As a global technology group integrating five major sectors: smart home, industrial technology, building technology, robotics and automation, and innovative business, Midea Group has recently successfully passed the audit of the United Nations Global Compact Office and officially joined the United Nations Global Compact (UN Global Compact).
The United Nations Global Compact (UN Global Compact) is the world's largest international organization to promote corporate sustainable development, and the concept of ESG (Environmental, Social and Governance) was first proposed by the UNGC. The organization has more than 20,000 corporate and other stakeholder members from nearly 170 countries who are committed to the 10 principles of the Global Compact, which are based on UN conventions and cover labor standards, the environment and anti-corruption. The UN Global Compact continues to help businesses integrate the 10 Principles of the Global Compact into their strategies and operations, and work together to advance the achievement of broader UN goals through cooperation and partnership, jointly address various challenges in the process of globalization, advance the realization of broader development goals, and accelerate the global sustainable development process.
Global breakthrough is one of the four strategic axes of Midea Group. Joining the United Nations Global Compact is an important measure for Midea Group to practice corporate social responsibility and promote sustainable development, and it is also an important embodiment of Midea Group's acceleration of global breakthroughs and enhancement of brand international influence. So far, Midea has about 200 subsidiaries, 35 R&D centers and 40 major production bases around the world, covering more than 200 countries and regions. Among them, it has 20 overseas R&D centers and 21 major production bases, covering more than 10 countries, with about 30,000 overseas employees and 22 settlement currencies.
In terms of environmental governance, Midea Group takes the "green strategy" as the core, actively advocates the concept of green development, and promotes energy conservation and emission reduction in the entire industrial chain. In 2021, Midea Group released its green strategy for the first time, and promised to "achieve internal carbon peak by 2030 and move towards carbon neutrality by 2060", actively integrating into the overall situation of serving the country's "dual carbon" strategy, and focusing on the six pillars of "green design, green procurement, green manufacturing, green logistics, green recycling, and green service". In May 2022, Midea Group officially established the ESG Committee, which is responsible for promoting the Group's ESG-related work, clarifying various ESG matters and incorporating them into the annual key work plans of each department, firmly and continuously promoting green development, integrating the concept of green environmental protection into the whole life cycle of products, and striving to drive the green development of the industrial chain.
In April 2023, Midea Group officially released its 2022 ESG report, which is also the second ESG report released by Midea Group. The report is prepared with reference to the 17 new development goals of the United Nations Sustainable Development Goals, which aim to address the social, economic and environmental dimensions of development in an integrated manner from 2015 to 2030, and shift to a sustainable development path. The 17 Sustainable Development Goals (SDGs) are also commonly used by companies as an important guiding tool for ESG reporting.
According to Midea Group's 2022 ESG report, Midea successfully registered and released the world's first air conditioning environmental product declaration last year, and obtained an internationally recognized "green ID card". In terms of emission reduction effectiveness, Midea Group's total greenhouse gas emissions last year decreased by more than 200,000 tons compared with 2021. Up to now, Midea Group has established a total of 14 national green factories, achieving an annual photovoltaic power generation capacity of 215 million kWh in 2022, an increase of 48.06% over 2021; Participated in the formulation of 110 national, industry and other green standards. In 2022, Midea Group received a rating of AA in the CSI ESG rating.
The current climate change situation is severe, and global warming is happening at an unprecedented rate. Addressing climate change has become an international consensus, and governments, enterprises, and social organizations are taking positive actions to significantly reduce global greenhouse gas emissions. In order to improve its ability to respond to climate change, Midea Group has incorporated climate change risks into the company's overall risk assessment and management system. In 2022, Midea initially identified and analyzed the potential risks brought about by climate change from both physical risks and transition risks, and formulated response measures for the identified risks to improve our ability to adapt to climate change.
For example, sudden natural disasters caused by climate change can reduce the functionality and services that infrastructure can provide, in addition to direct economic losses and additional facility operation and maintenance costs. In its daily operations, Midea Group comprehensively assesses the impact of possible natural disasters on infrastructure, and improves its emergency response capabilities by formulating relevant risk emergency plans, carrying out equipment safety inspections and emergency drills. Incorporate climate risks into the early planning, design, construction, operation and maintenance of infrastructure, and use advanced technologies such as digitalization and intelligence to improve the adaptability of infrastructure to climate change.
In the face of chronic climate risks such as persistent high temperatures, droughts, and rising sea levels, natural conditions such as geography and climate should be fully considered when selecting locations for office areas and production parks, and the possible impacts of natural factors on production, storage, and employee working conditions should be evaluated. By adopting automation/digital equipment and improving production processes, we will reduce the impact of human and natural factors on production efficiency, continue to pay attention to the energy structure of the operating areas, promote electricity conservation measures, and attach importance to the development and application of energy-saving and emission reduction technologies. Develop and apply green and low-carbon technologies from the whole life cycle of products, continuously improve energy efficiency and increase the proportion of clean energy, reduce the use of energy per unit of production, promote green design, deploy green and low-carbon technologies, develop green products, and meet the expectations of the market and consumers for green products.
In addition, the company adheres to the basic principles of integrity, law-abiding, integrity and compliance, builds a modern corporate governance mechanism, takes ESG management as part of the company's development strategy, and fully integrates ESG work into business operations and management. At the same time, we organically integrate the concept of social responsibility with supply chain management to create a sustainable supply chain system. In the process of practicing social responsibility, we attach importance to communication with stakeholders, establish a normalized communication mechanism and interaction methods, and regularly respond to various interests in an open and transparent manner. Continuously enhance the awareness of green supply chain management, put forward clear corporate social responsibility requirements for suppliers in procurement, manufacturing, sales, recycling and logistics, effectively control the possible risks of the supply chain in terms of environment and society, create a green supply chain system, and work with suppliers to create a better life and future for consumers.
Green development is a frontier topic of world development, and it is also a key link for enterprises to achieve high-quality development. On the road of practicing sustainable development, Midea will work with more than 22,000 corporate members and more than 3,000 other stakeholder members from 170 countries to jointly promote global sustainable development, strengthen green development cooperation, promote green technology innovation, and create a greener and more beautiful future!