At present, it has become a global consensus to address climate change and promote green, low-carbon and sustainable development. China's machinery and electronic foreign economic and trade industry has made excellent achievements in green, low-carbon and sustainable development. In order to summarize the experience of the industry, CCCME collected green development cases from its member enterprises, and together with Deloitte China, prepared the Report on Sustainable Development of China's Machinery and Electronic Foreign Economic and Trade and Collection of Cases on Green Development of CCCME Members.

 

The report analyzes the significance of the sustainable development of the machinery and electronic foreign economic and trade industry, and summarizes the excellent enterprise cases in five aspects: Contribution to International Cooperation for Sustainable Development, Innovation in Green Products and Services, Green and Low-carbon Transition of Enterprises, Building Responsible Supply Chains, and Fulfillment of Social Responsibilities. In this article, we will share the cases of building responsible supply chains.

 

 

The responsible supply chain is gradually becoming a crucial topic in global supply chain management. With the advancement of economic globalization and integration, competition among enterprises is evolving from the past competition of individual enterprises in product quality and performance to the competition of enterprise supply chains. More and more companies are optimizing internal processes and improving supply chain management through closer collaboration with other supply chain enterprises. However, this model, which is more dependent on the external environment and collaborative enterprises, has also become a new core competency for businesses. Under the global sustainable development agenda, after managing climate risks and social crises, supply chain management is accompanied by more attention to social and environmental dimensions beyond economic benefits. Correspondingly, policies and requirements for responsible/sustainable supply chain management are becoming increasingly stringent. As early as 2014, international attention was given to the sustainability of the supply chain, starting with the development of green and low-carbon supply chains. In 2014, the Asia-Pacific Economic Cooperation (APEC) endorsed the Proposal on Establishing an APEC Cooperation Network on Green Supply Chain, emphasizing the greenization of supply chain development for the first time. In 2016, the United Nations, in The 2030 Agenda for Sustainable Development, identified "Responsible Consumption and Production" as one of the 17 sustainable development goals. It specified in the sub-goals the need to reduce resource losses in production and supply chains, emphasizing the efficient utilization of limited resources from a supply chain perspective. Guided by the United Nations' 2030 Agenda for Sustainable Development Goals, countries around the world have successively issued policy requirements related to responsible supply chains, continually driving improvements in supply chain responsibility. This trend is observed in various countries and regions.

 

 

China actively advocates and promotes the construction of green supply chains. The State Council and relevant ministries have formulated normative guidance documents for various aspects of green supply chains, such as the Enterprise Green Procurement Guide and the Green Manufacturing Engineering Implementation Guide (2016-2020). These documents encourage companies to implement sustainable supply chain management, enhancing their core competitiveness. In response to national policies on green supply chain management, local governments have developed implementation plans for green manufacturing systems, such as the Notice on the Reward Policy for the Outstanding Units in Energy Conservation and Industrial Green Development in Tianjin during the 13th Five-Year Plan Period and the Implementation Plan for the Creation of Green Manufacturing System in Jiangsu Province. In some regions, to support the sustainable development of the supply chain, certain amounts of financial rewards have been provided to exemplary enterprises. The disclosure of information regarding responsible supply chains has become increasingly stringent. In 2018, the Shanghai Stock Exchange organized the formulation of the Guidelines for Environmental, Social, and Corporate Governance Information Disclosure of Listed Companies on the Shanghai Stock Exchange, which entered the solicitation of opinions stage. The draft guidelines further specify the requirement for enterprises to disclose the auditing systems and procedures in the environmental and social aspects of supply chains. In May 2019, the Hong Kong Stock Exchange released the Environmental, Social and Governance Reporting Guide (draft), requiring enterprises to identify the environmental and social risks at each stage of the supply chain, as well as related implementation and monitoring methods. The guide also describes practices to encourage the use of environmentally friendly products and services when selecting suppliers.

 

Against the backdrop of international trends and domestic dual carbon goals, companies in the machinery and electronic industry are actively promoting continuous exploration and practice in areas such as machinery and electronic equipment trade, product research and development, digital operations, and resource recycling. They are making unremitting efforts to build responsible supply chains and drive mutual sustainable development with industry partners. This not only enhances the competitiveness of enterprises and the resilience of supply chains but also helps them achieve positive social and environmental values.

 

 

Lenovo Group: The Whole Value Chain Digital and Intelligent ESG Solution - ESG Navigator

Lenovo Group has been exploring collaborative carbon emission reduction measures across the supply chain and the path of transition toward net-zero carbon emissions characterized by "externalization based on internal growth & external empowerment" through digital and intelligent methods, in a bid to boost low-carbon development of the manufacturing sector.

 

Lenovo Group has released ESG Navigator, an enterprise-level ESG solution, which includes 7 sections such as ESG control tower, carbon neutrality, supplier ESG collaboration, and public benefit impact, and 15 product modules. The carbon neutrality section includes five templates: enterprise carbon accounting, product carbon footprint, logistics carbon emissions, zero-carbon factory, and zero-carbon building. The supplier ESG collaboration section includes ESG scorecard and supplier carbon management. ESG Navigator intelligent product & service solution covers the substantive issues confronting enterprises in ESG management, which can help enterprises break down organizational barriers through digital and intelligent methods, and enable them to realize ESG data-driven decision-making and conduct closed-loop process management, thereby empowering enterprises to achieve low-carbon transition and sustainable development.

 

First, in the supplier ESG collaboration section, ESG Navigator's supplier ESG management module draws on the key supplier ESG scorecard used internally by Lenovo Group to manage suppliers' ESG performance through more than 30 indicators such as the RBA (Responsible Business Alliance) Code of Conduct, the ISO quality and environmental management system, the CDP disclosure levels and ratings, the GHG emission reduction targets, the water resource management and solid waste management targets, and the renewable energy usage. Suppliers' responsible performance is scored regularly and is used as a reference for the purchasing quota to provide incentives for suppliers to improve their ESG performance. At the same time, ESG Navigator completes internal KPI tracking and provides the subsequent supplier improvement plan by counting the supplier's performance in each index, completing the closed-loop management.

 

Taking Lenovo Group's supplier carbon reduction-related KPIs as an example, led by Lenovo, based on the purchasing value in FY2022/2023, the number of suppliers that have committed to setting or have already set science-based carbon targets has risen to 45%, up from 28% in the previous fiscal year, while 72% of suppliers have set renewable energy targets; and 84% of suppliers have tracked and reported on their renewable energy production and purchase. Lenovo's long-term goal is to drive suppliers, who account for more than 95 percent of purchases, to participate in science-based carbon reduction.

 

Next, in the carbon neutrality section, ESG Navigator's product carbon footprint module digitally realizes the accurate calculation of the life-cycle carbon footprint of products, and evaluates the environmental impacts of products at all stages of their life cycle, including carbon emissions, air pollution, and water pollution, etc.; and the carbon accounting module of enterprises serves for automatically accounting carbon emission data to satisfy the requirements of corporate information disclosure. Moreover, combined with product carbon footprint and industry data, it is capable of providing consulting and service support for enterprises in elaborative carbon emission reduction and carbon emission trading, thereby facilitating enterprises in achieving the goal of carbon neutrality.

 

In addition, in the environmental compliance section, ESG Navigator can help enterprises respond to the challenges of mandatory regulations and voluntary certification in export by transforming complex regulatory requirements into a system data model, significantly reducing the cost of compliance for enterprises. This is of vital significance for Chinese manufacturing to maintain global competitiveness.

 

As the world's leading ICT manufacturer and a model for the green development of China's manufacturing industry, Lenovo Group, while striving to achieve Net Zero by 2050, will also empower more manufacturing industries and enterprises toward zero-carbon future with its experience, expertise, and management ability accumulated.

 

 

Xiamen C&D Inc.: Boosting the Steel Industry to Develop a New Green and Low-Carbon Framework

Shanghai C&D Material Co., Ltd. (hereinafter referred to as "Shanghai C&D Material"), one of the main operators in the iron and steel supply chain section under Xiamen C&D Inc., has been focusing on the promotion and value-added services of iron and steel products for many years. Its business scope covers raw materials and finished products. Relying on its professional risk control system, the company integrates its experience in the industry with its professional capabilities in logistics, information, finance, and commerce to provide industry partners with supply chain operation solutions.

 

To facilitate the green and low-carbon development of the iron and steel industry, Shanghai C&D Material actively extends to the upstream and downstream sectors of the iron and steel industrial chain, and assists steel plant partners in improving the utilization rate of steel scrap by carrying out the recycling and processing business of steel scrap, shaping a mode of coordinated development of industrial and supply chains. Shanghai C&D Material has planned and built numerous steel scrap industrial bases integrated with warehousing, processing, distribution, and settlement around the mainstream cooperative steel plants. The total investment of the project amounts to about 1 billion yuan, covering an area of 400,000 square meters. The processing centers are located in Tianjin, Tangshan, Baotou, Changchun, Benxi, etc., with the total designed processing capacity of 3.7 million tons a year. Since 2019, the operating organizations invested and run by Shanghai C&D Material in succession, including Benxi Steel Scrap Base (Phase I and Phase II), Baotou Steel Scrap Base, Tangshan Steel Scrap Base, and Tianjin steel scrap Base, have all possessed the qualification of "Entry Criteria for Scrap Iron and Steel Processing Industry" issued by the Ministry of Industry and Information Technology. These megaton-scale national scrap iron and steel processing and distribution demonstration bases can meet the steel scrap demands of iron and steel companies within 100 kilometers.

 

To improve the operational efficiency of the steel scrap bases, the company's steel scrap project team continues to independently research and develop the digital management system and adopts technologies and applications such as blockchain, intelligent identification, electronic contracts, direct connection between banks and enterprises, and intelligent grading, which reduces the operational cost of the enterprise and solves the problems of high labor intensity, poor security, low unloading efficiency, low fairness, and great subjective influence that existed during the operation process of traditional steel scrap projects. It creates a full-chain digital closed loop of steel scrap operation and promotes industry standardization and digital intelligence.

 

As the project operation increasingly gets matured, Shanghai C&D Material deepens the cooperation with steel plants in the recycling of steel scrap. Up to now, Shanghai C&D Material Steel Scrap Processing Base has delivered a total of 3.08 million tons of steel scrap to the neighboring large and medium-sized iron and steel enterprises, which can reduce 4.93 million tons of carbon emissions and save 1.08 million tons of standard coal. It has become a vital strategic partner of many core iron and steel enterprises, such as Baogang, Shougang, Ansteel, and Bensteel. Besides, the company has been honored as the "Vice President Organization of China Association of MetalScrap Utilization", "2021 National High-Quality Steel Scrap Processing and Distribution Enterprise", "2022 China Famous Brand of Urban Mining", and "2023 China Outstanding Processing Enterprise in Recycling Industry". The company's innovation and practice in leading the digital transformation and development of the recycled iron and steel industry has won unanimous praise in the industry, and its system has been connected to 31 external customers, such as steel factories, banks, and logistics service providers. The company continues to promote the building of a renewable resources recycling circulation system, contributing to the new pattern of energy-saving emissions and green and high-quality development of China's iron and steel industry with practical actions.

 

Awarding Ceremony of National Steel Scrap Processing and Distribution Demonstration Base and Signing Ceremony of Xiamen C&D's Settlement in Benxi

 

C&D Steel & Iron (Tangshan) Steel Scrap Base

 

 

LONGi: "Supply Chain Green Partner Empowerment Plan" Facilitating Carbon Emission Reduction Across the Supply Chain

As a leader in global energy transition, LONGi Green Energy Technology Co., Ltd. (LONGi) has been committed to creating affordable and accesible green energy for the world. In response to the global climate action and in order to fulfill the national "dual carbon" strategic goal and promote the high-quality development of the enterprise, LONGi continues to promote the construction of a green supply chain system, conduct in-depth evaluation of green suppliers, adopt more accurate methods to calculate the emissions across the supply chain, and provide support in energy conservation and emission reduction for upstream and downstream suppliers.

 

In 2022, LONGi launched the "Supply Chain Green Partner Empowerment Program" toward its supplier partners. This plan aimed to enhance the carbon management awareness and ability of enterprises across the supply chain and urge them to take actions under the energy conservation and emission reduction initiative by conducting carbon management empowerment training, planning carbon emission reduction target and path, and establishing monitoring and evaluation systems.

 

In September 2023, LONGi completed the work in the first phase of the "Supply Chain Green Partner Empowerment Program". During the last session of the empowerment training in this phase, a total of over 120 supplier representatives exchanged their views on low-carbon fuels, carbon emission reduction across the supply chain, environmental and carbon data disclosure, science-based targets setting, integrated energy solutions and practices, and other relevant topics. In the following phase, LONGi will work together with its ecological partner Towngas Energy, to promote at least 50 supplier partners to complete carbon inventory, and support at least 10 suppliers in setting science-based targets and at least five key suppliers in taking actions under the energy conservation and emission reduction initiative. By doing this, LONGi aims to build a greener and more sustainable supply chain with all these partners.

 

Carbon management training for suppliers under the LONGi's "Supply Chain Green Partner Empowerment Plan"

 

LONGi has been included into the 2022-2023 Fortune China ESG Influential Listing, Forbes China Top 50 Sustainable Development Industrial Enterprises, and Corporate Knights 2022 Global 100: the world's most sustainable companies. Moreover, it has won the 2022 Bloomberg Green ESG Pioneers, and 2022 Technology Responsibility Pioneer. It has been rated as Level BBB, the top of the industry, in the global mainstream MSCI (Morgan Stanley Capital International) ESG rating, and has been rated as a CDP Global Environmental Disclosure Company. Moreover, it has been ranking first in terms of the Corporate Climate Action Transparency Index (CATI) issued by the Institute of Public & Environmental Affairs (IPE) in the photovoltaic industry for three consecutive years.