│ CONTENTS│
CONTENTSAbout this ReportMessage from the ChairmanAbout XCMG MachineryResponsibility Management
3.1 Strategic Planning
3.2 Ecient governance
3.3 Compliant operations
3.4 Investor relations
3.5 Digital and intelligent
transformation
Stable operations forrobust governance
1.1 Climate change responses
1.2 Green production
1.3 Green life
Green practices forleading low-carbondevelopment
United in purposefor a better life
2.1 Quality assurance
2.2 An ecosystem for mutual
benets
2.3 Protection of rights and
interests of employees
2.4 Safety mechanism
2.5 Social responsibilities
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│About this Report│
About this Report
◆Introduction
This is an Environmental, Social, and Governance (ESG) Report issued by XCMG Construction MachineryCo., Ltd. to disclose and demonstrate its ESG practices and performance to stakeholders. The Board ofDirectors guarantees that there are no false records, misleading statements or material omissions in thisReport and is responsible for the authenticity and validity of the information contained herein.◆Reporting PeriodThe period covered by this Report is from January 01, 2023 to December 31, 2023 unless otherwisespecied. Some information has exceeded the said period to ensure the completeness of this Report.◆Reporting ScopeUnless otherwise specied, this Report is about the XCMG Construction Machinery Co., Ltd. and coversits Head Oce, Branches and Subsidiaries, a scope that is identical to the scope of its consolidatednancial statements. Any deviation from the said scope will be stated in the Report.◆Data SourcesAll information and data used in this Report are from materials made public by governmental agencies,and the formal documents and disclosures of the Company. All nancial data referenced in this Reportare subject to the annual report and other data are from internal statistics of the Company. All monetaryamounts are expressed in Chinese yuan unless otherwise stated.◆Basic FrameworkThis Report is prepared with references to in particular general frameworks on ESG/ sustainability/social responsibility both at home and abroad, including the Guidance on Social Responsibility (GB/T36000), Shenzhen Stock Exchange’s Self-regulatory Supervision Guideline No. 17 for Listed Companies—Sustainable Development Reporting (Trial) , the Environmental, Social and Governance (ESG) Guide byHong Kong Stock Exchange, Global Reporting Initiative (GRI) Sustainability Reporting Standards and ISO26000:2010 Guidance on Social Responsibility (ISO 26000) and with a focus on the industry context andfeaturing the Company’s distinctiveness.
◆Names and Abbreviations
For ease of expression and comprehension, the following names are used throughout the Report:
◆Report PublicationThis Report is issued electronically, which is available on the website of Shenzhen Stock Exchange, andthe Company’s website http://xgjx.xcmg.com/. This Report is published in both Chinese and Englishversions. In case of discrepancies, the Chinese version shall prevail.◆FeedbackTo better address your and other stakeholders’ needs, and to enhance the value of our ESG informationprovided for you, we seek your valuable feedback on this Report. Your insights will help us improveour ESG management capabilities and performance. We sincerely expect your valuable comments orsuggestions and email the feedback to zqb@xcmg.com.
Company name
XCMG Construction Machinery Co., Ltd.Xuzhou Construction Machinery Group Co., Ltd.Xuzhou Heavy Machinery Co., Ltd.Xuzhou Construction Machinery Co., Ltd.XCMG Finance Co., Ltd.Xuzhou XCMG Mining Machinery Co., Ltd.Xuzhou XCMG Infrastructure Construction Machinery Co., Ltd.Xuzhou XCMG Excavator Machinery Co., Ltd.Road Machinery Branch, XCMG Construction Machinery Co., Ltd.Xuzhou XCMG Hydraulic Co. Ltd.Xuzhou XCMG Zhilian Logistics Service Co., Ltd.Xuzhou XCMG Schwing Machinery Co., Ltd.Xuzhou XCMG Hanyun Technologies Co., Ltd.Xuzhou XCMG Driveline Technology Co., Ltd.Xuzhou XCMG Environment Technology Co., Ltd.Xuzhou XCMG Truck Mounted Crane Co., Ltd.Xuzhou XCMG Rongpiao E-Technology Co., Ltd.Xuzhou XCMG Port Machinery Co., Ltd.Science and Technology Branch, XCMG Construction Machinery Co., Ltd.
Short nameXCMG, XCMG Machinery, Company, WeXCMG Group, GroupXCMG Heavy MachineryXCMG CraneXCMG FinanceXCMG Mining MachineryXCMG InfrastructureXCMG ExcavatorXCMG RoadXCMG HydraulicXCMG ZhilianXCMG SchwingXCMG HanyunXCMG DrivelineXCMG EnvironmentXCMG Truck MountedXCMG RongpiaoXCMG Port MachineryXCMG Science and Technology
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT
In 2023, confronted with a complex and dynamicmacroeconomic landscape and increasingly challeng-ing industry conditions, we held fast of our originalaspirations, forged ahead with grateful hearts, andstrived to be a pioneer. With the spirit of thinking,revolution, innovation, and perseverance, we activelypracticed a new development philosophy and initia-tively integrated into the new development pattern.With unwavering determination, we advanced towardsa high-quality development to promote the “high-end,intelligent, green, service-oriented, and internation-al” transformation and upgrade of our industry. Wesketched out a new chapter aimed at establishing aworld-class enterprise and climbing the summit ofglobal industry.With governance as the foundation in this year, weaccurately identified, appropriately responded to,proactively sought change, and upheld our missionand beliefs, igniting the “red engine” for high-qualitydevelopment. Guided by strategic planning, we haveremained unwavering in our commitment to buildinga high-quality development model and world-classcapabilities, with our key indicators continuing to leadthe industry. Implementing the development policyof “high quality, risk control, world-class, and stablegrowth”, we ensured ecient governance and com-pliant operations to enhance our operational quality.We standardized information disclosure, facilitatedcommunication with investors, consistently and stablydistributed dividends, issued an announcement on theaction plan to advance “mutual improvement of qual-ity and reporting” and eectively safeguarded inves-tor rights. We comprehensively advanced the “NumberOne Project” for IDN, and focused on “ComprehensivePlan” blueprint to improve rened operation and pro-cess management capabilities with intelligent reform,digital transformation, and networked connectivity.
With environment as the pivot in this year, we pur-sued our “carbon peaking and carbon neutrality”strategy. As a company firstly releasing the carbonpeak and carbon neutrality action plan in the industry,we have outlined the development routes for tech-nologies of electric, hybrid, and hydrogen energy,core component industries of battery cells, batteriesand motor electronic control and infrastructure ofcharging stations. Embracing the wave of the newtechnological revolution and industrial transforma-tion, we accelerated our presence in the new energysector, particularly products application in urban con-struction, mining, ports and road transportation. Weaimed to provide top-level services and green solu-tions to customers worldwide. We adhered to envi-ronmental protection laws and regulations, strength-ening resource and emissions management. Weintegrated the principles of green development intoour daily operations, installing rooftop photovoltaicsystems, and electric vehicle charging stations, andexploring renewable and clean energy applications,thus championing the green and low-carbon ideas.
With society in our hearts, we stood united with our
customers and industry partners, navigating challeng-es together and fostering continuous exchange andcollaboration. This collaborative effort contributedto local development and sustainable growth for allstakeholders involved. With adherence to four direc-tors, we implemented innovation-driven developmentstrategy. Through increased investment and a focuson high-end breakthroughs, we guided industrialinnovative development with technological advance-ment. Keeping internationalization main strategy, weworked to build world-class brands with strengthen-ing the equipment manufacturing sector and bolster-ing the real economy. Safety was prioritized and wemaintained high safety standards to ensure the qual-ity development of our Company. With a focus on our
│ Message from the Chairman │employees, we enhanced compensation, benefits,and training systems, prioritizing their well-beingand fostering a supportive environment. Committedto social responsibility, we contributed to communitydevelopment and engaged in public interest activi-ties, taking the responsibilities of a public enterprisethrough concrete actions.Looking ahead, we will forge ahead with innovationand make new breakthroughs. we remain commit-ted to internalizing and implementing the spirit ofthe 20th National Congress of the CPC and thesignificant speeches delivered by General Secre-tary Xi Jinping. We will take on the foremost taskof “high-quality development”, the strategic cor-nerstone of “constructing a new development land-scape” and the essential pathway of “achievinghigh-level technological self-reliance”. We are ded-icated to establishing a modern industrial ecosystemtermed “5+1”. Integrating ESG principles into ourcorporate strategy and daily operations, we striveforward to create new achievements with uniqueindustrial and XCMG characteristics, propelling uscloser to our vision of becoming a globally renownedenterprise distinguished by exceptional products, re-nowned brands, pioneering innovation, and moderngovernance.With great responsibility, long strides and persever-ance, great achievements are inevitable for XCMG!Empower solid future, solid to succeed!
Chairman of XCMG Construction
Machinery Co., Ltd.Yang Dongsheng
Message fromthe Chairman
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT
Incorporated in December 1993, XCMG ConstructionMachinery Co., Ltd. was listed on the ShenzhenStock Exchange in August 1996 under theabbreviation “XCMG Machinery” with the stockcode 000425. As a core member of XuzhouConstruction Machinery Group Co., Ltd. (XCMG),it stands as a prominent enterprise within China’sconstruction machinery industry. Renowned for itsextensive scale, and comprehensive product range,it demonstrates competitiveness, influence, andstrategic signicance on a national level. Currentlyranked 382th in the Fortune Global 500, XCMGMachinery stands as a prominent name in China’sequipment manufacturing sector.
The Company’s predecessor traces back to HuaxingIron Factory established in 1943, a pioneer andfounder of China’s engineering machinery industry.It leads the industry’s internationalization efforts,continuously contributing to major constructionprojects worldwide. The Company’s productportfolio encompasses five main industries:
earthmoving machinery, lifting machinery, pilingmachinery, concrete machinery, and road machinery.Additionally, it includes strategic new industriessuch as mining machinery, aerial work platforms,
About XCMG Machinery
Corporate Culture
│ About XCMG Machinery│
th in the Fortune Global 500
environmental industry, agricultural machinery, portmachinery, and emergency rescue equipment. Itoversees more than 60 subsidiaries engaged in mainunits, trade services, and emerging businesses.The Company’s cranes, mobile cranes, andhorizontal directional drilling equipment continueto maintain their global leadership positions. Pilingmachinery and concrete machinery are entrenchedin the top global tier. Road machinery, truckcranes and tower cranes maintain their third-placepositions worldwide while aerial work platforms havealso climbed to the third place globally. Open-pitmining and transportation equipment hold steady inthe fth place worldwide. Excavator machinery hasadvanced to the sixth place globally and the secondplace in China. Loaders have risen to become theindustry leader in China.After over three decades of exploration andexperience, the Company has pioneered a uniquepath to going global. This approach integrates exporttrade, overseas greeneld investments, cross-borderM&A and global research and development into acohesive strategy. Through this model, the Companyprovides comprehensive product marketing services,full value chain services, and integrated solutionsto customers worldwide. The Company’s marketingnetwork covers over 190 countries and regionsworldwide.
Empower Solid Future
Solid to Succeed
Responsibility Virtue Fortitude◆ Questioning Spirit to Develop Critical Thinking◆ Revolutionary Spirit on Self-reection◆ Innovative Spirit to Seek and Adapt to Changes◆ Persevering Spirit to Overcome Challenges◆ Create Value for Clients ◆ Create Value for Stakeholders◆ Create Value for Society ◆ Be Dependable◆ Be Responsible ◆ Be Upright and Innovative◆ Be Open and Inclusive ◆ Pursue Excellence◆ Be Long-term Oriented ◆ Embrace Win-win Cooperation
Our Mission&VisionOur CoreValues
Our Spirits
Global Employ-ee Code ofConduct
Our Slogan
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT
Company Overview
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT
History
1993
1996
2009
2012
2014
20222017
2023
▲XCMG ConstructionMachinery Co., Ltd. wasfounded.
▲Xuzhou ConstructionMachinery Co., Ltd. (for-mer name) was listed onShenzhen Stock Exchangeunder the stock code of000425.SZ.
▲ XCMG Machinerycompleted the restruc-turing of its materialassets, making assetsincluding hoisting ma-chinery and core partsget public.
▲Xuzhou EngineeringMachinery ResearchInstitute, built with aninvestment of 1 billionyuan, was completed.▲The four major in-dustrial bases ofXCMG were complet-ed construction andcommenced full-scaleoperations.
▲XCMG’s first over-seas wholly-ownedsubsidiary, the manu-facturing base in Brazil,was completed and putinto operation.▲The XCMG US Re-search and Develop-ment Center, located inMinnesota
▲General Secretary XiJinping visited XCMGMachinery
▲XCMG Machinery
(stock code: 000425.
SZ) completed the
material assets reor-
ganization and realized
its main business of
construction machinery
publicly listed
▲General Secretary XiJinping participated in thedeliberations of the Jiang-su delegation and listenedto the report from XCMG.He fully acknowledged andexpressed high expecta-tions for XCMG’s devel-opment over the past fiveyears.▲The Intelligent Trans-formation, Digitalization,and Networking (IDN)project has been official-ly launched, marking thecommencement of thechairman “Number OneProject” for IDN coopera-tion agreements have beensigned with IBM and SAPto fully kickstart the initia-tive.
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│ About XCMG Machinery│
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT
Awards and Honors
XCMGMachinery rankedthe 146th place inFortune China 500
2023 ForbesChina GlobalizationInnovators Selection
Top 30 Brands
The AfricanHousehold WaterCellar Project for SDG 6Clean Water and Sanitation— XCMG Machinery’sAfrican Water Cellar Project
BestPractice Casesfor CorporateGovernance in 2023
XCMGMachinery rankedthe 212nd place in2023 Fortune China
China’s 500Most Valuable
Brands
Good PracticeCases for Boardof Directors of ListedCompanies in 2023
National
“Two-hundredEnterprise”Benchmark
Best PracticeCases forPerformance Briengin 2022
World’s 500Most InuentialBrands
HurunChina MetaverseCompanies with theGreatest Potential 2023Fortune magazineJuly 2023
ForbesJanuary 2024
China International Poverty AlleviationCenter and other institutionsJanuary 2023
China Association for Public CompaniesDecember 2023
Fortune magazineJuly 2023
World Brand LabJune 2023
China Association for Public CompaniesNovember 2023
General Office of Stated-owned AssetsSupervision and Administration Commission of
the State Council
March 2023
China Association for Public CompaniesNovember 2023
2023 CharityGala: SpecialContribution Awardifeng.comNovember 2023
World Brand LabDecember 2022
HurunJuly 2023
2023 Top DigitalInnovative MarketingAward (Silver Award)
Best Marketing& CommunicationsAward at 2023 DigitalMarketing Conferenceand Golden Bull AwardCeremonyTop Digital Organizing Committee
November 2023
PRRENDecember 2023
Annual Awardsfor Chinese Brandswith Global Impact
PR NewswireJune 2022
2022 TBI TopBrand InnovationAwardsTBI Organizing Committee
October 2023
2023- 2025International Well-known Brands focusedby Jiangsu Provincefor cultivation anddevelopmentDepartment of Commerce of JiangsuAugust 2023
│ About XCMG Machinery│
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT
XCMG Machinery attaches equal importance to the legal rights and interests of its stakeholders while payingattention to its own high-quality development. The Company fully understands the expectations and demandsof its stakeholders. It actively builds communication channels and engages in dialogues with stakeholders,responding to their needs and concerns.
Association nameAsia Quality Function Deployment AssociationChina Association for Public CompaniesNational Association of Financial Market Institutional InvestorsChina Construction Machinery AssociationChina Machinery Industry FederationChina Machinery Enterprise Management AssociationChina Federation of Industrial EconomicsChina Machine Building Quality Management AssociationZhantianyou Development Foundation of Science and TechnologyMechanical Design Branch, Chinese Mechanical Engineering SocietyChinese Association for QualityJiangsu Association for Public Companies
Association membershipStanding Director EntityDirecting EntityMembership EntityVice Chair EntityDeputy Chair EntityVice Chair EntityVice Chair EntityVice Chair EntityVice Chair EntityDeputy Director EntityStanding Director EntityVice Chair Entity
│ Responsibility Management│
Industry Organizations
Responsibility Management
Communications with Stakeholders ΔΔ
Key stakeholdersExpectations and requestsCommunication channels
Customers
Governmental bodies
and regulators
Suppliers
Communities
?Compliance with national laws andregulations?Alignment with national and regionalstrategies?Compliant operation?Tax payments under laws
?Supervision and assessment?Information submission?Work meetings
?Ocial website and WeChat publicaccounts?Information disclosure?Performance Brieng?Road show/Reverse Road show?http://irm.cninfo.com.cn?Other exchanges and interviews
?Trade union?WeChat public accounts?Questionnaires
?Customer satisfaction survey?Messages via WeChat ocial accountand ocial website?Customer visits?Procurement information disclosure?Supplier exchanges and training?Communication and exchanges?Daily visits?Transparent information
?Robust corporate governancemechanisms?Better information disclosure?Performance growth and return oninvestments?Management of investor relations
?Protection of basic rights?Better salaries and benets?Facilitating career development?Safe workplace?Work well-being?Ensuring product quality?Privacy protection?Responding to customer needs?Fair biddings?Sustainable supply chain?Driving economic development in thecommunity?Activities for public interest?Reducing the impact of productionactivities on community
Investors/shareholders
Employees
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│Green practices for leading low-carbon development │
Responses to UN SDGs
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│Green practices for leading low-carbon development │
XCMG Machinery actively responds tothe national “carbon peaking and carbonneutrality” goals, aiming to establish acompetitive advantage in green initiatives. Thephilosophy of “advancing green developmentand fostering harmony between humans andnature” is deeply embedded in the Company'sdevelopment strategy and productionmanagement framework. This drives thecontinuous optimization of resource and energymanagement, as well as the enhancementof waste treatment practices. These effortspropel the transformation and upgrading ofthe industrial chain towards green practices,empowering the Company to achieve high-quality and sustainable development. In 2023,the Company invested 110 million yuan inenvironmental protection.
Green practices forleading low-carbondevelopmentPercentage of newenergy consumption
19.64
%
Percentage of hazardous wastedisposed under laws
%Waste gas emission reduction165,999.03
Waste water dischargereduction
86,207.25
Ton
Total outgoing electricity supplied bycharging posts
804,906.89
kWh
Performance highlights in 2023
10,000m
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│Green practices for leading low-carbon development │
1Note: Scope 1 greenhouse gas emissions represent the direct emissions from sources owned or controlled by theCompany. Scope 2 greenhouse gas emissions include the indirect emissions generated from the consumption ofpurchased energy, such as electricity, steam, heating, and cooling.XCMG Machinery’s implementation mode for “carbon peaking and carbon neutrality”.
Climate change responses
XCMG Machinery actively addresses climate change by outlining a “carbon peaking and carbonneutrality” action plan and innovating to develop new energy products. Through practical actions, theCompany responds to the “carbon peaking and carbon neutrality” goals.
XCMG Machinery is committed to low-carbon transformation, responding to the “carbon peaking andcarbon neutrality” goals by unveiling the industry’s rst Carbon Peak and Carbon Neutrality Action Plan. TheCompany has set strategic milestones to achieve carbon peak by 2027 and carbon neutrality by 2049, outliningdevelopment pathways and R&D directions for the electric, hybrid, and hydrogen energy sectors. It hasestablished a carbon emission management platform, devised a green supply chain management system, andintroduced industry-wide “carbon peaking and carbon neutrality” management frameworks and benchmarks.Continuously enhancing carbon emissions monitoring and reduction initiatives, XCMG Machinery leads thecompany and the industry towards green and low-carbon transformation and advancement.
Top-level design ΔΔ
In 2023, the greenhouse gas emitted by XCMG Machinery totalled
391,285.29
tons, areduction of
33,269.01
tons with a ratio of 7.84% compared to 2022.
XCMG Machinery released its Carbon Peak andCarbon Neutrality Action Plan.
XCMG Machinery’s implementation mode for“carbon peaking and carbon neutrality” issupported by “two rings, three news and fourempowerments”.
Direct greenhouse gas emissions(scope I)114,190.60
Ton
Indirect greenhouse gasemissions (scope II)
277,094.69
TonTotal greenhouse gas emission
391,285.29
Ton
Greenhouse gas emission intensity
0.04
Ton / 10,000 yuan value of revenue
Table XCMG Machinery’s greenhouse gas management performance
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│Green practices for leading low-carbon development │
▲ In November 2023, the world’s rst electric loader production line, which produced the XC988-EV, thelargest-tonnage electric loader across the world, was put into operation at XCMG. Every 25 minutes, anelectric loader is o from this production line.
XCMG Machinery’s carbon emission management platformCase
▲ Figure The carbon management platform and system building eorts received provincial or ministerial awards
XCMG Machinery has strategically planned routes for new energy technologies such as electric, hybrid, andhydrogen, focusing on addressing technical challenges in new energy system integration architecture andintelligent electronic control systems. It has pioneered the introduction of unmanned and electric constructionmachinery as well as new energy heavy-duty trucks in the industry. Furthermore, it vigorously developscomplete sets of new energy products and hydrogen fuel cell systems, increasing the market share of greenproducts. The Company has been selected as one of the first leaders in China’s carbon peaking initiative,empowered by its commitment to green design and intelligent manufacturing for high-quality and sustainabledevelopment. In 2023, the new energy products from XCMG Machinery increased by 108.9% year-on-year.
Low-carbon products ΔΔ
In 2023, XCMG Machinery successfully tackled technological challenges in carbon tracking and managementthroughout the industrial chain, achieving transparency in control and traceability of energy carbon emissions.The Company established a control system for industrial chain carbon emission based on “total control andquota allocation” coupled with “two-dimensional coordination and four-category support”. Additionally, itdeveloped a corresponding industrial chain carbon emission control platform. These eorts not only supportthe Company’s alignment with China’s “carbon peaking and carbon neutrality” strategic plan but also providesystematic support for ongoing initiatives to strengthen carbon monitoring and reduction. In 2023, XCMGMachinery’s project titled Establishment of Carbon Emission Control System for Large Construction MachineryEnterprise Groups toward Carbon Integration was awarded the Second Prize of the 30th Jiangsu ProvinceEnterprise Management Modernization Innovation Awards. Furthermore, its project named Integrated Researchand Application of Carbon Reduction Management System throughout the Lifecycle of Large ConstructionMachinery Products was honored with the “Green Circulation” Outstanding Award at the 2023 BRICS IndustrialInnovation Competition.
In June 2023, XCMG Machinery, inpartnership with a mining enterprise inShanxi, officially deployed the world’sfirst hydrogen-powered electric loader,the XC968-FCEV, into operation. Thispioneering effort effectively addressesair pollution arising from fuel combustionat construction sites and notably reducescarbon emissions.
Diverse new energy productsCase
▲ Figure Hydrogen-powered electric loader
XCMG Machinery focuses on three areas:
mining, logistics, and automotive. It hasindependently integrated a 140kW hydrogenfuel cell system, with the prototypeperformance reaching an industry-leadinglevel.
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│Green practices for leading low-carbon development │
In December 2023, XCMG Machinery’s innovative 240-ton intelligent hybrid heavy-dutymining truck, the XDE240H, commenced operations at the Xiwan Open-Pit Coal Mine inShaanxi Province. This initiative, as the world’s rst, dramatically reduces carbon emissionsduring on-site operations, contributing to the industry’s low-carbon transition and theadvancement of intelligent and eco-friendly mining practices.
In September 2023, at the 16th China (Beijing) International Construction Machinery,Building Material Machines and Mining Machines Exhibition & Seminar (BICES 2023),XCMG Machinery unveiled 16 new energy-powered main units. These include the XGE105electric mining truck, the world’s first electric unmanned three-axle rigid mining truckXDR80TE-AT, the world’s largest hybrid all-terrain crane XCA300L8-HEV, the electricloader XC968-EV, the electric excavator XE215E, the plug-in hybrid pump truck HB62VH,the electric mixer truck G4802BIIVE. Additionally, the line-up features three categoriesof new energy aerial work platforms - straight arm, articulated boom, and scissor type -equipped with ternary lithium batteries and lead-acid gel batteries. These oerings providecomprehensive solutions for global users seeking new energy-powered products used atheights.
▲ Figure 240-ton heavy-duty hybrid mining truck
Diverse new energy productsCase
▲ Figure Unmanned mining truck▲ Figure New energy-poweredplatform for working at height
Risk typeRisk descriptionPotential impactAction
XCMG Machinery actively responds to the risks of global climate change, accurately identifying theopportunities and challenges for sustainable development in extreme weather and climate change. TheCompany identies and addresses climate risks in accordance with the TCFD (Task Force on Climate-related Financial Disclosures) framework, constructing an enterprise-wide circular low-carbon ecosystemand green transformation pathway.Table Climate change risks identied
The requirements fromgovernments worldwidefor identifying green-house gas sources,greenhouse gas ac-counting, and emissionsmonitoring are increas-ingly stringent.Driven by national poli-cies, there is a growingdemand for the applica-tion of technologies thatreduce carbon emissionsand lower energy con-sumption, as well as newenergy engineering ma-chinery products.Consumer demand isshifting towards greenand low-carbon options,intensifying market com-petition.
The attention from thepublic and stakeholderstowards the Compa-ny’s response to climatechange, adherence tothe “carbon peaking andcarbon neutrality” goals,and commitment to sus-tainable developmenthas increased.
Adding carbon emissionsmanagement, compliancemanagement, and settingup a digital carbon foot-print management plat-form will incur additionalcosts.The adoption of greentechnologies and thedevelopment of new en-ergy products will leadto increased operationalcosts.
The sales of traditionalconstruction machineryproducts will be aected,making products unsal-able.
Failure to meet the ex-pectations of the publicand stakeholders re-garding the Company’sgreen transformationand proactive responseto climate change riskscould result in customerloss, decreased investortrust, and diminishedcompetitiveness.
Enhance carbon auditingand carbon reduction ef-forts within the Companyto meet national require-ments for greenhousegas emissions monitor-ing and reporting.Improve the research anddevelopment frameworkand cultivate a team ofresearchers to enhancethe Company’s innova-tion capacity.
Strengthen market re-search to understandmarket demands; adap-tively adjust productstructure and marketpositioning to expand themarket share of greenproducts and optimizeindustrial presence.Enhance public opinionmonitoring, establishcrisis management plansfor negative publicity,foster transparent andefficient communicationchannels with stake-holders, and improve thequality of ESG informa-tion disclosure.
Climate related risks and opportunitiesΔΔ
Trans-formationrisk
Policy andlegal risk
Technologyrisk
Market risk
Reputationrisk
Climatechange risk
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│Green practices for leading low-carbon development │
Physicalrisk
Immediaterisk
Non-im-mediaterisk
Extreme weather eventssuch as low tempera-tures, snowfall, heavyrain, and typhoons occurmore frequently.
Global warming leads torising sea levels, result-ing in natural disasterssuch as high tempera-tures and droughts, aswell as deterioratingclimatic conditions inraw material productionareas.
Logistical resources willbe strained, exacerbatingpressure on road trans-portation and affectingvarious aspects of pro-duction and operationssuch as raw materialsupply and product de-livery, resulting in nan-cial losses.There is a risk of supplychain disruptions, leadingto the inability to deliverproducts, which in turnincreases productioncosts.
Monitor suppliers’ re-garding material prepa-ration and productionstatus, analyze therationality of procure-ment cycles; establisha mechanism for supplychain risk supervisionand management, createa weekly alert for anom-alies throughout theprocess and follow upon closure; diversify thesupply of raw materialsto reduce dependenceon a single supplier andsupply location, therebyenhancing supply chainstability.
Risk typeRisk descriptionPotential impactAction
Climatechange risk
Green production
XCMG Machinery places signicant emphasis on regulating environmental protection within its productionand operational activities. We strive to establish an environmentally friendly enterprise, promoteecological civilization, and drive sustainable economic and social development. As of the end of 2023,four subsidiaries had obtained national certification as green factories, while eight subsidiaries hadreceived provincial-level certication as green factories.
▲ Figure Green factory certicate for XCMG Machinery’s subsidiaries
XCMG Machinery strictly complies with environmental protection laws and regulations, including theEnvironmental Protection Law of the People’s Republic of China. The Company has established theEnvironmental Protection Supervision and Management Policy and set up an Environmental ProtectionCommittee and Office. Continuous efforts are made to enhance monitoring of critical environmentalindicators such as energy conservation, emissions control, energy consumption, and carbon emissions.XCMG Machinery signs HSE commitments, sets annual environmental protection targets, and prioritizesthe standardization of environmental management practices across its processes. As of the end of 2023,its 24 subsidiaries had their environment management systems certified according to ISO14001:2015standard.Table XCMG Machinery’s environment management targets and their completion in 2023
Environmental protection ΔΔ
Environment management objectives2023 outcomesNo signicant environmental event or pollutionEmissions and discharges in compliance with laws
No signicant environmental event or pollution occurred.100% compliance
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│Green practices for leading low-carbon development │
▲ Figure Certicate of ISO14001 environment managementsystem of one of XCMG Machinery’ subsidiaries.XCMG Machinery adheres to the principle of “unity of environmental, economic, and social benets”,placing significant emphasis on preventing and managing environmental risks. The Company hasdeveloped an “Emergency Response Plan for Environmental Pollution Accidents” and rigorously adheresto procedures for environmental impact assessments and necessary approvals for construction projects.It conducts regular monitoring of pollutant emissions, undertakes clean production audits, clarifiesenvironmental protection responsibilities, and enhances the quality of environmental management systemoperations.
Water resource managementXCMG Machinery continues its efforts to enhance water resource management by coordinating itsproduction entities to devise annual water usage plans, fully embracing water conservation principles,and preventing water wastage. In 2023, the total water consumption of the Company amounted to2,858,820 tons, and XCMG Heavy Machinery, a subsidiary of the Company, was awarded the honor ofWater Eciency Benchmark Enterprise” by the Xuzhou Municipal Government.
Energy and resource management ΔΔ
Water resourcemanagementmeasures by XCMGMachinery
Give priority to purchasing of andpromote the use of water-savingequipment and facilities.
Regularly inspect water pipes toprevent pipe bursting incidents.Enhance the promotion of water-saving concepts and organizetargeted training sessions.Rainwater collection and recycling,wastewater treatment and reuse,steam condensate water recycling.
Exclude high-water-consumingapplications, equipment, andprocesses from investment projects.
Improve water consumption measurement and analysis, conduct regularreviews of water-saving practices across departments, and compile andassess the requirements for water-saving technological upgrades.
Regularly inspect and maintain waterfacilities to prevent any instances ofleakage.
Water resource management measures by XCMG Machinery
XCMG Heavy Machinery was awardedthe honor of Water Eciency BenchmarkEnterprise” in Xuzhou.
Total water consumption2,858,820
Ton
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│Green practices for leading low-carbon development │Energy managementXCMG Machinery has established an Energy Management Policy and built an X-EMS energy managementplatform. This platform utilizes energy measurement, automated analysis, and real-time monitoring tocategorize core strategies for energy conservation and carbon reduction in electricity, steam, and naturalgas usage. This initiative signicantly enhances the eciency and transparency of energy and carbonemission management within the Company. With a focus on optimizing welding processes, upgradingcoating technology, converting air compressors to variable frequency, and integrating renewable energyapplications, XCMG Machinery has reduced energy consumption across its industrial chain, laying arobust foundation for its green and low-carbon transformation. As of the end of 2023, 15 subsidiarieshad their energy management systems certified according to ISO 50001:2018 standard. In 2023, theCompany achieved a comprehensive energy consumption of 0.0145 per 10,000 RMB of output value. For2024, it has set a target to further reduce this gure to 0.0134.Table Energy eciency management measures by XCMG Machinery
Developing dynamic optimization models for energy efficiency of weldingprocess, gradually implementing advanced technologies like high-speed laserwelding, optimizing shielding gas formulations, enhancing welding processeciency, and reducing energy consumption during welding by 70% to 80%.Developing energy efficient, low-emission, environmentally friendly coatingtechnologies such as low-temperature curing, and replacing direct-red gasprocesses with gas infrared heating to improve drying efficiency by 20% to25% and reduce energy consumption by 25% to 30%.Implementing frequency conversion for air compressors, achieving automaticstart-stop control, and enabling each compressor unit to save 132,000 kWheach year.Harnessing the potential of renewable energy sources like photovoltaic powergeneration, and utilizing the unused space on rooftops and parking shed roofswithin the Company premises for solar panel installation to generate electricity.As of the end of 2023, the Company’s installed photovoltaic capacity reached112 MW.
Welding processoptimizationCoating technologyupgradingAir compressor up-graded to variablefrequencyApplication of re-newable energysources
XCMG Machinery’s EMS platformBird’s view of XCMG Machinery’s
photovoltaic power generation facility
▲ Figure XCMG Machinery’s coating waste heat recycling system
XCMG Heavy Machinery’s certificate ofenergy management system
XCMG Machinery has achieved a breakthrough in the industry by developing a technologyfor recovering waste heat from high-volume, unstable, and low-temperature coatingexhausts. This accomplishment includes the successful development of composite phase-change thermal storage materials with high capacity, high stability and proper temperaturerange, as well as the design and development of Type 2 waste heat recovery systemsfor coating exhausts. In the system, the waste heat can be recovered at temperaturesas low as 20°C, reducing 30% of energy consumption and carbon emissions during themanufacturing process, providing essential decarbonization support for the Company’sgreen and low-carbon transformation.
Development of technologies for waste heat recyclingCase
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│Green practices for leading low-carbon development │Table Energy management performance by XCMG MachineryNatural gas consumption20,149,000
m
Electricity consumption
41,322.18
Petroleum consumption
2,067.21
TonSteam consumption
163,836.24
GJ
Diesel consumption8,506.50
Ton
Comprehensive energy consumptionper 10,000 yuan value of output
0.0145
Percentage of newenergy consumption
19.64
%Total new energy consumption74,145,373
kWh
Wastewater control
XCMG Machinery upholds the principle of “separate treatment for domestic and stormwater pollution” inits wastewater management approach. It establishes wastewater treatment stations in each productionentity and employs various treatment methods and technologies, including chemical and biologicalprocesses, tailored to the specific pollution factors of each unit. In addressing industrial wastewaterdischarge, the Company has adopted nanotechnology for water treatment, eciently reclaiming heavymetal elements from electroplating wastewater. Following treatment, both domestic and industrialwastewater undergo testing to meet the Grade III standard outlined in the Integrated WastewaterDischarge Standards GB/T8978-1996. Then, the wastewater is discharged into the sewage treatmentplant in the development zone for further management.Moreover, the Company employs an information-driven platform for real-time monitoring of CODdischarge, taking proactive measures to prevent discharge over the limits and thereby mitigating the riskof water source contamination. In 2023, the Company’s wastewater discharge amounted to 893,327.08tons, achieving a reduction of 86,207.25 tons compared to 2022.
Emissions and discharges management ΔΔ
Waste water treatment station
Real-time platform for monitoring
of COD discharge
Ton of standard coalequivalent/ 10,000 yuanvalue of output
Table XCMG Machinery’s wastewater control performanceTotal wastewater discharge893,327.08
Ton Total phosphorus
0.68
Ton
Suspended solids
12.88
Ton
Including: COD
54.68
Ton Chromium (VI)
0.000048
Ton
Ammoniacal nitrogen
4.89
Ton
Total chromium
0.000048
Ton
Waste water discharge reduction86,027.25
Ton Total nickel
0.0000419
Ton
Table Waste gas management measures by XCMG Machinery
Waste gas management
XCMG Machinery has accurately identied the two primary sources of air pollution: welding fumes andVOCs emitted during industrial coating. Tailored equipment management systems and targeted measuresare devised to ensure that the concentration of air pollutants meets both national and local standards.These actions are pivotal in winning the battle against air pollution. In 2023, the Company’s waste gasemission amounted to 1,626,350.92 million cubic meters, achieving a reduction of 165,999.03 millioncubic meters compared to 2022.
?Use of environmentally friendly welding gunssuch as suction arm type, blow-suction type,and integrated machine type.?The welding workshop upgrading withthe implementation of a dust-free system,including the construction of a centralizedblow-suction type smoke and dust collectionfacility that covers all welding areas.?Regular inspection, cleaning, and assignedpersonnel management of dust removalequipment.
?Improving the operational managementprotocol for the zeolite molecular sieve rotarywheel + regenerative thermal oxidation processequipment, with regular inspections to monitor itsperformance.?Use of on-line platform to monitor VOCs in realtime.?Installation of exhaust gas treatment equipmentleads to a VOCs treatment efficiency exceeding96%.
Welding fume management measures
Management measures on VOCs from coatingprocess
10,000kWh
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│Green practices for leading low-carbon development │ Table XCMG Machinery’s waste gas control performance
Total waste gas emissionIncluding: particles Sulfur dioxide Nitrogen oxides NMHC VOCsWaste gas emission reduction
10,000 m
TonTonTonTon10,000 m
1,626,350.92
109.93
3.67
53.27
101.84
165,999.03
IndicatorUnit2023
Solid waste managementXCMG Machinery continues to rene its system for the recycling and compliant disposal of manufacturingwaste. As a pilot entity in China’s remanufacturing initiative, the Company actively aligns with the StateCouncil and the National Development and Reform Commission’s “14th Five-Year Plan for Circular EconomyDevelopment”. It is establishing an efficient system for reusing industrial waste materials and advancingresearch and development in engineering machinery remanufacturing technologies. Through this initiative,the Company aims to create a comprehensive technical and equipment system for remanufacturing variousmachinery components and entire machines, including cranes, rotary drilling rigs, shield machines, hydrauliccylinders, pumps, and motors. This eort facilitates the value creation from and circular utilization of scrapresources like scrap steel, non-ferrous metals, and plastic waste, thereby supporting the realization of “zero-waste enterprises” and providing robust backing for Xuzhou’s “zero-waste city” pilot eort.Furthermore, the Company adheres to the National Hazardous Waste Directory, precisely identifying hazardouswaste generated throughout its production and operation procedures. It rigorously standardizes the collection,transfer, and storage processes of hazardous waste, which is entrusted to qualified entities regularly fordisposal. As of the end of 2023, the Company invested a total of 215 million yuan in the project for hazardouswaste centralized disposal. This project includes one production line for hazardous waste incineration and oneproduction line for waste packaging drum cleaning and reuse. Together, these facilities can handle 22,200tons of hazardous waste annually. As of the end of 2023, three subsidiaries under XCMG Machinery wererecognized as excellent enterprises in the special rectication of hazardous chemical use and management. In2023, the Company generated 5,989.34 tons of hazardous waste, all of which was disposed properly.
Subsidiaries under XCMG Machinery were recognized asexcellent enterprises in the special rectication of hazardouschemical use and management.XCMG Machinery’s hazardous waste warehouse
Table XCMG Machinery’s solid waste treatment performance
Table Noise management measures by XCMG Machinery
Total hazardous waste producedIncluding: organic solvent waste and waste containing organic solvent Mineral oil waste and waste containing mineral oil Oil/water, hydrocarbon/water mixture or emulsion Dye and paint waste Surface treatment waste Waste containing chromium Waste containing lead Waste acid Other wasteTotal hazardous waste disposed properlyPercentage of hazardous waste disposed under laws
TonTonTonTonTonTonTonTonTonTonTon%
5,989.34
74.06
920.81
426.48
2,988.27
433.36
23.79
91.61
119.81
911.16
5,989.34
IndicatorUnit2023
Noise managementXCMG Machinery strictly complies with laws and regulations such as the Environmental Noise PollutionPrevention Law of the People's Republic of China. Noise management is a core focus for the Companywhich emphasizes the control of noise sources. This is achieved through optimization of processes andupgrading equipment, thereby effectively reducing noise pollution generated during the production ofmechanical equipment.
Process optimization
Equipment upgrading
Promoting the adoption of electric grinding tools as alternatives to pneumaticones, and utilizing flexible grinding discs to reduce noise during grindingoperation.Upgrading air-operated impact wrenches to lithium battery-powered impactwrenches.
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│Green practices for leading low-carbon development │
XCMG Machinery focuses on five areas: electricity, water, paper usage, vehicles, and material withinoce premises. It emphasizes standardizing green oce practices among employees to prevent wastageof resources and energy, thereby maintaining energy eciency. Additionally, the Company installs electricvehicle charging stations so that employees are encouraged to opt for new energy vehicles, facilitatinglow-carbon transportation. In 2023, the Company’s usage of packaging materials reached 3,817.19 tons.As of the end of 2023, the Company owned 11 new energy ocial vehicles for business purposes, with347 electric vehicle charging stations installed. In 2023, the total external charging capacity of thesestations reached 804,906.89 kilowatt-hours.
Green oce ΔΔ
Green lifeXCMG Machinery seamlessly incorporates the principles of green development into its daily officepractices and operations. It establishes internal green oce action plans and holds ecological awarenesscampaigns. By promoting energy eciency and low-carbon business practices, the Company endeavorsto cultivate a green workplace environment and foster a culture of low-carbon living.
Prioritizing the use of energy-saving oce equipment such as LED lights and strengtheningthe management of high-energy-consuming devices.Use of energy-saving posters to eradicate the “always-on” lights and “daylight” lamps.Reducing the electricity consumption and standby power consumption of oce equipment,as well as minimizing equipment idling.Properly setting the working duration and temperature of air-conditioners.Electric power monitoring platform is used to enhance electricity consumption metering andanalysis.Displaying water-saving slogans and posters in public water usage areas to prevent “runningwater”.Strengthening the management of water-related equipment such as water dispensers, pipes,and faucets.Encouraging online work and electronic documents, advancing towards a paperless oce.Double-sided printing
Enhancing the management of vehicles for business purposes by strategically planning tripsand passenger occupancy.Distribution of production order management regulations and logistics management policy tostandardize the issuance and utilization of production materials.
Reducing electricityconsumption
Reducing water
consumption
Reducing paper
consumption
VehiclemanagementMaterial manage-
ment
Charging stations
Water-saving signs
Paper saving
signs
Electricity saving signs
Paper savings in office areasPacking materials consumptionConsumption of recycled packaging materialsTotal new energy vehicles for business purposesTotal charging stationsTotal outgoing electricity supplied by charging posts
TonTonTonUnitSetkWh
34.60
3,817.19
736.19
804,906.89
IndicatorUnit2023Table Green oce performance by XCMG Machinery
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│Green practices for leading low-carbon development ││Green practices for leading low-carbon development │
Seizing the opportunity presented by Tree Planting Day in 2023, XCMG Machinery coordinated springtree planting events. Leveraging enjoyable activities, the Company communicated the strategicimportance of advancing green development and fostering harmony in humanity and nature to allemployees. This initiative aimed to instill a deep commitment to the development philosophy that greenmountains and lucid waters are valuable assets.
Green activities ΔΔ
XCMG Machinery’s tree plantingactivity
XCMG Finance’s tree planting activity
│United in purpose for a better life │2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT
XCMG Machinery upholds a philosophy of responsiblebusiness management, continuously ensuring product qualityand elevating customer service standards. We deepen ourcommitment to innovation and research and development,enhancing our capacity for sustainable growth. Bystrengthening strategic partnerships and collaborating withinthe industry, we contribute to the “Belt and Road” initiative,fostering a mutually beneficial ecosystem. With a focus onpeople, we prioritize the well-being and rights of employees,nurturing talent and promoting their physical and mentalhealth. As a state-owned enterprise, we embrace socialresponsibility, take part in meaningful public welfare activitiesand demonstrate our steadfast commitment to sustainabilityalongside our partners.
United in purposefor a better life
Annual investment in research503,868.87
10,000 yuan
Total employee training expense
Correction rate of safety risks identied
%
Customer satisfaction
98.6
%
Total employee training expense
2,603.40
10,000 yuan
Table Performance highlights in2023
(SDGs) Responses to UN SDGs
As a global enterprise, XCMG Machinery places utmost importanceon product quality. The Company diligently complies with localregulations governing its operations, employing multiple measures toensure product quality. Furthermore, it enhances the development ofour quality management system and implements incentive mechanismsfor quality assessment, thereby reinforcing standardized operatingprocedures. The Company has released the Standard for ManagingKey Quality Performance Indicators of Products, monitoring monthlyquality metrics, analyzing any anomalies, and facilitating targetedenhancements for entities with abnormal metrics.The Company actively fulfills its responsibility for product qualityby establishing a robust quality control and inspection system. Itrigorously oversees product quality to ensure product reliability andexcellence in the market. The Company’s ISO9001 quality managementsystem certicate remained valid in 2023.The Company implements specialized tracking and scheduling for critical exports, swiftly supervising andresolving quality issues concerning products to overseas markets. We implement tracking and scheduling forkey exports, ensuring quality control in aspects such as product reliability, contract requirements, and productappearance. We conduct specialized supervision for over 10 signicant quality issues reported from overseasregions, organizing root cause analysis and addressing market-related problems. As of now, overseas regionshave reported 331 issues regarding the quality of overseas products and improvement suggestions through theCSM system. The factories for producing main units have resolved 312 issues, with a resolution rate of 95%.
Quality monitoring ΔΔ
Quality assuranceXCMG Machinery is committed to thorough implementation of quality management and operationalexcellence principles. By continually upgrading its technology, refining research and developmentprocesses, and actively engaging in customer demand research, the Company ensures seamlesscommunication channels with customers. This dedication allows us to deliver premium products andelevate both product quality and customer service standards.
▲Figure ISO9001 certificate ofXCMG Machinery
XCMG Machinery has identied pain points in product quality that often arise during new product development,design changes, manufacturing process changes, and the introduction of main units into new markets. Inresponse, the Company has formulated the Initial Material Management Process, which categorizes andmanages initial materials based on the degree of impact on product characteristics and quality resulting fromchanges. We have implemented a graded classication management system for critical changes in the researchand development process, encompassing new product development, design changes, 5M1E changes duringmanufacturing stage, and the introduction into new markets during the sales process. This ensures stable andcontrolled process management for product quality.To drive improvements in product quality, the Company has initiated a targeted eort focusing on enhancingcorporate quality indicators. In 2023, a total of 48 projects under the eort were initiated across 24 main unitand component entities, facilitating the ecient progress of quality enhancement work.
XCMG Machinery has coordinated with its subsidiaries and branches to identify and develop a checklist for inspectingpotential weld fractures, as per the Macroscopic Inspection Requirements for Destructive Weld Testing of EngineeringMachinery. Standardized inspections for such risks are conducted regularly. Through weld fracture inspection program,we conduct in-depth analysis of weld seam failure causes, regularly monitor the welding quality of vulnerable weld seams,and facilitate the enhancement of welding process capabilities. This work ultimately promotes the improvement of productreliability.
XCMG Mining Machinery performed reliability validation project for XDE440 product exported to Peru along with specializedtests on braking, fuel consumption, and lifting capabilities.The Company undertook a specialized correction plan for its high-end market products in Australia. Under the correctionplan, a total of 789 units were expected for rectication, with 779 units successfully completed, resulting in a completionrate of 98.7%.
Case description
In 2023, XCMG Machinery launched 373 Six Sigma projects, spanning across 22 subsidiaries. Among these, there were 304Green Belt projects and 69 Black Belt projects. In terms of project selection, particular emphasis was placed on addressingtechnical and quality challenges, with quality and research and development projects accounting for 88.2% of the totalprojects. The Company provided a 96-day training course for 12 classes. A total of 684 individuals passed the certication,with a pass rate of 88.6%.
The Company’s customer service center diligently follows up with a callback procedure, ensuring that callbacksare made within 24 hours after customer calls to confirm that issues have been effectively addressed orresolved. Furthermore, specialized customer surveys are conducted to understand customer needs. In 2023,the customer service center made 497,000 outbound calls for customer callbacks, averaging 42,000 calls permonth.
XCMG Machinery’s ecient XPS (lean six sigma) managementCase
XCMG Machinery is committed to delivering exceptional after-sales service. To this end, we have establishedthe After-Sales Service Management Policy which outlines management requirements regarding servicestandards, service forms, code of conduct, as well as training and development. Customers can accessservices through the customer service hotline at 4001109999. In the scal year 2023, the customer servicecenter received 396,000 customer calls, averaging 33,000 calls per month.The Company has the Customer Complaint Escalation Management Policy in place, oversees every aspect ofcustomer complaint accepting, dispatching, process supervision, escalation, and closure. This ensures swiftand eective resolution of customer complaints, protecting their rights, and enhancing the quality of after-sales service.
Rights and interests of customers ΔΔ
Rate of product/service-related complaints
0.22
%
Rate of responses to product/service-related complaints
%
Rate of product/service-relatedcomplaints resolved
91.20
%
XCMG Machinery employs measures such as data encryption, restricting data access, and employee trainingto comprehensively safeguard customer privacy. We utilize encryption software and watermarking to ensuredocument security, while restricting access to customer information to only essential personnel. Additionally,regular training sessions on data privacy protection are conducted for employees to ensure compliance withprivacy policies. In 2023, the Company experienced no customer data breach.
XCMG Machinery has established the Supplier Evaluation Management Regulations which specifycomprehensive procedures for supplier admission, assessment, evaluation, penalties, and exit management.Emphasizing supplier risk management, information management, and integrity management, these regulationsserve as key components of the Company’s supply chain management, fostering a high-quality and sustainablesupply chain. This approach aims to enable supply chain management system standard, regulated, process-oriented, procedure-based and digit-driven.
Sustainable supply chain ΔΔ
Customer satisfaction for callbacks
98.6
%
Table XCMG Machinery’s measures for improving customer service
We have maintained 24-hour completion rate reports and satisfaction reports tostrengthen the management and control of service timeliness. Furthermore, we oversee andsupport lagging entities in developing specialized improvement plans and ensuring theirimplementation.A monthly report on service parts is prepared and submitted to relevant leadership,reinforcing service awareness and eectiveness, thereby enhancing service timeliness andsatisfaction.Quarterly, the service resources for each subsidiary, including the number of servicepersonnel, service points, service vehicles, and spare parts inventory, are allocated.The Company focuses particularly on areas with limited service resources, continuouslyadvancing the optimization and reinforcement of service resources.
The Company identifies environmental and social risks in procurement, production, andlogistics, including extreme weather events, energy resource utilization, policy changes,wars and conflicts, and shifts in market demand. It also performs risk assessment andanalysis, and develops targeted mitigation measures accordingly.
StepMeasures
Indicator manage-
mentMonthly reporting
Ensuring serviceresources
Supply chain riskmanagement
The Company has developed the Green Supply Chain Management Policy, set up the Green Supply ChainManagement Committee and Office, and created a low-carbon supply chain control platform. We havealso created a digital system for carbon footprint accounting, assessment, and traceability of supply chaincomponents. This system integrates the green and low-carbon concept into various business processesincluding product R&D, procurement, logistics transportation, manufacturing, and recycling. It aims to promotecarbon footprint accounting throughout the entire industry chain, reduce the carbon footprint of productsthroughout their lifecycle, and create a digital and intelligent system for XCMG Machinery that encompassescarbon monitoring, analysis, and reduction. This initiative will support XCMG Machinery’s efforts into low-carbon supply chain development and achieve resonance with suppliers in low-carbon eorts. As of the end of2023, 1 subsidiaries had their green supply chains certied.
XCMG Machinery’s management measures for green supply chain
In alignment with China’s carbon peaking and carbon neutrality strategy and the implementationof the Company's corresponding action plan, XCMG Machinery conducted a training sessionon carbon footprint accounting and management for component products. This initiative aimsto advance the low-carbon development of the industry chain. During the training session,detailed presentations were given on domestic and international low-carbon policies, carbonfootprint standards, carbon footprint accounting frameworks and processes, as well as casestudies of carbon footprint applications in the supply chain. Representatives from 100 supplierrepresentatives taking charge of carbon management engaged in discussions exploringstrategies for sustainable development in the supply chain, focusing on green and low-carboninitiatives.
Supplier training on carbon footprint managementCase
StepMeasures
The Company has incorporated ESG factors such as waste management, research andutilization of new energy and materials, occupational health, and environmental safety intosupplier admission standards.The Company dynamically monitors and manages multidimensional data related to supplierproduct quality and material usage, and performs regular supplier quality performanceevaluations.The Company actively organize exchanges and visits with strategic suppliers, and trainingsessions to enhance supplier quality cost management, carbon footprint calculation skills,and overall management capabilities.
The Company has devised an industry chain-wide platform for carbon footprint accounting, assessment, and traceabilitysupported by data collection, analysis, and application and aimed at serving the entire industry chain, facilitatingcarbon neutrality. This platform aims to promote the development of a low-carbon supply chain and enable detectable,measurable, and traceable carbon emission data across all stages of its value chain.The Company periodically discloses information regarding the environmental system certifications, progress inenvironmental initiatives, achievements in energy conservation and emission reduction targets, as well as pollutantemissions and other green management practices by upstream suppliers. This facilitates the sharing of greeninformation on the supply chain management platform and enables effective monitoring of suppliers’ energy andresource consumption, as well as their environmental management performance.The Company monitors suppliers regarding their environmental system certications, 3C certications, and hazardoussubstance process management system certifications. It performs regular supplier risk assessments based onenvironmental indicators such as resource and energy management capabilities, material risk management capabilities,and compliance with environmental requirements.
The Company has established a traceable and verifiable green recycling system incollaboration with certified waste recycling organizations. This system will handle thecollection, processing, and reuse of packaging materials and discarded products.Additionally, we will promote the reuse of supplier product packaging and providecustomized packaging solutions by using renewable and biodegradable materials. Thisapproach aims to standardize packaging, minimize waste during material transportation,and reduce environmental pollution.The Company has achieved the full coverage of battery-powered electric forklifts,strategically planned logistics routes to reduce energy consumption and air pollutantemissions.Leveraging the 3+2 system platform, the Company worked to establish the XCMG GlobalDigital Supply Chain Platform, centered around intelligent procurement decision-makingand digitized warehouse functionalities. Focused on the “1-3-1” core line of supply chainmanagement, this platform is designed to foster a collaborative supply chain system withsynergistic eects, driving deep cooperation among upstream and downstream enterprisesto enhance resource and energy eciency.The Company has revised the Integrity Cooperation Agreement and other transparencyprocurement regulations to achieve 100% coverage of supplier integrity agreements.Leveraging a digital supply chain management system that can be monitored real time toensure fairness, transparency, and eciency at every stage of the supply chain.
Procurement andsupplier management
Packaging andlogisticsmanagement
Information systemmanagement
Social responsibilitymanagement
Cooperations and exchanges with NanjingUniversity of Aeronautics and Astronautics
Participating in the first Engineering MachineryTechnology Innovation Conference 2023
XCMG Machinery - Baosteel Joint Lab
Hosting the IMIE2023 (Intelligent ManufacturingInternational Summit and Expo).
Dana Technology Exchange Day
XCMG Machinery upholds a commitment to technological innovation, actively driving research projects,and pursuing excellence in innovative outcomes. The Company consistently strengthens its technologicalmanagement system, fostering extensive collaborations with experts and scholars from both within andoutside the industry to drive notable advancements in technological innovation.
Technological innovation ΔΔ
Technological innovation frameworkXCMG Machinery actively builds a “1+6+N” technological innovation framework, featuring high-end,intelligent, green, service-oriented and international to drive technological innovation. The Companyhas implemented distinctive XCMG-specic policies focusing on organizational innovation, institutionalinnovation, management innovation, technological innovation, and product innovation. These include theResearch and Development Management Policy, and the Technological Innovation Project ManagementMeasures among others.The Company has formed a Technical Committee, tasked with decision-making, resource allocation,and external collaboration in technological innovation initiatives, to explore engineering technologiesand provide solutions for global construction and sustainable development. As of the end of 2023, atotal of 35 major research and development platforms at or above the provincial level were established.These include one national-level Industrial Design Center, one National Key Laboratory for IntelligentManufacturing of High-end Engineering Machinery, one CNAS-accredited testing center for engineeringmachinery whole units and parts as well as two provincial-level manufacturing innovation centers, eightprovincial-level engineering research centers, eight provincial-level research centers for engineeringtechnologies, and 14 provincial-level enterprise technology centers.
Academic exchanges
XCMG Machinery actively participates in technical exchanges within the industry. Leveraging itsadvantages in industry-university-research resources, the Company extensively collaborates withuniversities, research institutions, and other entities, fostering deep and comprehensive partnerships. Thishas led to the establishment of interdisciplinary industry-university-research-application consortia. Thiscollaborative model has contributed to numerous technologies reaching leading positions internationally,domestically, and within the industry.
Table XCMG Machinery’s innovation performance
Table XCMG Machinery’s participation in academic exchanges
Annual R&D costs503,868.8710,000 yuan
New projects in which the Company participated in 2023
Total patents authorized in20231,674件Inventions authorizedUtility models authorizedIndustrial designs authorized
National standardsIndustrial standardsGroup standards
Standards newly formulated in 2023
件
Total R&D personnel
6,795
Software copyrights granted
Software copyright applications
Total software copyrights atthe year end
1,229
XCMG Machinery is actively involved in the Belt and Road initiative. Guided by the principles of mutualconsultation, joint construction, and shared benets, we prioritize openness, sustainability, and integrity inour eorts to contribute to the high-quality development of this initiative. Seizing upon opportunities forgrowth, we accelerate our global expansion and practice our internationalization strategy. Our presencealong the Silk Road serves as a testament to our industrial prowess, propelling our agship machinerytowards greater global recognition. Our Belt and Road eorts go beyond mere trade, aiming to integratethe global value chain. With nearly 40 overseas subsidiaries and over 300 overseas dealers, we have ourproducts available to 190 countries and regions worldwide, covering over 95% of countries and regionsalong the Belt and Road. Together with countries along this route, we share opportunities, pursue mutualdevelopment, and foster collective prosperity, paving the way for shared progress.We remain steadfast in localized integration, driven by our dedication to serving local communitiesand residents. With solutions, ideas, and strength, we play an active role in local developmentinitiatives. Through localized projects, we aim to deliver high-quality Belt and Road construction,and deepen cooperation and communication with local stakeholders to facilitate the enhancement oflocal infrastructure. We provide comprehensive services to projects, including product adaptabilityimprovement, spare parts, on-site engineers, financial assistance, and localized currency settlement.Through local employment eorts and the development of local talent, we contribute to the sustainabledevelopment of local economies and societies. In 2023, we successfully established overseas trainingcenters in multiple countries along the Belt and Road, and made the most of advanced technologies suchas big data and 5G to expedite the supply of spare parts overseas and ecient services to our globalcustomers.
Technological achievements
XCMG Machinery consistently optimizes its management of research projects. This includes theimplementation of project registration and classication systems. Monthly, the Company conducts qualitychecks on key project milestones and issues warnings for critical checkpoints to strengthen control overproject progress. Furthermore, the Company strengthens collaborative eorts with industry partners byappointing specialized leaders to facilitate synergy between research and industrial operations. In termsof engineering delivery, the Company has initially established standards for project outcomes in productdevelopment and component research, driving the transition from technology delivery to engineeringdelivery.Table XCMG Machinery’s important achievements in technological innovationR&D awardsAchievements
The world’s largest tonnage wheeled crane, the firstXCMG XCA3000, independently developed in China,has completed its rst assignment in Yingkou, LiaoningProvince.XVM1600, the world-rst vertical milling mining machine,jointly developed by an enterprise from Shanxi and XCMGInfrastructure, successfully underwent on-site trial tests.The 2000-ton crawler crane XGC28000 completed thefan assembly for the world’s first floating wind-fisheryintegration project, i.e., “Guoneng Gongxiang” in Fuzhou.
XCMG released China’s rst 40-meter telescopic aerialre truck with straight and articulated boom.
The world’s rst hydrogen-powered electric loader, theXC968-FCEV, developed through collaboration betweenXCMG and a large mining enterprise based in Shanxi, hasbeen successfully deployed in Shanxi Province.
In 2023, XCMG Research Institute’s project titled Estab-lishment of Carbon Emission Control System for LargeConstruction Machinery Enterprise Groups toward CarbonIntegration was awarded the Second Prize of the 30thJiangsu Province Enterprise Management ModernizationInnovation Awards.The project named Integrated Research and Applicationof Carbon Reduction Management System throughout theLifecycle of Large Construction Machinery Products washonored with the “Green Circulation” Outstanding Awardat the 2023 BRICS Industrial Innovation Competition.The ZL201830721208.1 Crawler Crane project submittedby the Industrial Design Center of the Research Institute,clinched the China Industrial Design Gold Award.
The Research and Application of Cable Reel and Auto-matic Extension Control Method for Wheeled Crane Tele-scopic System, from XCMG Heavy Machinery, and theKey Technologies and Industrialization of Ultra-large PileFoundation Construction Equipment for Large Diameterand Hard Strata, from XCMG Infrastructure have beenawarded the First Prize of Science and Technology Prog-ress Award for China Machinery Industry.XCMG Machinery’s project titled Research and Applica-tion of Key Technologies for Intelligent Green ContainerTerminal was awarded the Special Prize of the Scienceand Technology Award by China Ports and Harbors Asso-ciation.
The Belt and Road ΔΔ
An ecosystem for mutual benetsXCMG Machinery is committed to openness and mutual benet, collaborating closely with partners toachieve exceptional results together. Through deep collaboration and close communication, the Companynot only strives to foster a tighter industrial ecosystem but also advances global resource sharing andcomplementing strengths, thereby forging a bright future of coordinated development.
Jakarta MRT ProjectSeveral XCMG XEG2600 telescopic excavators were contributingto the construction of the second phase of the JakartaMRT North-South Line project. Serving as pioneers in thisinfrastructure endeavor, they were tasked with the critical role ofinitial earth excavation.
Upgrading of the National Road 31/33 in CambodiaMore than twenty units from XCMG Machinery, including roadrollers, bulldozers, and graders, were involved in the upgradingand reconstruction of the National Road 31 and 33 in Cambodia.This project holds significant importance in promotingtransportation infrastructure development and enhancing thequality of roads in Cambodia.
Since 2016, XCMG Machinery has partnered with the Poverty Alleviation Foundationto address the long-term drought challenges in Ethiopia by constructing householdwater cellars in affected areas. The Company employs rooftop and ground-level waterharvesting technologies to eciently collect rainwater during the rainy season. Followingltration and treatment, the water is distributed to villagers for drinking and agriculturalneeds during the dry season, alleviating water scarcity issues for the community. As of theend of 2023, the Company had constructed 161 household water cellars and 20 schoolwater purication systems, meeting the basic water needs of local farmers for domestic,livestock, and production purposes during the dry season.
Addressing drought and extreme weather to build a secure future for water sourcesCase
▲Figure XCMG Machinery’s household water cellar project (phase IV) 2023
▲Figure XCMG Machinery's overseas employees
The Company actively pursues aninternationalization strategy, prioritizing theutilization of local talent to support its cross-border business development. XCMG Machinerystrengthens recruitment, training, and managementof local talent. The Company upholds a policyof localized management, giving priority tothe employment of residents. We providethem with employment opportunities, cultivatetheir professional skills, and strengthen localemployment management. This approach respectslocal cultures, enhances welfare systems, andensures the rights of our employees. As of theend of 2023, the Company had over 5000 localemployees, effectively supporting the operationsof overseas subsidiaries.
Localized management ΔΔ
Swak Dam Project in Kenya13 XCMG XS263S road rollers were supporting the constructionof the Swak Dam in Kenya. The dam’s civil engineering in whichXCMG Machinery played a role covers a stretch of about 1.5 km,with a total embankment volume of approximately 12 million cubicmeters.
Dangote Renery Project inNigeriaSince the initiation ofthe Dangote project,several hundred XCMGemployees and over 2000units of XCMG productsspanning cranes, trucks,concrete machinery, pilingmachinery, excavators, androad machinery have beenengaged in the construction.The project is anticipatedto deliver 12 gigawatts ofelectricity to the local area.
In July 2023, XCMG and Toyota signed a strategiccooperation agreement in the field of hydrogenenergy. This agreement aims to establish a Xuzhou-based production center manufacturing hydrogen-powered machinery and core component, therebycatalysing the comprehensive development of thehydrogen industry chain in Xuzhou.
In November 2023, XCMG Machinery and China RailwayTenth Bureau signed a letter of intent for cooperationin new energy equipment. Both parties have gainedmutual benefits in areas such as resource sharing,market expansion, and cost management. Both partieslook forward to close collaboration in overseas projects,jointly undertaking high-quality orders, and committingto delivering premium projects. This aims to furtherenhance their influence in the international market andcreate a brighter outlook for cooperation.
XCMG Machinery signed a Strategic CooperationAgreement with Chongqing Expressway, aimingfor technological research in the construction andmaintenance of expressways, with a particular focuson the development of smart construction technologiesand platforms. The collaboration also encompassesextensive exchanges in talent development, technology,culture, and other areas, with a commitment to drivingthe advancement of the intelligent construction marketand fostering mutual success. XCMG Machinery and Toyota signed cooperation agreement in the eld of hydrogen powerXCMG Machinery deepened its collaboration with China Railway Tenth Bureau
XCMG Machinery and Chongqing Expressway signed a strategic cooperation agreement
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CaseXCMG Machinery collaborates with “strategic partners” jointly exploring new opportunities forcooperation. Building on close collaboration, we strive together to achieve outstanding performanceand share the fruits of success. Through collaboration, XCMG Machinery will leverage its technologicalprowess and innovative capabilities, working with its strategic partners to reach the pinnacle of theindustry together.
Strategic cooperation ΔΔ
XCMG Machinery is active in industry exchanges and knowledge sharing, continually updating itsfoundation for innovative technologies, and propelling the industry towards higher-quality development.With a dedication to building a prosperous and sustainable future, the Company contributes to theindustry’s innovation and progress. XCMG Machinery’s involvement injects new momentum into drivingindustry development.
Industry advancement ΔΔ
In September 2023, XCMG unveiled its “Steel Intelligence”to the world under the theme of Digital and Green,showcasing 28 agship products across 8 major sectorsalong with intelligent technological achievements andcomprehensive solutions.
In September 2023, XCMG Machinery hosted the 2023China Engineering Machinery Technology InnovationSummit and the Prime Suppliers 500 Conference forComponents. During the event, 11 individuals from XCMGwere selected for the 2023 China Engineering MachineryTechnology Innovation Top 50, while 5 XCMG entitieswere included in the 2023 China Engineering MachineryComponents Prime Suppliers 500, making it the enterpriseharvesting the most honors in the industry.
In 2023, XCMG Machinery utilized numerous innovativeadvancements in the film The Wandering Earth 2. Thesedevelopments, tailored for complex environments includinghigh altitudes, extreme temperatures, and harsh conditions,centered on intelligent, green, and high-end technologies.Notably, unmanned and new energy equipment accountedfor over one-third of the total equipment used in thefilm. These super equipment ensured the productionof top-quality footage, showcasing China’s industrialmanufacturing capabilities.
XCMG Machinery showed up in BICES 2023
XCMG Machinery invited to Engineering Machinery Technology Innovation Conference 2023
XCMG Machinery products showed in the Wandering Earth II
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The Company strictly abides by the Labor Law of the People’s Republic of China, the Labor ContractLaw of the People’s Republic of China, and various local regulations. It has implemented internal policiesincluding the Labor Contract and Personnel Prole Management Policy, Employee Attendance and LeaveManagement Regulations, and Employee Departure Management Regulations. It lawfully signs laborcontracts with employees, prohibit child labor and forced labor, and rejects all forms of discrimination inlabor practices.
Lawful employment ΔΔ
Protection of rights andinterests of employeesXCMG Machinery is committed to fulfilling its responsibilities to employees by adhering to legalemployment practices. We continuously optimize our employee welfare system, implement comprehensivetalent development programs, and enhance our employee care initiatives, ensuring a nurturingenvironment for all employees.
Total employees28103
Employees by gender
MaleFemale
238134290
Domestic employees by ethnic groupMinor ethnic groupsNon-minor ethnic groups
Employees by region
Jiangsu ProvinceOther provinces in ChinaOverseas
1559977504754545022653
Employees by age
30 years old or below30 - 50 years old50 years old or above
8407178041892
The Company has developed internal policies including the Employee Compensation Management Policyand the Employee Performance Management Policy. We distribute performance bonuses, adjust salariesand positions based on performance review results, build a welfare system including supplementarymedical insurance and corporative social security and accumulation fund, implement employee stockownership plan and oer benets such as transportation subsidies, heat allowances, and meal allowancesto employees.
The Company continuously enhances its talent development system to cultivate a top-tier talent pool.We focus on two strategic priorities, i.e., internationalization and technological innovation to establisha qualification framework and explore the intrinsic laws of talent cultivation. With the “LayeredClassification and Grading” talent development framework and the introduction of new conceptsand initiatives, we strive to enhance the alignment of talent cultivation with Company strategies andits integration into business development. This effort has led to the cultivation of a cohort of high-level individuals distinguished by their integrity and competence. Utilizing a blend of online and oinemethods, centralized and decentralized approaches, and theoretical and practical training, we strengthenthe development of talent across elds including technology, management, marketing, manufacturing,and internationalization. This ensures a continuous influx of talent to fuel the achievement of theCompany’s ambition.
Employee assistance
XCMG Machinery cares for employees facing diculties by establishing assistance standards. In 2023,the Company distributed 454,000 yuan to employees in need. We routinely visit employees facingdiculties, oering nancial assistance to those who are hospitalized or ill, along with their families. In2023, the total expense for employees facing diculties reached 2,565,300 yuan.In 2023, the Company conducted employee care activities in summer and winter, distributing 120,000boxes of Huoxiang Zhengqi Oral Liquid for heat-exposed workers. Additionally, in response to specialcircumstances such as employee retirement or the passing of family members, we organized 160 carevisits, reaching 98,266 family members of employees. These efforts demonstrated our care for ouremployees.
Salaries and benets ΔΔ
Career development ΔΔ
Employee care ΔΔ
Total training cost2,603.40Total participants399,278
Average training duration per employee
72.81
hour
Including: senior managers
Including: Average trainingduration per senior manager
25.82
hour
Average training durationper middle manager
81.44
hour
Average training duration peraverage employee
73.85
hour
Middle managers44,264
Average employees354,871
Total training sessions10,067
Total training duration1,365,970.30
hour
Total employee assistance expense
374.9
10,000 yuan
XCMG Machinery held the biennial “X Creator Challenge” centered around the theme of “usingtechnology to safeguard lives”. This event was jointly organized by XCMG Machinery, ChinaAcademy of Safety Science and Technology, and the Industrial Culture Development Centerof MIIT. The challenge aimed to unite innovative forces for driving the industry towards atransformation and upgrade focused on green, safe, and sustainable development, whilefostering high integration between industry and design. The event had four stages: globalrecruitment, offline sessions, preliminary rounds, and final showdowns. A total of 2,978teams from around the world registered, resulting in 261 outstanding submissions. Throughoine sessions, live broadcasts, and specialized coaching sessions, we provided tailoredguidance to over 200 participants, enhancing the quality of their submissions.
XCMG Machinery held “X Creator Challenge”Case
10,000yuan
Sending warmth in winter
Basketball contest
Swimming contest
Helping employees in diculty
Ping-pong contest
Figure Nursing room in XCMG Machinery
Caring for female employeesXCMG Machinery has set up a Women Committee tooversee the proper execution of “Special CollectiveAgreements for the Protection of Women Workers’Rights” in subsidiaries, and to ensure the effectiveimplementation of these agreements. The Companyactively allocates resources for comprehensive careinitiatives for female employees. These include theprotection plan for women in menstrual period,pregnancy, perinatal period, breast-feeding period,perimenopause, health check-ups, and screeningsfor breast cancer and cervical carcinoma. We payparticular attention to the work and family situations
Employee activitiesXCMG Machinery values its employees and enriches their work and life by organizing diverse culturaland sports activities such as sports competitions, artistic performances, team-building exercises, andbirthday celebrations.Number of sports and cultural activities foremployees
Number of employee care activities
of female employees returning to work after maternity leave. Additionally, we have introduced dedicated diningaccess for pregnant and breastfeeding women. In 2023, 78 caring events were held for female employees, withan investment of approximately 2.78 million yuan.The Company actively attends to employees’ family care needs by establishing a more nurturing workenvironment. To this end, we have set up nursing rooms to offer convenient breastfeeding and caregivingservices for female employees.
The Company has established a 10-minute tness routine. In 2023, based on employees’ needs, XCMGentities organized 953 cultural and sports activities, including mini-marathons and fun sports games.More than 80,000 individuals participated in these activities which contributed to fostering a positivework atmosphere, promoting employees’ physical and mental well-being, and demonstrating ourcommitment to comprehensive employee care.
Safety management system
XCMG Machinery strictly adheres to 15 internal safety rules and has established a safety managementstructure with the Chairman as the primary responsible individual. This structure oversees comprehensivesafety supervision and occupational health protection throughout the Company, implementing andenforcing the XCMG Ten Safety Guidelines (2023 Edition) to build a culture of inherent safety within theCompany.
Safety risk managementXCMG Machinery strictly adheres to safety production laws and regulations, establishing a graded riskcontrol mechanism. The Company conducts annual risk identification and professional reviews for allemployees, with the results submitted to the Safety Production Risk Reporting System for IndustrialEnterprises in Jiangsu Province. In response to identied risks, the Company formulates correspondingrisk control measures which are regularly updated. This includes risk warning signs, emergency responsecards, clearly dened and streamlined emergency response procedures, emergency contact numbers, andkey emergency supplies. The Company has developed and implemented the Production Safety AccidentEmergency Response Plan, each subsidiary has created comprehensive plans, specialized plans, and on-site disposal protocols to minimize the potential impact of risks. As of the end of 2023, the Companyexperienced no major safety risk.
Workplace safety ΔΔ
Safety mechanismXCMG Machinery consistently emphasizes on workplace safety, continually rening safety mechanismsto ensure the well-being and health of its employees. With stringent safety management systems inplace, the Company provides regular safety training, drills, and assessments to enhance employees’safety awareness and emergency response skills. The Company has instituted a comprehensive safetyinspection mechanism, under which, regular checks on production equipment, work areas, and employeeconduct are checked to promptly detect and rectify any potential safety hazards.
In May 2023, XCMG Machinery issued the SafetyManagement Rules for Mid and Night Shifts whichstipulate the safety duties of shift factory leadersand full-time safety inspectors, inspection frequency,and record-keeping requirements for mid shifts andnight shifts. The rules also specify the inspectionfrequency requirements for major unit leaders, safetymanagement officers, and environmental protectiondepartment heads, and outline eight penalty items.
XCMG Machinery’s Safety Management Rules for Mid and Night ShiftsCase
▲Figure Safety risk warning cards
▲Figure XCMG Machinery’s structure for safety managementWorkplace safety managers
Registered safety engineers
Safety ocers in branches
ChairmanPresidentVice President
EHS Dept.Excavator Machinery
Business – EHSDept.
Earth MovingMachinery Business– EHS Dept.Dept/Oce – Part-time Safety Ocer
Section/Group –Part-time SafetyOcer
Section/Group –Part-time SafetyOcer
Section/Group –Part-time SafetyOcer
Factory – Full/Part-time Safety Ocer
Factory – Full/Part-time Safety Ocer
XCMG Schwing –EHS Dept.
XCMG HeavyMachinery – EHSDept.
Road MachineryBusiness – EHSDept.
Xuzhou Crane– EHS Dept.– ……– ……
– ……
– ……
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│United in purpose for a better life │Spotting safety hazardsXCMG Machinery routinely conducts hazard identication and mitigation eorts, including comprehensiveinspections, specialized examinations, safety checks during holidays, middle and night shift inspections,and daily patrols. In 2023, the Company spotted 13,320 safety risks, and all of which were corrected.
Safety cultureXCMG Machinery issues its annual Company No. 1 document at the start of each year to guide theyear-round safety and environmental protection initiatives, and rene safety objectives and indicators,ensuring targeted and actionable tasks. The Chairman of the Board and subsidiary General Managerssign the Business Responsibility Commitment and HSE Responsibility Commitment, ensuring that safetyresponsibilities are thoroughly implemented at all levels, down to average employees.Embracing the principle that inadequate training poses risks, the Company abides by the OccupationalHealth and Safety Training Policy, consistently allocating substantial resources to employee safetytraining. This initiative enhances employees’ safety awareness, emergency skills, and operational conduct,thus boosting their overall safety competence.
Campaigns to spot safetyhazards
Workplace safety trainingsessions2,073
Safety hazards corrected
12,320
Workplace safety trainingduration
88,601.2
Hour
Correction rate of safety risksidentied
%
Workplace safety trainingparticipants
307,346
In 2023, XCMG Machinery conveneda special meeting to address the newrisks associated with the widespreaduse of industrial robots. A total of 522sets of bending, machining, welding,painting, and handling robots underwentinspections, with the correction worksuccessfully completed. Additionally,safety light curtains were installed on 113ordinary metal cutting machine tools toenhance overall safety protection.
In 2023, XCMG Machinery organized Workplace Safety Month during which, a raft of safetytraining, drills, and promotional events including safety knowledge lectures, emergency evacuationdrills, simulated accident handling were held to foster a strong culture of intrinsic safety.
XCMG Machinery's special correction of risks associated with industrial robotsCase
XCMG Machinery held a Safety ManagementExperience Training Program.
XCMG Excavator’s training on workplace safetymanagement skills
XCMG Road held knowledge contest onworkplace safety
XCMG Heavy Machinery solicited cartoons forWorkplace Safety Month
XCMG Earth Moving Machinery held SafetyPromotion Day on June 16
XCMG Infrastructure held safety speech contest
Safety emergency drillsXCMG Machinery subsidiaries carry out emergency drills as per the annual emergency drill plan. Thesedrills encompass scenarios like mechanical injuries, vehicle accidents, conned spaces, and res. Theyserve to evaluate the response time, refine emergency protocols, replenish emergency supplies, andenhance the overall emergency handling capabilities through rigorous training of emergency teams.
Safety emergency drills1,846
Safety emergency drill participants47,691
Occupational healthexamination coverage
%
Occupational healthtraining sessions
Occupational healthtraining duration
hour
Occupational healthtraining participants17,195
In 2023, XCMG Schwing partnered with the MarketRegulation Administration of the Economic DevelopmentZone, Xuzhou, to jointly host an emergency drill on cranerelated accidents. 70 entities using cranes were invited toparticipate in on-site observations. The drill aimed to upholdthe primary responsibility for specialized equipment safetymanagement, thereby enhancing the proficiency of craneusers in emergency response concerning crane machinery.
XCMG Schwing held crane accident drillCase
XCMG Machinery adheres to the Occupational Health and Safety Supervision and Management Policyand regularly commissions accredited rms for testing and assessments of various occupational hazards.During the production process, the Company provides employees with standard PPE, supervises thewearing of PPE, and conducts regular inspections to ensure full compliance. Regular inspections areconducted to check the operation of occupational disease prevention facilities, ensuring their properfunctioning. Employees exposed to occupational hazards undergo regular occupational health checks,with enhanced personal protection measures in place. Prompt job reassignment is carried out whennecessary to prevent the occurrence of occupational diseases. As of the end of 2023, 24 entities out ofthe Company and its subsidiaries held the ISO45001 certicates.
Occupational health ΔΔXCMG Crane provided safety training session forresponsible leaders
XCMG Zhilian held the seventh forklift skillcontest
XCMG Hydraulic held safety speeches deliveredby the general manager
XCMG Research Institute held the immersivesafety education
XCMG Excavator adheres to national laws andregulations regarding the prevention and control ofoccupational diseases. It provides comprehensivetraining sessions during the week for promoting the Lawof Prevention and Control of Occupational Diseases.Various forms of training activities were employedto ensure that employees understand and masterthe prevention and control of occupational diseases,thereby guaranteeing a healthy working environment incompliance with all relevant regulations.
Placing a strong emphasis on the psychologicalwell-being of its employees, XCMG Machinery hasdeveloped and implemented a visual monitoringdashboard displaying the physical health,psychological status, and behaviour patterns ofemployees.
XCMG Excavator held a special training session on the Law ofPrevention and Control of Occupational DiseasesCase
▲Figure XCMG Machinery's visual monitoring
dashboard for mental health
▲ Figure XCMG Machinery’s global responsibility brand system
XCMG Machinery actively participates in volunteering services, consistently spreads warmth and fosterspositive energy, while collaborating with diverse sectors of society to build a harmonious and thrivingcommunity.
Volunteering activities ΔΔ
Social responsibilitiesUpholding its core values, XCMG Machinery deeply engages in educational assistance and povertyalleviation initiatives. Through standardized management, systematic operations, team collaboration, andconcurrent multi-project implementation, it has established an ecient philanthropic operation system,spreading the great love.The Company continues to promote its Global ResponsibilityBrand with a philanthropic philosophy of Help with Love. Focusedon three main themes: contribution to development, contributionto creating the future and contribution to love spreading, ithas created a social responsibility system centered around thecontribution. This system encompasses six pillars: rescue, health,education, green initiatives, and others, demonstrating its activeengagement in social welfare actions on a global scale. Whilegiving back to society, the Company showcases the image ofbeing a world-class corporate citizen. In 2023, we donated 1.5773million yuan in 2023 Xuzhou “One day donation” activity.
创新相关
行业相关
Development
Contribution todevelopmentContribution
Contribution to
love spreadingContribution tocreating the future
行业相关
公益相关
Education
Rescue
Life
Customers
Green
Major construction projects;Infrastructure construction;Contribution to localemployment
Small wishesXCMG Alliance for theYouthSTEAM courses
Green industrystandards;Carbon peaking andcarbon neutralityplatform;X Creator Challenge
Household watercellars;
Water purication
projects
Great machineryoperatorGlobal skills contest
Rescue in
signicant
disasters;
Post-disaster
reconstruction
In November 2023, multiple entitiesincluding XCMG Hanyun, XCMG Importand Export, and XCMG Crane, activelyparticipated in the “Heart to Heart” XCMGYouth Volunteer Activity. They conveyedlove and goodwill to the students of PeizhiSchool, promoting the spirit of youthvolunteering at XCMG.
XCMG Machinery volunteers came intoCASA DO JARDIM Elementary School inBelo Horizonte, Brazil, bringing warm giftsto the local students. Under the guidanceof XCMG volunteers, those Brazilianstudents showcased a variety of talents.This event illustrated XCMG Machinery’sdistinctive approach to cross-culturalexchange and social responsibility.In 2023, the Company’s Global Small-Wish Responsibility Brand initiative was relaunched. Varioussubsidiaries deepened collaborations with communities, charitable organizations, and NGOs, with a focuson education, environmental protection, health, and other areas. Their goal was to address social issues,promote sustainable development, and fulfill corporate social responsibility through specific projectinitiatives.
In July 2023, volunteers from XCMGMachinery, together with the local dealerOCR, visited Ban Santikham ElementarySchool in Thailand and KolabariRamnagar High School in Chuadanga,Bangladesh. They brought small giftsto the local students and organized aunique XCMG Sports Day event.
In February 2023, XCMG Road organizeda voluntary service activity, delivering hottea to the sanitation workers around theCompany during the early spring.
Many entities under XCMG Machinery held volunteering activity.XCMG Machinery’s Eu amo o XCMG event in Brazil
XCMG Machinery held XCMG Sports Day in Thailand and Bangladesh
XCMG Road sent hot tea to sanitation workers
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XCMG Machinery actively supports the Belt and Road initiative, and upholds the philanthropic principle ofHelp with Love. We strive to leave a lasting philanthropic footprint in countries along the Belt and Road.We believe that persisting in the realization of each goal can nally achieve a great and beautiful world.
Public welfare course ΔΔ
XCMG Port Machinery
XCMG Environment, XCMG Truck Mounted
XCMG Driveline
XCMG Mining Machinery
In July 2023, a team from XCMG HeavyMachinery visited the Longjing Nursing Homein Huangshan, initiating a heart-warming socialservice activity. Team members and the oldpeople had friendly conversations and gainedinsights into their physical health and daily lifesituations. They provided care services such asnail trimming, cleaning, and doing householdchores for the elderly residents.
In June 2023, XCMG Machinery organizeda blood donation drive on World BloodDonor Day. Employees enthusiasticallyparticipated in the donation, contributingto the society.
In November 2023, volunteers from XCMGMachinery took the children from FanlouTown Primary School in Feng County, JiangsuProvince on a special trip to Beijing, fulfillingtheir wishes to explore the capital city. Theyled the children to visit landmarks such as theGreat Wall at Badaling, Tiananmen Square,Tsinghua University, and the Beijing Science andTechnology Museum. Additionally, customizededucational kits were provided to the children.
XCMG Heavy Machinery visited the old in nursing home
XCMG Machinery helped students travel to Beijing
XCMG Machinery held blood donation activity
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XCMG Machinery remains steadfast in its commitment to diverse social responsibility endeavors withinthe education sector in line with the country’s technology powerhouse and workforce developmentstrategy. These endeavors are designed to improve educational equality while fostering the valuesof model workers, craftsmanship, and diligence. Through signature programs like “Industrial StudyTours”, “National Craftsmen Visiting Schools” and “XCMG STEAM Courses”, the Company instills theaspirations of engineering machinery deeply within the minds of youth.
Responsibility education ΔΔ
STEAM Course
“XCMG Study Tours”
National Craftsmen Visiting Schools
XCMG Finance, XCMG Hanyun, XCMG RongpiaoXCMG Heavy Machinery
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│United in purpose for a better life │XCMG Brazil, XCMG India, Schwing, and personnel from overseas offices, joined hands to visit localschools and welfare institutions on International Children’s Day and Christmas as part of the One World,One Blue Sky caring initiative. XCMG Import and Export, in collaboration with overseas distributors,has established the XCMG Overseas Scholarship in universities across Pakistan, Thailand, Cambodia,Ethiopia, Iran, and Laos for five consecutive years. This initiative aims to provide support to youngstudents passionate about engineering machinery.
XCMG internshipOverseas scholarship
In September 2023, XCMG Machinery signeda joint agreement during the Jiangsu-Germany Industrial Cooperation Forum tosponsor Chinese language courses for eightmiddle schools in Krefeld. At the event,Professor Klotz, President of the ChinaGermany Friendship Association, introducedthe Company’s supported programs,including practical courses in physics andcomputer science, thesis topics, and voluntaryinternships. By sponsoring educationalinitiatives, the Company desires to furtherpromote cultural exchange between Chinaand Germany and deepen the multi-sectorcooperation between XCMG and Krefeld.
XCMG Machinery signed an agreement to sponsor mandarin courses in 8 schools in KrefeldCase
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│ Stable operations for robust governance │
│ Stable operations for robust governance │2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT
XCMG Machinery embraces the newdevelopment phase, adapting strategic plansto internal and external dynamics to fostera high-quality growth model. Serving as thecornerstone of China’s socialist economy,and fulfilling crucial missions, we prioritizeecient governance, compliance, and investorprotection, while promoting digital andintelligent transformation, propelling us towardsbecoming a world-class enterprise.
Stable operations forrobust governance
Percentage offemale directors
Total anti-corruptiontraining duration
hour
Percentage of independentdirectors
Announcementsdisclosed
Table Performance highlights in 2023
Responses to UN SDGs
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│ Stable operations for robust governance │
XCMG Machinery, under the theme of high-quality development, has formulated the 14th Five-Year Strategic Plan Outlineof XCMG Machinery. In 2023, we actively addressed changes in internal and external circumstances by formulating the 14thFive-Year Mid-term Revision and Strategic Plan Outline (2023-2027). Incorporating shifts in the landscape, we outlined atwo-phase strategic blueprint, dened clear objectives, propelled the transformation and upgrading, and aimed to establish aworld-class enterprise.
XCMG Machinery adheres to the requirements of relevant laws, rules and regulations, such as the Company Law, SecuritiesLaw and Code of Corporate Governance for Listed Companies. With the mission of “stable operation, standard management,expanded main businesses, the Company continually renes its corporate legal person management system by establishing acorporate governance mechanism consisting of the General Meeting, the Board of Directors, the Supervisory Committee andthe Management with statutory and transparent powers and responsibilities, coordinated operation and eective balances.It has formulated 170 rules and regulations, including the Articles of Association, the Rules on Procedure of the GeneralMeeting, the Rules on Procedure of the Board of Directors, the Rules on Procedure of the Board of Supervisors, the Rules onProcedure of the Special Committee of the Board of Directors, the Rules on President Work, and the System of IndependentDirectors, forming a sound corporate governance system. Moreover, in accordance with the latest laws, regulations andregulatory provisions, the Company timely revises and improves its rules combined with their life cycle and the actualoperation of corporate governance to guide its practice scientically and reasonably for corporate governance.In 2023, the Company arranged for its board members, supervisors, and senior executives to participate in training sessionsorganized by the Shenzhen Stock Exchange, Jiangsu Bureau of CSRC, and China Association for Public Companies. Thesesessions, totalling six, were attended by a combined 26 individuals. This ongoing initiative is aimed at enhancing theperformance capabilities of directors, supervisors and senior management and reinforcing corporate governance practices.The Company was selected by the China Association for Public Companies into the Best Practice Cases for CorporateGovernance in 2023, the Good Practice Cases for Board of Directors of Listed Companies in 2023, and the Best PracticeCases for Board of Supervision of Listed Companies in 2022. The Board of Directors was awarded the Best Board ofDirectors with the Golden Round Table Award.
Strategic planning
Ecient governance
▲Figure 2023 Best Practice Cases for Corporate Governance and the Good Practice Cases for Board of Directors
of Listed Companies
Governance structure ΔΔ
General Meeting, Board of Directors andSupervisory Committee ΔΔ
GeneralMeeting
▲Figure Organizational structure
General Meeting
Board of Directors
Strategy CommitteeNomination CommitteeRemuneration and
Review Committee
Supervisory Committee
Audit Committee
The General Meeting is the highest authority within the Company.In 2023, a total of four meetings were convened, during which 18proposals were considered and approved.Number of generalmeetings
Number of proposals approvedat general meetings
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│ Stable operations for robust governance │
Board ofDirectors
NameYang DongshengLu ChuanSun LeiShao DanleiXia YongyongTian YuGeng ChengxuanKuang ShidaoYang Lin
TitleChairmanDirector andPresidentDirectorDirectorDirectorDirectorIndependentdirectorIndependentdirectorIndependentdirector
GenderMaleMaleMaleFemaleMaleMaleFemaleMaleMale
Age
MasterMasterMasterMasterMasterDoctorDoctorBachelor'sdegreeDoctor
Management, R&D, production,and marketingManagement, technology andnanceManagementManagement, and nanceManagement, and productionFinance and marketingFinanceLegalScientic research
Educationbackground
Industry background
Number of Boardmeetings
Number of directors thatindeed attended
Number of directors thatshould have attended
In 2023, the Company held
Board meetings where
proposals were considered.
Number of proposalsconsidered by the Board
As the Board of Directors being the decision maker and the center of governance,the Company continually strengthens its building to develop its core role incorporate governance with scientific structure, high efficiency and effectiveresults.
As of the end of 2023, the Company had 9 directors including 3 independentdirectors and 2 female directors. Moreover, 3 observer seats on the Board wereset to help the middle and small shareholders participate in the decision-makingof major matters of the Company.
Table General information of directors
Strengthen the building of the Board of Directors
Establish a scientic and reasonable structure of the Board of DirectorsImplement Special Committee of the Board of DirectorsOptimize the operation system with adherence to the leadership system of “two-way accessand cross- position”Strengthen the standardized operation and the construction of daily guaranteed institutions
NameZhen WenqingZhang LiankaiCheng QianZhang XuLi GeJiang LeiXu Tao
Title
ChairVice ChairSupervisorSupervisorSupervisorSupervisor
Secretary ofthe SupervisoryCommittee
Gender
MaleMaleFemaleFemaleFemaleFemale
Male
Age
Bachelor's degreeMasterDoctorBachelor's degreeMasterMasterBachelor's degree
ManagementManagement and investmentFinance, Investment, andManagementFinanceManagementManagementR&D, and Management
Educationbackground
Industry background
Number of SupervisoryCommittee meetings
Number of supervisorsthat indeed attended
Number of proposals consideredby the Supervisory Committee
SupervisoryCommittee
The Supervisory Committee independently exercises its authority in accordancewith laws, eectively supervising to ensure the Company operates in compliancewith regulations. The Company provides guarantees for duty performance ofthe Board of Supervisors and innovates performance mode to further exert theeectiveness of the Board of Supervisors in corporate governance.
As of the end of 2023, the Company had 7 supervisors. In 2023, the Companyheld 8 Supervisory Committee meetings where 21 proposals were considered.Table General information of supervisors
Provide guarantees for duty performance of the Board of SupervisorsScientically establish the structure of the Board of Supervisors and appoint theSecretary to ensure the ecient duty performance of the Board of SupervisorsStick to "cross-position", and cooperate with the Party Committee and DisciplineInspection Commission to explore the general supervision system.Improve the supervision work mechanism with integrity and innovation tocontinuously strengthen the capacities of the Board of Supervisors.
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│ Stable operations for robust governance │
SeniorManagement
As of the end of 2023, the Company has 11 managers, including 1 President,9 Vice Presidents (financial staff included), 1 Secretary of the Board, witheducational background of 2 doctors, 8 masters and 1 bachelor. 9 managersare from the frontline of production, technology and marketing while the left 2are from the frontline of the financial department. With their average plentifulmanagement experience of 30 years, the managers have a deep understanding ofcustomer needs and abilities for cycle prediction.The company fully practices a professional manager system, improves the tenuresystem and contractual management system, sets assessment indicators aroundthe company's high-quality development goals, and perfects the mechanism of"all-round" for cadres. With adherence to performance and market orientations,the Company strictly implemented "two books and two contracts" to clarifyresponsibilities, rights and obligations for strict tenure and target assessment,and realized the market-oriented salary distribution and performance assessmentand exit mechanism for professional managers with customized employmentcontracts and tenure performance contracts. It optimized salary management andintroduced tenure incentives based on the original annual basic salary, annualpost salary and annual benefits salary to promote senior managers to focuson the realization of the company's long-term strategic goals. The Companyconducted 2,000 employee-stock ownership incentive with 118 million shareholdings, creating the co-development of backbone employees and the Company.
Guided by the principle of “engagement and accountability for all in internal control, centered aroundshared values”, the Company refines its audit and compliance mechanisms. It reinforces risk and integritymanagement, establishing a rm ideological foundation for compliant operations and ensuring the Company’sfunctioning.
XCMG Machinery has formulated and strictly adheres to internal regulations such as the Comprehensive RiskManagement System. In 2023, the Company introduced new internal regulations, including the Export Controland Economic Sanctions Compliance Management Policy, Anti-Money Laundering Compliance ManagementPolicy, Trade Remedy Compliance Management Policy, Anti-Commercial Bribery Compliance ManagementPolicy, Antitrust Compliance Management Policy, Critical Data Protection Compliance Management Policy,and Compliance Management Policy. A Chief Legal Ocer cum Chief Compliance Ocer has been appointed.Under the Legal Department are Legal Committee and Compliance Committee tasked with developing andenhancing the risk and compliance management system. The Company follows business ethics and fulfillssocial responsibility throughout its operations, unequivocally prohibiting any form of illegal activity such asbribery or infringement upon intellectual property rights for unjust gain.The Company identies compliance risks through analyzing risk instances, reviewing compliance obligations,conducting personnel interviews and surveys, and examining regulations and their implementation. In 2023,the Company identied control risks associated with important and signicant business activities, and issuedthe Management Measures for Reviewing Important and Signicant Business Activities. Using the RGC (Risk,Governance, Control) framework, the Company conducted compliance risk identication based on seven keyelements: goal setting, tone, responsibility system, integrity environment, supervision, deterministic control,and non-deterministic control. It developed guidelines for compliance risk identification, assessment, andmanagement. The Company continued to enhance its overseas compliance system, establishing a legalmanagement model centered on compliance, winged by legal aairs and intellectual property, with organizationand talent as the driving force, to ensure compliant operations in overseas business.
XCMG Machinery has developed and rigorously follows internal regulations such as the Internal Audit Policy,Internal Audit Quality Control Measures, Economic Responsibility Audit Measures for Key Personnel ofSubsidiaries, and Audit Management Policy for Engineering Construction Projects. Under the leadership of theAudit Committee, the Audit and Internal Control Department took measures to strengthen internal team buildingwith closed-loop management consisting of expanding supervision, conducting regular internal audit work,nding the weak links and supervising audit improvement. It participates in the whole process of value creationwith a normalized, continuous and cyclical combination of pre-event, in-process and post-event audits.The Company carries out economic responsibility audits for removed leaders, supervises nine aspects, suchas compliance with laws and regulations, asset preservation and appreciation, and completion of economicindicators, and assesses operational risks to fully implement management responsibilities at all levels.
Compliant operations
Risk control and compliance ΔΔ
Internal audits ΔΔ
In 2023. The Company conducted a total of
special audits with
% of issuescorrected.
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│ Stable operations for robust governance │
Anti-corruption management ΔΔThe Company follows regulations such as the Eight Rules for Clean and Self-disciplined Conduct in XCMGand the Code of Conduct for Business Activities with Relevant Parties in XCMG. It has established the CPCXCMG Disciplinary Inspection Committee and continuously enhances its integrity management system,strictly guarding against the risks of commercial bribery and corruption. The Company has developed theWhistleblowing, Key and Important Personnel Integrity Management Regulation and Carders Integrity Rulesalong with the Rules for Handling Complaints and Accusations by Discipline Inspection and SupervisionAuthorities. These rules are strictly enforced to safeguard the privacy of whistle-blowers.
The Company fosters a culture of integrity through initiatives like the “Going to positions, households andpartners” Integrity Culture Program and events such as Integrity Culture Month. These activities provide diverseplatforms for integrity education and explore new modes of integrity education. They promote integrity trainingas normal practices and enrich the “Clean XCMG” integrity culture, fostering a positive atmosphere conduciveto high-quality development within the Company.
Number of anti-bribery and anti-corruption employees
Integrity activities on “going to positions, households and partners”
?Leaders and cadres study General Secretary Xi Jinping’s important discourseon strengthening Party conduct, promoting clean governance, and advancingthe integrated approach of the “dare not, can not, want not corruption”principle. This enhances their ideological understanding and strengthens theirpolitical consciousness.?Integrity education and pre-holiday warnings are held to further strengthensawareness of integrity.?The Discipline Inspection Secretary led a delegation to visit the families ofcadres, promoting the “Eight Rules” to their relatives. They also distributedthe “Promoting Integrity in Households” initiative leaet along with books onfostering a virtuous family culture.?Each entity organized integrity home visits, distributing “Promoting Integrityin Households” initiative leaflets. This aims to guide and educate cadrerelatives to serve as pillars of integrity within their families, fostering a cultureof honesty and serving as guardians of a clean household.?The Company’s Discipline Inspection Commission guided various entities tocollaborate with business partners in promoting integrity. Through activities likeDiscipline Inspection Secretary Visits Business Partners, they distributed theIntegrity Initiative Leaets for Business Partners before festivals, transmittingthe culture of integrity within XCMG. Emphasis was placed on maintaining abalanced and clean relationship of cooperation between the Company andbusiness partners.
Integrity culture“going to positions”
Integrity culture “goingto households”
Integrity culture“going to partners”
The Company actively organizes audit-related training sessions. In June 2023, a course titled Key Aspectsof Internal Control and Major Audit Risks in XCMG Machinery was conducted, focusing on internal control,finance, taxation, and engineering. In July, training sessions on Audit Management Standards for XCMGMachinery Dealers and Common Issues and Response Strategies in XCMG Machinery Engineering Projectswere held, to enhance the compliance awareness of all employees.
Number of anti-corruptiontraining sessions
Including: Manager-targeted anti-corruption training sessions
Employee-targeted anti-corruption training sessions
Total anti-corruptiontraining participants55,870
Total anti-corruptiontraining duration
Including: Managers who participatedin anti-corruption training
Including: Manager-targeted anti-corruption training duration
Employees who participatedin anti-corruption training
55,246
Employee-targeted anti-corruption training duration
The integrity education program for the newhires of 2023 was aimed at helping them kick-start their careers on the right note, ensuringthey securely fasten the “rst button” of theirprofessional journey.
During the Integrity Culture Month, weengaged in four key activities: learning,warning, reection, and discussion. We studiedimportant remarks by General Secretary XiJinping on family ethics, watched educationalvideos, assessed our lives through the “sevenaccounts”, and experienced the nourishmentof a clean family culture.
XCMG Machinery actively implementedthe requirements outlined in the DisciplineInspection Commission’s Discipline InspectionRecommendations by convening warningeducation meetings in the field of brandpromotion. It vigorously rectified corruptionissues in brand promotion and strengthenedthe eectiveness of warning education.
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│ Stable operations for robust governance │
XCMG Machinery adheres to the principles of transparency, accuracy, completeness, fairness, and timelinessin disclosing information, ensuring ongoing communication and interaction with investors. We strive to shareour development achievements with investors, creating a Community of Common Future with investors.
XCMG Machinery strictly complies with laws and regulations such as the Company Law, Securities Law,Measures for the Administration of Information Disclosure of Listed Companies, and Listing Rules of theShenzhen Stock Exchange. We have established the Information Disclosure Management Policy, whichstipulates that the Board of Directors leads and manages information disclosure, with the chairman assumingprimary responsibility. The Securities Department serves as the competent and executing authority forinformation disclosure. We aim to standardize disclosure practices, strengthen insider information management,and safeguard the right to information and decision-making participation, especially for small and medium-sized shareholders.In 2023, the Company issued 144 announcements, including 138 interim announcements and 6 periodic reports.The Company got the A-rated information disclosure assessed by the Shenzhen Stock Exchange for six yearsin a row and was selected as the Most Respected Listed Company by Investors by the China Association forPublic Companies.
Attaching great attention to investor relations management,XCMG Machinery formulated its Investor RelationsManagement Policy and established proactive investorrelations to seek communications with investors via manychannels and in many forms.Except holding performance briefing, or major eventmeetings, the Company carried out roadshows (online andoine) and reverse roadshows, investor eld investigations,and franchiser research, as well as participated in collectivereception day activities held by supervision agencies orother institutions, annual meetings, strategy meetings, and
Investor relations
Information disclosureΔΔ
Communication channels ΔΔ
The Company continuously repays its investors with cash dividends and share repurchases to enhance thecondence in capital market with a cumulative share repurchases exceeding 1 billion yuan and cash dividendsachieving 8.37 billion yuan. As of March, 2023, its repurchases achieved 852 million yuan. In 2023, TheCompany's prot distribution plan for each 10 shares is 1.80 yuan (including tax), with a total distribution of2,126.8955 million yuan.
Interests and rights of investors ΔΔ
▲Figure Investors Roadshow in the 16th BICESforums and other meetings held by securities companies and other institutions. Investor relations hotlines,e-mails, http://irm.cninfo.com.cn, media interviews are set up while calls, WeChat (groups), messages andemails of Board secretary and investor relations management personnel were developed to achieve eectivecommunications with investors. Furthermore, the Company increased the frequency and level of investorroadshows to fully respect and protect the interests of investors, aiming to build a healthy and transparentinvestor relations system to win the trust and support of the capital market and investors.The Company was awarded with Best Practice Cases for Annual Report Performance Brieng in 2022.In 2023, the Company introduced an innovative approach by conducting interviews with the chairman, invitingover 290 investors, garnering significant attention from the capital market. Furthermore, the Companyorganized the Beijing International CES Roadshow, where 13 institutions were invited for on-site visits andcommunication exchanges. These initiatives facilitated constructive interactions with investors and elevated thelevel of investor services.
Dividends for2022 semi-year2,717,178,200
Dividends for20221,772,424,900
Dividends for20232,126,895,500
Total cash dividend payout
Repurchases of March 2023
million yuan
yuanyuanyuan
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│ Stable operations for robust governance │
XCMG Machinery is dedicated to advancing the Chairman's “Number One Project” for IDN. Aligned with thecomprehensive plan, the Company swiftly progresses digital initiatives aimed at addressing immediate needsand lling gaps. By leveraging digital technology to drive and lead improvements across business operations,XCMG Machinery prioritizes intelligent manufacturing, enhances information security, and empowers theCompany to achieve world-class status. In 2023, the Company’s digital initiatives garnered 39 honors,including 19 at the ministerial level and 20 at the provincial level.Digital management ΔΔThe Company has established a process-focused organization that matches the transformation, togetherwith clear responsibilities, and efficient collaboration. It designates the Digitalization Department at theheadquarters to lead, while digitalization departments in various subsidiaries are responsible for implementationand providing support. This model facilitates the continuous advancement of digital transformation eorts.In 2023, the Company continued to refine its top-level planning for digital transformation, prioritizing theadvancement of the Chairman’s Number One Project on intelligent, digital and networking. It devised a
Digital and intelligent transformation
National-Level “Digital Navigator” Enterprise
transformation blueprint outlining overall strategies,transformation directions, initiatives, and tasks. Thisapproach aims to achieve more efficient strategicmanagement, better organizational processes, astronger talent ecosystem, and systematic projectmanagement through digital transformation. Effortswere made across various fronts, including talentacquisition, cultural development, and strategiccooperation. Initiatives were launched to enhancedigital development capabilities and upgrade datacapabilities, facilitating the eective implementationof intelligent transformation, digitalization, andnetworking at XCMG. The Company was awarded thenational-level honor of “Digital Navigator” enterprise.
Around the project of “intelligent, digital and networking”, the Company hasenlisted nearly a hundred high-level experts, providing robust assistance forthe advancement of the project.Around the project of “intelligent, digital and networking”, experts havebeen invited to provide training and guidance to all leadership teams and keypersonnel of XCMG Machinery.On July 20, the Company signed strategic cooperation agreements with world-class enterprises such as IBM and SAP, advancing the implementation of itsIDN strategy.
Cultural development
Strategic cooperation
Talent acquisition
Digital projectsDescription
These include two parts: PDM optimization and upgrading, and digital processes.The system blueprint and three-round testing were completed for the PDMoptimization and upgrading, resulting in 23 test cases. Over 800 individualsparticipated in more than 10 training sessions, and there were 10 overseasthematic exchanges. Additionally, the PDM platform migration was accomplished.The business blueprint, and UAT for digital processes were completed, and thesystem was put into operation.Include the data XCMG governance system and platform, development of businessscenarios for data governance at XCMG, XCMG data visualization BI project,implementation project for XCMG data bus, XCMG master data managementproject, and XCMG equipment IoT device 360-degree prole project.Projects forenhancing thedata capability
system
Projects forenhancing itsdigit-driven R&Dcapabilities
Intelligent manufacturing facilities ΔΔ
Relying on its intelligent manufacturing base for high-end loaders, the Company consistently exploresintelligent manufacturing models that encompass the entire value chain, from product design and productionto supply chain coordination, marketing, and after-sales service. These endeavors aim to establish scalablemodels for constructing and operating large-scale equipment intelligent manufacturing factories. By promotingthese models across engineering machinery manufacturing clusters and throughout the industry chain, theCompany endeavors to spearhead the high-quality development of the equipment manufacturing industry,catalysing the ecological chain through demonstrative eects.
In November 2023, the Ministry of Industryand Information Technology released the listof 2023 Demonstration Factories in IntelligentManufacturing, the XCMG Machinery's intelligentmanufacturing base for loaders was on the list.The factory produces a full range of loaders from
0.4 tons to 35 tons, including skid steer loaders
and excavator loaders. It boasts the largestintelligent single-unit assembly plant in Asiaand has maintained the industry’s top positionin loader exports for 34 consecutive years.Leveraging the Hanyun platform, an industrialInternet platform leading in China, we haveexplored over 30 industrial big data application scenarios, such as “online detection of welding defects”. Thisattempt was selected for the inaugural national “Industrial Big Data” pilot demonstration projects.
National-level demonstration factory in intelligent manufacturingCase
2023 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE REPORT│ Stable operations for robust governance │
Information security ΔΔThe Company has developed internal regulations like the Digital Security and Confidentiality ManagementPolicy and the Information Security and Confidentiality Authorization Management Policy to facilitate theintegration of technology-based protection and management, thus ensuring the security of informationnetworks. The Company has developed an information security system in compliance with ISO 27001 standardsand Level 3 requirements for information security protection. Security protection assessments have beenconducted, with the XCMG Rongpiao platform attaining a Level 3 security rating.
The Company continued to strengthen communication and training on data security. This included setting upknowledge banks, organizing regular data security training workshops, conducting comprehensive training forall sta and part-time security ocers, and hosting events like Information Security Month. These eorts aimto continuously enhance employees’ awareness and capabilities in safeguarding network information security.
?Further strengthen the management and audit of remote server maintenance.?Enhance monitoring of external network attacks through a situational awareness platform.?Conduct data security risk assessment on the Company’s core systems in accordance withthe requirements of the pilot entities for “Data Security Risk Assessment in the Industry andInformation Fields”.Information securitymanagementmeasures
Information security trainingCybersecurity training for employees
Zip code：210005Email：zqb@xcmg.com