ZTE's Sustainability Report 2023 highlights advancing digital innovation for a more sustainable future

ZTE constantly explores new fields, applications, and value of digital and intelligent transformation, contributing to industrial revolution, social development, and the well-being of all humanity

ZTE made CDP A List for leading climate action and received official approval for both near-term and long-term GHG emission reduction targets from SBTi

As one of the first ITU P2C Champions, ZTE pledged to construct ICT infrastructure annually for LDC/LLDC/SIDS countries by 2025 and to dedicate 50,000 hours of ICT lectures globally for the benefits of local workforces in need, as part of its efforts to drive global meaningful connectivity

ZTE Corporation (0763.HK / 000063.SZ), a global leading provider of integrated information and communication technology solutions, recently released the company's Sustainability Report 2023, detailing its strategies, actions and progress in green innovations, social contributions and corporate governance. As a Driver of Digital Economy, ZTE has been releasing sustainability reports for 16 consecutive years, highlighting its unwavering commitment to sustainable business.

Xu Ziyang, CEO at ZTE, stated in the report: "We uphold the Human-Centric and Tech for Good philosophy, and constantly explore new fields, applications, and value of digital and intelligent transformation. Together with global customers, partners, investors, and people from all walks of life, we will build a digital and intelligent ecosystem, making efforts and contributions to promote industrial revolution, accelerate social development, and enhance the well-being of all humanity."

The report highlights ZTE's dedicated efforts in building its digital intelligence capabilities and continuous innovation in underlying technologies. The company has been enhancing its investments in main business fields, including chipset, algorithm, architecture, database and operating system. As of 2023, ZTE has filed over 89,500 patent applications and obtained over 45,000 granted patents globally. Additionally, ZTE has been advancing phygital innovation, successfully implementing benchmark projects in multiple industries to promote high-quality development across diverse sectors.

Driving green innovations to shape an eco-friendly ecosystem

ZTE is committed to green development, driving green innovation to shape an eco-friendly ecosystem. This commitment is underpinned by four dimensions: green operations, green supply chain, green digital infrastructure and green empowerment, contributing to net zero emission.

In green operations, ZTE achieved a 9.7% YoY decrease of absolute GHG emissions (scope 1&2&3) throughout the value chain, a 14.58% YoY decrease in the physical intensity of GHG emissions during the use and maintenance phases of the company's sold telecom products, and over 700% YoY growth of PV power generation installed capacity in 2023.

In terms of green supply chain, the company has completed carbon reduction audit for more than 150 suppliers, and achieved a 3.26% reduction in carbon emissions intensity through its green logistics efforts. Moreover, ZTE was rewarded "National Level Green Supply Chain Management Enterprise" and ZTE Heyuan Base was recognized as a "National Green Factory" in 2023.

For green digital infrastructure, ZTE currently holds over 650 green patents, has conducted carbon footprint assessments for 101 products, encompassing all product categories. The company has helped global operators save more than 10 billion kilowatt-hours in electricity consumption annually.

In the realm of green empowerment, ZTE has introduced a green precision cloud-network solution based on its "Digital Nebula" architecture. Collaborating with over 1000 global top industry partners across diverse sectors, the company has launched more than 100 application scenarios for 5G+ innovative green initiatives. Through these efforts, the company continues to support various industries in their digital transformation and sustainability goals, promoting cost reduction, efficiency improvement, and quality enhancement to drive energy conservation and emission reduction.

Thanks to its sustained efforts in green development, ZTE's science-based targets, achieving greenhouse gas emissions reduction in line with the 1.5°C temperature rise limitation pathway and reaching net-zero emissions by 2050 at the latest, have been approved by the Science Based Targets initiative (SBTi) in April 2024. This makes ZTE the first large-scale ICT tech company in China to receive official approval for both near-term and long-term GHG emission reduction targets and to make CDP A List for leading climate action, the highest level of recognition for corporate environmental transparency and performance. Additionally, the company recently unveiled "ZTE Zero-Carbon Strategy" white paper at ZTE Sustainable Development Forum, outlining the implementation roadmap of its zero-carbon strategy, demonstrating the company's commitment to collaborating with various sectors to advance global zero-carbon endeavors.

Embracing Tech for Good to bridge global digital divide

Xie Junshi, Executive Vice President and Chief Operating Officer at ZTE, said: " ZTE incorporates sustainability and ESG into corporate operations and governance, sticks to the philosophy of Tech for Good, and takes on the responsibility and role of a leading ICT player, to bridge the digital divide and enable connectivity and trust everywhere."

As a global enterprise, ZTE has been engaging in building high-performance "superb networks" across over 100 countries and regions, facilitating the bridging of global digital divide. ZTE has been actively responding to the International Telecommunication Union's (ITU) call for support in global digital transformation efforts through its Partner2Connect (P2C) Digital Coalition and was recognized as one of the first P2C Champions by ITU. Specifically, ZTE pledged to construct ICT infrastructure annually for Least Developed Countries (LDCs), Landlocked Developing Countries (LLDCs), and Small Island Developing States (SIDS) by 2025, and to dedicate 50,000 hours of ICT lectures globally for the benefits of local workforces in need, as part of its efforts to drive global meaningful connectivity.

Supplier capability building is key for ZTE to ensure supply chain resilience and product quality. In 2023, the company released the SPIRE 2.0 strategy to boost resilience of its supply chain, and carried out diverse training programs to promote capability enhancement of suppliers, jointly contributing to sustainable development.

ZTE puts people first and front, prioritizing the welfare and development of its employees and fostering a nurturing and inclusive workplace environment. In 2023, the average training hours per employee reached 144.7. ZTE was honored with LinkedIn MostIn Awards - Global Talent Magnet Employer in 2023, recognizing its global talent attraction efforts.

ZTE actively fulfills its corporate social responsibility by engaging in public welfare initiatives worldwide, including educational support, medical aid, and care for vulnerable groups. As of 2023, the company has registered 10,754 employee volunteers, accumulating a total of 29,024 volunteer hours. The company's influence on green development was further extended through welfare activities. For example, the pilot project of forest management and carbon sequestration, which marked milestone progress of the "ZTE Ecosystem Conservation Fund," was successfully implemented.

Strengthening corporate governance to build a highly resilient organization

ZTE places significant emphasis on internal controls, compliance, social credibility, and business continuity management (BCM). The company continually enhances its corporate governance system, standardizes operations, and ensures continuous and robust business performance.

In 2023, ZTE successfully passed the re-certification audit of the company's anti-bribery management system and maintained the ISO 37001 Anti-Bribery Management System certification. It conducted 214 joint Business Continuity Plan (BCP) drills in high risk fields. Additionally, the company continuously improves its quality management system. In 2023, ZTE Global Certification and Testing Center conducted 1,372 safety tests throughout the year with a test pass rate of 100%.

As a member of the United Nations Global Compact (UNGC) and the Global Enabling Sustainability Initiative (GeSI), ZTE's achievements in sustainable development and ESG have gained widespread recognition. For instance, ZTE was selected in UNGC Private Sector Case Studies for achieving Sustainable Development Goals (SDGs) in 2023, and has been included in the FTSE4Good Index Series for eight years and Fortune China ESG Impact List for three consecutive years. Additionally, ZTE was honored among Top 30 ESG Excellence Practices in China and recognized as 2023 IDC China Sustainable Development Pioneer Case.

Moving forward, ZTE will remain committed to its vision "To Enable Connectivity and Trust Everywhere," leading the way in digital innovation to ensure that the benefits of innovations reach all industries and sectors, contributing new momentum to sustainable development.

For more details of ZTE Sustainability Report 2023, please download: https://www.zte.com.cn/content/dam/zte-site/investorrelations/en_announcement/ZTE_Sustainability_Report_2023_EN_0603.pdf

To discover more updates about our commitment to the sustainability, please visit ZTE Sustainability website: https://www.zte.com.cn/global/about/sustainability.html