&G strictly complies with relevant laws, regulations, and standards related to water resource management, such as the Water Law ofthe People's Republic of China, the Water Pollution Prevention and Control Law of the People's Republic of China, and the ShanghaiIntegrated Wastewater Discharge Standard. The Company strives to continuously optimize water e?ciency, ensure compliant dischargeof wastewater, and integrate the concept of sustainable use of water resources into its production and operation process.The Company closely watches its water use conditions by monitoring key indicators such as the total consumption of municipal water,total amount of recycled and reused water, as well as wastewater discharge statistics, and continuously optimizes water utilizatione?ciency with various campaigns and upgrade projects on the reduction, recycling, and reuse of water. In 2023, the Companyimplemented a leak detection and renovation project over the re protection water supply system, identied ve leakage points, andpromptly completed the necessary corrections.Regarding wastewater treatment, the Company has formulated the M&G Stationery Water Treatment Facility Operation Manual, whichspecies the procedures and processes for wastewater treatment facilities, including equipment operation, operation management,process maintenance, and water quality management. The Company has also developed a wastewater treatment process owchart andrigorously carries out staged treatment of production wastewater accordingly. Third-party wastewater compliance testing is conductedannually to ensure strict compliance with applicable discharge standards before the wastewater enters the municipal sewage system. Byadding a water treatment system that redirects wastewater to the condensing tower for recycling, wastewater discharge can be reducedby one ton per day.
M&G strictly complies with national laws and regulations regarding waste management, such as the Solid Waste Pollution Preventionand Control Law of the People's Republic of China, and has formulated waste management systems and policies, such as the SolidWaste Control Plan, the Hazardous Waste Storage Facility Management System, and the Hazardous Waste Pollution Preventionand Control Responsibility System, to specify the supervisory responsibilities of various departments regarding the management ofhazardous waste. M&G continuously optimizes the management of solid waste, hazardous waste, and relevant storage facilities,aiming towards standardized, safe, and economical disposal of waste. The Company also regularly conducts training for environmentalmanagement personnel on standardized management of solid waste.M&G requires that all solid waste generated during the production process shall be properly disposed of in accordance with relevantlaws, regulations, and standards. Solid waste is categorized into hazardous waste, recyclable waste, and non-recyclable waste withdi?erent statistics and management approaches accordingly.Recyclable waste will be processed by waste recycling companies. Non-recyclable waste and domestic garbage are collected anddisposed of by qualied companies. Hazardous waste is handled by properly licensed third parties in compliance with relevantregulations.
Water Resource Management
Waste Management
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M&G manages exhaust gas emissions strictly in accordance with relevant laws, regulations, and standards, such as the Regulations ofShanghai Municipality on Prevention and Control of Air Pollution and the Integrated Emission Standard of Air Pollutants. The Companycontinuously upgrades and optimizes air pollution control facilities to eliminate or mitigate the adverse impact on the atmosphericenvironment as much as possible. In 2023, Axus Stationery carried out pipeline and process improvement projects for dust control,e?ectively solving the problem of dust accumulation and improving the working environment at the operation site.
M&G vigorously explores best practices in green packaging and green transportation, and strives to build a modern green logisticssystem with e?orts such as logistics packaging improvement and energy-saving and carbon reduction in logistics processes.
In 2023, M&G carried out packaging optimization and used boxes recycling projects torealize greater reduction and recycling of logistics packaging.Packaging optimization: The Logistics Center piloted packaging optimization on arubber product, collaborating with multiple functions including ordering, production, andquality, to test di?erent ways to optimize product packaging. By removing unnecessarycartons and inner boxes and using turnover boxes, the project resulted in the saving of6,000 large cardboard boxes and 324,000 small cardboard boxes during the year. Thepackaging optimization project was expanded to another three products in November,which is expected to further reduce the amount of cardboard boxes used in 2024.Recycling of used boxes: The Logistics Center arranged dedicated personnel to collectand recycle cardboard boxes used for storage and replenishment. A total of 640,000used cardboard boxes were recycled during this year. Other than being used for productshipping, recycled boxes were also sent to retail stores for reuse, raising the employees'awareness about recycling while reducing packaging waste.
The logistics industry is a signicant source of global carbon emissions. In 2023, M&G focused on reducing carbon emissions as a maintask for the logistics process, and carried out a number of specic projects to reduce logistics energy consumption.The Shanghai production and distribution center optimized the operation mode of equipment for better energy conservation inwarehousing. RGVs were operated for shorter durations, or temporarily shut o? when workload was low to avoid unnecessary powerconsumption. The lighting mode of the aisles of the automated warehouse were also optimized, with lights shut-o? during daytime andhalf-lit at night, saving approximately 515 kilowatt-hours of electricity per day. In addition, a total of 11 diesel powered forklifts werereplaced with electric forklifts, e?ectively reducing fuel consumption.Regarding self-operated transportation, the Company has made various e?orts, such as route optimization and vehicle schedulingoptimization, to minimize unnecessary shipping. Regarding third-party shipping carriers, a comprehensive assessment of their routing,service, and warehousing was carried out to identify optimization opportunities. Based on the locations, coverage, and shipmentrequirements of M&G's regional distribution centers, a number of measures have been implemented to improve transportation e?ciency,including adjusting shipment ratio, adjusting the quantity of goods received at di?erent warehouses, and increasing the proportion ofdirect shipments to customers, etc. These measures are expected to help reduce fuel consumption by 240,000 liters per year.
Air Pollutants Control
Green Logistics
Green Logistics PackagingBuilding Energy-e?cient Logistics
Number of cardboard boxes saved in 2023
small cardboard boxeslarge cardboard boxes
324,0006,000
Number of cardboard boxes recycled640,000
M&G Colipu Recycling and Reusing Cardboard Boxes and Pallets
Green Logistics Initiatives of M&G Colipu
M&G Colipu requires its warehouses to implement categorized management of recycled cardboard boxes. Boxes fromsuppliers are sorted and stored according to di?erent sizes and types in the product receiving process, and in the orderpackaging process, on-site workers prioritize the use of recycled cardboard boxes that match the product size. In 2023, thereuse rate of recycled cardboard boxes of M&G Colipu reached 49.3%. In addition, other than the pallets used in designatedareas within the warehouse, M&G Colipu also shares some printer paper pallets with carriers and requires them to returnthe pallets after use, achieving circular utilization of materials.
M&G Colipu East China Warehouse replaced its shipping eet with10 newly purchased new energy vehicles, which not only e?ectivelyreduced the emissions of pollutants but also lowered the shippingcost from approximately RMB1 per kilometer to RMB0.5 perkilometer.M&G Colipu's warehouses use an intelligent system to closelymonitor the operations and energy consumption of vehicles. Drivershave their daily routes optimized based on shipment quantitiesand customer locations prior their departure to avoid unnecessaryshipping distance and reduce energy consumption.
Recycling of logistics cardboard boxes
M&G Colipu's new energy delivery vehicles
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M&G vigorously promotes the concept of green o?ce operation, and is committed to enhancing employees' awareness of energyconservation and environmental protection while cultivating green and low-carbon behavior habits. With the implementation of electricity,water, and paper conservation campaigns, M&G headquarters o?ce building reduced approximately 48,840 kilograms of carbon dioxideequivalent in 2023.
Biodiversity has become a focus in global environmental governance. The Chinese government has named biodiversity conservation asa strategic topic of the country and formulated relevant biodiversity conservation strategy and action plan for 2030. The wastewater andpollutants generated during the production and disposal of plastic products can cause negative impacts on land and marine ecosystemsand threaten biodiversity. As a stationery manufacturer, M&G attaches great importance to the sustainability of raw materials and strivesto minimize the environmental harm caused by product disposal. The Company actively explores solutions to reduce plastic usage,researches and develops biodegradable materials, and vigorously promotes the importance of biodiversity conservation to youngconsumers through marketing channels, product advocacy, and consumer communications, encouraging the public to pay greaterattention to biodiversity and participate in conservation activities.M&G collaborated with the Mangrove Wetlands Conservation Foundation (MCF) to launch the "Endangered Animals: Wetland" seriesof gel pens, which were made with PLA biodegradable materials and recycled materials to reduce plastic waste and pollution, thusminimizing the risk of animals ingesting or getting entangled in plastic waste. This series also used ve endangered wetland animals asthe inspiration for its packaging design. The Company further invited more people to pay attention to endangered animals and raise theirawareness of biodiversity by means of bird-watching tours, in-store education, VR experiences, and interactive H5. In addition, M&G hasdonated part of the revenue from this product series to support MCF's wetland conservation and environmental education programs.The Company conducts monthly workplace environmentinspections to encourage all departments to activelyimplement the "Building a Beautiful Home" campaign.The inspection focuses on four areas, including bottledwater consumption, electricity consumption, printer paperconsumption, and workplace sanitation. The results areannounced on the monthly meetings of the SustainabilityAmbassadors and shared with all senior executives toprovide greater incentives for more positive actions.In 2023, the Company also organized two stair climbingevents as a fun way to raise employees' awareness ofthe low-carbon concept. Employees from 23 departmentsparticipated in these events, climbing a total of 60,006oors of stairs collectively.
In August 2023, the Company started implementing the "Lights Out Hour" campaign. Lights in elevator halls and o?ce areaswere turned o? for an hour during the lunch break. As the result, a total of 115,000 kilowatt-hours of electricity was saved bythe end of year.
The G60 Science and Technology Innovation Corridor in Songjiang District, Shanghai, where M&G headquarters o?cebuilding is located, has obtained the LEED Platinum certication, the highest level of the LEED international green buildingrating system, exceeding in green and low-carbon facilities and operations.
The Company encourages employees to reduce the use of bottled water. Bottled water is no longer served at internalmeetings, and participants are encouraged to bring their own water bottles. Receptions of external guests can still servebottled water, but only with prior application via the OA system. Since the launch of this campaign, the use of a total of 4,648bottles of bottled water were avoided, a 56% reduction compared to the same period before the campaign.
In August 2023, M&G launched a campaign to encourage employees to prioritize the use of electronic documents, reduceunnecessary printing and photocopying, use double-sided printing, and reuse recycled printing paper with a blank side. TheCompany also set the default conguration of all o?ce printers to use double-sided printing. The campaign resulted in asaving of 66 packs of printer paper, an 8.7% reduction compared to the same period before the campaign.
Green Workplace
"Lights Out Hour" Campaign
Green Building
Reducing Bottled Water Use
Reducing O?ce Paper Use
Green O?ce OperationBiodiversity Conservation
The green o?ce proposal of M&G
M&G organized wetland bird-watching tours for consumer families
Axus Stationery attaches great importance to sustainable forest management and biodiversity conservation. As early as 2009, AxusStationery successfully overcame the technical challenges of "using fast-growing poplar to replace basswood in making pencil shafts",and has been continuously conducting research on more sustainable tree species. As of the end of 2023, all of the 2,396 mu of forestland owned by Axus Stationery had obtained the FSC Certication. In its Sustainability Management Policy, Axus Stationery speciesits commitment to never using non-certied tropical rainforest timber. It does not use chemical fertilizers in plantation management andcarried out pilot drip irrigation projects to reduce soil erosion. Forest rangers conduct weekly inspections of the forest and continuouslymonitor the biodiversity conditions of its forest land. Prior to construction, Axus Stationery provides training to its contractors on operationprocedures and forest protection to enhance their awareness of biodiversity conservation.
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Social Responsibility
Addressing Sustainable Development Goals (SDGs):
This chapter responds to the Sustainable Supply Chain and EmpoweringEmployees and Communities pillars of M&G Stationery's sustainabledevelopment strategy.
2023 Performance Highlights
M&G Stationery actively fullls its social responsibility and collaborateswith stakeholders such as employees, consumers, and suppliers tocreate social value together. We practice responsible procurement byevaluating, training, and communicating with suppliers to continuouslyoptimize supply chain sustainability management. We respect employeerights and attach great importance to employee development and growth,and strive to create an equal, inclusive, healthy, and safe workingenvironment. With a consumer-centric mindset, we take product andservice quality as our top priority. We also actively participate in a varietyof public welfare activities to fulll our responsibilities and pay back tosociety.
? Revised the Employee Handbook in accordance with internationalhuman rights conventions, and added multi-dimensional employeecommunication channels to ensure the e?ective protection ofemployee rights? Optimized the remuneration system, providing all employees withperformance-based variable compensation? Introduced comprehensive health insurance for all employees,upgraded the living conditions in factory dormitories, andachieved an overall employee satisfaction score of 92% for o?ceenvironment? Average training time per employee increased to 11.8 hours, with
an employee training coverage rate of 93%? Launched the M&G online learning platform, o?ering 85 courses
covering workplace skills, management skills, corporate culture,
and business knowledge; the cumulative online learning time over
the platform reached 10,000 hours? Charitable donations totaling RMB6.08 million? M&G Charity carried out educational public welfare initiatives in 42
cities in 19 provinces, beneting nearly 1 million students and over
3,000 teachers? 3,787 employees participated in public welfare activities, including
all M&G executives
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Sustainable Supply Chain
Supply Chain Management Mechanism
Supply Chain ESG Management
Striving to build a responsible supply chain, M&G continuously consolidates and optimizes its supplier management system with theincreasing integration of ESG factors. The Company provides suppliers with capacity building trainings to guide suppliers to better fullltheir environmental and social responsibilities, ensuring the high-quality and sustainable development of its supply chain.
Supplier on-site audit was a new focus of M&G's supply chain ESG evaluation in 2023,which focused on the supplier's management capabilities in areas such as labor andemployment, environmental compliance, health and safety, and quality management.The supplier's self-assessment and on-site audit scores were consolidated into acomprehensive score rating. Suppliers who failed the on-site audit should develop andimplement a rectication action plan based on the audit results and undergo anotherassessment after rectication completed. In 2023, the Company conducted ESGevaluation on 71 key suppliers, with 27 of them receiving on-site audits. The pass ratefor supplier rectication e?orts exceeded 80%.In 2023, M&G also integrated ESG management into the annual performance evaluationfor key suppliers. In addition, the Company rened the ESG assessment criteria inthe comprehensive evaluation of new supplier development and introduction, placingESG assessment ahead of the formulation of partnership. In the future, M&G willcontinue to deepen the ESG evaluation and management of key suppliers, which will begradually expanded to cover all suppliers and potential suppliers to enhance the overallsustainability of its supply chain.
Over the years, M&G has established a robust supplier management system and formulated policies such as the Supplier ManagementMethod, Supplier Evaluation Management Method, New Supplier Development and Introduction Management Method, and SupplierCode of Conduct. These documents clearly dene the classication, evaluation and assessment of suppliers, as well as themanagement procedures and key control points for introducing new suppliers, e?ectively controlling supply chain risks.M&G has established a fair supplier introduction mechanism. The seven-step process includes application, wide selection, preliminaryscreening, sample testing and review, eld review, etc. A total of six departments are involved in the review and approval process,including the Legal A?airs Department, the Audit Department, the Technical Center, and the departments overseeing procurement.Qualied suppliers still face a comprehensive assessment on their capabilities in various areas, including pricing, managementcapabilities, technical R&D, sales capabilities, production capacity and equipment, warehouse management, and quality assurancesystems. The Company ensures the stability, security, and competitiveness of its supply chain with dynamic evaluations covering sixareas, including management, quality, cost, delivery, service, and technology, of the suppliers.
In 2022, M&G initiated the process to build an ESG evaluation system for its supply chain, developing a preliminary set of standardsand carrying out pilot ESG evaluations of suppliers. In 2023, the Company further optimized the supplier ESG evaluation standards andindicators, and formulated a number of relevant policies, such as the Supplier ESG On-site Audit Protocol, and the ESG Audit Checklist,with evaluation focusing on ve aspects: labor and employment, environmental protection, health and safety, business ethics, andmanagement systems, making continuous improvements of its supply chain ESG management system.
M&G's 2025 Sustainable Supply Chain Goals
To implement responsible procurement, keep optimizing supply chain management, raiseawareness about sustainable supply chain, and optimize the management of chemicals in thesupply chain.
To meet M&G ESG guidelines by 2025 for 100% key suppliers.
Number of key suppliers receiving ESGevaluation from M&G
Number of on-site audits
Pass rate for supplier recticatione?orts exceeding
80%
Rectication
plan
Document
review
On-site audit
0205
0403Qualitative
Quantitative
Self-assessment
questionnaire
Rating
M&G's SupplierESG EvaluationProcess
· Data verication
· Selection of suppliers to be audited· Document review· Report compilation
· On-site audit· Personnel interview
· Developing a recticationaction plan· Progress tracking· Reviewing recticationresults· Rating update
· Communication andcollection of additionalinformation· Score review· Self-assessment rating
· Comprehensive score rating (self-assessment+ on-site audit)· Result feedback
· Questionnaire distribution· Supporting documents collection
· Self-assessment scoring
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Supplier Capacity Building
M&G regularly communicates with suppliers regarding topics such as cost, operational plans, quality control, and implementation statusto deepen mutual understanding and coordination in areas like product demand, process improvement, and production and supply plansynchronization. M&G's procurement team constantly collaborate and support suppliers in overcoming practical challenges in productionand logistics, monitoring improvements in bottleneck processes, or sharing peer best practices to identify gaps, support rectication, andenhance quality management. Beyond daily business interactions, the Company holds supply chain conferences annually, facilitatingfocused and in-depth communication with supply chain partners. In addition, the Company also organizes ad hoc meetings regardingspecic key issues identied in the supply chain.
Supply Chain ConferenceM&G has been holding its Supply Chain Conference for 11 consecutive years, engaging in in-depth discussions with supplychain partners on topics such as quality, cooperation, and corporate management. The conference is an important annualevent for M&G and suppliers to review the work of the previous year and look forward to future collaborations.
M&G supplier received the "ESG Progress Award"
M&G organized the 2023 Supply Chain Conferencewith a total of 155 supplier participants. Theconference arranged a dedicated ESG trainingsession, during which the Company emphasized its2025 goals for sustainable supply chain and urgedits suppliers to improve their ESG performances, soas to continuously enhance supply chain resilienceand risk mitigation capabilities. The conferencealso established the "Supplier ESG ProgressAward" to commend suppliers who had madeoutstanding contributions in energy conservation,environmental protection, safety management,employee rights protection, and social welfarecontributions, encouraging all suppliers to worktogether in building a sustainable supply chain.
Number of procurement sta?participating in the supplier ESGassessment system training
Percentage of employees joining thelabor union
100%
M&G is committed to providing support for the Company's procurement sta? andsuppliers regarding ESG management. In 2023, the Sustainability O?ce conductedtraining on the supplier ESG assessment system for about 100 employees fromthe Procurement Department to enhance their ESG competency. For suppliers, theCompany not only provides training on key issues during the ESG evaluation process,but also supports suppliers to develop customized and practical improvement plansbased on their specic conditions to help them further enhance their ESG managementcapabilities.To ensure smooth cooperation and win-win outcomes with suppliers, the Companydistributes the M&G Stationery Supplier Questionnaire annually to inquire aboutsuppliers' sustainability certications, environmental reporting, and satisfaction levelsthroughout cooperation, etc. to help improve any potential issues in the cooperationprocess.
Employee Rights and BenetsM&G prioritizes a "people-oriented" principle, placing great emphasis on employee experience and corporate culture, and is committedto growing together with its employees. The Company strives to create an open and inclusive corporate culture with innovativemeasures, explore employee empowerment and development models, and build a strong employer brand for the new generation.In 2023, M&G won the "Top Human Resources Management Awards—Outstanding Employer" by 51job and the "Digital IntelligenceOrganization Development Award" at the 16th Management Action Force by the Business Review.
M&G strictly abides by the Labor Law of the People's Republic of China, the LaborContract Law of the People's Republic of China, and other labor and employmentlaws and regulations. Adhering to the seven core International Labour Organization(ILO) conventions approved by China, including the Equal Remuneration Convention,the Minimum Age Convention, the Worst Forms of Child Labour Convention, theDiscrimination (Employment and Occupation) Convention, the Forced Labour Convention,the Abolition of Forced Labour Convention, and the Occupational Safety and HealthConvention, the Company has formulated the Code of Business Conduct, the EmployeeHandbook, and other policies and systems regarding employment. M&G is committedto treating all employees with respect, recognition, and care, and rmly prohibits forcedlabor, child labor, and any infringement of employees' legitimate rights and interests. TheCompany ensures fair remuneration and benets for employees, and makes recruitment,salary, promotion, performance management, disciplinary action, dismissal, and otheremployment related decisions based on employees' job value, abilities, and performance.The Company prohibits any forms of discrimination, including discrimination basedon gender, region, ethnicity, religion, age, pregnancy or marital status, disability, andother legally protected characteristics, and maintains a zero-tolerance attitude towardsharassment, violence, or bullying behaviors.M&G strictly abides by the Trade Union Law of the People's Republic of China and strivesto build harmonious labor relations, establishing open and equal consultation channelsinternally. As of the end of 2023, 100% of the Company's employees are union members.
"Top Human Resources ManagementAwards—Outstanding Employer" by 51job
"Digital Intelligence OrganizationDevelopment Award" by Business ReviewManagement Action ForceProtecting Employee Rights
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Comprehensively Updating the Employee Handbook
Moms for Temps Program
In 2023, M&G updated its Employee Handbook, after acomprehensive review of its human resources managementpolicies, as well as the requirements of relevant laws andregulations and the trends of external business environment. Thecontent of the handbook was expanded to include specied rightsand obligations of M&G employees, further standardizing thehuman resources management of the Company.After referencing with international human rights conventions,the new Employee Handbook added provisions againstworkplace discrimination and harassment, commitment to equalremuneration, strict prohibition of child labor and any form offorced labor, and requirements for multi-dimensional employeecommunication channels. It also included 14 revised policydocuments as attachment, including the holiday and leave policyand the performance management policy.The revision process followed democratic decision-making andconsultation procedures, with suggestions from employeesfully incorporated. Over 40 employee suggestions regardingthe revised content were received, and more than 30 employeerepresentatives participated in the discussion. The revisedEmployee Handbook o?cially took e?ect after proper employeeconsultation and acknowledgement.
M&G strives to provide equal employment opportunities for di?erent groups and help create a fair employment environment.M&G Shanghai base launched the Moms for Temps program, providing temporary stationery assembly and packaging jobopportunities for moms from neighboring communities. Workers on this post worked six hours a day, and ve days a week.In 2023, a total of 100 moms were recruited through this program. The program not only helped these moms increase theirfamily income while allowing them to pick up and drop o? their children at kindergartens or schools, but also e?ectivelysupplemented the Company's labor demand during peak seasons.
M&G and Me—the M&G Employee Handbook revisedin 2023
2023 recruits of the Moms for Temps programDesktop display of the M&G's Code of Conductfor Executives
Flowers for female employees on Women's Day
M&G regards "openness and inclusiveness" as one of its core values, and iscommitted to creating a diverse, equal, and inclusive workplace that is free fromdiscrimination or harassment for all employees. The Company also strives toprovide employees with fair and equitable career development opportunitiesand the necessary empowerment to support its employees to fully unleash theirpotentials and achieve self-development.In 2023, M&G focused its corporate culture building e?orts on "openness andinclusiveness". Senior management were required to take the lead in settingexamples, discussing and formulating the Code of Conduct for Executives,which advocates behaviors such as listening with an open mind and valuingmutual recognition and encouragement. The Company printed out and placedthis document on the desks of all senior executives, constantly reminding themto lead by example in fostering an open and inclusive workplace. The Companyplans to keep promoting the awareness, acceptance, and belief in the valueof openness and inclusiveness among all employees in the future, using avariety of approaches, such as promotion articles, cultural activities, and specialcultural month campaign, to steadily guide employees to "see it, remember it,and practice it".
M&G attaches great importance to safeguarding the rights and interestsof female employees, and is committed to supporting them to achievecareer development and work-life balance. In addition to ensuring thatemployees have the rights to maternity, nursing, and parental leaves, M&Ghas furbished nursing rooms in its o?ce building, providing nursing motherswith the amenities and privacy. Every year, the Company o?ers the "Parent-Child Mother EQ Course", helping new moms to deal with the pressure ofparenting and achieve work-life balance with knowledge sharing, practicaltools, and communication skills on parenting.
Diversity and Equal Opportunities
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M&G continuously optimizes its compensation and benets system. The Company strives to unleash the potential of employees withreasonable compensations and incentives while building a unique employee benets system to provide support to employees both intheir work and personal life.
Adhering to the principles of "fairness, motivation, and equal pay for equal work", M&G is committed to providing fair, scientic, andreasonable compensation for all employees. The Company strictly complies with national laws, regulations, and local policies of whereit operates to ensure that its compensation exceeds local minimum wage standards. The Company sets its compensation standardsbased on the value creation, capabilities, and performance requirements for each position as well as benchmark results with industrypeers, and dynamically adjusts the employee compensation system to ensure its competitiveness in comparison with industry peers andother local businesses.The Company has developed a performance-based variable compensation mechanism for all employees. According to the Company’sPerformance Management System, a closed-loop management of performance goal setting, performance coaching, performanceevaluation, and application of evaluation results is carried out on an annual basis. The performance review results will be appliedto calculate employees' performance bonuses and year-end bonuses, as well as position and salary adjustments. This mechanismprovides an e?ective guidance and motivation to help employees align their career development goals with the Company's strategicgoals. To better motivate employees, the Company developed and launched a number of compensation incentive programs in 2023,such as granting equity incentives to middle and senior management, and establishing a sales performance-based compensationincentive scheme for sales sta?.
M&G has built a sta? residential area at its Shanghai production base, and hasestablished the "VOC" employee feedback platform to collect suggestions and opinionsfrom employees regarding the administrative and facility management within the factoryarea. In 2023, the Company renovated 527 dormitory rooms, creating cleaner and morecomfortable accommodation and convenience for employees with optimized rooms,housekeeping services, environment, and layout.
Compensation and Benets
Employee Compensation and Incentives
M&G Employee Benets System
Employee Benets and Care
Number of dormitory rooms renovated
? Cash allowances and subsidies, such as communication allowance, meal allowance, seniority
allowance, overseas allowance, etc.;? Successful application of RMB300,000 in government allowance for special talents for applicableemployees in 2023.
? Maternity leave, paternity leave, nursing leave, childcare leave, additional leave for factory workers
during Spring Festival, etc., aside from statutory annual leaves.
? Dormitories and apartments, and rental subsidies for qualied employees.
? Annual physical examinations;? Gym facilities at the M&G headquarters o?ce building;? Various sports clubs such as badminton, basketball, football, and board games; annual sports
games;? Health and well-being activities such as stair climbing, weight loss campaigns, and health lectures
to ensure the physical and mental health of employees.
? Paying basic pension insurance, basic medical insurance, unemployment insurance, work-related
injury insurance, maternity insurance, and housing provident fund for employees;? Additional commercial health insurance for all employees launched in 2023, with comprehensive
protection against death from disease, critical illness, accidental injury, and accidental medical
treatment; additional cost-e?ective optional insurance products for employees and their families.
Allowances and
subsidies
Health andwell-being
Protectionagainst risks
Paid leaves
Accommodations
Besides providing various social insurance and housing provident fund for employees in compliance with state and local laws andregulations, M&G has also established a unique employee benets system. In addition, the Company organized various interest clubsand activities to enrich the leisure time of employees. Every year, the Company organizes physical examinations and medical servicessuch as traditional Chinese medicine consultations, and provides employees who work in overseas markets with medical and casualtyinsurances, fully ensuring the health and safety of all employees.
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M&G organizes a variety of cultural and sports activities to enrich employees' leisure time and enhance team spirit. Special celebrationactivities are organized at both the M&G group and subsidiaries at home and abroad such as M&G Colipu and Jiumu Store, onoccasions such as New Year's Day, Women's Day, Mother's Day, Mid-Autumn Festival, National Day, Qixi Festival, Christmas, etc. In2023, the Company held the Family Open Day event, arranging family visits for factory employees. Employees shared their work withtheir families, and participated in parent-child fun activities together, enhancing communication with their families.
M&G highly values the demands and opinions of the employees.The Company has established an open, transparent, and smoothcommunication channel and a standardized and fair complaint handlingmechanism to ensure employee feedback and opinions are timelyresponded and handled. Employees can communicate their complaintsthrough various channels, including WeCom, Human Resources Centeremail, HR-related report email, and anti-fraud report email. The Companyrequires that employee complaints shall be responded and handledwithin certain timeframes, and that the progress of the handling shall becommunicated to the employees. As of the end of 2023, the Companyreceived 618 employee feedback and suggestions through the employeefeedback platform, all of which were closed loop processed. Regarding themanagement of working environment and facilities, the Company not onlyconducts a semi-annual satisfaction survey, but also posts the QR codefor satisfaction survey in restroom, lounge, and cafeteria areas to collectfeedback from employees on a daily basis. In 2023, the overall employeesatisfaction rate was 92%.In 2023, M&G launched an internal corporate culture platform for timelycommunication of company news, corporate culture, stories of outstandingemployees, etc. The Company also created the "GuangHeJiang" IP, adedicated WeChat account, to interact with employees and ensure that theinformation about M&G cultural values is e?ectively communicated.
M&G continuously optimizes its talent recruitment mechanism. In 2023, the Company formulated the Recruitment Management Policyto further rene the principles and standards for talent recruitment, and specify recruiting processes and procedures. The Company alsointensied its cooperation with universities and launched the "Future Leaders" program for MBA graduates in 2023, promoting two-waycommunication with students through "enterprise open day" events or "campus roadshows".M&G is committed to building a fair and robust promotion mechanism and position system, and providing employees with scientic,transparent, and diversied career development channels. The Company has established various promotion mechanisms, includingannual promotion, on-the-job promotion, management trainee promotion, and management sta? promotion, and continuously expandsthe career development channels for employees, aiming to motivate capable and willing employees to pursue better career developmentopportunities. The Company encourages employees to apply for positions and provides abundant opportunities for job rotation andpromotion for outstanding employees, allowing them to fully utilize their talents.
Employee Communication
Talent Introduction and Cultivation
Employee feedback platform
Employee Sports Game
Employee birthday party
New Year's Day Celebration
M&G Colipu employee activity forChildren's Day
Mid-Autumn Festival celebration
Jiumu Store 7th anniversary team building
Employee Cultivation and Development
M&G highly values the growth and development of employees. The Company has developed a comprehensive promotion mechanismwith scientic performance evaluations, encouraging employees to continuously improve their professional competitiveness. TheCompany strives to cultivate talents at multiple levels, in multiple areas, and across di?erent elds by continuously improving its talentdevelopment and employee training system, and providing targeted training customized to the diverse needs of employees.
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Monthly training at the Sales CenterAnchoring training at the Live Streaming Sales Department
In 2023, M&G launched a company-wide M&G e-learning platform, which o?ers a wide range of self-learning resources in leadership,workplace skills, company policies and events, corporate culture, and sustainable development. Departments can also share theirinternal training materials on this platform to ensure greater interdepartmental knowledge sharing. There are currently 85 online coursesavailable. As of the end of 2023, the cumulative learning time of M&G e-learning platform reached 10,000 hours, with over 67% ofemployees, including 2,052 active users using the platform for self-improvement.The Company strongly encourages employees to improve their professional skills through continued education to meet both theirpersonal growth and the Company's development needs. The Company provides nancial support for employees applying for certaincertication programs. For example, fee reimbursement is o?ered for employees at the Finance Center who passed relevant nancialcerticate exams. For factory employees, the Company also o?ers similar fee reimbursement incentives for vocational qualicationcerticates related to seven job categories, such as forklift operators and electricians. In 2023, a total of 32 employees receivedcerticate reimbursement support. The Company also provides the "Executive Growth Management Fund" degree training program forexecutives, providing funding support for executives to participate in education and training programs to achieve self-improvement.
2023 M&G Employee Training DataPercentage of employees covered byemployee training system
Number of online courses available onthe M&G e-learning platformAverage training hours peremployee
M&G empowers employees through multi-level and diverse training opportunities of various formats, enhancing their overall abilitiesand skills, and supporting their career development. The Company o?ers a variety of training programs customized to the growth needsof employees at di?erent levels and growth stages, such as new employee orientation training, training for management trainees,leadership training, etc. Each department organizes targeted training according to job requirements to promote continuous improvementof employees' professional capabilities. In 2023, in support of the rapid development of live streaming business, the Company carriedout a series of training focusing on live streaming skills, such as anchor training, short video training, and operation training. Subsidiariessuch as Jiumu Store, M&G Colipu, and Axus Stationery, also o?er targeted employee capability training programs based on their ownbusiness characteristics. For example, M&G Colipu continuously empowers employees' career development with a comprehensiveseries of training programs, including new employee orientation training, skills training, management training, leadership training,campus recruitment and management trainee training, etc.
Employee Training and Development
93%8511.8Jiumu Store Empowerment Training
Management Trainee Development Program
In 2023, Jiumu Store organized 23 empowerment training sessionsfocusing on corporate culture and values for new employees, functionaldepartment employees, and middle-level managers, aiming to create apositive and proactive team spirit.? 88 functional department employees participated in the updatedcorporate culture course—"Building Trust"? 37 young employees were invited to the Executive Roundtable, listeningto corporate culture stories shared by company executives? Middle-level managers participated in leadership courses such as "One-Minute Manager", "Crucial Conversations", and "E?ective Delegation"? Hosted 10 Values Co-creation Workshops to help employees betterunderstand and practice company values
"Building Trust" corporate culture course
Jiumu Store's Values Co-creation Workshop
Every year, M&G carries out a management trainee development program following the principles of "competitive selection,balance, and timeliness", aiming to help newly graduated trainees better integrate into the workplace and become qualiedbackbone/management talents. In 2023, the M&G management trainee development program conducted a total of 20training sessions for 97 management trainees from 12 departments.
M&G management trainee program in 2023
The Company organized a one-week orientation training for newly recruited management trainees, inviting industryexperts to share their business knowledge and experiences to help the trainees set the right course for growth. In the nexttwo weeks, trainees participated in job rotation to quickly understand the Company's business and get used to the workenvironment. After the trainees were assigned to their formal positions, each business unit or department assigned mentorsto assist the trainees in their early career development.The Company also made e?orts to help the management trainees realize their long-term potentials. Exceptional traineeswith outstanding learning willingness, reective ability, and inuence would have promotion opportunities to support them inpursuing their career dreams.
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M&G strictly complies with the Labor Law of the People's Republic of China, Production Safety Law of the People's Republic of China,and other relevant laws and regulations. Following the principles of "prevention as priority, response as supplement, e?ective control, andcontinuous improvement", the Company has established e?ective emergency plans and occupational health and safety managementplans, and formulated policies and systems, such as the Environmental and Safety Management Operation Control Procedures andthe Safety Management Standards, providing specic requirements for safety management, safety inspections and acceptance, andaccident handling, in order to fundamentally eliminate or reduce occupational health and safety risks, and ensure the occupational healthof employees. The Company has established a robust production safety responsibility system, covering managers at all levels withclearly dened safety management responsibilities. With its strict and comprehensive system requirements and implementation, M&G'ssafety management system has obtained the ISO 45001 Occupational Health and Safety Management System Certication.
To ensure the occupational health and safety of employees, M&G strictly complies with relevant laws and regulations such as the Lawof the People's Republic of China on the Prevention and Control of Occupational Disease, the Regulations of the People's Republic ofChina on Work-Related Injury Insurance, and the Classication for Hazards of Occupational Exposure. The Company has formulated aseries of system documents, including the Occupational Health Management Policy, the Occupational Disease Prevention ManagementPolicy, the Occupational Hazard Prevention and Control Responsibility Policy, and the Occupational Disease Hazard Monitoring andEvaluation Policy. With the implementation of various policies and measures, M&G continuously optimizes its working conditions toensure the physical and mental health of employees.The Company has formulated and vigorously implements occupational disease prevention and control plans and implementation plans.Regular monitoring and assessment is conducted focusing on occupational disease hazard factors such as dust, toxic gases, andnoise. There is also regular inspection, maintenance, and upkeep of occupational disease prevention and control equipment to ensurethat they function properly. Employees are properly equipped with personal protective equipment, and employees with occupationalcontraindications are prohibited from engaging in work with occupational disease hazards. Occupational health records and annualphysical examinations are in place for employees.
Strengthening Production Safety System
Occupational Health Management
Occupational Health and SafetyM&G is committed to creating a healthy and safe work environment for employees. The Company prioritizes building a robust safetyproduction system and ensuring the occupational health of employees, and continuously optimizes its safety management system toensure production safety.
For safety management in production bases, the Company has formulated clearrequirements for safety and environment management signs, forklift safety, aisleplanning, temperature setting, etc. High-risk operations in factory areas need priorapproval and are subject to full-process supervision of dedicated personnel. TheCompany also conducts regular and ad hoc safety inspections in both o?ce buildingsand production bases, with the identied safety hazards or unsafe factors promptlyrectied, and regular re emergency drills.The Company provides professional training for employees at production bases incompliance with the requirements of the laws and regulations. Specialty operators andkey safety position personnel are required to complete the relevant certication processbefore taking up their positions. On top of the mandatory safety trainings, the Companyalso provides dedicated safety trainings for factory safety management personnel toenhance their safety awareness and safety management capabilities. Ad hoc safetyeducation is o?ered to on-site workers during daily production operations to enhancetheir safety awareness in order to promptly identify and rectify safety risks. In 2023,M&G provided a total of 20,220 hours of safety training.
Total hours of safety training in 2023
20,220
Leadership Training
M&G has developed customized leadership training programs for managers at di?erent levels to help them more e?ectivelymanage their teams. In 2023, the Company conducted a total of 47 leadership training sessions for 996 participants from 32departments."Bootcamp for New Managers" was a series of courses o?ered by M&G to help newly promoted managers accelerate theirtransition from professional employees into junior managers. The program included a ve-month online courses and in-person workshops to help new managers take the rst step right in their new management roles. The training consistedof ve modules: role change/self motivation, achieving results, coaching team members, e?cient collaboration, and teambuilding.M&G provides rich leadership training and workshops forcore executives to enhance their strategic decision-makingand team management capabilities. In 2023, the Companyorganized a "Strategic Leadership Sandbox Workshop",using sandbox simulations to help executives improve self-awareness and explore strategic plans to establish corecompetitiveness and develop di?erentiated advantages.The Company also invited Global Leadership Summit (GLS)lecturers and CEO coaches from CEIBS to organize a GLSworkshop for executives focusing on innovative thinkingand leadership. In addition, the Company used the Hoganpersonality assessment tool and conducted assessmentsand team workshops to guide executives to rethink aboutbusiness direction, organizational design, mechanismand processes, and incentive mechanisms, promoting thecontinuous improvement of the organizational e?ectivenessof the Company.
Leadership training for executives
"Bootcamp for New Managers"
Executive Leadership Workshops
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Noise Control Improvement
M&G Stationery strictly complies with national laws, regulations, and standards related to product quality, such as the Product QualityLaw of the People's Republic of China, the Request in Common Use of Security for Student's Articles, and the Hygienic Requirementsof Study Products for Myopia Prevention and Control in Children and Adolescents, while actively implementing national and regulatoryrequirements such as the Outline to Improve Quality of Development and the Work Plan for the Safety Protection of Children andStudent Supplies. The Company continuously upgrades internal inspection standards and has established the M&G quality managementsystem to ensure higher requirements and standards for quality control. The system includes a number of relevant policies, such asthe Management and Control Procedure for Product Safety, the M&G Product Audit Sampling Mechanism (Trial), the Product SafetyRequirements Checklist - Student Supplies, and the Product Safety Requirements Checklist - O?ce Supplies and O?ce Equipment,as well as specic safety control processes, audit and sampling mechanisms for various types of new products, high-risk products, andregular products. The system also species the disposal mechanism for non-conforming products. In 2023, the Company formulated theOperational Specication for Outsourced Product Safety Testing, which standardizes the testing process for outsourced products, furtherstrengthening the standardization of third-party testing for all self-made and outsourced products. M&G has passed the ISO 9001:2015quality management system certication. Third-party supervision and audit of the Company's system are conducted annually. In 2023,the Company had no occurrence of any signicant safety or quality incidents related to its products or services.M&G has established and continuously improved a comprehensive quality control system throughout the entire process. From rawmaterial procurement and manufacturing to the delivery of nished products, all steps are strictly monitored and managed to ensure andimprove the stability of product quality. The Company conducts in-depth research of consumer demands and uses the insight to developbetter and safer products. The product initiation ow management approach is adopted during the product development stage to identifypotential risks for improvement.
Product Quality Management
Product and Service Quality
For M&G, providing society with quality products and services is not an ongoing pursuit, but also the cornerstone of the Company'shigh-quality and sustainable development. With a customer-centric mindset, M&G strictly controls product quality and safety withhigh standards for both itself and its suppliers. The Company also actively engages in responsible marketing, maintains smoothcommunication with consumers and customers, and strives to continuously improve the quality and e?ciency of customer service.
Research
anddevelopment
stage
Ensuring preventive control of product quality by conducting technical feasibility assessment on thesafety compliance, use environment, user experience, and extreme use conditions of products in theplanning, R&D, and design stages of new products.
Production
stage
Requiring production guarantee for new products in product validation and production stages, andcontinuously carrying out process improvement in production.
Distributionand sales
stage
Initiating improvement projects for quality issues identied in incoming inspection, logistics and storage,and feedback and improvement stage, and ensuring closed-loop management of customer complaints.
M&G Quality Control System
In 2023, M&G Shanghai production base carried out a noise control improvement project, improving noise controlcomprehensively with ve approaches of elimination, reduction, absorption, diversion, and isolation. Specic measuresincluded adding cushion pads and soundproof covers, reducing the operating speed of pneumatic workstations, addingsound-absorbing covers, using silent fans, selecting low-noise vacuum generators, etc. The successful implementation ofthis project signicantly reduced the number of employees exposed to noise.Sharing sessions were organized to promote the improvement measures to more workshops. As of the end of 2023, thenoise issues were improved in 8 assembly workshops and 7 ip-op workshops.
Preventing Occupational Hazards in Paper Production
Packaged boxes of notebookproducts are quite heavy. To moveabout 25 tons of products requiresa worker to bend over about1,000 times in a day, which islikely to cause lower back injuries.In 2023, the paper productionworkshop deployed an automaticstacking robot to replace manualhandling, e?ectively reducing thelabor intensity of employees.
Dust generated in paper-making process is collected using suction of negative pressure. But the process still leaves asignicant amount of ying dust in the workshop. The paper production workshop of the M&G Shanghai base installed dustextraction units inside the machines, directly extracting paper dust from the machine. This upgrade has e?ectively eliminatedvisible dust particles in the workshop and reduced the potential health risks caused by dust exposure.
Automatic stacking robot in the paper production workshop
Deploying stacking robot to reduce lower back injury risk
Preventing dust hazards and improving working environment
The Company also vigorously carries out awareness raising and education activities regarding occupational disease prevention andcontrol, providing EHS-related training for safety management personnel, including job safety analysis (JSA), occupational health andprotection training, safety awareness and management capability training, etc.
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M&G strictly complies with the Advertising Law, the Copyright Law, and other relevant laws and regulations, and has formulated relevantinternal system policies such as the Measures for the Administration of Trademark Applications, the Product Specication Manual (Document)Compliance Audit Standard, and the Notice on Further Standardizing Product Graphic Design Elements. To protect consumer rights, allpackaging and promotional information of products must go through internal review, so that the advertising is legitimate and in compliancewith relevant laws and regulations, and the marketing and sales information is transparent and accurate. The Company has also formulatedthe M&G Social Media Platform Content Guidelines to lay out the specic requirements for regulating social media communication content. Itis required that "all content published on social media platforms shall be truthful, legitimate, healthy, and accurate, and must not contain falseor misleading information, or deceive or mislead consumers". The Company has also formulated the M&G Media Relations Guidelines, whichstipulates that when M&G employees communicate with the media or inuencers, they shall base their communication on facts with honesty,clarity, and candidness, and actively practice responsible marketing.
Responsible Marketing
The M&G "Brand Messenger" ProjectIn October 2023, M&G launched the "Brand Messenger" project. The project aimed at standardizing the Company's brandmanagement in areas such as social media, visual identication system (VI), and crisis response by forming an internalcommunity of "brand messengers" and a communication mechanism. All brand messengers were provided with regulartrainings on brand management awareness to improve capabilities to better prevent relevant risks, and to protect theCompany's brand image.More than 40 brand messengers from various departments participated in the program. They shared ideas on brandmanagement and brand image maintenance, co-created the Brand Messenger Declaration, and signed the BrandMessenger Commitment together, committing to playing the role of brand owners, actively promoting the M&G brand, andjointly building a warm and sustainable M&G brand.
M&G Brand Messengers
M&G supply chain quality improvement training campSupplier Product Quality Management
M&G Supplier Product Quality Control System
In 2023, the Company established the Quality Center, formally separating quality inspection from production as an independent function.The Quality Center is responsible for independent inspection of the product manufacturing process and the internal/external inspection
M&G continuously optimizes the product quality management system for suppliers and has established a robust system of policiesregarding defective products and product quality risk control, strictly ensuring the quality of purchased products from the source. TheCompany has issued the Management Measures for Comprehensive Improvement of Supplier's Factory Inspection and Performance,in order to reduce the occurrence of quality issues in incoming goods by setting the product shipment inspection standards andstrengthening the self-checking capabilities of suppliers. As of the end of 2023, the qualied rate of purchased products reached 99%.In 2023, M&G organized two quality improvement training camps for suppliers, inviting external lecturers to provide targeted qualityimprovement guidance for 32 suppliers. In addition, the Company regularly visited suppliers to provide on-site quality management andimprovement support.
Qualied rate of nishedproducts before warehousing
One-time pass rate of fullinspection
99.97%
99.75%
during product warehousing, report collection and conrmation, as well as the submission and samplecollection for annual inspections and external inspections. The Quality Center has established aquality management system consisting of QC (Quality Control), QA (Quality Assurance), and QE(Quality Engineering). Under each section, the Quality Center carries out various work such as productinspection, quality non-conforming incident handling, process quality improvement, and establishmentof good product conditions. In 2023, the Company established a standardized QC operatingprocedure based on "one process, one standard, and one method", comprehensively improving itsproduct quality management. The Company also regularly organizes activities, such as quality reviewmeetings and quality improvement weeks. By collecting and analyzing quality data, common problemsare identied and become the focuses of targeted improvement activities, and preventive measuresare taken to address key quality issues to avoid future incidents. In 2023, the Company handled andresolved 43 product quality non-conforming incidents. The qualied rate of nished products beforewarehousing was 99.97%, and the one-time pass rate of full inspection was 99.75%.
Standardizing the daily pre-launch management of new outsourced products,including planning, designing, prototyping, internal and external inspection,quotation, and sealing stages, shortening the time to market for new products.
Clarifying the responsibilities of various functional departments regarding theapproval of bulk samples, including the scope, timeframe, and process ofapproval, ensuring the quality of bulk products.Bulk Sample Approval Process
Clarifying the pre-launch inspection processes, both internal inspection and third-party inspections, for all product categories, improving the e?ciency of new productdevelopment, and shortening the development and launch cycle of new products.
Clarifying the control process of key secondary material for suppliers to ensureproduct quality stability and cost optimization.
Standardizing the regular self-inspection process for product quality risk control,continuously reducing product quality risks, optimizing product quality, andensuring that product quality meets company requirements.Product Compliance Self-checkManagement SystemCode of Practice for Internal andExternal Inspection of Outsourced
ProductsDefective Product ReturnManagement ProcedureKey Level 2 Material Control ProcessQuality Risk Control RegularVerication Management SystemNew Product Launch DevelopmentManagement System
Standardizing, supervising, and managing the return process for three types ofdefective products: recalls due to quality issues, customer complaints, and incominginspection failures.
Standardizing the regular inspection mechanism for quality risk control of variousproduct categories, reducing product quality risks, and ensuring that outsourcedproducts meet national standards and company requirements.
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Adhering to the consumer-centric philosophy, M&G actively listens to the voices of customers and consumers and gathers feedback,taking consumer suggestions and criticism as opportunities to further improve its products and services. The Company handles thereceived feedback in a timely manner, and develops new products or optimizes existing ones based on market demand.
Providing Quality Services
Compliance Training on Social Media Platform Operation
In November 2023, M&G organized a compliance training on socialmedia platform operation. A total of 61 employees participated in thetraining online and o?ine. The training mainly focused on materialusage, advertising and promotional activities, and VI requirements,aiming to enhance the compliance awareness of social mediaoperation teams and designers, prevent risks, and maintain theCompany's brand image and interests in social media operations.Social media operation team leaders signed the Platform Content Self-Discipline Commitment during the training.Compliance training on social media platformoperation
The Company has established operational standards for the M&G Customer Complaint Platform, clarifying thecomplaint submission process to reduce re-submission of complaints due to incomplete information or improperinformation input, ensuring the timely and e?cient handling of complaints from channel partners regarding productquality, delivery shortages or damages, and other issues. In 2023, the Company conducted a satisfaction surveyof 36 channel partners. The survey covered various aspects such as product quality, timely delivery, new productsupply, information communication, service attitude, and after-sales service. The overall satisfaction score was 83.5.
For e-commerce channels, M&G has formulated policies, such as the Customer Complaint Handling Standards, tospecify the responsibilities for handling pre-sales, sales, and after-sales complaints. The Company standardizesthe full-process management of e-commerce sales through measures such as pre-sales data dashboards and dailyreview meetings, continuous follow-up communication during sales, and daily report on key after-sales indicators. Atthe beginning of each month, the Company reviews and categorizes the complaints received in the previous monthand conducts follow-up reviews over quality-related complaints, continuously optimizing the complaint handlingprocess and response speed to improve the quality of e-commerce services.
Jiumu Store has established a comprehensive customer complaint handling process with standardized full-channelhandling and analysis processes for customer complaints, as well as relevant rules for complaint escalation.Customer complaints are categorized into general complaints, urgent complaints, and major complaints, eachcategory with specic handling processes accordingly to ensure more timely, complete, and e?cient responses andbetter after-sales service.
In 2023, M&G Colipu conducted a satisfaction survey for corporate customers, using a combination of variousforms, such as telephone communication, social media platform surveys, and questionnaires distributed in customergroups. The survey result was used to continuously optimize the service experience of customers, aiming to improvecustomer satisfaction.
M&G adheres to the core value of "Beneting Others" and the business philosophyof "Partnership for a Shared Future", and is committed to forming a stable and win-win cooperation mechanism with channel partners at all levels. The Company strivesto build a high-level partner ecosystem and grow together with partners, providingcomprehensive support for channel partners to help them achieve progress inbusiness management and technological improvement.The Company organizes a number of activities and events for partners, such asannual marketing conferences and elite training camps. Channel partners can usethis opportunities to learn about new M&G products and marketing strategies for thenext year, and communicate with the Company on sales related issues. In 2023,the Company held four partner meetings with over 4,000 attendees. The Companyalso regularly conducts market visits and store visits to help stores identify and solveproblems, and better support their operations and development.
Empowering Partners
Introducing new products to channel partners
Store Partner Training and Empowerment
M&G actively empowers retail store customers. In November 2023, thesales team visited the headquarters of Dingjia Stationery in Xinxiang City,Henan Province to provide category planning training for more than 20 storemanagers and purchasing personnel. The training on aesthetic appearanceand product display skills helped the participants improve product displayat their stores with the e?cient presentation of product appearance,performance, and features to store consumers.
The themed pop-up store in Xinyulou,Hebei Province
Social PhilanthropyThroughout its history, M&G has demonstrated a strong commitment to fullling social responsibilitiesand paying back to society. The Company established the M&G Rainbow Charity Fund in 2015,and Shanghai M&G Charity Foundation (hereinafter referred to as "M&G Charity") was o?ciallyregistered in 2020. Adhering to the philanthropic concept of "promoting quality education andempowering inclusive community development", M&G Charity carries out a variety of philanthropicprograms in the elds of quality education, environmental protection, and humanitarian care.M&G Charity not only leverages the corporate resources of M&G to focus on supporting rural arteducation, caring for groups with special needs, and other philanthropic causes, but also raisesthe awareness and encourages actions of the public to work together to address social issues,contributing to the harmonious development of society. As of the end of 2023, M&G Charity hadcarried out educational charity initiatives in 19 provinces and 42 cities across China, benetingnearly a million students and over 3,000 teachers. In 2023, M&G donated RMB6.08 million in total,including in-kind donations, to support philanthropic programs, and a total of 3,787 employeesparticipated in public welfare activities, with a total of volunteer service duration of 5,730 hours.
M&G also actively explores new opportunities of stationery sales with key retail customers, such as setting up agship pop-up stores to achieve the rapid sales turnover of in-store products during the peak sales season. In August 2023, the Companysuccessfully opened its rst themed pop-up store in the agship store of Xinyulou Department Store in Cangzhou City, HebeiProvince. A 60-square-meter pop-up area was set up, and popular short video inuencers from Douyin were invited to conducton-site promotion. The event attracted much attention and generated signicant sales growth.
Number of students benetingfrom the M&G philanthropicprograms
Number of teachers benetingfrom the M&G philanthropicprograms
3,000+
Nearlymillion
E-commercePlatforms
M&GColipu
RetailStores
ChannelPartners
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M&G Charity donating Golden Seed stationery gift packages to students in Laos and Kenya
Total value of donations including in-kind donations of the "Golden SeedPlan" exceeding
RMB1.5
million
Launched by M&G Charity in 2015, the "Golden Seed Plan" is a public welfare initiative that donates customized stationery gift packagestailored to the learning needs of rural students for 1-2 school years. As of the end of 2023, the "Golden Seed Plan" had been carried outin more than 1,000 schools and social service institutions, distributing over 500,000 Golden Seed stationery gift packages and beneting100,000 rural students with high-quality stationery.
Golden Seed Plan
M&G Charity also actively responds to China's "Belt and Road" initiative and hasextended the "Golden Seed Plan" to help students in overseas markets such as Laosand Kenya. M&G also encourages its channel partners, subsidiaries, and other like-minded companies from the industry to join the e?orts for doing good, driving a totaldonation of over RMB1.5 million, including in-kind donations.
In response to the national policy calling for supporting rural arteducation, M&G Charity consolidated its resources and launchedthe "Art Education Plan" for rural children in view of the unbalanceddistribution of art education resources. The program aims to build arural art education network, in order to promote rural revitalizationand provide quality rural art education. M&G Charity partnered withthe One Foundation, the Jack Ma Foundation, the Huochaibox, theShanghai Charity Education and Training Center, as well as otherlike-minded partners and jointly launched the "Art Education Plan"program. With comprehensive e?orts such as teacher resourcematching, art lesson development, and community art classes, theprogram benets an increasingly number of students with qualityart education resources through a variety of activities. As of theend of 2023, the program had been carried out in 153 rural primaryschools and 20 community child service centers, beneting a totalof over 330,000 person-times.
Art Education Plan
M&G Charity actively leverages the business advantages of M&G to support public welfare. In 2023, for the rst time, the art teachertraining program developed by the M&G Children's Art and Creativity Division for rural art teachers through online live streaming. Thecourses were viewed for 14,000 times during the year, allowing many rural art teachers to use the program to grow their teachingabilities. We also leveraged M&G's resources and capabilities of organizing nationwide painting competitions and partnered with theOne Foundation to launch a rural painting competition. The competition, participated by nearly 120,000 rural children, provided aplatform for them to showcase their artwork, and motivated rural schools to attach greater importance to art education. In addition, thecompetition not only beneted rural students with improvement in their art education abilities, but also functioned as an evaluation of thee?ectiveness of the art teacher training program.To further promote rural art education, in November 2023, on the occasion of World Children's Day, the Company aired short videoclips of interviews with 20 rural students from Sichuan, Yunnan, Guizhou, and other places, and invited inuencers to expand impactthrough short video platforms. The campaign brought these children's real-life stories with rural art education classes and M&G Charity'sphilanthropic concept of "Gathering Twilight, Warming Childhood" to a greater audience registering over 10.24 million views. TheCompany also set up a dedicated philanthropy section at large-scale exhibitions such as the Frankfurt Stationery Exhibition, showcasingboth M&G's philanthropic creative products as well as the philanthropic e?orts of M&G Charity in promoting art education.
M&G Charity art education class
M&G Charity distributing philanthropic posters onWorld Children's Day
The philanthropy section of the M&G booth at the Frankfurt StationeryExhibitionAlong with the implementation of the national strategy of rural revitalization, the Chinese government has been actively promoting ruralart education in recent years. The Ministry of Education issued a number of policy documents accordingly, such as the Guidelines forPublic Art Courses in Higher Education Institutions and the Notice on the Establishment of the First National Primary and SecondarySchool Art Education Teaching Guidance Professional Committee. All sectors of society are encouraged to increase their support for arteducation and contribute to improving the quality of education for rural children.Supporting the growth and social integration of groups with special needs isone of the focuses of M&G Charity. In 2017, M&G Charity cooperated withthe Shanghai Charity Education and Training Center and jointly launchedthe Autism Support Program, supporting the rehabilitation training of autisticchildren with artistic creation. Over 2,000 autistic children received regularservices to help them improve their Autism Support Program to better expresshow they feel, think, and say with creative artwork. Each year, a number ofoutstanding works are selected and used on product packaging of M&G'sphilanthropic products, to allow a greater audience to witness and appreciatethe special talents of these children. Currently, M&G has developed andlaunched seven philanthropic products, with all prots donated to support theoperation of this program.In 2023, the Autism Support Program started covering autistic population of older ages, with special attention given to the developmentalneeds of di?erent age groups with autism. M&G Charity, in collaboration with partners such as China Construction Bank, set upworkshops in special needs schools, helping adult autistic students to learning to do artistic reiteration of rural intangible cultural heritageworks. Their selected works were also used in M&G products, with prots donated to help individuals with autism and craftswomen inrural areas with more employment opportunities and better quality of life.
Autism Support Program
Deputy Minister of Civil A?airs acknowledging M&GCharity's Autism Support Program
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M&G Charity strives to foster a corporate culture of everyone for charity with a variety of activities. In 2023, M&G Charity furtherexpanded the channels to encourage more employees and partners to participate and support charitable programs, including the "99Giving Day Rural Children Art Education Fundraising" event, the "E.G.G Walkathon" charity walk, and volunteering opportunities as arteducation tutors. In the volunteering program designed for senior executives, all M&G executives visited a beneciary school of M&GCharity's charitable programs to interact with the students, allowing them to better understand and appreciate of the Company's value of"Beneting Others".
Everyone for Charity
Arbor Day Employee Charity Event
M&G Colipu employees receiving greenplant at the Arbor Day event
Since 2020, M&G Charity has been working together with Gansu QingsuoPhilanthropy Development Center to grow 1,000 mu of Haloxylon ammodendronshrubs in the Tengger Desert in Changning Town, Minqin County, GansuProvince. To support this program, M&G Charity contributed RMB350,000,while individual M&G employees contributed close to RMB130,000 in addition.The program aims to help sand xation in the northwest region and reduce theimpact of sandstorms on the environment and local residents.On Arbor Day 2023, M&G Charity invited Mr. Ma Junhe, the founder of GansuQingsuo Philanthropy Development Center, to visit the M&G headquarters inShanghai. Mr. Ma shared his rst-hand experience of greening the desert landas well as environmental governance knowledge with M&G Stationery and M&GColipu employees. M&G Colipu also used this occasion to join the "VolunteerOasis Action" to contribute e?orts towards windbreak and sand xation.
During the "99 Giving Day" annual national philanthropy event, M&G Charityand the One Foundation jointly launched a fundraising campaign for arteducation for rural children. Using "A box of art supplies for RMB19.9" as theslogan, the campaign aimed to encourage public participation and cultivate aculture of philanthropy by signifying that a small amount of donation could helpa child to have a box of painting tools and creative art classes. The campaignwas promoted through various channels, including M&G's corporate WeChataccount, its short video platform accounts, and Weibo account, as well asposters displayed in Jiumu Stores nationwide. During the campaign, a varietyof activities were organized to maximize public participation. With ea marketcharity sales in o?ce buildings and production bases, and a philanthropy cornerat the channel partner conference, we encouraged consumers, employees,and partners to join us in participating in philanthropic activities. During the"99 Giving Day" event, a total of 1,260 people participated in our fundraisingcampaigns, raising over RMB150,000 in total, which could be used to bring theM&G Art Education Plan to more than 15,000 children.
A charity gala, the rst for M&G, was hosted during the"99 Giving Day" event. Nearly 600 people from 250 retailterminals across the country attended the gala. Fivepaintings, all painted by children helped by M&G Charity'scharitable programs, were auctioned, with all proceeds usedto support these programs. This event built a bridge betweenM&G and its channel partners, forging a partnership not onlyin business but also in philanthropy.
"99 Giving Day" Fundraising Event
M&G charity gala during the "99 Giving Day" event
Flea market charity sales market at M&Gheadquarters
M&G Charity has been participating in the "E.G.G Walkathon"charity walk for consecutive years. In 2023, nearly 150executives and employees from various departments of M&G,M&G Colipu, and Jiumu Store formed eight charity teams tochallenge themselves to nish a 50-kilometer trekking within12 hours, raising a total of over RMB130,000 for the AutismSupport Program, which would be used to provide bettergrowth and development opportunities for people with specialneeds.
"E.G.G Walkathon" Charity Walk
M&G executives and employees participating in the"E.G.G Walkathon"
The charity exhibition of works of people with autism
M&G Colipu actively collaborates with its value chain partners to participate inthe caring for people with autism. In September 2023, M&G Colipu participatedin the charity exhibition of paintings and calligraphy works of people with autism,organized by the CPIC Blue Foundation, supporting autistic children to realizetheir dreams with the donation of 1,000 customized stationery kits.
With its unwavering dedication to and support for philanthropic causes, M&G Stationery continuously received recognition and awardsin 2023, such as the 18th People.cn's "Corporate Social Responsibility Award" and Southern Weekend's "For Good Company" Award. Inthe future, the Company will continuously respond to the national call for rural revitalization, expand the breadth and depth of charitableprograms, and promote the cultivation of a corporate culture of philanthropy.
"Corporate Social Responsibility Award" by People.cn"For Good Company" Award by Southern Weekend
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Focus: DevelopingSustainable Products
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Performance Dataand Index
Sustainability PerformanceEnvironmental PerformanceEnvironmental Investment
Energy Consumption and Carbon Emissions
Materials
Packaging Materials
IndicatorUnit202120222023
Gasolineton564589Dieselton566485414Purchased electricitykWh107,153,15694,360,79192,582,027Photovoltaic electricity consumptionkWh8,757,0509,114,71813,222,559Scope 1 GHG emissionstCO
e2,4812,1702,115Scope 2 GHG emissionstCO
e88,87646,66845,940Total GHG emissions (Scope 1 + Scope 2)tCO
e91,35748,83848,055GHG emission intensity
tCO
e/million RMB ofrevenue
5.22.42.1
IndicatorUnit202120222023
Total materials usageton48,81842,40144,498 Plastic ton28,010 21,000 23,286 Paperton16,03018,00015,356 Inkton4,7783,4013,114
IndicatorUnit2023
Total packaging materials usage
ton24,114 Paperton21,010 Plasticton2,577 Other (such as metal, etc.)ton527Total logistics packaging materials reused
ton3,316 Woodton2,697 Plasticton619
IndicatorUnit20222023
Environmental investmentRMB10,000222239
In 2023, based on ISO 14064-1:2018 Specication with Guidance at the Organization Level for Quantication and Reporting of Greenhouse GasEmissions and Removals, China's General Guideline of the Greenhouse Gas Emissions Accounting and Reporting for Industrial Enterprises (GB/T 32150-2015), and the 2019 Renement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories, M&G conducted a systematic accounting of Scope1 and Scope 2 greenhouse gas emissions at the company level. The accounting scope covered M&G Stationery Shanghai production and distributioncenter, Shanghai headquarters o?ce building, South China production and distribution center, North China distribution center, Axus Stationery, M&G Colipu,and Jiumu Store. The energy consumption and carbon emissions data disclosed in this report for the years 2021 to 2023 are based on the methodologyand scope determined in this accounting process. Therefore, certain data disclosed in previous reports are restated accordingly.
The scope of materials-related data for 2021 and 2022 includes the M&G Stationery Shanghai production and distribution center, while in 2023 the scopeof data also includes the South China production and distribution center and Axus Stationery.
The packaging material data for 2023 covers M&G Stationery's Shanghai production and distribution center, South China production and distributioncenter, North China distribution center, Axus Stationery, M&G Colipu, and Jiumu Store. In addition to expanding the scope of data disclosure compared toprevious years, we have also optimized the data calculation method and added the disclosure of breakdown indicators in 2023. Therefore, historical data for2021 and 2022 are not provided in this report due to the lack of base for comparability as a result of the above-mentioned updates.
Logistics packaging materials reused refer to reusable wooden pallets, turnover boxes, etc. The data scope of this indicator in 2023 includes the M&GStationery Shanghai production and distribution center.
The data scope of "tap water consumption" in 2021 and 2022 includes the M&G Stationery Shanghai production and distribution center. This indicator isrenamed as "total water consumption" in 2023, with its data scope expanded to include the M&G Shanghai headquarters o?ce building and Axus Stationery.
The data scope of "recycled and reused water" in 2021 and 2022 includes the M&G Stationery Shanghai production and distribution center, and hasexpanded to include Axus Stationery in 2023.
IndicatorUnit202120222023
Woodton//495
Pencil leadton//2,247
Material usage intensity
ton/million RMB ofrevenue
2.82.11.9
Water
IndicatorUnit202120222023
Total water consumption
ton596,000546,100570,185
Recycled and reused water
ton50,00045,00049,772
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E?uents and Waste
IndicatorUnit202120222023Total solid wasteton1,020728663Hazardous wasteton202829General waste (non-hazardous waste)ton1,000700634Wastewater discharged ton2,8002,0001,876
IndicatorUnit202120222023
Total number of employeesperson5,5275,5745,839Number of employees, by ageUnder 30 years oldperson/1,5272,08030–50 years oldperson/3,6423,311Over 50 years oldperson/405448Number of employees, by educational backgroundBachelor's (college) degree or aboveperson3,2103,4013,621High school, vocational schoolperson1,094997964Otherperson1,2231,1761,254Number of employees, by levelNon-management sta?person//4,506Management sta?person//1,333Number of ethnic minority employeesperson//183Number of senior management personnel, by gender
Maleperson/86101Femaleperson/2428
Social Performance
Employment
The data scope of "e?uents and waste" includes the M&G Stationery Shanghai production and distribution center.
IndicatorUnit202120222023
Total number of employees on parental leaveperson/3078Number of employees on parental leave, by genderMaleperson/728Femaleperson/2350Number of employees who returned to work after parental leave during the reporting period and remained employed for 12 months ormore, by genderMaleperson/626Femaleperson/2248Return-to-work rate and retention rate of employees who took parental leave, by gender
Male%/8692Female%/9696Percentage of members of Board of Directors and Board of Supervisors, by age
Under 30 years old%00030–50 years old%303030Over 50 years old%707070Percentage of members of Board of Directors and Board of Supervisors, by gender
Male%606370Female%403730Ratio of basic salary and compensation for male employeesBasic salary%/6666Additional compensation%/3434Ratio of basic salary and compensation for female employeesBasic salary%/7777Additional compensation%/2323
The data scope of "percentage of board members and senior management, by age" and "percentage of board members and senior management, bygender" in 2021 and 2022 reports includes directors, supervisors, and senior executives. In 2023, the scope of both indicators has been changed to excludesenior executive due to an adjustment to the statistical methods, and the names of the indicators as well as data value for 2021 and 2022 have also beenadjusted to reect the change.
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IndicatorUnit202120222023Percentage of vacancies lled by internalcandidates (internal recruitment)
%//20Employee turnover rate%/13.411.9Percentage of employees covered by thetrade union
%/100100
The data scope of employee training indicators in 2021 and 2022 includes M&G Corporation, M&G O?ce Stationery, Jiumu Store, and More-Than-Fun,which has been expanded in 2023 to also include M&G Colipu. In addition, the statistical method for employee training has also been optimized, such asreplacing "person-time" with "person". Therefore, the employee training data for 2021 and 2022 is not disclosed in this report for lack of comparability due tothis adjustment.
IndicatorUnit2023
Number of employees trained, by genderMaleperson1,873Femaleperson1,711
Percentage of employees trained, by genderMale%94Female%92Number of employees trained, by levelNon-management employeesperson2,920Middle-level management personnelperson569Senior management personnelperson95
Percentage of employees trained, by levelNon-management employees%92Middle-level management personnel%98Senior management personnel%100Average training hours per capitahour11.8Average training hours per capita, by gender
Malehour13.7Femalehour9.8
Employee Training
Performance AssessmentIndicatorUnit202120222023
Percentage of employees receiving regularperformance assessment
%90100100
IndicatorUnit2023
Average training hours per capita, by level
Non-management employeeshours12.5Middle-level management personnelhours10.2Senior management personnelhours6.0
Occupational Health and Safety
IndicatorUnit202120222023
Number of workers covered by occupational healthand safety management system
person/8181,140Total working hourshour2,068,5241,992,9953,597,498Fatalities caused by work-related injuriescase000Rate of fatalities caused by work-related injuries%000Severe work-related injuries (excluding fatalities)case/00Severe work-related injury rate (excluding fatalities)%/00Recordable work-related injuriescase131821Recordable work-related injury rate (per millionworking hours)
/6.39.05.8Work-related injuries (male)person81416Work-related injuries (female)person545Total safety training hourshour18,00018,00020,220Total number of employees who received safetytraining
person200,000200,000202,020Investment in labor protectionRMB10,000253222208
The data scope of "occupational health and safety" in 2021 and 2022 includes the M&G Stationery Shanghai production and distribution center, whichhas been expanded in 2023 to also include Axus Stationery.
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Products and Services
Charitable and Philanthropic Activities
Anti-corruption
IndicatorUnit202120222023
Number of health and safety violations related toproducts and services
case001Customer satisfaction by average satisfaction scorescore888883.5
IndicatorUnit202120222023
Total cash donationsRMB10,000611425303Total in-kind donationsRMB10,000249108305Number of participants in volunteer servicesperson-time//3,778Volunteer service hourshour//5,730
IndicatorUnit202120222023
Number of public legal cases regarding corruption broughtagainst the Company or its employees
case000Total number of employees participating in anti-corruption training
person703132,364Non-management employeesperson//1,786Middle-level management personnelperson//534Senior management personnelperson//44
The data scope of "charitable and philanthropic activities" in 2023 includes Shanghai M&G Charity Foundation, M&G Colipu, and Jiumu Store.
The data scope of "anti-corruption" in 2021 and 2022 includes M&G Corporation, M&G O?ce Stationery, Jiumu Store, and More-Than-Fun, which has beenexpanded in 2023 to also include M&G Colipu. We have also added the disclosure of anti-corruption training by level in 2023.
IndicatorUnit2023
Number of operational sites covered by business ethics auditsnumber22
Rate of operational sites covered by business ethics audits%100
Governance and Economic PerformanceBusiness Ethics
Intellectual Property and Technological Innovation
IndicatorUnit202120222023
Number of patent lings during the yearitem258275212Number of patents granted during the yearitem210312148Number of valid patentsitem//1,211Cumulative patent lingsitem2,1162,3912,612Cumulative patents granteditem1,9232,2352,407Technological improvement, innovation, and R&Dinvestment
RMB10,00018,87518,35517,752Supply Chain ManagementIndicatorUnit20222023
Number of suppliers participating in ESG auditduring the year
number7071Percentage of key suppliers participating in ESGaudit during the year
%/100Number of assessed suppliers with substantialactual/potential negative impacts
number/6
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GRI Standards (2021) Content Index
M&G Stationery has reported the information cited in this GRI content index for the period January 1, 2023to December 31, 2023 with reference to the GRI Standards.GRI 1: Foundation 2021
Statement of use
GRI 1 used
GRI StandardDisclosurePages
GRI 2:
General Disclosures2021
2-1Organizational details1-22-2
Entities included in the organization's sustainabilityreporting
1-22-3Reporting period, frequency and contact point1-22-4Restatements of information93-1002-5External assurance
External assurance has
not been conducted2-6
Activities, value chain and other businessrelationships
7-8; 17-182-7Employees95-972-8Workers who are not employees69-71; 882-9Governance structure and composition35-372-10
Nomination and selection of the highest governancebody
2-12
Role of the highest governance body in overseeingthe management of impacts
3-4; 11; 17-182-13Delegation of responsibility for managing impacts112-14
Role of the highest governance body in sustainabilityreporting
2-15Conicts of interest372-16Communication of critical concerns112-17Collective knowledge of the highest governance body112-18
Evaluation of the performance of the highestgovernance body
2-19Remuneration policies372-20Process to determine remuneration35-372-22Statement on sustainable development strategy12-132-23Policy commitments17-18; 41-42; 72-73
GRI StandardDisclosurePages
GRI 2:
General Disclosures2021
2-24Embedding policy commitments11; 41-442-28Membership associations512-29Approach to stakeholder engagement17-18GRI 3:
Material Topics 2021
3-1Process to determine material topics15-163-2List of material topics15-163-3Management of material topics15-18; 38-44; 47-92GRI 201:
Economic Performance2016
201-1Direct economic value generated and distributed7-8201-2
Financial implications and other risks andopportunities due to climate change
55-59GRI 202:
Market Presence 2016
202-1
Ratios of standard entry level wage by gendercompared to local minimum wage
75-77GRI 204:
Procurement Practices2016
204-1Proportion of spending on local suppliers41-44GRI 205:
Anti-corruption 2016
205-2
Communication and training about anti-corruptionpolicies and procedures
43-44GRI 206:
Anti-competitive Behavior2016
206-1
Legal actions for anti-competitive behavior, anti-trust,and monopoly practices
41-42
GRI 301:
Materials 2016
301-1Materials used by weight or volume93-94301-2Recycled input materials used62
GRI 302:
Energy 2016
302-1Energy consumption within the organization58-59; 93302-2Energy consumption outside of the organization93302-4Reduction of energy consumption60-61GRI 303:
Water and E?uents 2018
303-1Interactions with water as a shared resource62303-2Management of water discharge-related impacts62303-4Water discharge95303-5Water consumption94
GRI 304:
Biodiversity 2016
304-2
Signicant impacts of activities, products and serviceson biodiversity
25-27; 66304-3Habitats protected or restored66
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GRI StandardDisclosurePages
GRI 305:
Emissions 2016
305-1Direct (Scope 1) GHG emissions58-59; 93305-2Energy indirect (Scope 2) GHG emissions58-59; 93305-3Other indirect (Scope 3) GHG emissions58-59305-4GHG emissions intensity58-59; 93305-5Reduction of GHG emissions58-59
GRI 306:
Waste 2020
306-1
Waste generation and signicant waste-relatedimpacts
306-2Management of signicant waste-related impacts62306-3Waste generated95306-4Waste diverted from disposal93-94306-5Waste directed to disposal95GRI 308:
Supplier EnvironmentalAssessment 2016
308-1
New suppliers that were screened usingenvironmental criteria
69-70308-2
Negative environmental impacts in the supply chainand actions taken
69-70
GRI 401:
Employment 2016
401-1 New employee hires and employee turnover97401-2
Benets provided to full-time employees that are notprovided to temporary or part-time employees
75-77401-3Parental leave96
GRI 403:
Occupational Health andSafety 2018
403-1Occupational health and safety management system82-83403-2
Hazard identication, risk assessment, and incidentinvestigation
403-3Occupational health services82-83403-5Worker training on occupational health and safety82-83403-6Promotion of worker health75-77403-7
Prevention and mitigation of occupational healthand safety impacts directly linked by businessrelationships
82-83403-8
Workers covered by an occupational health andsafety management system
403-9Work-related injuries99403-10Work-related ill health82-83
GRI StandardDisclosurePages
GRI 404:
Training and Education2016
404-1Average hours of training per year per employee79-81; 98404-2
Programs for upgrading employee skills and transitionassistance programs
79-81404-3
Percentage of employees receiving regularperformance and career development reviews
GRI 405:
Diversity and EqualOpportunity 2016
405-1Diversity of governance bodies and employees95-97405-2
Ratio of basic salary and remuneration of women tomen
GRI 413:
Local Communities 2016
413-1
Operations with local community engagement, impactassessments, and development programs
88-92GRI 414:
Supplier SocialAssessment 2016
414-1New suppliers that were screened using social criteria69-71414-2
Negative social impacts in the supply chain andactions taken
69-71GRI 416:
Customer Health andSafety 2016
416-1
Assessment of the health and safety impacts ofproduct and service categories
28-32; 84-88416-2
Incidents of non-compliance concerning the healthand safety impacts of products and services
GRI 417:
Marketing and Labeling2016
417-1
Requirements for product and service information andlabeling
86-87GRI 418:
Customer Privacy 2016
418-1
Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data
104103
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Website: www.mg-pen.comAddress: No. 5, Lane 288, Qianfan Road, Xinqiao Town, Songjiang District, ShanghaiEmail: ESG@mg-pen.com