Green and Environmental Protection

Strengthening Scientific Management

As an important player in the global ICT industry, ZTE is highly concerned about global climate change. The company continuously promotes green operations, and actively contributes its ICT core capabilities to the industry's green development.

Optimizing Organizational Structure and Processes

ZTE's dual-carbon strategy implementation project team (hereinafter referred to as "the dual-carbon team") is a corporate-level project team led by the Chief Strategy Officer. The dual-carbon team, under the Enterprise Development Dept., consists of core sub-teams and supporting teams. Its members are from the carbon reduction teams in multiple fields, including R&D, product operation, marketing, supply chain, administration, operations management, and human resources. The dual-carbon team has become the major organization support for the company's energy conservation and carbon reduction efforts. In 2023, the company conducted a comprehensive analysis of its overall carbon emissions, risks, and opportunities, and optimized the organizational structure of the dual-carbon team accordingly:

· Focusing on the primary sources of its carbon emissions, the company has established the industrial park power conservation sub-team, supply chain carbon reduction sub-team, and product carbon reduction subteam, and strengthened their responsibilities for energy conservation, carbon reduction, and efficiency improvement.

· The carbon reduction product sub-team has been newly set up as an important pioneer and enabler, responsible for reserving, planning, and researching carbon reduction technologies, products, and solutions based on digital and intelligent innovations.

To better implement the company's dual-carbon strategy, in 2023, ZTE formed a special task list every week based on the problems, required support, and decision-making points in the dual-carbon strategy implementation process. And the tasks were communicated and tracked through internal systems until they were closed. The dual-carbon team reports to the CSO at least every two months. For major risks that may arise during project implementation and key matters to be decided (such as the commitment to science-based targets, and dual-carbon budget planning), the dual-carbon team promptly reports to the company's Chairman and Operation Management Committee (Members include the CEO, EVPs, and CFO.) for decision-making.

Improving Risk and Opportunity Analysis

ZTE has established a company-wide risk management process that involves multiple departments. The process involves the identification, assessment, and response to climate-related risks and opportunities, including direct operations, as well as downstream and upstream processes.

In addition, the company has formulated the ZTE Strategic Risk Management Guide, Regulations on Risk Assessment and BCM Strategy Management, and ZTE Risk Management Regulations to standardize and provide guidance on the company-wide risk management processes, in which climate-related risks and opportunities are incorporated.

The sustainable development team and the dual-carbon team coordinate and promote the identification, assessment, and response to company-wide climate risks and opportunities.

In 2023, based on research into external trends, analysis and interpretation of policies, and communication and research with internal and external stakeholders, ZTE identified climate-related risks and opportunities from the perspectives of technology, reputation, and market, analyzed their importance and possible impacts, and took measures accordingly.

For details on risks and opportunities posed by climate change, refer to the ZTE CDP Climate Change Questionnaire.

Fulfilling Science-Based Targets

In May 2023, ZTE submitted a letter of commitment to join the SBTi. In accordance with the requirements of the science-based targets and the results of its own carbon footprint verification and scenario analysis, the company has set the following targets:

· Scope 1 & 2: Taking 2021 as the base year, ZTE aims to reduce scope 1 & 2 carbon emissions by 52% by 2030.

· Scope 3: ZTE aims to reduce carbon emissions per product unit by 52% by 2030 (using physical intensity methods) with no increase in the total amount.

· ZTE aims to achieve operational carbon neutrality by 2040 and net-zero emissions by 2050.

The above targets have been submitted to the SBTi in Q4 2023, and are currently under review and verification by SBTi.

Following the established goals and paths, ZTE has been making solid steps to fulfill its science-based targets by continuously promoting green operations, green supply chain, and green digital infrastructure, and empowering green industries.

In 2023, ZTE achieved a 9.7% year-on-year reduction in absolute emissions (scope 1+2+3) throughout the value chain. Compared with 2022, the physical intensity of GHG emissions of telecom products sold by ZTE in the use and maintenance phase was 14.58% lower, and the full-lifecycle absolute emissions of terminal products sold by ZTE were 5.12% lower.

Green Product Design and R&D

Concentrating on the environmental performance of products throughout their lifecycles, ZTE has formulated such regulations as the Technical Requirements for Product Energy Consumption Reduction, Technical Requirements for Carbon Reduction of Mobile Devices, and Product LCA Carbon Footprint Assessment Specifications, embedded LCA requirements into the R&D process, and added assessment methods for product end-of-life phase and Product LCA Carbon Footprint Assessment Data List. In this way, ZTE aims to reduce carbon emissions from the source.

In 2023, in strict accordance with the ISO 14040 Environmental Management—Life Cycle Assessment— Principles and Framework, ZTE established an expert team to conduct quantitative analysis of 11 environmental impact categories and indicators in the lifecycles of such products as mobile phones, multimedia terminal devices, broadband network terminals, BN devices, and base stations, and make corresponding improvements. The company also promoted the construction of an LCA database. Specifically, ZTE completed internal assessment of 65 products, and worked with a third-party organization for the first time to conduct LCA of a lithium battery product, which passed the third-party certification. As of 2023, ZTE conducted carbon footprint assessment on 101 products, which covered all product categories of the company.

Based on the LCA results, we set emissions reduction targets for different product categories in 2023:

· Telecom products: Reduce the physical emission intensity in the use and maintenance phase of sold products by 5% compared to 2022.

· Terminal products: Reduce the absolute emissions throughout the lifecycles of the sold products by 5% compared to 2022.

Targeted emissions reduction measures were taken for different types of telecom products:

· Wireless products: Adopted next-generation chipsets and Super N2.0, a self-developed power amplifier architecture with the highest efficiency in the industry;

· Wired products: Applied self-developed chipsets with lower power consumption for hardware and increased energy efficiency of autonomous networks for software;

· Digital energy products: Improved the efficiency of power products, adjusted the percentage of highenergy-consuming products in delivery, and reduced the PUE of data centers to 1.13 through liquid cooling technologies and site photovoltaic applications.

In 2023, the physical intensity of GHG emissions in the use and maintenance phase of sold telecom products fell by 14.58% compared to 2022, which exceeded the target.

In terms of terminal products, recycled plastic was used as raw materials for some products. Meanwhile, the company actively promoted the weight reduction design of product materials. For example, the company improved the structure design and reduced the shell thickness of the radiators, casings, and outdoor mounting brackets of CPE products, without compromising product performance. By optimizing methods for the connection between and within components, we increased the pass rate of repaired products, and eased the difficulty of dismantling and recycling waste products to improve recycling efficiency and diminish scrap rate. In 2023, the absolute emissions throughout the lifecycles of sold terminal products dropped by 5.12% compared to 2022, which exceeded the target.

Green Infrastructure

Based on a deep understanding of the underlying communications standards and architecture as well as its strong R&D capabilities, ZTE has developed and adopted a number of innovative technologies applicable to the industry chain to promote green infrastructure construction.

· AI-based adaptive remote control products and solutions: For energy-intensive equipment that does not operate 24/7, support remote on/off of the equipment via mobile phones, precise remote control through IT systems and mobile apps, and remote AC/DC control, so as to reduce energy consumption.

· Energy-saving solutions for data centers and servers: ZTE uses High Voltage Direct Current (HVDC) solutions to improve efficiency, and realizes resource integration for low-load servers through the coordination between NFVO+/OSS and VNF, VNFM, and VIM.

In addition, ZTE's power amplifiers can operate with optimal efficiency at any transmit power with in-house dynamic adaptive amplifier architecture, in-house power amplifier chipsets and tube components and circuits, as well as neural network algorithms. In 2023, the GaN power amplifier efficiency of ZTE's base stations exceeded 60%. Based on the SUPER-N2.0 technology, the power amplifier efficiency of ZTE's new-generation RRUs was increased to the highest level in the industry, 8%–10% higher than the industry level, maintaining a leading position in the world.

Green Packaging

Lightweight Product Packaging

ZTE makes continuous efforts to optimize the packaging design and the use of packaging materials. We have reduced over 117 tonnes of plastic consumption per year, by replacing foam cushioning materials with honeycomb boards or pulp molded cushioning materials in packaging, changing taping methods from H-shaped to I-shaped, and bringing down the number of pallets and packing straps. Over 30 tonnes of woods have been saved every year by using vertical cartons instead of horizontal wooden boxes in cabinet packaging.

At the same time, the company pushes suppliers to refine their product packaging and adds green packaging requirements to technical specifications, helping suppliers reduce packaging.

· For the equipment that does not need onsite debugging, we encourage suppliers to use the packaging that meets our standards, so that we can deliver the equipment to customers without repackaging, saving more than 21 tonnes of packaging materials per year.

· ZTE uses less compound materials to facilitate material classification and recycling. We promote the use of pure PE bags instead of PA or PE bags in the packaging of some indoor equipment. In 2023, approximately 1.8 million pure PE bags were consumed, weighing about 320 tonnes.

Plastic Reduction and Replacement in Packaging Materials

ZTE adopts plastic-free and low-plastic packaging for mobile devices and telecom products. We promote the application of environmentally friendly and sustainable materials in product packaging by using substitutes for plastic and reducing packaging through design.

For home information terminals, the surface wear resistance of products is improved through optimization of surface texture and materials. Meanwhile, ZTE refuses plastic packaging, uses kraft paper straps instead of plastic straps, and replaces the commonly used lamination process with water-based varnish process for printed boxes. With biodegradable fibers, product packaging is completely plastic-free. This packaging solution has been largely applied in the packaging of multiple router products, and will gradually be used for the packaging of other home information terminals such as set-top boxes.

Regarding other telecom products, plastic-free packaging is realized by replacing foam cushioning materials like EPE with honeycomb boards and molded pulps, using paper bags instead of plastic bags for packaging, and substituting plastic tape with kraft paper tape for box sealing. Currently, this solution has been adopted in the packaging of products including cabinets and base stations.

In terms of terminal products, the company uses paper ties for charging, network, and data cables of some terminal products, facilitates the application of kraft paper and FSC-certified materials, and raises the recycling rate of packaging materials. In several projects, we have achieved plastic-free packaging, with recycling rate of packaging materials exceeding 90%. At the same time, we have reduced paper consumption by making users guides accessible via labels on the devices or QR codes on printed boxes.

Packaging Recycling and Reuse

By piloting pallet recycling, ZTE actively promotes the recycling and reuse of packaging materials. In 2023, over 6,000 pallets were recycled, and more than 54 tonnes of packaging materials were saved.

Empowering Industry Practices

With the goal of "clean energy, advanced ICT, and intelligent networks", ZTE aims to build a new "zero-carbon" network that is green, efficient, and reliable for customers. In the past two years, the comprehensive energy efficiency of all sold products has increased by more than 27%. For example, ZTE's green sites use 35% less energy through intelligent shutdown or deep sleep mode. In green data centers, the liquid cooling technologies help reduce PUE to 1.13 in special scenarios. And full-scenario intelligent photovoltaic applications raise solar power generation by more than 20%.

[Case] AI-Based Dynamic SPN Power-Saving Solution

Based on the tidal effect and the periodic changes of network traffic, an AI system is built to accurately predict the trend of traffic changes. Through real-time collection of network data and intelligent analysis of service load changes, a multi-level and multi-mode power-saving solution for chips, modules, boards, and networks can be automatically generated. In 2023, the solution was piloted in 20 provinces and conserved power of 8.51 million kWh with an average power-saving efficiency of 16.9%.

· Intelligent power conservation: Real-time monitoring, energy consumption visualization, accurate traffic prediction, intelligent adjustment of power consumption, and one-click report generation;

· Cost saving: Software upgrades without hardware modifications, saving upgrade costs; automatic task execution without manual intervention, improving O&M efficiency;

· Security and reliability: Network and business security can be guaranteed in power-saving mode for various scenarios.

[Case] Power-Saving Strategy of Cloud Resource Pools Promotes the Green Operations of Data Centers

In recent years, cloud computing industry has gained strong momentum. Data center is one of the energy-intensive business in the industry. So energy saving in data centers can not only contribute to the goals of carbon peaking and carbon neutrality, but also help enterprises reduce costs and strengthen competitiveness. Against such backdrop, ZTE created a "two-level and three-state" energy-saving solution, which implements power-saving operations in the resource pools of servers and CPU cores, realizing precise control of power consumption of serves and achieving energy conservation and emissions reduction, with average energy saving of 10%.

Energy Efficiency and Structure Optimization

ZTE strictly complies with national and regional energy laws and regulations and related policies. The company also keeps promoting the building of energy management centers, and development of energy management solutions based on "IoT + IT" for online monitoring, analyzing, and controlling all energy consumption in each industrial park. So far, ZTE has built energy management centers in 21 industrial parks in 13 regions. In 2023, the company's electricity and carbon visualization apps for industrial parks achieved an accuracy rate of over 98%, providing real-time multi-dimensional data support for the realization of energy-saving goals.

[Case] ZTE Promoted the Building of Smart Industrial Parks to Ensure Accurate Energy Management

In 2023, ZTE built a smart industrial park system, with platforms for the intelligent control of parking lot lighting, multi-split air conditioners, as well as lighting and air conditioners at office areas. For large energy-consuming equipment such as central air conditioners, elevators, and water pumps, ZTE implemented an energy-saving solution through the "ZTE 74 / 117 Digital Nebula + AI" intelligent control system. In accordance with the solution, an AI model was built for the air conditioners in the industrial park based on the ZTE Digital Nebula, and then trained with the operational data of the air conditioners, so as to optimize the control strategy and thus reduce the energy consumption of the air conditioning system while ensuring user experience.

In 2023, ZTE conducted in-depth management of power consumption and formed an energy-saving technology roadmap that covers the metering, reading, control, and evaluation of power consumption based on its energy management centers.

· Metering and reading of power consumption: With its energy management centers, ZTE has built a software and hardware network for energy management, covering the power consumption of all key units of the company. The year-on-year and month-on-month power consumption data of these units are displayed on an hourly, daily, and weekly basis on the system dashboard, thus data visualization is achieved.

· Control and evaluation of power consumption: By analyzing its power consumption, ZTE makes timely adjustments to its energy-saving measures based on power consumption fluctuations, and reduces the waste of electricity. Through continuous review of the power consumption of each unit, the company summarizes experience, identifies and eliminates weaknesses, replicates and promotes good practices, and forecasts power consumption of the next year in accordance with the actual business activities.

[Case] Fresh Air System Renovation Project for Labs

ZTE has labs in Tianjin, Nanjing, Shanghai, Chengdu, and Xi'an, where the average temperature is below 15°C from October to April. To further improve energy efficiency, the company carried out a fresh air system renovation project for these labs. After the renovation, the fresh air supply mode will be activated when the temperature is less than 15 °C, achieving the cooling effect at no cost. Take the eight labs in Nanjing as an example, compared with VRV air conditioning systems, the fresh air system equipment can save power consumption by 49% per year, with an annual energy saving of about 1.28 million kWh.

Focusing on high energy-consuming equipment and central air conditioners in R&D labs and production lines, ZTE promotes energy conservation and carbon reduction in daily operations through management and technology-enabled measures. specifically, they include hierarchical control of lab equipment, dynamic sharing of resource pools (such as intelligent management of server pooling), intelligent remote control (such as remote power on/off of equipment), aerothermodynamic optimization (such as the renovation of the fresh air system in equipment rooms), intelligent energy saving of equipment, intelligent manufacturing powered by 5G, dark factory, and frequency conversion. In doing so, the company practices all-round low-carbon operations, reducing resource consumption and environmental impact.

Based on the PV power stations in Shenzhen, which have been put into use for many years, ZTE continues to expand the use of its self-built new energy system that enables the integration of energy storage and solar PV, so as to achieve "self-generation for self-consumption" and "surplus electricity to grid". In 2023, the Binjiang PV power station was built and put into use, with an annual power generation capacity of 22 million kWh. PV power stations in Heyuan, Xi'an, and Changsha are under construction and expected to be completed and put into use in 2024.

Waste Management

In strict accordance with the Law of the People's Republic of China on the Prevention and Control of Environment Pollution Caused by Solid Wastes, the National Catalogue of Hazardous Wastes, and other laws and regulations, the company formulated the ZTE Waste Sorting and Disposal Criteria, Waste Management Process, and other regulations to standardize the categorization, collection, storage, and disposal of wastes, and set up ledgers for waste control.

· General wastes: ZTE prioritizes reducing waste generation in its operations and production processes. The company properly sorts and collects general wastes such as foam, plastics, paper, scrap metals, and woods, uses nationally standardized waste labels for proper posting, and recycles or reuses wastes accordingly.

· Hazardous wastes: Hazardous wastes from production include solvents and solutions, batteries, and circuit boards, and hazardous wastes from daily operations include ink cartridges and toner cartridges. Such wastes are transferred to the Administration Dept. by the departments that generated them, stored in the company's designated collection containers or areas, and eventually handed over to qualified professional organizations for transfer and treatment.

In addition, the company visits suppliers' waste disposal sites from time to time to review relevant information, including but not limited to the suppliers' relevant qualifications and treatment methods, to ensure proper disposal of the wastes.

Exhaust Gas Emission Management

ZTE strictly abides by the Atmospheric Pollution Prevention and Control Law of the People's Republic of China, the ISO 14001: 2015 Environmental Management Systems—Requirements with Guidance for Use, the Emission Standard for Air Pollution of Guangdong Province, and other regulations and policies on exhaust gas emissions, and has formulated the Regulation on the Control of Air Pollution and improved its exhaust gas management system.

The company's exhaust gas emissions, mainly come from its daily operations, for example, exhaust gases produced by canteens, generators, and shuttle buses. Another source is the production processes, such as exhaust gases from reflow soldering/wave soldering, volatilization of chemicals during use, chemical release from packaging materials, and vehicle exhaust emissions.

· Exhaust gas emission control: ZTE conducts annual inspections on the company's vehicles to ensure that exhaust gas emissions meet national standards; for equipment and facilities that may generate exhaust gases, the company rigorously enforces the operating procedures and maintenance regulations. Exhaust gases are collected through specified pipeline facilities and discharged after treatment by the exhaust gas treatment tower, to ensure that exhaust gas emissions meet relevant laws and regulations.

· Exhaust gas emission monitoring: The company arranges for qualified third-party organizations to monitor the compliance status of exhaust gas emissions every year at the periphery of the company (including exhaust gas emission outlets and the exhaust gas treatment towers), and to verify all the exhaust gas emission equipment.

Water Resources Management

ZTE strictly follows the Water Pollution Prevention and Control Law of the People's Republic of China and other relevant regulations of local governments and industries, and has formulated the Regulations on the Control of Water Pollution. Wastewater emitted by the company is mainly generated from office areas, and discharged into the city sewage in accordance with relevant regulations. The company conducts wastewater inspections on an annual basis, to ensure compliance with the discharge limits of water pollutants and relevant standards.

As the business activities do not require a large amount of water usage, the company faces a low risk of water stress in its daily operations.

In 2023, all water used in the company was taken from the waterworks, and there was no difficulty in water intake.

Protection of the Ecological Environment of Industrial Parks

To protect the ecological environment of areas where the company operates, ZTE invests resources in greening and maintenance every year, and formulates a three-level greening and maintenance plan covering the headquarters and each industrial park.

In Changsha, all the trees and shrubs at the construction locations were transplanted and maintained by the company in the initial stage of the construction, and replanted at suitable locations after completion of the construction, so as to minimize the impact on the local ecological environment.

In Shanghai, the company has hired a third-party professional team to continuously control the water quality of Bibo Lake in the industrial park. Meanwhile, the company has not only added plants and maintained the greening area around the lake, but also properly put fish fry in the lake, to promote its ecological recovery.

In 2023, ZTE was selected as a "National Green Supply Chain Management Model Enterprise" and ZTE Heyuan Base was recognized as a "National Green Factory" by the Ministry of Industry and Information Technology.

[Case] Green Supply Chain Forum of ZTE's Global Partners Day

At this event, the company held for the first time the Green Supply Chain Forum, which was themed "Win-Win Collaboration for a Green Ecosystem".

ZTE shared its dual-carbon strategy, and explained the end-to-end green and low-carbon practices of its supply chain in terms of green procurement, manufacturing, delivery, and circulation. Representatives from more than 50 leading enterprises in achieving the dual-carbon goals, including Schneider Electric, SGS, Hisense, and Sinotrans, came together and explored the green and low-carbon path of the ICT industry in the context of global climate change. In the session for proposing supply chain initiatives, ZTE played a leading role based on its self-developed "SMART goals for green supplier management", and proposed the green and dual-carbon initiative for suppliers, to promote the sustainable development of the industry chain.

Green Procurement

While reducing its own carbon emissions, ZTE also promotes joint carbon reduction with upstream suppliers, and incorporates dual-carbon requirements into the entire supplier management process.

The company conducts comprehensive LCAs of its products. According to the assessment results, the raw material stage of terminal products accounts for a relatively high proportion of carbon emissions. For such products, the company requires the purchase of low-carbon materials during the procurement stage. For example, after gaining customer approval, the company purchases recycled plastic as raw materials for structural parts of some of its terminal products, to achieve an overall carbon reduction of over 3% while meeting customer and enterprise standards. Related products have been mass-produced and available on the market.

Regarding carbon reduction in collaboration with green suppliers, the company has developed the "SMART goals for green supplier management", where "SMART" stands for "Strategy, Management, Accounting, Reduction, and Technology". The "SMART" model won the 2023 Science and Technology Progress Award from the China Federation of Logistics & Purchasing. Based on this model, the company has refined the eight-step methodology of dual-carbon governance for suppliers. In addition, the company issued A Letter Regarding Requirements for ZTE Suppliers to Start Dual-Carbon Strategy Planning to global suppliers, providing guidance on how to effectively conduct carbon footprint verification, set emissions reduction targets, and implement emissions reduction measures.

In 2023, ZTE selected two sample suppliers and provided them with guidance on effective dual-carbon governance based on the "SMART" model. By the end of 2023, both suppliers had conducted carbon footprint verification for 2022 and passed certification by third-party organizations. Based on the verification results, the suppliers had set emissions reduction targets, formulated measures accordingly, and publicly disclosed their information on GHG emissions and emissions reduction targets.

The company has formulated the Supplier Dual-Carbon Audit Checklist. In 2023, dual-carbon audits were conducted on more than 150 suppliers.

To enhance suppliers' dual-carbon awareness and capabilities, in 2023, the company provided dual-carbon training for more than 200 people from 96 suppliers. In June 2023, the company organized training for 30 related suppliers in the interpretation of the EU's Carbon Border Adjustment Mechanism.

In addition, ZTE actively promotes suppliers' self-disclosure of carbon emissions. In April 2023, ZTE invited more than 200 people from 75 suppliers to the online meeting of CDP's 2023 Disclosure Kick-off Event. The data from the CDP 2023 Climate Change Questionnaire showed that among the 300-plus strategic core suppliers of the company, 81 participated in the CDP rating and disclosure and submitted the response publicly. Among the 81 suppliers, 17 (21%) achieved a Leadership (A/A-) rating, and 27 (33%) received a Management (B/B-) rating.

Green Manufacturing

In ZTE's production base, the company mainly uses technological means to incorporate innovative energysaving and consumption reduction into green manufacturing and intelligent manufacturing. Specifically, the company focuses on energy saving in high energy-consuming scenarios such as the production lines of telecom products and home information terminals. For example, through technological improvements in the production process, such as the application of frequency conversion technology in air compressors and the revamp of chillers for reflow ovens, carbon emissions in high energy-consuming scenarios are significantly reduced, thus resource consumption and environmental impact are minimized.

In 2023, ZTE implemented several key energy-saving projects, including transformation of the cooling technology in reflow furnaces, promotion of the heat preservation technology in reflow furnaces to reduce energy consumption in soldering, promotion and application of variable-temperature solder paste to achieve energy saving in soldering, and optimization of the high-temperature aging process for energy saving.

In 2023, ZTE reduced the power consumption of production in its five major bases by 8% year-on-year, saving 20.62 million kWh of electricity.

[Case] ZTE Heyuan Base Was Awarded "National Green Factory"

ZTE (Heyuan) Company Limited is included in the 2023 Green Manufacturing List released by the Ministry of Industry and Information Technology of China, and is the only high-tech company in Heyuan city to have been certified as a national green factory in 2023.

Guided by the company's dual-carbon strategy, ZTE Heyuan Base actively practices energy conservation and emissions reduction for sustainable development. The base has built an industry-leading data center and energy management center with self-developed server products and communications technologies, and adopted innovative technologies and management measures for energy saving. These are aimed to accelerate the building of a green manufacturing system, explore the "dual-carbon" model for the electronics manufacturing industry, and realize high-end, intelligent, and green development.

Green Logistics

With the digital and intelligent foundation of the supply chain, ZTE has been advancing innovations in delivery modes. By promoting automation, scenario-based management, and diversified services, we have achieved efficient and green delivery.

Green Transportation

ZTE enables digital interactions between partners along industry chains through the Intelligent Logistics Management System (iLMS). The company has managed to select the optimal transportation routes, prioritize low-carbon transportation modes, and improve the loading rate, promoting green transportation.

To effectively promote green logistics, ZTE has extensively communicated with relevant stakeholders and, coordinated the green logistics resources of all parties. On this basis, the company has formulated a full-cycle carbon-neutral green logistics solution, and promoted the implementation of the solution.

[Case] End-to-End Carbon-Neutral Pilot Line for International Freight

In June 2023, together with Lufthansa and Sinotrans, ZTE picked up goods from its factory in Nanjing to Shanghai Pudong Airport with electric trucks, transferred the goods to Frankfurt Airport in France by air with Sustainable Aviation Fuel (SAF), and then to the warehouse in Madrid, Spain by road. In terms of the carbon footprint in this process, the company bought carbon offsets under the Verified Carbon Standard (VCS) and International-Renewable Energy Certificate (I-REC) in strict accordance with the international standards ISO 14064-3: 2019 and PAS 2060: 2014, to conduct carbon offsetting of the project and achieve carbon neutrality in the "end-to-end" logistics services. On June 29, 2023, ZTE received the "Verification Statement of Achievement of Carbon Neutrality" issued by SGS, marking that the "end-to-end" carbonneutral green logistics solution has been verified.

Green Warehousing

ZTE actively promotes the digitization of warehousing by putting the systematic management of warehousing processes on the WMS system, including inbound and outbound delivery as well as inventory management. By optimizing outbound operation tickets and the handover process between the company and logistics service providers, and adding functions such as electronic signatures for outbound delivery tickets, ZTE reduced a total of 2.85 million paper sheets consumed by its global warehouses throughout last year.

In addition, the company has formulated regulations on warehouse energy saving to tighten control, and realized lights-out management in the automated operation areas, effectively saving electricity for lighting and storage equipment and facilities in warehouses. In 2023, ZTE completed the installation of a solar PV system on the roof of the finished products warehouse in Nanjing, enabling the use of PV power in the warehouse. At the same time, ZTE has adopted electric forklifts in all its warehouses in China, and increased the proportion of electric forklifts replacing fuel-powered forklifts in overseas warehouses by 10%.

Green Circulation

ZTE is committed to maximizing resource efficiency through the "dual circulation" mode, ensuring that resources are fully utilized and recycled.

Regarding internal circulation, we focus on the integration of multiple utilization methods. Through disassembly, reassembly, rework, and repair, recycled materials can be internally consumed in finished and semi-finished products, reducing the scrap rate while meeting the quality and compliance requirements. In 2023, the company's direct reuse rate of returned materials reached 92%.

As for external circulation, the focus is put on collaborating with downstream recyclers to build a global green recycling network. With new recycling technologies, the company has been increasing the residual value of materials to be scrapped through the refining of metals or recycling of bioplastics in a compliant and environment-friendly manner. In 2023, ZTE collaborated with more than 120 downstream recyclers, recycling a total of 612.5 tonnes of metals and 43 tonnes of bioplastics throughout the year, and the incineration and landfill rate for materials remained less than 1%.