2023 Environmental Social and

Governance Report

Writing a Sustainable Business Future

Shanghai M&G Stationery Inc. Stock Code: 603899Contents

Opening Performance Data and Index

About this Report 01 Environmental Performance 93

President's Message 03 Focus: Developing Social Performance 95

Sustainable Products Environmental DevelopmentSustainability Highlights of the Year 05 Governance and Economic Performance 99

About the Company 07 Sustainable Products of the Year 21 Responding to Climate Change 55 GRI Standards (2021) Content Index 101

Sustainable Design Concept 24 Practicing Green Operations 60

Sustainable Materials 25

Green Product Packaging 28

Chemical Safety Management 28

Sustainable Development

Strategy and Management Governance and Business Growth Social Responsibility

Sustainable Development Management 11 Corporate Governance 35 Sustainable Supply Chain 69

Identification and Analysis of Material Topics 15 Risk Management 38 Employee Rights and Benefits 72

Stakeholder Communication 17 Business Ethics and Anti-Corruption 41 Employee Cultivation and Development 78

Information Security Management 45 Occupational Health and Safety 82

Technological Innovation and Digitalization 47 Product and Service Quality 84

Social Philanthropy 88Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

About this Report

This report is the third Environmental Social and Governance Report (hereinafter referred to as "ESG Report" or "this Report")

released by Shanghai M&G Stationery Inc. (hereinafter referred to as "M&G Stationery" "M&G" "we" or "the Company")

focusing on the disclosure of M&G Stationery's concepts progress and highlights in environmental protection social

responsibility and corporate governance in 2023.Basis of Preparation Report Access

This report is prepared with reference to the Sustainable Development Goals (SDGs) the GRI Sustainability Reporting Standards This report is available in both Simplified Chinese and English. It is released in both paper and electronic versions. This English

issued by the Global Sustainability Standards Board (GSSB) (hereinafter referred to as the "GRI Standards") and the Guidelines version is converted from the Chinese version. In case of any discrepancy between the Chinese version and the English version

No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial) (Draft for Comment). the Chinese version shall prevail.The electronic version of the report can be viewed and downloaded on the Shanghai Stock Exchange website (www.sse.com.cn)

China Securities Information Service Platform website (www.cninfo.com.cn) and M&G Stationery's corporate official website (www.mg-pen.com).Scope of Report

Feedback and Suggestions

This report covers the sustainable development practices and progress of M&G Stationery and its subsidiaries from January 1

2023 to December 31 2023 (hereinafter referred to as "this year" or "reporting period") with some content and data appropriately

traced back or extended to other years. Unless specifically stated all amounts involved in this report are in RMB. If you have any questions or feedback on this report please feel free to contact us through the following channels:

Address: No. 5 Lane 288 Qianfan Road Xinqiao Town Songjiang District Shanghai

Email: ESG@mg-pen.com

Statement

Data used in this report is sourced from the Company's official documents related reports and statistical reports.This report was reviewed and approved by the Company's 5th meeting of the 6th Board of Directors the 1st meeting of Strategy

Committee in 2024 and the 5th meeting of the 6th Board of Supervisors on March 28 2024.

01 02Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

President's Message

M&G celebrated its 34th anniversary in 2023. This

year is also the second year since the launch of M&G

Stationery's sustainable development strategy. Amidst

the global wave of sustainable development and with

the trust and support of our stakeholders we have been

forging ahead seizing development opportunities in this Building a sustainable supply chain and urging Strengthening corporate governance and

uncertain era. We have been vigorously accelerating suppliers to enhance responsibility management consolidating the foundation for steady growth

our sustainable development process focusing on the

four strategic pillars of "sustainable products" "response We attach great importance to a stable secure and sustainable We continuously optimize our corporate governance structure

to climate change" "sustainable supply chain" and supply chain and have been vigorously integrating ESG and composition and strive to build a robust and efficient

"empowering employees and communities". We are considerations into supply chain management. In 2023 governance model which is vital for us to operate and grow in

we optimized and upgraded our supplier ESG evaluation a benign way. In 2023 we established the Risk Management

committed to integrating sustainability into every aspect mechanism comprehensively incorporating indicators in labor and Compliance Committee to enhance risk management

of our operations laying a solid foundation for the and employment environmental protection health and safety compliance management and internal control management of

Company's long-term success. business ethics and management system into the evaluation the Company ensuring continuous improvement of compliance

criteria. We completed the ESG evaluation of 71 key suppliers standards in our operations. We also integrate ESG concepts

during the year. To enhance supply chain capacity building into corporate governance and strive to build a robust motivation

we offered trainings on the supplier ESG evaluation system mechanism for ESG management by linking ESG performance

for both our procurement staff and suppliers and launched the with executive compensation.Focusing on quality and expanding our sustainable Addressing climate change and focusing on full "ESG Progress Award" at the annual supply chain conference

products portfolio value chain energy conservation and carbon to recognize suppliers with outstanding ESG performance. The only viable way to achieve true sustainable economic

reduction We will continue to work together with our suppliers to build a environmental and social development in the new era is by

We have been increasingly incorporating sustainability concepts sustainable supply chain. fully integrating sustainable considerations into all aspects

into the full lifecycle of products. Our innovative sustainable We actively respond to the carbon peaking and carbon of business operations. This is the fundamental logic behind

products such as the carbon-neutral stationery series are neutrality goals of China steadily moving forward towards our Empowering employees and communities and our sustainable development vision of "writing a sustainable

highly recognized by consumers customers media and goal of "to be carbon neutral by 2050". In 2023 we conducted joining hands with partners to do good business future". We will adhere to long-termism keep

professional partners. We are encouraged to continuously a company-level Scope 1 and Scope 2 greenhouse gas (GHG) on innovating overcome difficulties to do the right things

innovate on more sustainable product possibilities. We also emissions accounting to understand the baseline emissions We are committed to building a people-oriented open and provide "quality stationery for everyone" and respond to the

actively explore more sustainable material choices regarding data of our operations. In addition we also initiated the efforts inclusive corporate culture. We provide employees with rich expectations of stakeholders with concrete actions instilling the

key material categories. Our industry leading PVC phasing to calculate our Scope 3 emissions. With the rapid deployment training resources to support their career development and world with the positive energy of a Chinese brand.out program has already eliminated PVC plastic from more of photovoltaic power generation units in our production bases continuously optimize the compensation and benefits system

than 1700 products and/or packaging. In order to further grow our installed capacity of photovoltaic power generation further allowing our employees to realize their career dreams at M&G.our sustainable products lineup we have formulated our first expanded to 15700 kilowatts. M&G Shanghai base achieved Over the years through the Shanghai M&G Charity Foundation

sustainable products corporate standard and are committed to significant energy-saving results through a series of energy- we have been actively participating in rural revitalization as well

fully integrating sustainable concepts into the development of all saving projects. We focused on green logistics and have as other charitable undertakings. We have carried out a series

product categories. achieved greater results in resource conservation and energy of long-term charitable programs with increasing impact such

conservation in the logistics process with measures such as the "Golden Seed Plan" education assistance program the Chen Huxiong

Over 600 Jiumu Stores nationwide have set up a dedicated as packaging reduction packaging reuse intelligent route "Art Education Plan" program and the Autism Support Program.section for sustainable products. M&G sustainable products are optimization etc. In 2023 we were honored to be recognized As of the end of 2023 close to 1 million students and more than President of Shanghai M&G Stationery Inc.gaining greater attention on major events home and abroad as a "Shanghai Five-Star Green Factory". In the future we will 3000 teachers have benefited from the M&G public welfare

such as the Consumer Products Expo the Boao Forum for Asia continue to reduce our environmental footprint in production projects. Meanwhile we engage senior executives employees

and the 28th Conference of the Parties to the UN Framework operation and supply chain contributing to the green and low- channel partners and other internal and external stakeholders

Convention on Climate Change (COP28). We want to share carbon transformation of the industry. of M&G to participate in charitable donations and provide

our sustainable concept of "writing a greener future" with an volunteer services further expanding the scope and influence of

increasing number of consumers and communities contributing our public welfare undertakings.to making sustainable consumption a new trend of the era.

03 04Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Sustainability Highlights of the Year

* Developed and launched a number of innovative sustainable products such as the carbon-neutral * Leveraged M&G's business advantages to organize a painting competition for rural students that participated

series the "Carbon Emission Reduction Plan" series and the "Endangered Animals: Wetland" series by close to 120000 children

* Raising consumer awareness about climate change and biodiversity through multiple product promotion * Enlarged the scope of the Autism Support Program to support adults with autism by integrating resources

activities online and offline from multiple parties to provide employment and social inclusion opportunities

* Eliminated PVC plastic from over 1700 products and/or packaging cumulatively

* Released ESG report for the 3rd consecutive year

* Developed M&G's 1st sustainable products corporate standard covering the new product development

process for all product categories * Linking ESG performance to executive compensation including ESG factors in the annual performance

Sustainable evaluation system for 8 department heads* Jiumu Store created a sustainable products section in over 600 stores nationwide and a total of 166000

products consumer membership points were redeemed for donations of over 1600 stationery sets * Established the Risk Management and Compliance Committee chaired by the Company president further

optimizing the Company's risk management structure and policy system

* Established the Chemical Management Committee revised the Company's Chemical Management

Policy and updated the list of chemicals to be phased out by referencing the REACH regulation Responsible * Launched an online training course on the M&G Code of Business Conduct as a mandatory course for all corporate employees

governance * Conducted internal control audits against non-compliance with business ethics covering 22 operating locations

* Completed company-level Scope 1 and Scope 2 GHG emissions accounting and conducted that represent 100% of M&G's operational sites

preliminary calculation of Scope 3 emissions to identify carbon emission sources and reduction potentials

* Implementing multiple energy-saving measures: air compressor energy saving waste heat recovery Awareness and

injection molding machines upgrade and water pump motors optimization Participation

* Increased the total installed capacity of photovoltaics to 15700 kilowatts

* 1000+ employees from 36 departments participated in trainings on M&G's sustainable development strategy

Response to * Promoted greener packaging options and packaging reduction for the logistics process with 330000

climate change cardboard boxes saved and 640000 cardboard boxes recycled cumulatively * 16 sustainability themed events and activities organized internally

* Reduced 48840 kilograms of carbon dioxide equivalent in 2023 through electricity water and paper

conservation campaigns in the M&G headquarters office building * 23 employees selected as Sustainability Ambassadors to promote sustainability concepts within their own departments

* 3787 employees participated in public welfare activities including all M&G executives

* Optimized the supplier ESG evaluation standard focusing on labor and employment environmental

protection health and safety business ethics and management systems * RMB280000 charitable donations raised through activities such as the "E.G.G Walkathon" charity walk and the "99

Giving Day" events with the participation of consumers employees and partners of M&G

* Evaluated 71 suppliers and conducted 27 on-site audits with a rectification pass rate of over 80%

* Incorporated ESG indicators into the annual performance evaluation of suppliers and the new supplier

introduction process

Sustainable ESG Ratings and External

supply chain * The first "Supplier ESG Progress Award" was presented at the annual Supply Chain Conference Recognitions

* 100% procurement service and engineering suppliers and contractors signed the Transparent MSCI ESG rating upgraded from BB to BBB 2023 "Top Human Resources Management

Procurement & Integrity Convention Awards—Outstanding Employer" by 51job

"Social Value 99" ranking improved from 42nd to 17th

The 18th "People's Corporate Social Re-

* Revised the Employee Handbook in accordance with international human rights conventions and added "ESG Best Practice Case for Listed Companies sponsibility Award" by People.cn

multi-dimensional employee communication channels to ensure the effective protection of employee rights in 2023" by China Association for Public Companies

* Optimized the remuneration system providing all employees with performance-based variable compensation "Shanghai Five-Star Green Factory"

2023 "China Green Point" Case of the Year by

* Introduced comprehensive health insurance for all employees upgraded the living conditions in factory China Business Network (Yicai) Axus Stationery was awarded the title of "Shanghai

dormitories and achieved an overall employee satisfaction score of 92% for office environment Industrial Product Green Design Demon-

* Average training time per employee increased to 11.8 hours with an employee training coverage rate of 93% "GoldenKey—SDG Forerunner" by China Sustain- stration Enterprise"

ability Tribune Magazine

Empowering * Launched the M&G online learning platform offering 85 courses covering workplace skills management

employees and M&G Colipu achieved "2022 Social Responsibil-skills corporate culture and business knowledge; the cumulative online learning time over the platform 2023 GoldenBee CSR China Honor Roll—ESG Competi-

communities ity Award" from Shanghai Federation of Industry and reached 10000 hours tiveness · Sustainable Product & Service Award Commerce

* Charitable donations totaling RMB6.08 million The 8th "Value Co-creation" 2023 Sustainability

* M&G Charity carried out educational public welfare initiatives in 42 cities in 19 provinces benefiting nearly Case of Chinese Enterprises—Sustainable Product

1 million students and over 3000 teachers Award

05 06Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

About the Company Headquartered in Shanghai China M&G owns the M&G Stationery Industrial Park which covers a total area of 550 mu. In 2023 M&G sped up the expansion of overseas markets. Based on local characteristics the Company developed localized products to enhance

overseas competitiveness of its products and sorted out the product development process and improved product management

efficiency for prompt satisfaction with consumers' needs in overseas markets. Shouldering the mission of "providing affordable stationery

for local students" the Company continued to explore the African market and carried out product promotion activities and made

Business Overview donations to schools enabling more students to use cost-effective products of M&G. In the Southeast Asian market the Company

made positive channel arrangements improved operation quality and further enhanced the influence of M&G brand. Amid the changing

external environment the Company saw rapid growth of overseas sales and continuously improving product competitiveness brand

influence and channel development capability with the overall operation management and team-building capabilities in overseas

As one of the world's largest stationery manufacturers Shanghai M&G Stationery Inc. is a comprehensive stationery supplier and office

markets significantly boosted.servicer. The Company integrates the value of creativity into its products and service advantages advocates a fashionable stationery

lifestyle and provides solutions for study and work committed to making study and work more joyful and effective. M&G's products

mainly include writing instruments student stationery office supplies and other related products. On January 27 2015 M&G Stationery M&G Cultural Concept System

was officially listed on the Shanghai Stock Exchange A shares under stock code 603899.ness and inn clue siven

et

op ess

s sd in ni cem ri

M&G focuses on the development of four major product categories—mass market stationery segment premium stationery segment

World-cla

arts and kids drawing segment and office stationery segment. The Company also vigorously innovates on developing new channels n: ss Misio &G

including large retail store business such as Jiumu Store and M&G Life the direct office supplies business—M&G Colipu and the V

independent trendy cultural and creative brand More-Than-Fun (Qizhihaowan). With the acquisitions of Axus Stationery (which owns

the well-known wooden pencil brand MARCO) and the Norwegian high-end ergonomic backpack brand Beckmann M&G is expanding

its international market and continuously strengthening its brand portfolio. Core Culture

Prioritizing the well-

being of others before

our own

ake a stu joyf

ul

dy an d work more

2023 Business Performance

Revenue: RMB 23.3 billion

Total number of employees: 5839

M&G is present in nearly 70000 retail stationery shops nationwide including 659 large retail stores—M&G Life and Jiumu Store.In addition due to market demand thousands of new products are launched by M&G every year and its products are exported to

worldwide partners. M&G has maintained annual double-digit growth over the past decade with a total revenue of RMB23.3 billion an

increase of 16%.Retail shops nationwide: Nearly 70000

0708

Values: Consumer-centr

i c

nd eff ective

win-win mindset

s a

nd

ocu

y ft

: M

Missi

onSustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

History of M&G Stationery

2022

2021 Leading the industry in

sustainable development

1989 1997 A new five-year strategy M&G Stationery released the "2021

First step Launched the "M&G" trademark M&G Stationery formulated a new Environmental Social and Governance

five-year strategy; held a cloud 2020 Report" becoming the first listed

As the first step in start-up the The "M&G" trademark was officially launched signing ceremony with the Norwegian company in the Chinese stationery

Company was built in two small establishing the development path of the brand. schoolbag brand Beckmann. Established global industry to release an ESG report

bungalows in Hengshan Village The Company cooperated with stationery agents design center leading the industry in sustainable

Gurao Town Shantou. across the country and established partnerships. development.Brought Israeli design

brand Peleg Design to

attend CIIE announced

establishment of Israel

office of its global design

center.

200219992019

Creating M&G classic Production system has Acquired Axus Stationery 2023

products with ingenuity begun to take shape M&G Stationery acquired Axus

K35 the first press gel pen in M&G settled in Liuli Pudong with Stationery as its subsidiary.Launched M&G's first carbon-

neutral stationery series

China came out after 180 days of more than 100 employees. It has Brought Italian painting brand

process debugging and 17 process successively established mold CARIOCA to attend CIIE. M&G Stationery collaborated with Meituan's

optimization creating M&G classic injection printing and assembly "Lush Mountain Plan" and launched its first

products with ingenuity. workshops and the production system carbon-neutral stationery series another

has begun to take shape. encouraging step of the industry towards a

more sustainable future.

2005

Designated stationery

supplier of Boao 2008 2017

Selected as the designated Gained leading position

stationery supplier of Boao in the stationery industry 2015 Started strategic

Forum for Asia and has

The first "franchise chain" project Listed on the Shanghai transformation

provided support for Boao

was launched in the stationery Stock Exchange A shares

Forum for Asia for more than M&G Stationery explored new

industry. At the same time the

one decade. M&G Stationery officially listed on the retail in the industry and started

Guangming Park was completed Shanghai Stock Exchange A shares the strategic transformation of

and China Writing Instrument Center (stock code: 603899). "taking brand as the core and

and China Writing Instrument transforming from stationery to

Industrial Base were established cultural and creative life"; M&G

establishing the Company's leading Colipu successfully acquired Office

position in the stationery industry. Depot (China).

09 10Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Sustainable Development Strategy and Sustainable Development Vision and Strategy

Management In 2021 M&G formulated its 2022–2025 Sustainable Development Strategy around the vision of "writing a sustainable business future"

based on its development focus and business strategy in combination with industry trends. Focusing on four strategic pillars: sustainable

products response to climate change sustainable supply chain and empowering employees and communities the Company is

Sustainable Development Management committed to leading the industry's sustainable development with continuous efforts in developing environmentally friendly products ensuring sustainable procurement of raw materials conserving energy and reducing carbon emissions safeguarding employee rights

promoting employee development and conducting community activities to promote the concept of sustainable development.As the first listed company in China's stationery industry to release an ESG report M&G Stationery has been paying close attention to

sustainability-related topics in recent years and has formulated its governance framework and strategy for sustainable development.With a strong focus on sustainability culture the Company strives to continuously improve its sustainable development governance and

openly responds to stakeholders' concerns dedicating itself to writing a sustainable business future. M&G Stationery Sustainable Development Strategy

Sustainable Development Governance Framework

Vision Writing a Sustainable

M&G's Board of Directors and the Strategy Committee are responsible for the overall management and supervision of the Company's Business Future

sustainability risks reviewing and approving company sustainable development strategies goals and information disclosure and

supervising and self-assessing sustainability-related policies management approaches performance and goals and targets. Becoming an industry leader of sustainable development including:

Strategic

Under the supervision of the Board of Directors and the Strategy Committee the Company has established a dedicated Sustainability sustainable consumption green production responsible procurement focus on employee Positioning

Office. With the Chief Sustainability Officer in charge and equipped with professional talents with expertise and work experience in growth and promoting equal education

sustainability-related fields the Sustainability Office is responsible for coordinating environmental social and governance goals and work

plans in business operations ensuring the effective implementation of the sustainable development strategy and conducting internal

and external communication on sustainability-related content. The Sustainability Office regularly reports to the Strategy Committee on

sustainability-related risks and opportunities as well as the implementation progress of the strategic goals.Sustainable Response to Sustainable Empowering employees

Focusing on the four strategic pillars of M&G's sustainable development strategy the Sustainability Office collaborates with relevant units products climate change supply chain and communities

of the Company to form cross-business unit cross-department ESG taskforces. With each business unit functional department and

subsidiary responsible for the specific implementation all parties work together to ensure the realization of the Company's sustainable Producing sustainable Group-level carbon Supply chain manage- Management system of

development goals. To motivate the Company's management to focus more on sustainability M&G has included ESG-related factors in the products emission reduction targets ment system occupational health and

annual performance evaluation of the executives in charge of core strategic departments for two consecutive years. Sustainable design Improving energy Anti-corruption manage- safety

concept efficiency energy ment of supplier Employee training and

Sustainable raw material conservation and Supplier capacity building career development

consumption reduction system

M&G Stationery's Governance Framework for Sustainable Development selection Supply chain traceability

Chemical management Optimizing energy Employee benefits

system consumption structure Diverse and inclusive work

Board of Directors Four Green logistics culture

Pillars Green office operation Internal social support

Decision-making mechanism

Board Strategy Committee Featured community

activities

Sustainability Office

Coordination

Sustainable Response to Sustainable Empowering

products climate change supply chain employees and communities

Cross-business unit cross-department ESG taskforces

Execution Systematic Responsible corporate governance: Each business unit functional department and subsidiary Foundation building a top-down corporate management and governance system

11 12Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

M&G has set up sustainable development goals around the four pillars of its sustainable development strategy to ensure the Fostering a Culture of Sustainability

implementation of the strategy and planning.M&G Stationery's Strategic Goals for Sustainable Development In 2023 M&G actively carried out activities and events to promote the concept of sustainable development aiming to enhancing the

understanding of sustainable development among all employees. A total of 18 sessions were delivered on the Company's sustainable

development strategy with 1000 employees from 36 departments participated. The Company also established a team of Sustainability

Ambassadors to promote sustainability concepts internally ensuring that each department integrates the sustainability concept into

* To provide consumers with safe environmentally friendly and low-carbon products formulate practical actions.sustainable design concepts create sustainable products adhere to sustainable material

selection and establish principles for ensuring the safe use of chemicals.Sustainable Sustainability Ambassadors Ensuring the Implementation of

products * To achieve sustainable selection of some key raw materials by 2025 Sustainable Development Strategy

M&G is committed to ensuring the group-wide implementation of its sustainable development strategy. In July 2023

the Company established a team of Sustainability Ambassadors with a total of 23 employees serving as ambassadors

for their respective business units/departments. The Company has also established the Charter of Sustainability

Ambassadors to clarify the responsibilities objectives operation mechanisms requirements and disciplines of

* To measure carbon footprints regularly set group-level emission reduction targets further reduce Sustainability Ambassadors.energy consumption optimize energy consumption structure and promote green logistics and

green office. Responsibilities of Sustainability Ambassadors

Response to

climate change * To be carbon neutral by 2050.To understand and disseminate knowledge of sustainable development assist in

Knowledge

Dissemination building the Company's sustainability knowledge base and support the Sustainability

Office to implement training at each department.Sustainability To promote M&G's sustainable development concepts and actions to employees

Advocacy and support the recruitment and promotion of group initiated activities within each

* To implement responsible procurement keep optimizing supply chain management raise department.awareness about sustainable supply chain and optimize the management of chemicals in the

supply chain.Sustainable

supply chain * To meet M&G ESG guidelines by 2025 for 100% key suppliers. Low-carbon To promote the concept and support of the implementation of low-carbon office

Office initiatives in order to achieve annual low-carbon office goals.The Sustainability Ambassadors play an

important role in ensuring the implementation

* To attach great importance to employee growth and promote education equality. of the Company's sustainable development

strategy. They convey the concept of sustainable

Empowering * To extend the benefits of charity and community investment to development across various departments through

employees and 10 million people by 2030.communities strategy communication employee volunteering

and low-carbon office practices. With their efforts

sustainability concepts become more tangible

and the Company's sustainable development

strategy also becomes better understood among

employees making valuable contribution to

building a sustainable corporate culture.M&G Sustainability Ambassadors

13 14Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Identification and Analysis of Material Topics

In 2023 the Company continued to identify assess and select ESG material topics based on the GRI Standards as well as referring

to state regulations and guidelines and the best practices of industry peers. The Company conducted extensive questionnaire surveys M&G Stationery's 2023 Sustainable Development Material Topic Matrix

among various stakeholders and analyzed material topics based on survey results. In 2023 a number of key material topics have been

revised accordingly including "business ethics" "risk management" "response to climate change" "information security and privacy

protection" etc.Based on the 2022 material topics matrix M&G closely studied key state policies and Product quality

Topic industry policies and benchmarked ESG disclosure standards and guidelines as well as

Identification industry best practices home and abroad to identify 24 sustainable development topics

of interest to stakeholders.Information security and privacy protection

Consumer health and safety

Human rights protection Chemical safety

Employee benefits

Occupational health and safety

Using questionnaire surveys a total of 976 valid questionnaires were collected from Education and training Business ethics

Topic internal and external stakeholders including shareholders and investors the Board of Social welfare

Investigation Directors senior management employees consumers corporate customers suppliers Diversity and equal opportunities Technological Responsible marketinginnovation

distributors media NGOs and professional institutions to comprehensively understand Sustainable materialsWater resources and effluents

the focus of stakeholders on M&G's sustainable development topics. Packaging materials

Response to climate change Risk managementWaste

Community support management

Carbon emissions and energy management Corporate governance

Supplier chain management

Biodiversity

M&G developed its sustainable development material topics matrix by constructing

Topic

Assessment a two-dimensional model ranking the importance of issues based on "importance to

corporate development" and "importance to stakeholders".Importance to corporate development

Based on the evaluation results M&G selected material topics with higher importance

Review and as the areas of focus which were later reviewed and confirmed by the Company's

Confirmation Sustainability Office and senior executives. There were 24 material topics identified Environmental Dimension Social Dimension Governance Dimension

through this process and their relevant management and practices became the focus

of this report.

1516

Importance to stakeholdersSustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Stakeholder Communication

M&G continuously strengthens communication with customers employees investors and other stakeholders and has established Communication Mechanisms and

various communication channels to better understand and respond to the demands and expectations of stakeholders in a timely manner. Stakeholders Most Concerned Material Topics1 Methods

* Product quality * Channel cooperation conference

Stakeholders Most Concerned Material Topics1 Communication Mechanisms and * Business ethics * Marketing conferenceMethods

* Information security and privacy * Market visits

* Special reports Distributors protection * Daily business communication

* Corporate governance * Participation in government

* Carbon emissions and energy meetings * WeCom

management * Supervision and assessment * Internal email

Government and * Product quality * Field research

regulatory authorities * Performance interview

* Information disclosure * Employee benefits * Employee satisfaction survey

* Product quality * Training and workshop

* Shareholder meetings * Information security and privacy * Employee clubs and activities* Response to climate change protection

* Investor meetings Employees * Annual company meeting* Carbon emissions and energy

management * Performance briefings * Internal corporate culture

Shareholders and platform* Waste management * Information disclosure

investors * Employee suggestion platform

* Product sales and promotion * Social welfare * Cooperation and dialogue

* Product quality * After-sales service * Waste management * Public welfare projects and

activities

* Consumer health and safety * Consumer survey * Sustainable materials

NGOs/Philanthropic * Official website and corporate * Chemical safety * Customer satisfaction survey

organizations * Packaging materials WeChat account

Consumers and * Information security and privacy * Exhibition events

customers protection * Official website and corporate * Consumer health and safety * Official website and corporate WeChat account WeChat account

* Product quality * Media interview and cooperation

* Bidding * Responsible marketing * Forums and seminars

* Supply chain conference Media * Sustainable materials * Information disclosure

* Product quality * Contract signing and execution

* Chemical safety * Daily business communication * Forums and seminars

* Occupational health and safety * Supplier training * Technological innovation * Participation in industry standard Suppliers

* Supply chain ESG assessment * Consumer health and safety

formulation

and on-site audit * Product quality * Project collaboration

Industry associations * Visit and communication

1 Based on the results of our daily communication with our stakeholders and the annual materiality survey we have identified the material topics that are of

greatest concern to each stakeholder groups.

17 18Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Focus: Developing

Sustainable Products Addressing Sustainable Development Goals (SDGs):

M&G Stationery actively responds to the trends of green consumption and

sustainable development at home and abroad. Focusing on "sustainable products" as

one of its strategic pillars for sustainable development M&G continuously innovates

and develops products with sustainable attributes based on the insights of consumer

needs. M&G leverages these sustainable products to engage more young consumers

to start with small things in daily life and practice the sustainable concept of "writing a

greener future". The Company has established a sustainable products development

team and actively explores the definition of "sustainable products" in the stationery

industry gradually forming a systematic process for the design development and

marketing for sustainable products. Adhering to the principle of "only with high

quality can we achieve sustainability" M&G is committed to implementing stringent

quality requirements and continuously enhancing the green and healthy attributes of

products strengthening the control of chemical safety of products so as to provide

consumers with safe and reliable products.

2023 Performance Highlights

* Developed and launched a number of innovative sustainable

products such as the carbon-neutral series the "Carbon Emission

Reduction Plan" series and the "Endangered Animals: Wetland" series

* Eliminated PVC plastic from over 1700 products and/or packaging

cumulatively

* Developed M&G's 1st sustainable products corporate standard covering

the new product development process for all product categories

* Jiumu Store created a sustainable products section in over 600 stores

nationwide and a total of 166000 consumer membership points were

redeemed for donations of over 1600 stationery sets

* Established the Chemical Management Committee revised the

Company's Chemical Management Policy and updated the list of

chemicals to be phased out by referencing the REACH regulation

This chapter responds to the Sustainable Products pillar of M&G Stationery's

sustainable development strategy.

19 20Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Sustainable Products of the Year

In recent years M&G has formed two sustainable product series the Huanbaoji series and the "Endangered Animals" series focusing

on lowering carbon emissions reducing plastic waste and protecting biodiversity guiding the public to have a better understanding of

sustainability issues in a fun way. In 2023 M&G launched its first carbon-neutral stationery series and the "Carbon Emission Reduction

Plan" gel pen series featuring quantifiable carbon reduction data. The Company also collaborated with the Mangrove Wetlands

Conservation Foundation (MCF) and developed the "Endangered Animals: Wetland" stationery series to raise consumer awareness of

green low-carbon living and biodiversity conservation.Carbon-neutral stationery series

M&G teamed up with Meituan's "Lush Mountain Plan"

program and jointly launched M&G's first carbon-neutral M&G Launching its First Carbon-neutral Stationery Series

stationery series. This series of products is carbon

neutral throughout its life cycle from raw material

sourcing production and processing transportation In February 2023 M&G launched its first carbon-neutral

and distribution to use and disposal. Each barrel of the stationery series in China including eight product

pen made from recycled plastic food containers can categories such as gel pens highlighters markers

reduce the use of 2.3 grams of plastic and the related staplers pen holders and pencil cases etc.carbon emissions. This product series has passed

third-party carbon footprint accounting and offsetting in This series of stationery is an innovative attempt by M&G

accordance with ISO 14067 and PAS 2050 standards in collaboration with Meituan's "Lush Mountain Plan"

and obtained carbon-neutral certification. program. It uses recycled plastic made from discarded

food containers to reduce the use of virgin plastic. The

carbon footprint data collected during this project allows

"Carbon Emission Reduction Plan" gel pen series the Company to evaluate the carbon emission sources

and emissions data of its product life cycle laying a solid

Optical grade acrylic sheet from discarded LCD TVs foundation for further carbon reduction efforts.and displays can be used as materials for recycle

and reuse. Made with recycled acrylic from used Adhering to the concept that "green products are first

household appliances each "Carbon Emission and foremost good products" M&G conducted technical

Reduction Plan" gel pen can help reduce the emission research and experiments. From initial trials pilot tests

of about 49 grams of carbon dioxide equivalent. to large-scale continuous production tests the production

testing of the product series took 50 days undergoing

20 mold structure adjustments product performance

and process verifications showcasing M&G's strong

commitment to product quality. Closed-loop environmental impact of the carbon-neutral stationery series

After its launch the M&G carbon-neutral stationery series was exhibited in a dozen high-profile sustainability-related venues

"Endangered Animals: Wetland" stationery series home and abroad such as the China International Consumer Products Expo the Shanghai International Carbon Neutrality

Expo and the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28)

This product series is made of PLA biodegradable playing a pioneering role in the low-carbon and green development of the stationery industry. Based on this product series

materials or recycled materials. Using five endangered M&G Colipu also launched a green product procurement program for corporate customers to choose greener stationery

wetland animals as the inspiration for its packaging design products engaging customers with greater cooperation in sustainability-related opportunities.this series of eco-friendly products aims at educating

consumers about endangered animal conservation.Information about endangered animals was also displayed

in Jiumu Stores in various formats such as in-store

education interactive H5 VR experiences etc. allowing M&G's Huanbaoji carbon-neutral stationery series won the "2023 Stationery · China Culture

more people to learn about endangered animals. We also and Education Office Supplies Innovation Award (Student Stationery)"—Green Award

invited consumer families to visit wetland conservation

areas for bird watching to gain a first-person view of

wetland environments and endangered animals.

21 22Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Jiumu Store an independent brand of cultural and creative products under M&G is an important channel for the Company to directly In 2023 M&G's subsidiary More-Than-Fun launched a charitable campaign in

reach consumers. Jiumu Store is committed to actively raising the awareness of sustainability concepts among consumers through collaboration with Alipay and the "Genshin Impact" IP of miHoYo. With the launch

measures such as offering sustainable products integrating sustainable consumption factors into its membership store point platform of a series of environmentally friendly IP products and fun gameplays such as

and organizing sustainability themed activities. point redemption and lucky draws the campaign reached out to consumers and

called on them to choose green travel and other low-carbon lifestyles. Among

the environmentally friendly products launched there were a vintage eco-

Jiumu Store's Advocacy for Sustainable Consumption friendly laptop sleeve with washable kraft paper cover and wool felt lining and an

environment-friendly notebook with high strength spruce paper pages and fabric-

bound edges. All of these products were made with bio-degradable materials and

had obtained FSC certification and Green Product Certification issued by third-

party organization. More-Than-Fun environment-friendly notebook

Advocated green consumption By 2023 over 600 Jiumu Stores

concept with sustainability ctivities nationwide set up a sustainable a O Sustainable Design Concept

themed seasonal activities med

f e

e rin product section for sustainable

such as a city walk campaign th g products such as the

to encourage green walking "Huanbaoji" and "Endangered

lifestyle. Animals" stationery series M&G's sustainable innovation is not limited to the development of new products.directly promoting sustainability Instead the Company is dedicated to expanding the concept of sustainable design

concepts and green lifestyle to to other product categories and continuously expanding its pipelines of sustainable

consumers. products with various sustainable attributes in all product categories.In September 2023 the M&G Sustainability Office the Sustainable Products

M&G's Green Logo for sustainable products

Development Team and the Technical Center collaborated with other departments

to jointly develop its first sustainable products corporate standard after studying

ing ati domestic and international standards and certification requirements for green products me onmbe rity

d and recycled materials. In alignment with the strategic focuses of M&G's sustainable 2023 Red Dot Award

rship points for ch

a

products development this standard specifies the definition of sustainable products Winning Products of M&G

from four aspects: material functionality safety and packaging. The standard also

specifies the procedures for the development of new products with sustainable M&G Steel Tape Pro "Contemporary Good

attributes. Besides formally applying this standard to the assessment process of Design – Gold Winner 2023"

product development M&G also designed a dedicated green logo for sustainable M&G Utility Knife Pro "Contemporary Good

products for future use highlighting the sustainable attributes of the products for Design Award – Winner 2023"

consumers to draw greater attention towards green production and consumption.Jiumu Store developed a store point charity platform for store members to promote consumer awareness and encourage sustainable

consumption. By 2023 consumers donated 166000 store points which were matched with over 1600 donated stationery sets. Jiumu In 2023 M&G continued to apply sustainable design concepts in new product development and launched a

Store donates 5% of the sales proceeds of the "Carbon Emission Reduction Plan" gel pen series to "One Planet Foundation" engaging number of products with sustainable attributes:

consumers to jointly support climate action.Larger capacity The new metal gel pen has 20% more ink compared to previous models.With the deepening of China's carbon dioxide peaking and carbon Longer product The quick-drying stamp pad and refill ink can last as long as five years with the new ink formula.neutrality strategy the demand for green and sustainable products life

from corporate customers increases rapidly. In 2023 M&G Colipu

developed a green product catalogue offering a rich selection of

sustainable products to meet the growing green procurement needs The design of a utility knife box product was optimized by reducing unnecessary clamps which resulted in Simpler design

of customers. This catalogue includes products defined as green simpler mold shorter molding time and reduced material use.products in multiple aspects including using recycled materials

obtaining green certifications adopting environmentally friendly

manufacturing processes using green packaging or low-impact M&G optimized the structure of a vacuum sealer product reducing the number of screw specifications from Generic design

logistics sourcing from certified manufacturers and promoting 8 to 3 and making it easier for production and assembly.low-carbon concepts etc. Typical green products include Forest

Stewardship Council (FSC)-certified printer paper zero carbon

paper towel with carbon neutral certification and toner cartridge More efficient By modifying the shape of sheet metal parts such as nail tracks and guide rails of a single-handed stapler

with environmentally friendly packaging. Sustainable products offered by M&G Colipu material use product designed for the food delivery businessthe utilization rate of sheet metal has been greatly improved.

2324

Carrying out sustainability

on

le productsab

sta

in

su

eem

RedSustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Sustainable Materials Developing products using food-grade materials

Material safety is a key focus of M&G regarding arts and kids drawing products. All products developed for children fully comply with

M&G pays great attention to the sustainability of materials and continuously strengthens the use of certified environmentally friendly mandatory safety standards in China. Among these products food-grade crayon food-grade markers and food-grade rice color clay

and safer materials aiming to bring more green and safe products to consumers. M&G is committed to using sustainable materials for series products also meet the requirements of the EU standard Safety of toys - Part 3: Migration of certain elements (EN71-3). The

certain key material categories by 2025. Company has formulated detailed inspection standards on health and safety regarding the three major categories of arts and kids

drawing products: painting products handicraft products and puzzles covering product categories such as acrylic markers clay and

board games. Product development is also implemented in strict accordance with these above-mentioned standards. In 2023 M&G

Using Certified Environmentally Friendly Materials intensified the development of food-grade antibacterial and easy-to-clean products to further expand the food-grade product lineup. New food-grade materials have been used in a greater variety of product sub-categories such as color pencil outline pens markers

watercolor pens oil paint stick clay crayon etc.M&G actively sources raw materials for multiple product categories that have passed environmental and health-related certification

aiming to improve the environmental attributes of its products from the source. M&G Colipu also actively sources printer paper products Development of Food-grade Cat Paw Easy-grip Crayon

with sustainable forest certifications to support the protection of forest resources.M&G Products with Sustainable Certifications In 2023 M&G launched the food-grade Cat Paw Easy-grip crayon. The

product is made of food-grade paraffin which meets both Chinese national

mandatory safety standards and the stricter EU EN71-3 safety standard.Sustainable Certification Certified Products Besides being safer harmless and environmentally friendly this product also

EU toy safety standard EN71-3 Arts and kids drawing products such as clay markers oil paint stick watercolor pens features a three-point grip design to guide children in developing the correct

Certification glue stick etc. gripping posture. This product has won the "Green Stationery Award" (Art

supplies). Food-grade Cat Paw Easy-grip crayon

EU Restriction of Hazardous Smart calculating device smart spelling device smart large screen microscope and

Substances (RoHS) Certification toner cartridges for laser printer

Global Recycled Standard (GRS) Carbon-neutral stationery series "Carbon Emission Reduction Plan" gel pen series and

Certification notebooks customized for Boao Forum

Phasing-out Harmful Chemicals

German IGR Ergonomics Certification M&G spine protection schoolbags

M&G actively promotes the phasing-out of harmful materials in products. In 2023 we focused on phasing-out PVC and replacing

China Environmental Labeling

Product Certification (Ten Ring Toner cartridges for laser printer and multifunctional printer paper nitrocellulose paints with water-based paints further enhancing the safety and harmlessness of our products.Certification)

China Energy Conservation Product

Certification Laser printer and dot matrix printer PVC Phasing-out Project

Forest Stewardship Council (FSC)

Certification Red M&G multifunctional printer paper and M&G Colipu 3-Star and 5-Star printer paper

Programme for the Endorsement of PVC plastic may contain potential health and safety hazards such as

Forest Certification Schemes (PEFC) M&G Colipu 2-Star printer paper benzene lead and mercury. PET plastic which is more environmentally

Certification friendly than PVC and does not contain plasticizers can be used as

alternatives to PVC. In August 2023 M&G officially launched the PVC

phasing-out project with the goal to completely eliminate the use of PVC in

Ensuring the Safety and Harmlessness of Materials the future.As of the end of 2023 PVC plastic was not allowed to be used in packaging

materials such as blister packs bases and trays meaning that packaging of

M&G always prioritizes the safety and quality of its products. The Company attaches great importance to the safety and harmlessness new products contains no PVC while PVC packaging for existing products

of materials in product development and material procurement strictly adhering to Chinese national mandatory safety standards and will gradually switch with alternative materials. Replacement plans for PVC

referring to international standards. M&G has formulated targeted chemical control policies regarding different consumer age groups bags are currently in development. For products with PVC as the main

and conducts thorough internal testing and third-party inspections to ensure that its products fully meet the requirements of relevant material we will strengthen the safety supervision and explore replacement

safety standards. plans in the future. As of the end of 2023 the Company has already phased

out PVC plastic from over 1700 products and packaging materials.Products that have eliminated PVC plastic

25 26Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Green Product Packaging

M&G regards green packaging as one of

Paint Replacement for Wooden Pencil the core elements of sustainable products.The Company vigorously promotes the

green transformation of product packaging

to reduce the negative impacts on the

Wooden pencil used to have a coating of nitrocellulose paint. With

ecological environment prioritizing the use

nitrocellulose as well as alkyd resin rosin modified resin and other

of more environmentally friendly packaging

soft and hard resins as its main film-forming material nitrocellulose

materials and advocating for using paper

paint usually not only has an odor but also contains some organic

packaging instead of plastic packaging. For

solvents.example the packaging box of the carbon-

Axus Stationery actively pushes for the replacement of nitrocellulose neutral stationery series set is made from

paint with the safer and more environmentally friendly water-based recycled pulp and the display shelf of the

paint in the production of wooden pencil. With the new paint the "Endangered Animals: Wetland" series is

safety of product is further enhanced with the reduction of harmful made using paper material instead of plastic

substances in its paint coating. Water-based paint mainly consists material. Axus Stationery has developed pulp

acrylic resin emulsion pigments fillers solvents and water. It molding packaging to replace the traditional Eco-friendly packaging of the carbon-neutral stationery series

does not contain organic substances such as benzene aromatic Axus Stationery's MARCO water-based paint professional tin box packaging of gift sets.hydrocarbon as well as curing agents or plasticizers thus no art charcoal M&G also vigorously explores "packaging reduction" following the principles of "simplicity and practicality" minimizing the use of packaging

odor is produced. As of the end of 2023 50% of Axus Stationery's materials without compromising on product quality. By using new packaging materials and processes we eliminated the inner boxes for

wooden pencil products have switched to water-based paints. some office supply products reducing both the use of cardboard boxes and the amount of work for packaging operations. We are working

on a compact packaging for the M&G large screen microscope series products which is expected to be launched in 2024 to accelerate the

reduction of product packaging.Exploring Plastics Recycling Solutions

Chemical Safety Management

Plastics is a major material for the manufacturing of stationery products. M&G has been focusing its innovation efforts for

environmentally friendly products on plastics identifying reduction possibilities researching on biodegradable materials and exploring To reduce the impact of chemicals in products on the environment and human health M&G has established a comprehensive chemical

innovative replacement solutions in order to contribute to the development of circular economy. management system and continuously optimizes its chemical safety management in accordance with stricter standards than the

mandatory regulatory requirements in China.Plastics reduction

Chemical Management System

The Company developed a gel pen made with plant-based materials

replacing the plastics in pen body with plant-based materials produced

from plant residues such as sugarcane wheat and fir which have good M&G closely adheres to the requirement of national chemical management standards. In

biodegradability and biocompatibility. accordance with the Inventory of Severely Restricted Toxic Chemicals the Regulation of the

People's Republic of China on the Administration of Controlled Chemicals—Various Monitored

The faux ceramic gel pen uses a self-developed faux ceramic material

Chemicals List the Request in Common Use of Security for Student's Articles (GB 21027-2020)

containing 80% of zirconia and 20% of plastics. Using zirconia to

the Company forbids the use of any of the listed chemicals in product development and requires

replace plastics can significantly reduce the amount of plastics used Plant-based gel pen Faux ceramic gel pen

that all purchased chemicals must be sourced from qualified suppliers.without compromising on product quality and performance.M&G has formulated the Chemical Management Policy2 to ensure centralized and standardized

management of chemical use in the Company. The policy clearly specifies the main objectives

Biodegradable materials of chemical management the prohibition and phasing-out of chemicals safety standards and

certification requirements product audits and penalties and the management of chemical suppliers

The "Endangered Animals: Wetland" stationery series uses biodegradable PLA material and related parties. To comprehensively ensure the chemical safety of products the Company has

made from biomass such as corn. This material has excellent biodegradability. After 180 also formulated strict chemical risk assessment and inspection control procedures covering the full

days of industrial composting the degradation rate can reach over 95%. lifecycle of products including material procurement storage product development production

acceptance and sales.Biodegradable PLA material gel pen

2 The M&G Stationery Chemical Management Policy can be accessed from the Company's website under the section "Investor Relations - ESG".

27 28Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

In early 2024 M&G established the Chemical Management Committee to coordinate the management of chemical safety in products and M&G Chemical Safety Management Structure

production processes. The committee consists of representatives from the Sustainability Office the Procurement Center the Production

Center the Technical Center and the Quality Center. Aiming to ensure the compliance of the Company's chemical management the

committee's responsibilities include the regular review of the list of chemicals-related issues establishing performance assessment

criteria and ensuring the implementation of improvement measures. The Company also focuses on chemicals prohibited or restricted Chemical Management Committee

by regulations to make phase-out lists and plans and ensures the implementation of the phase-out plans. The committee also works to

improve information transparency to better communicate about M&G's management of chemical safety externally.For products containing substance of very high concerns (SVHC) M&G strictly monitors and manages their environmental health

and safety attributes based on the requirements of relevant national and industry standards. For example student supplies and toys

for children under 14 years old are managed in accordance with the EU EN71-3 standard; the inks used in all writing instruments are Procurement Quality Sustainability Production Technical

managed in accordance with the EU EN71-3 standard among which the black gel pen ink also refers to the restricted substances list Center Center Office Center Center

in Appendix XVII of the EU REACH regulation; and soft modeling products such as modeling clay are managed in accordance with the

EN71-3 EN71-9 and T/CSSGA 1006 Student Modeling Clay standards.M&G's European subsidiary Beckmann has developed a dedicated chemical compliance guide in accordance with local regulatory

requirements which also applies to all suppliers in terms of chemical management. For certain chemicals this guide has stricter Key Chemical Safety Standards Referenced by M&G

requirements than the EU REACH regulation. As a member of the Research Institute of Sweden (RISE) Chemicals Group Beckmann

regularly communicates with industry experts to closely follow the latest updates and trends of relevant laws and regulations in the * Inventory of Severely Restricted Toxic Chemicals

chemical and environmental sectors.* The Regulations of the People's Republic of China on Administration of Controlled Chemicals—Various

Monitored Chemicals List

* Request in Common Use of Security for Student's Articles (GB 21027-2020)

* Gel Ink Ball Pens and Refills (GB/T 37853-2019)

* National Safety Technical Code for Toys (GB 6675-2014)

China

* Student Modeling Clay (T/CSSGA 1006)

* Book Cover and Slipcase (T/CSSGA 1001-2017)

* Technical Requirements for Environmental Labeling Products Cultural Paper (HJ 410-2017)

* Requirements of Concentration Limits for Certain Restricted Substances in Electrical and Electronic

Products (GB/T 26572-2011)

* Hygienic Requirements of Study Products for Myopia Prevention and Control in Children and Adolescents

(GB 40070-2021)

* Safety of Toys - Part 3: Migration of Certain Elements (EN71-3)

EU * Safety of Toys - Part 9: Organic Chemical Compounds Requirements (EN71-9)

* Registration Evaluation Authorization and Restriction of Chemicals (REACH Regulation)

29 30Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Chemical Control and Phasing-out

M&G has established a comprehensive chemical control list and is committed to implementing a strict phasing-out list to eliminate

certain chemicals from its products. The number of product categories covered by the chemical control list and the phasing-out plan Phasing-out Harmful Elements in Clay Products

continues to grow. In 2023 M&G added the EU REACH Regulation to the testing standards for black gel pen ink further raising the

chemical control requirements for inks. M&G also actively participates in the development of industry standards regarding the control

of hazardous substances making positive contributions to the green and healthy development of the industry. In 2023 the industry M&G actively promotes the control and elimination of boron in products. In June 2023 the Company launched a boron-free

standard GB/T 42822-2023 Determination of Primary Aromatic Amines in Art Articles was officially released. M&G has participated in clay with its proprietary formula. The product has passed the 3C quality certification as well as the EU EN71-3 and EN71-9

the development of this standard which is applicable to the determination of primary aromatic amines in art supplies (including crayon standards certifications.oil paint stick gouache paint oil paint and acrylic paint) filling the gap in the testing methods for harmful aromatic amines in related

categories. In 2018 M&G took the lead in formulating the association standard T/CSSGA 1006-2018 Student Modeling Clay for the China

Stationery & Sporting Goods Association which sets higher safety requirements than the industry standard. Safety indicators

In terms of the phasing-out and upgrading of chemicals M&G has innovatively developed thermoplastic elastomer (TPE/TPR) materials regarding boron harmful aromatic amines and other limited substances that consumers are concerned with were included

which were used to make TPE erasers providing an effective solution to phase out PVC materials in traditional erasers. The Company in the standard. After five years this standard has been adopted by many companies in the industry voluntarily as well as

has also developed safer boron-free clay products and developed a PVC phasing-out plan continuously promoting the improvement various third-party testing agencies and market supervision authorities using the standard in their evaluation of clay products.of production processes and the development of alternative chemical choices. To further enhance product safety M&G will continue to This standard has been awarded the 2020 Ministry of Industry and Information Technology's Demonstration Project for the

strengthen the control of chemicals to comply with increasingly stringent domestic and international standards and regulations. Application of One Hundred Association Standards.Furthermore in 2023 M&G proposed a revision plan of the Modeling Clay industry standard to the National Technical

Developing More Environmentally Friendly TPE Erasers Committee on Stationery and Sporting Equipment Standardization Administration of China. The revision plan calls for stricter

limits on migratory elements such as boron free formaldehyde and preservative in order to further improve the safety

standards of modeling clay products. The proposal has been submitted to the Ministry of Industry and Information Technology

In 2023 M&G developed and launched a benzene-free TPE eraser making another step to gradually phase out PVC for review and approval.materials. Ordinary erasers are made mainly of PVC materials whose processing often needs various additives including

benzene plasticizers. TPE is an environmentally friendly material. It does not produce irritating odors during processing and

is non-toxic and harmless to the human body. TPE can also be recycled and reused. In addition TPE erasers have greater

safety attributes because that the material is free of chemicals such as heavy metal halogen polybrominated biphenyls

polychlorinated biphenyls organic tin etc.TPE erasers Boron-free clay product with M&G's proprietary formula

Awareness Raising on Chemical Safety

M&G actively disseminates knowledge about chemicals to the public. With more

transparent communication with consumers the Company aims to enhance consumers'

awareness of the safety of children's stationery. We use platforms such as corporate

WeChat account Xiaohongshu and Douyin live streaming to provide consumers with

chemical safety information of stationery products such as food-grade clay and book

covers. These initiatives intend to guide consumers to pay attention to chemical safety

and make informed choices about stationery products that have good performance high

quality and dependable safety.Pop science short videos on product

chemical safety

31 32Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Addressing Sustainable Development Goals (SDGs):

Governance and

Business Growth

M&G Stationery has established a robust corporate governance system.The Company continuously optimizes its corporate governance

strengthens risk management and implements compliance management

with business ethics and anti-corruption management at the core

aiming at laying a solid foundation for the healthy and sustainable

development of the Company. We continue to strengthen information

security management and strive to protect data security and customer

privacy with effective measures. Relying on technological innovation as

the driving force for our growth we commit to contributing our expertise

to the development of the industry and providing continuous support to

achieve a sustainable and shared future.

2023 Performance Highlights

* Linking ESG performance to executive compensation including

ESG factors in the annual performance evaluation system for 8

department heads

* Established the Risk Management and Compliance Committee

chaired by the Company president further optimizing the

Company's risk management structure and policy system

* Launched an online training course on the M&G Code of

Business Conduct as a mandatory course for all employees

* Conducted internal control audits against non-compliance with

business ethics covering 22 operating locations that represent

100% of M&G's operational sites

* Filed 2612 patent applications cumulatively with 2407 patents

granted and 1211 valid patents

* Member of 22 industry associations and participated in the

formulation of 25 standards in 2023

This chapter responds to the Responsible Corporate Governance of M&G

Stationery's sustainable development strategy.

33 34Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Corporate Governance

Strategy Committee Responsible for studying and providing recommendations on the Company's long-

term development strategy and major investment decisions.M&G has established a sound corporate governance structure and strives to build a robust modern enterprise system so as to

build a top-level design that ensures the orderly and efficient operation of the Company.Responsible for formulating the assessment criteria for directors and senior

Remuneration and executives and conducting assessments; formulating and reviewing the remuneration

M&G Stationery’s Corporate Governance Structure Appraisal Committee policies and plans for directors and senior executives with the authorization of the

Board of Directors.General Meeting of Shareholders

Responsible for researching reviewing and providing recommendations on the

Nomination Committee selection criteria and procedures for candidates for the Company's directors

Accountability Election Accountability Election president and other senior management positions that need the appointment of the

Board of Directors.Board of Directors

Appointment Accountability Audit Committee Responsible for the communication supervision and verification of internal and external audits of the Company.Committees of the Board of Directors

Strategy Audit Remuneration and Nomination

Committee Committee Appraisal Committee Committee Efectiveness of Board of Directors

Management Accountability Management/guidance Accountability

The Company has made specific provisions on the powers authorities and meeting arrangement of the Board of Directors in the Rules of

Procedure of the Board of Directors. In 2023 the Company convened a total of five Board of Directors meetings all of which with a 100%

Internal audit Management attendance rate of all directors.In order to ensure that independent directors have sufficient time and energy to fulfill their duties the China Securities Regulatory Commission

Review Review Management/monitoring Accountability Supervision released the Measures for the Management of Independent Directors of Listed Companies (hereinafter referred to as the Measures) in 2023

which stipulates that "in principle independent directors can serve as independent directors in a maximum of three domestic listed companies

and should ensure that they have sufficient time and energy to effectively fulfill their duties as independent directors". The Company will revise

Business activities

its Independent Director Working System in accordance with the Measures. In fact the three independent directors of the Company already

meet the requirements of the Measures each holding less than three independent director positions in domestic listed companies. The

Company's three independent directors have professional experience in law accounting and management consulting respectively as well as

Board of Directors expertise in strategic development corporate governance and risk management allowing them to provide effective advice for decision-making

in various dimensions of the Company's development. An independent director also has experience in the manufacturing industry.M&G strictly follows the requirements of the Company Law of the People's Republic of China the Securities Law of the People's Republic

of China the Code of Corporate Governance for Listed Companies and the relevant laws and regulations promulgated by China Securities The nominated directors are first reviewed and approved by the Board of Directors and

Regulatory Commission and Shanghai Stock Exchange. The Company continuously improves its corporate governance structure ensures then submitted to the General Meeting of Shareholders for election and approval. The

effective division of responsibilities and checks and balances mechanism at the Board of Directors and standardizes corporate operations term of office for directors is three years and they can be re-elected for consecutive terms

laying a solid foundation for the sustainable and healthy development of the Company as well as the effectively protection of the legitimate upon expiration of their term. Independent directors shall not serve for more than 6 years

consecutively. As of the end of 2023 the average tenure of M&G's board members is 5.4 In 2023 number of board meetings rights and interests of investors and other related parties.years calculated from the starting date of their terms. In 2023 the Company re-elected convened by the Company

The General Meeting of Shareholders is the highest authority of M&G Stationery and decides on significant matters of the Company's its Board of Directors. The relevant information regarding the re-election and election of 5

operation and management. The Board of Directors is elected by the General Meeting of Shareholders in accordance with the law and is directors and election of independent directors can be accessed from the Company's

the standing executive body of the Company. The Board of Directors has four specialized committees: the Strategy Committee the Audit corporate website under the section "Investor Relations - Interim Announcement Reports"

Committee the Remuneration and Appraisal Committee and the Nomination Committee. When appointing members of the Board of Directors and on the Shanghai Stock Exchange website as public information.the Company takes into account diversity factors such as professional experience cultural and educational background age and gender to

ensure the competency of the Board of Directors to make scientific decisions. The Board of Directors consists of seven directors including four Regarding the performance evaluation of the Board of Directors the Company's annual

non-independent directors and three independent directors with female directors accounting for 14.3%. work report of the Board of Directors also needs to be reviewed and approved by the Board As of the end of 2023 the average

of Directors before being submitted to the General Meeting of Shareholders for review. tenure of M&G's board members

Each board committee is composed of three directors who fully leverage their expertise to support the functioning of each committee. All The Company's 2022 Annual Work Report of the Board of Directors was approved by the

years

directors conscientiously fulfill their duties as directors providing efficient and professional decision-making advice for major corporate matters 19th meeting of the 5th Board of Directors and 2022 General Meeting of Shareholders 5.4

in accordance with the Rules of Procedure of the Board of Directors as well as other governance policies. respectively.

3536

Accountability

Board of Supervisors

Supervision

Accountability

External audit

EmploymentSustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Independence of Board of Directors Board of Supervisors

The Board of Supervisors of the Company is a standing supervisory institution under the

The Company has specific provisions regarding the number and qualification nomination leadership of the General Meeting of Shareholders coexisting with the Board of Directors

election and re-election of independent directors in the Rules of Procedure of the Board and independently exercising the supervisory power over the Board of Directors senior

of Directors and the Independent Director Working System which also clearly define the executives and the entire company management. Upholding its responsibility to the

authorities and responsibilities of independent directors. The Company stipulates that As of the end of 2023 independent Company and all shareholders the Board of Supervisors strictly complies with the relevant In 2023 the Board of Supervisors

the Board of Directors shall include at least one-third independent directors with at least directors in the Board of Directors provisions of the Company Law of the People's Republic of China and the Articles of convened a total of

one of them being an accounting professional to ensure that the Board of Directors can accounted for Association and the Rules of Procedure of Board of Supervisors of M&G Stationery

exercise its powers independently from management and has sufficient risk management attends the General Meeting of Shareholders and Board of Directors meetings convenes 5 meetings

capabilities. As of the end of 2023 independent directors accounted for 43% of the 43% the Board of Supervisors meetings and exercises its supervisory powers in strict

Board of Directors higher than the 33% required by the China Securities Regulatory accordance with laws and regulations. The Board of Supervisors supervises the legitimacy

Commission. and compliance of the Company's governance financial condition and the performance of

The nominators of independent directors need to provide a statement that there is no duties by the Company's directors and senior executives playing an active and important

relationship that affects their independence with the Company while the nominees also role in safeguarding the Company's compliance management. The Chairman of the Board

need to make a public statement that they meet the independence requirements and of Supervisors has extensive experience in financial risk control and internal control. Attendance rate of supervisors

other conditions for serving as independent directors. The independence statements of the The Board of Supervisors has three members including an employee supervisor and two

three independent directors and their nominators can be accessed from the Company's 100%external supervisors. In 2023 the Board of Supervisors convened a total of five meetings

corporate website under the section "Investor Relations - Interim Announcement Reports" with a 100% attendance rate for the supervisors.and on the Shanghai Stock Exchange website as public information.In order to fully leverage the role of independent directors in addition to the powers granted by the Company Law of the People's

Republic of China and the M&G Stationery Articles of Association the independent directors of the Company are also authorized to Risk Management

make judgments on major related-party transactions propose the appointment or dismissal of accounting firms propose the convening

of interim General Meeting of Shareholders and Board of Directors meetings independently engage external audit firms and consulting

firms and publicly solicit voting rights from shareholders.In order to effectively respond to external risks and further enhance the Company's stability and sustainable development capabilities

the Risk Management and Compliance Committee was established in July 2023 with the approval of the Company president. Aiming at

the goals of "optimizing operations preventing corruption and controlling risks" M&G's risk management system is divided into three

major components: risk management compliance management and internal control management.Remuneration and Appraisal of Directors and Executives

M&G Risk Management System Framework

According to the M&G Stationery Articles of Association the remuneration for directors and supervisors shall be approved by the

General Meeting of Shareholders and the remuneration for senior executives shall be approved by the Board of Directors. The Risk Management System

allowances for independent directors shall be approved by the General Meeting of Shareholders. Senior executives are assessed

based on annual operational performance and receive monthly prepayments of their basic salary and an annual settlement of their

annual remuneration after the completion of the Company's annual operational goals. The Company approved the Proposal on the 2023

Remuneration Standards for Directors and the Proposal on the Independent Director's Allowance of the 6th Board of Directors at the

2022 General Meeting of Shareholders.

Risk Management Compliance Management3 Internal Control Management

M&G establishes a comprehensive compensation and incentive system for all employees. Compensation of functional department

employees has a fixed salary part and a variable compensation part which is determined by the annual performance of employees. To review and refine the risk To formulate and standardize To optimize internal control

The Company has implemented equity incentives as a long-term incentive plan for middle and senior executives. To further promote management process and policies and regulations tools strengthen mechanism

the achievement of the Company's sustainable development goals sustainability related performance has been incorporated into the formulate contingency plans and optimize compliance construction and ensure

variable compensation part for certain senior executives. and response mechanisms to procedures to ensure the effective operation of the

ensure the smooth operation compliant operation of the three lines of defense so

of the Company. Company. as to continuously refine the

M&G clearly states in its Employee Handbook that the Company reserves the right to reclaim employee compensation due to company internal control management

property damage or loss caused by employees and rights of other recovery of payment authorized by employees. This clawback of the Company and reduce

provision also applies to senior executives. operational risks.

3 Please refer to section "Business Ethics and Anti-Corruption" for more content on compliance management.

37 38Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Deepening Risk Management Strengthening Internal Control Mechanism

The Company's Board of Directors is responsible for planning and establishing the Company's risk management framework The Company has established an internal control framework based on the understanding of the concept of the "three lines of defense"

formulating risk management policies and related guidelines and supervising the execution of risk management measures. The Board and has adopted a series of tools including compliance testing (CT) proactive review (PR) and semi-annual/annual assessment (SACA)

of Supervisors supervises the establishment of internal control systems and the implementation of internal control measures by the to evaluate the effectiveness of the "three lines of defense" management model.Board of Directors and the management is responsible for coordinating the daily operation of internal controls in the Company. The

Risk Management and Compliance Committee operates under the leadership of the Company president. Committee members include

directors of the Sustainability Office the Human Resources Center the Audit Department the Legal Affairs Department and the Finance Positioning of the "Three Lines of Defense"

Center. The Committee functions independently of the operational departments to ensure the independence and objectivity of the

Company's risk management function. Senior executives of the Company were briefed about the optimized risk management system in

September 2023. Line of Defense Department Responsibility

* Each business unit is the primary responsible party for internal

M&G Risk Management and Compliance Committee Structure First line of defense Business units/functional control responsible for resolving over 95% of issues.departments * Developing business process standards.President * Developing relevant processes.* Formulating internal control strategies.Second line of * Monitoring activities and conducting inspections.Vice Director Finance Center

defense Internal Control Department * Providing coaching on internal control system.Responsible for presiding over committee work * Carrying out inspections to ensure sound internal control of high-

coordinating member departments and ensuring the risk businesses.implementation of relevant tasks.* Carrying out special audits.Third line of * Carrying out internal control audits.Risk Management and Compliance Committee defense Audit Department * Carrying out audits for corruption and fraudulent incidents.* Carrying out spot inspections as a deterrent.Finance Center Audit Legal Afairs Human Resources Sustainability Department Department Center Office A sound process alone constitutes an effective internal control line of defense. In 2023 the Company reviewed 766 policies and

regulations from 20 departments issued standards for policy document and compiled the M&G Document Management Regulation

to effectively standardize the internal business processes and code of conducts within the organization. The Company carried out pilot

Responsible for Responsible for the Responsible for Responsible for the Responsible for optimization projects focusing on high-risk processes streamlining the "three lines of defense" with comprehensive improvement of

establishing internal assessment audit formulating updating communication of the identification policies processes and systems evaluating the maturity levels of the internal control for pilot projects and continuously following up the

control mechanisms and investigation announcing and risk management and and assessment of results of the improvement measures.developing the of whistleblowing implementing policies compliance culture sustainability risks

risk map and incidents related to related to business and related employee and integrating the Each year the Audit Department conducts regular audits of the authenticity accuracy and timeliness of key financial data included in the

coordinating risk internal control and ethics anti-corruption training and discipline. identified risks into consolidated financial statements to ensure the timely detection of significant potential internal control risks. During the reporting period

management action business ethics. and compliance and the risk management the Audit Department carried out a series of audit projects to comprehensively examine the Company's risk management procedures

plans. ensuring operational system of the and promote the optimization and improvement of various processes and policies such as the management systems of the direct sales

compliance. Company. business and the store management systems of Jiumu Store. These audits included internal control audits of 18 key business processes

such as sales procurement fund management and information system management internal control audits of financial statements

The Company has identified three major risk categories including strategic risks operational risks and financial risks. In 2023 the of subsidiaries audits of procurement prices monthly audits of fund expenditures quarterly reviews of information security audits of

Company conducted risk mapping assessment and is expected to develop a complete risk mapping next year with targeted risk executive departures and other special audits based on specific risks.management action plans.Audits of business ethics has been incorporated in the Company's internal control audits covering audits for fraudulent activities false

expense reporting and misappropriation of funds/assets etc. In 2023 the Company conducted internal control audits on 22 operating

The Company has formulated the Tax Management Policy and the Tax Self-Inspection Procedures to regulate its tax management. To locations achieving 100% coverage of M&G's operational sites.ensure strict tax compliance the Company requires that all tax-related data shall have the confirmation of dedicated personnel during its

tax declaration process. In 2023 the Company carried out focused self-inspections on VAT deduction ratios and other tax-related risks In addition the Company actively carries out internal communications to raise the awareness of internal control among employees

and made these measures into standardized management procedures. In addition the Company organized a series of themed trainings through monthly meetings on the "three lines of defense" the internal publication "M&G Internal Control" and relevant capacity building

on tax risk self-inspection tax planning and interpretation of the latest tax policies for employees engaged in tax-related work to further trainings. By incorporating risk management culture and internal control concepts into M&G's corporate culture the Company is building

enhance the tax management of the Company. a strong risk control culture laying a solid foundation for ensuring stable growth.

39 40Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Business Ethics and Anti-Corruption

M&G Stationery strictly adheres to the relevant laws and regulations on business ethics such as the Anti-Monopoly Law of the People's M&G has set up whistleblowing channels to ensure effective supervision of its compliance management. Both employees and external

Republic of China the Anti-Unfair Competition Law of the People's Republic of China and the Interim Provisions on Prohibiting parties can report any incident of violations through hotline email WeCom and other means. Upon receiving the complaint dedicated

Commercial Bribery continuously strengthens business ethics and anti-corruption management and adheres to the bottom line of personnel from relevant departments shall contact the whistleblower within three working days to obtain more details and follow-up

compliance. In 2023 while strengthening the awareness education of business ethics and anti-corruption among employees the accordingly. To ensure the due process of the investigation of reported cases and protect both the whistleblowers and the investigation

Company also developed an online compliance management platform. In addition M&G formulated the Supplier Code of Conduct personnel the Company has formulated the Whistleblower Protection and Non-retaliation System that requires strict confidentiality of

and actively conducted supplier surveys in order to deepen supply chain compliance management and build an honest business the whistleblower's privacy information. Employees who intentionally disclose such information or engage in retaliatory actions against

environment. them shall face disciplinary actions accordingly ranging from warnings demerit and termination of employment to legal consequences

depending on the severity of misconducts. In 2023 the Company received a total of 42 complaints all of which were promptly recorded

and properly handled.The Risk Management and Compliance Committee is in charge of all compliance and business ethics-related work of the Company.The Audit Committee of the Board of Directors is responsible for internal audit supervision of the financial management and internal

control systems of both the Company and its subsidiaries. Under the guidance of the Audit Committee the Audit Department conducts

audits independently. It is also responsible for establishing of robust anti-fraud mechanisms within the Company covering the key areas Supplier Compliance Supervision

processes and content of anti-fraud operations and monitoring and preventing possible fraudulent activities during the internal audit

process to strictly prevent fraud risks. M&G has signed the Transparent Procurement & Integrity Convention with all procurement service and engineering suppliers and contractors

urging them to commit themselves to business integrity. The Company opens its whistleblowing channels to suppliers and encourages them

Compliance Management of Business Conduct to report any unethical behavior such as embezzlement fraud solicitation or acceptance of bribes by M&G employees in a timely manner. In

2023 the Company formulated the M&G Supplier Code of Conduct specifying requirements and expectations for suppliers in five aspects:

business ethics labor and employment health and safety environmental protection and intellectual property. This document has already been

Compliance management is one of the core components of the M&G risk officially attached to the processing contracts of the Supply Chain Management Center and the Office Business Division as well as the annual

management system. The Company has been continuously optimizing its procurement contracts of the Procurement Center. Suppliers are required to sign this document together with the contract. In addition the

compliance system and formulated a series of policies in recent years such Company has formulated dedicated management policies regarding supply chain integrity risk prevention with detailed provisions on codes of

as the Guidelines of Anti-trust Compliance the Management System Against M&G's Compliance Documents conduct and relevant disciplinary actions for various violations further strengthening the integrity of the supply chain and related personnel in

Fraudulence the Whistleblower Protection and Non-retaliation System the the office business line.Internal Investigation and Handling System for Employee Misconduct the M&G Guidelines of Anti-trust Compliance

Code of Business Conduct the Supplier Code of Conduct and the Employee

Conflict of Interest Management System4. These policies both ensure that the Management System Against Fraudulence

Company's compliance system fully complies with national laws and regulations Whistleblower Protection and Non-

and provide a viable guidance for regulating the compliance behaviors of retaliation System M&G Supplier Code of Conduct Requirements on Business Ethics

employees and suppliers. Internal Investigation and Handling

System for Employee Misconduct

Suppliers must comply with the laws and regulations of where they operate and adhere to the highest ethical standards.In the 2022 revised version of the M&G Code of Business Conduct the Company M&G Code of Business Conduct Suppliers must comply with all applicable anti-corruption and anti-bribery laws and regulations adhere to M&G

dedicated a full chapter to focusing on "Upholding Integrity and Legal Compliance Stationery's Transparent Procurement & Integrity Convention and the Management System Against Fraudulence and

Bottom Line" laying out specific requirements for various compliance behaviors Supplier Code of Conduct prohibit any form of bribery corruption extortion and embezzlement.covering compliance with laws and regulations and business ethics fair Suppliers are prohibited from providing any cash or cash equivalents gifts or entertainment to M&G employees

competition and anti-trust anti-fraud probation of insider trading use of privacy agents and their family members beyond reasonable limits.data record transparency anti-money laundering etc. In 2023 the Company

incorporated these requirements into the revised version of the Employee

Handbook to further enhance the awareness of compliance among employees.In 2023 M&G further strengthened the compliance management of its social media platforms. Based on national laws and regulations Starting from 2022 the Audit Department has been conducting surveys among suppliers

such as the Advertising Law of the People's Republic of China and the Copyright Law of the People's Republic of China as well as the of the Procurement Center the Supply Chain Management Center and the Office

M&G Intellectual Property Compliance Management Provisions the Company formulated the M&G Social Media Platform Operation Business Division using questionnaires and phone interviews to identity improvement

Guidelines comprehensively enhancing risk control by requiring stricter content review and confirmation across its social media outlets. opportunities in procurement quality inspection logistics and other related processes

of the Company and reflect on the business conducts of M&G employees. For suppliers

the surveys also serve both as a briefing about the Company's anti-fraud and complaint Number of suppliers participated in the

mechanisms and an opportunity to report possible misconducts ensuring a stronger survey in 2023

anti-fraud environment. The Audit Department regularly issues audit reports on supplier 305

4 The Management System Against Fraudulence and the M&G Code of Business Conduct are released publicly and can be accessed from the Company's follow-up visits based on the survey results. In 2023 a total of 305 suppliers participated

corporate website under the section "Investor Relations-ESG". in the survey.

41 42Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Compliance Culture Cultivation

M&G has been focusing on the cultivation of vision for a business environment that is honest transparent and trustworthy and

compliance culture and building an integrity striving to work together with like-minded organizations to advocate for a culture of

and fair business environment as an important integrity and compliance. During the year M&G participated in seminars forums and

part of business ethics work for years. Once exchange meetings organized by the Alliance covering topics such as compliance Number of participants in anti-fraud

the Company's compliance policies such as system construction integrity and compliance in the internet industry anti-fraud training

the Management System Against Fraudulence compliance construction audit and supervision methods business data management

and the M&G Code of Business Conduct were fraud investigation experience sharing integrity culture construction etc. 420+

approved by Company president they would

be directly communicated to every employee

via office email and posted on the OA platform

at the same time. In February 2024 the

Company launched an online training course

on the M&G Code of Business Conduct which Number of compliance training

sessions conducted

was made mandatory for all employees to

ensure the full coverage of employee training 25

on the code of conduct.The Company sends monthly email reminders

on anti-fraud reporting channels to all

employees. "Anti-fraud Prioritizing Integrity"

posters were also put up in offices factories Number of participants in

retail stores and warehouses. New employees compliance training (person-times)

must sign the Letter of Commitment on Integrity

and Self-Discipline upon joining the Company 949

pledging to jointly maintain a transparent and

honest working environment.M&G joining the Trust and Integrity Enterprise Alliance

Code of Business Conduct

Notice of the training on the M&G Code of Business Conduct

In 2023 the Company carried out a series of anti-fraud training covering the definition and causes of fraud anti-fraud focuses

relevant policies and requirements common forms of frauds and their consequences aiming to create a culture of integrity where

employees "do not want cannot and dare not" engage in fraud activities. Over 420 employees participated in the anti-fraud training

including Company executives as well as front-line employees on key sensitive posts such as procurement retail store operations

manufacturing quality inspection logistics and administration. The course was included in the mandatory orientation training for

new employees. Over 80% of the Company's procurement personnel have completed in-person training of this course. In 2023 M&G

Colipu also carried out online anti-corruption trainings covering 100% of its employees.In 2023 M&G organized 25 compliance training sessions covering topics of anti-fraud personal information protection intellectual

property management marketing promotion with product style book Labor Law intellectual property issues in social media platform

operations etc. A total of 949 participants effectively enhanced their compliance awareness with the take-aways of these trainings.In March 2023 M&G officially joined the Trust and Integrity Enterprise Alliance as a member pledging to operate with integrity and

embarking on a new journey of building a corporate culture of integrity. The Alliance was initiated jointly by a number of well-known

enterprises and the Criminal Law Science Research Center of Renmin University of China. M&G joined the Alliance with a shared

43 44Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Information Security Management Data Security and Privacy Protection

The Company requires the secure management of data in various business systems with a focus on the identification of data that

M&G established the Information Security Management Working Group in July 2022 to take full charge of the information and network

requires special security management. Employees are required to prioritize using the Company's domain to login the system to ensure

security of the Company. The Company has formulated a series of relevant policies and regulations to ensure the confidentiality integrity

the timeliness of access information. The login records are required to be archived for at least six months for reference. For sensitive

and availability of its information system including the Information Security Management Manual the Information Security Policy the

information containing personal data including but not limited to name address ID number phone number and WeChat ID is required

Information Security Management Framework the System Construction Security Management Policy the Information Classification and

to be desensitized. Other sensitive information including but not limited to pricing costs formulas mold information etc. is also

Grading Labelling Management Policy the Information Security Incident Management Policy etc. The Company continuously optimizes

required to be isolated and stored with encryption as much as possible. The authorization of access to information follows the principles

these management policies and takes active measures to ensure their implementation following the principles of "active prevention

of "traceable access reasonable scope and appropriate permission" and is managed as a closed loop process. When an employee

coordinated planning focusing on both technology and implementation and all-in participation". In 2023 the Company did not receive

leaves or changes position his/her access permission shall be promptly termination or changed accordingly. Permissions of operations

any complaint on information security and privacy protection and had no information security incident such as information leaks or loss

and export of core data are strictly controlled and the records of such operations shall also be archived for reference.of customer information.In terms of customer information collection the Company requires that the targeted customers shall be informed of the purpose

Information System Construction scope methods use sharing etc. publicly and transparently and asked for their consent. In 2023 the Company further strengthened its privacy protection measures by following the principle of "minimum and necessary only" regarding collecting customer information.Jiumu Store optimized its membership information collection process and platform interfaces following the principle of "collecting only

In 2023 the Company established an information security self-inspection taskforce when necessary using only when necessary and displaying only when necessary".to conduct monthly information security inspections and threat simulations of the

information systems of M&G Alliance OA and Jiumu Store. The M&G Alliance System

and Jiumu Store Membership System have passed the Level 3 certification of the The M&G Alliance System and Jiumu Jiumu Store Membership Information Management Procedures

Security Classified Protection for Information System Registration and the Company's Store Membership System have passed

email system has passed the Level 2 certification of the same standard. the Security Classified Protection for

Collect member information based on the principles of lawfulness openness and transparency.Information System Registration with Collection of member Clearly inform members of the scope and purpose of information collection and obtain their consent.information Collect member information through secure channels and take reasonable technical and management

The Company has formulated information security emergency plans and incident measures to protect the security of member information.response procedures and conducts business continuity tests at least once a year. The LeveL 3 certification

Company also uses third-party tools of Alibaba Cloud and Huawei Cloud to conduct

Use of member Use member information strictly for its intended purpose and ensure not to use it beyond the intended vulnerability scanning and analysis of relevant hosts and sites and carries out the scope.suggested security repairs or updates accordingly. In 2023 the Company did not information Use member information reasonably and in compliance with agreements with members.discover any information security vulnerabilities. In addition the Company carried out The Company's email system has passed

two high-traffic access attack simulation drills and a data injection simulation drill on the the Security Classified Protection for

Jiumu Store Membership System UAT environment during this year. Information System Registration with

Take reasonable measures to protect the security of member information and prevent information leak

damage or loss.LeveL 2 Protection of member certification information Regularly back up and encrypt member information to prevent unauthorized access or use of the

information.Strictly limit the permissions for accessing member information to those with proper authorization.M&G Information Security Incident Response Procedures

Response Procedures for Customer Information Leak Incident

02 Promptly determine the scope of the incident including the specific time location types and quantities of leaked data and

01 Immediately report the incident to the Information Security the customer groups affected.

Diagnose identify and analyze to find the cause of the Management Working Group and relevant departments.problem create initial assessment of the urgency and 02 02 Take measures to contain the incident and prevent further losses with measures including but not limited to: isolating affected

problem spot of the incident and evaluate the approximate systems or devices closing vulnerabilities that may be exploited by attackers and cleansing leaked or tampered data.time for incident resolution and system recovery.Determine the affected systems and carry out emergency

03 repairs such as system isolation setting firewall and 03 Promptly notify relevant parties including affected customers regulatory authorities and other potentially affected third

router rules updating system patches etc. and collect parties.Make sure the security incident is solved and the affected and preserve evidence of infiltration for future reference.system service and data are recovered conduct analysis of 04 Conduct an investigation to determine the specific cause of the incident the technical methods used by the attackers and system with similar vulnerabilities to develop corresponding 04 the impact on customers in order to take measures to prevent similar incidents from happening again.solutions such as security reinforcement or security

protection which will be implemented by the information 05 Report the cause of the incident and the relevant follow-

security administrators. up optimization measures to the relevant departments

05 Take remedial measures based on the investigation results to minimize the impact of the incident on customers.and senior management of the Company.

45 46Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Information Security Awareness Training Product Research and Development

M&G regularly conducts information security awareness education and training activities to continuously improve both the awareness In 2023 M&G formulated the Technology Development Project Management Process and the R&D Process Management—New

and risk response capabilities of employees regarding information security. The Company developed and launched the M&G Employee Technology Development to standardize the process for new technology development accumulate and consolidate project experience

Information Security Training online lectures which allows its employees to learn about the importance of information security and and enhance the technical and project management capabilities of developers. The Company achieved a series of key technological

common information security case studies through the online learning platform. breakthroughs during the year focusing on product functionality core consumer needs and environmental friendliness and developed

a series of new products including the development of easy-to-wash marker ink formula and the full series of Pickering emulsion ink as

Employees are required to report suspicious information security incidents to relevant personnel of the Company's Digitalization Center. well as the development of food-grade painting stick boron-free ultralight clay large screen microscopes smart calculating device (2nd

Reported incidents are handled by personnel with different security clearance levels based on the type and severity of the incidents. generation) smart spelling device smart reader color timer etc.Employees can also directly report the incidents to the Information Security Management Working Group. Upon receiving an incident

report the information security management personnel and supervisors need to promptly handle the incidents or report them to higher- As of the end of 2023 M&G had filed 2612 patent applications cumulatively with 2407 patents granted and 1211 valid patents. In

level supervisors based on the severity of the incident. 2023 M&G further enhanced its product competitiveness with the completion of 32 product certifications in various product categories.For information security incidents and violations discovered during information security inspections the Company will take disciplinary

actions towards the individuals involved in accordance with the relevant provisions of the Employee Handbook and the Performance Number of Patent Applications and Grants Owned by M&G Stationery

Evaluation System. Former employees who violate their security responsibilities and leak sensitive information of the Company will also

be held liable. The Company will pursue their legal responsibilities in accordance with relevant regulations and agreements. Incidents of

severe violations will be compiled into internal awareness education cases to prevent similar issues from happening again.

26122407

M&G Colipu Enhancing Information Security Risk Prevention and Control 2391

211622351923

To protect against network attacks and malware M&G Colipu has formulated a series of information security management

policies including the Information Content Security Management Policy the Information Assets and Equipment Management

Policy the General Emergency Plan for Major Emergencies and the Personnel Security Management Policy. It has

deployed cloud firewalls cloud WAF and cloud security centers. In 2023 M&G Colipu initiated the third-party network

security classification evaluation of its e-commerce platform and received a "Level 3 (S3A3)" security protection rating. The

Technical Department conducts security training every month and produces a series of information security risk prevention

knowledge posters for employees. Cumulative patent filings (item) Cumulative patents granted (item)

202120222023

For any form of leaks of confidential information whether intentional or due to negligence M&G Colipu will require the

responsible personnel to pay a compensation based on the severity and harm of the incident with possible termination of

the labor contract. If such behavior leads to serious consequences M&G Colipu may pursue legal liability following due

processes. 2023 M&G Product R&D Innovation Awards

"Q31/0120000003C163 Gel Ink Ballpoint Pens and Refills" was awarded the honor of "Shanghai Standard"

Technological Innovation and Digitalization "Stainless Steel Pen Tip Preparation Technology Development and Application" won the "Private Sector

Technology Development Contribution Award—Second Prize"

"Pen Manufacturing Intelligent Detection Technology Development and Application" won the "Shanghai

M&G is committed to achieving innovative-driven development and innovation for Science and Technology Award—Third Prize"

good causes. As a champion of the sustainable development of the industry M&G

continuously enhances research and development and innovation capabilities "Key Technology and Industrialization of New Environmentally Friendly Materials for Pen Manufacturing"

and integrates green and environmental factors in research and development. won the "Shanghai Science and Technology Award—Second Prize"Investment in technological

The Company also vigorously uses digitalization to promote the transformation improvement and innovation and The project "Key Technologies and Industrialization of High-performance and Environmentally Friendly Ink"

of operational and development models to achieve greater win-win economic R&D in 2023 won the "2023 China National Light Industry Council Science and Technological Innovation Award—

environmental and social benefits. In 2023 the Company invested RMB170 million in First Prize"

technological improvements technological innovation and R&D. RMB170 million

47 48Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Improving Performance and User Experience of Products Advanced Pen Production Intelligent Factory

In 2023 the Company focused its improvement efforts on gel pen and correction tape products aiming to comprehensively Established in 2021 the M&G Stationery Advanced Pen Production Intelligent Factory mainly manufactures the liquid-ink

improve overall user experience in terms of user perception quality and functional performance of the products. The ballpoint pens student fountain pens retractable ballpoint pens and other mainstream products with intelligent production

improvement measures covered product planning and design supply chain improvement and technological breakthroughs. operations. The factory has developed a series of application systems in equipment intelligence production process

As the result the user experience of core category consumers has been comprehensively improved. The gel pen intelligence product and service intelligence and software system application topping industry peers in per capita output

performance improvement project included 16 sub-projects on the soft rubber feel plug-in force of pen cap adhesion of the value with its lean production management mode. Some of the systems such as the independently developed intelligent

protective cover texture standardization printing positioning etc. The correction tape performance improvement project waterway system the mold precision maintenance system the line marking detection system and the Andon system are all

included 6 sub-projects on mold structure wrinkling and damage in re-writing gear structure and parameter design etc. pioneering in the stationery industry.After the intelligent manufacturing transformation the Factory has achieved significant improvements in all major indicators:

Per capita annual output value increased by Annual cost reduction Product defect rate reduced by

Digitalization

30% RMB5 million 38%

Digital transformation is the strategic path for enterprises to achieve high-quality development. M&G has built a digital vision of "Digital Energy consumption reduced by Workshop noise reduced by

M&G Internet M&G" focusing on the digitalization of core businesses (marketing and consumer operations channels and sales

terminals and R&D production and supply chain) organizational and collaborative digitalization and digital infrastructure continuously 75% 13%

growing its digital capabilities.In 2023 with the launch of projects such as the JuBaoPen App the M&G Alliance and the Sales and Inventory System the Company

has initially built a complete digital sales and marketing system. The channel management App JuBaoPen provides digital support M&G Colipu Enhancing Digital Capabilities

to sales personnel in three dimensions: People (task follow-up decision-making support) Product (category opportunity exploration

accurate order copying) and Place (store operation analysis). These measures can effectively improve sales operation efficiency

and have been widely used by frontline and channel personnel. In terms of logistics the Company has successively launched digital M&G Colipu is a B2B integrated digital e-commerce platform

systems such as the visitor appointment system the electronic release form system and safety inspection system which not only result built by M&G Group. M&G Colipu continuously promotes

in simpler processes and higher efficiency but also effectively reduce the use of paper documents implementing the green and low- the digitalization of the industry focusing on four areas:

carbon principles in practice. expanding product lines promoting the efficient operation of

the platform ecosystem upgrading intelligent warehousing

systems and optimizing the platform through digital

technology iteration. With a strong R&D team consisting of

100 personnel M&G Colipu has independently developed

a number of core systems such as business rule engines

workflow engines information collection engines price

monitoring engines and auxiliary quotation systems which Fully intelligent warehouse of M&G Colipu

have been widely used in digital business scenarios such as

price comparison data retrieval and information collection

and accumulation.M&G Colipu deployed multiple intelligent processing systems in its new intelligent warehouse such as dense storage

system. The warehouse deploys various intelligent systems across the full warehousing process such as the advanced

AS/RS automated warehouse system information transmission through the EIP system order allocation through the

WMS system picking by the AGV system robot scheduling by the RCS system and order dispatching and control by the

TMS system. These systems have significantly improved the throughput efficiency of the warehouse topping intelligent

warehousing and logistics peers with a daily throughput capacity of 80000 boxes.With its outstanding digital capabilities M&G Colipu has won a number of awards in digitalization in 2023 such as the China

Government Procurement Award "Excellent Supplier Award" "2023 China Industrial Digitalization Pioneer Award" and "2023

China Industrial Digitalization Top 100 Enterprises" by Toby.com and "Dingge Award" Digital Transformation Pioneer List

"Annual Industry Platform Award".

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Promoting Industry Development Intellectual Property Protection

M&G has been actively involved in the development of the industry. The Company has successively participated in initiatives such M&G has formulated more than 20 policies regarding the protection of intellectual

as the "Global Sustainable Consumption Initiative" "Decarbonizaition-Friendly Actions" "Sustainable Solutions" and "Sustainable property including the Intellectual Property Handbook the Intellectual Property

Industrial Development Consensus" working together with ecosystem partners to vigorously promote sustainable consumption and Management Method the Intellectual Property Risk Management Control the

the green and low-carbon development of the industry. M&G has participated in 22 industry associations with annual membership Reward System of Intellectual Property the Patent Management Method the

fees totaling RMB420000. As a member of the China Writing Instrument Association and the China Culture Education and Sports Copyright Management Method the IP Licensing Product Risk Control System etc. Number of cases of crackdown on

Industry Standardization Expert Committee M&G actively participates in the formulation of relevant national industry and association In 2023 the Company formulated the Trademark Application Management Method intellectual property piracy in 2023

standards contributing our experience in product research and development into industry standards. In 2023 the Company participated to comprehensively protect intellectual property rights. The Company obtained the 121

in the formulation of 25 standards including 5 national standards 16 industry standards and 4 association standards expanding its certification of the Intellectual Property Management System (GB/T 29490-2013) in

professional influence in pen production to a broader scope of stationery sporting goods "the four treasures of the study" (brush ink 2021 and completed the periodic audits in 2022 and 2023 respectively. The certification

paper inkstone) etc. process has helped the Company monitor and evaluate the effectiveness of intellectual

property management in various business processes which is conducive to the

continuous improvement of the intellectual property management and the formulation

of a positive mechanism in support of technological innovation. In 2023 the Company

cooperated with law enforcement authorities in the crackdown of 121 intellectual

property piracy cases.In 2023 number of standards National standards Industry standards Association standards

formulation the Company participated in

5164

25 Maintaining Legitimate Market Operations

Supporting the Development of Sustainability Standards In March 2023 M&G identified three online stores selling counterfeit M&G brand gel pens and refills with a significant

amount of sales. The Company promptly collected information and reported the case to the regulatory authorities. After

investigating the sales volumes and operating locations of these illegal vendors law enforcement authorities arrested the

In 2023 M&G formulated its first corporate sustainability standard the M&G Sustainable Products which clearly defines three suspects in July.the Company's sustainable products from the aspects of material functionality safety and packaging and promotes

the development of sustainable products throughout the Company. The Company is also committed to promoting its M&G has always adopted a "zero tolerance" attitude towards infringement. With a strong determination the Company

sustainability concept in the industry and participated in the formulation of the association standards "Carbon Footprint vigorously protects the legitimate rights and interests of consumers channel partners and M&G itself safeguarding the

Accounting Methodological Guidelines for Cultural and Sport Products" and the "General Principles for Evaluation of the Company's brand and reputation.Reusability and Recycling and Reuse Rate of Cultural and Sport Products" as well as the industry standard "General

Requirements for Recyclable and Recyclable Design of Plastic Products".M&G attended the United Nations Sustainable Development Goals Summit and signed the "Business in Action: Sustainable Industrial

Development Consensus" initiative

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Environmental Development

As one of the largest stationery manufacturers in the world M&G

Stationery is highly concerned about the environmental impact of its

operations and vigorously takes on the responsibility of environmental

protection. The Company actively implements its climate strategy and

continuously strengthens the management of its environmental footprint.In 2023 M&G was awarded the title of "Five-Star Green Factory" by the

Shanghai Municipal Commission of Economy and Informatization and the

Shanghai Municipal Development and Reform Commission. In the future

M&G will fully leverage the exemplary role as a "Green Factory" and

continue to integrate the concept of green and low-carbon development

in every aspect of production and operation processes.

2023 Performance Highlights

* Completed company-level Scope 1 and Scope 2 GHG emissions

accounting and conducted preliminary calculation of Scope

3 emissions to identify carbon emission sources and reduction

potentials

* Implementing multiple energy-saving measures: air compressor

energy saving waste heat recovery injection molding machines

upgrade and water pump motors optimization

* Increased the total installed capacity of photovoltaics to 15700

kilowatts

* Promoted greener packaging options and packaging reduction for

the logistics process with 330000 cardboard boxes saved and

640000 cardboard boxes recycled cumulatively

* Reduced 48840 kilograms of carbon dioxide equivalent in 2023

through electricity water and paper conservation campaigns in

the M&G headquarters office building

Addressing Sustainable Development Goals (SDGs):

This chapter responds to the Response to Climate Change pillar of M&G Stationery's sustainable development strategy.

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Responding to Climate Change Risk Type Risk Description Impact Main Response MeasuresTime

* Rising sea levels may lead to greater instability * Upgrade equipment performance and

M&G regards "response to climate change" as a key pillar of its sustainable development strategy. The Company closely follows in the operation of the Company's facilities extend equipment service life and gradually

government climate policy trends and the related dynamic development strives to take targeted actions to manage climate change risks Physical located in coastal areas thereby increasing Medium- incorporate climate risk considerations into

and actively explores climate-related innovative solutions so as to fully grasp the development opportunities under the background of risk operating costs. to long- infrastructure construction and future business

the carbon peaking and carbon neutrality policy. termChronic risk planning.* Climate change may exacerbate the

vulnerability of ecosystems which may affect * Strengthen the prevention and control of

Axus Stationery's own forest land as well as forest risks such as fire and wind disasters

Governance Structure M&G's supply chain stability regarding wood pests and diseases and gradually deepen the

pulp and other supplies. sustainable management of forests.M&G has established a top-down sustainable development governance structure with four strategic pillars including response to climate * In the long run continued high temperature * Closely follow the physical risks caused by

change. The Board of Directors and the Strategy Committee are responsible for supervising the Company's response to climate change may increase the possibility of virus climate change and continuously improve

risks reviewing and approving climate-related goals and policies and ensuring the implementation of key climate response projects. transmission and outbreak which may affect employee health safety and benefits.The Sustainability Office is responsible for coordinating the implementation of climate strategies including assigning goals and tasks the health and safety of employees.coordinating and formulating cross-department working mechanisms following up on implementation progress toward the goals and

climate-related information disclosure.In 2023 M&G established a Risk Management and Compliance Committee that directly reports to the Company president. Climate risks * Under the context of the carbon peaking * Establish training and sharing mechanisms

will be gradually incorporated into the Company's comprehensive risk management system in the future which will generate a more and carbon neutrality policy companies face to ensure that relevant departments of

systematic climate change response action plan. Transition increasingly stringent energy-saving and Medium- the Company have a comprehensive

risk carbon reduction regulatory requirements and term understanding of the latest policies and

may need to increase efforts and investment in promptly integrate policy requirements into

Climate Risks and Opportunities Policy and order to meet compliance requirements. daily work plans for implementation.legal risk

* With the expansion of the national carbon * Continuously improve carbon management

trading market an increasing number of capabilities and promote the energy

Identifying climate-related risks and opportunities allows us to better understand climate issues and their relevance to M&G and lay

companies will be required to fulfill the GHG transformation; meanwhile continue to carry

a solid foundation for deepening our climate action. M&G evaluates the impact of climate risks and opportunities in the following time

emission allowance surrendering obligation out carbon emission assessment and gradually

frames: short-term (1-3 years) medium-term (3-10 years) and long-term (10-50 years).which also needs more refined management of promote carbon reduction in the value chain.their carbon assets.* As EU's carbon border tax policy gradually

Climate-related Risks expands its scope high-emission companies

may face increased export costs and border

taxes in the future.Risk Type Risk Description Impact Main Response Measures

Time

* Frequent extreme weather events such as high * Regularly inspect and upgrade production * Increasingly strict carbon reduction policies * Actively explore carbon reduction potential and

temperatures typhoons heavy rains etc. may operation and storage facilities to enhance the require companies to continue to increase implement energy conservation and carbon

Physical result in risks such as damage to Company's Short- level of protection against natural disasters. Transition R&D investment in renewable energy Short- to reduction projects; optimize energy structure

risk production equipment logistics disruptions and medium-

risk energy conservation and emission reduction medium- and continuously increase the proportion damage to product inventories which may have and long- * Develop customized emergency response plan Acute risk technologies. However the implementation term of renewable energy in the overall energy

negative impact on the Company's operational term for each factory regularly conduct emergency Technology of carbon reduction measures can achieve structure.capacity and result in higher operating costs. drills purchase accident insurance and ensure risk effective cost reduction in the long run and the

adequate inventory of disaster prevention and cost of using renewable energy will continue * Vigorously promote the construction of

* Extreme weather events such as high control supplies. to decrease in the future lowering the overall intelligent factories to ensure greater synergy

temperatures and thunderstorms may pose technology risks for the Company in future. of energy conservation and carbon reduction.risks to the health and safety of employees.

55 56Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

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Risk Type Risk Description Impact Main Response Measures Strategic Goals and Actions

Time

* Consumers and customers are increasingly * Increase R&D investment of sustainable

concerned about the carbon footprint of products continuously develop green and low- Climate Goals

Transition products and have greater demand for low- Medium- carbon products and communicate M&G's

risk carbon and environmentally friendly products. term sustainability concept to consumers engaging

Market risk To better compete in such a market companies them to participate in joint climate action.M&G actively responds to the national carbon peaking and carbon neutrality strategic goals and has identified "response to climate

need to focus their carbon reduction actions change" as one of the key pillars of its sustainable development strategy. The Company has set the goal of "to be carbon neutral

from the perspective of the entire value chain. * Gradually promote carbon reduction throughout by 2050" and is currently working on the breakdown of emission reduction targets by phase to create an effective implementation

the value chain to reduce product carbon mechanism to achieve the goal.* The gradual phasing out of fossil-based

footprint.materials may lead to price increases for

materials such as plastics which could

increase the operational costs of the Company. Climate Action Progresses

* Media professional institutions industry * As the first listed company in the Chinese

associations and other stakeholder groups are stationery industry to release an ESG report In 2023 M&G conducted a systematic accounting of Scope 1 and Scope 2 GHG emissions at the company level covering M&G

Transition increasingly concerned about global warming Short- to M&G has long attached great importance to Stationery Shanghai production and distribution center Shanghai headquarters office building South China production and distribution

risk and its various impacts and have higher medium- green and low-carbon development. Listing center North China distribution center Axus Stationery M&G Colipu and Jiumu Store. The accounting methodology was based on ISO

term 14064-1:2018 Specification with Guidance at the Organization Level for Quantification and Reporting of Greenhouse Gas Emissions and

Reputation expectations for companies to set positive "response to climate change" as a key strategic

goals and take actions. pillar for sustainable development M&G Removals relevant Chinese standards such as the General Guidelines of the Greenhouse Gas Emissions Accounting and Reporting for risk

responds to stakeholders' expectations with Industrial Enterprises (GB/T 32150-2015) the 2019 Refinement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories

practical actions and has adopted positive carbon as well as other international and domestic standards and specifications. According to the accounting results in 2022 Scope 1 emissions

reduction measures in product R&D production accounted for 4.4% of M&G's total emissions mainly from the combustion of fossil fuels such as diesel and gasoline while Scope 2

and operation daily office work and warehousing emissions accounted for 95.6% mainly from various forms of electricity consumption.and logistics.The Company also made preliminary attempts to calculate Scope 3 emissions in accordance with the GHG Protocol: Corporate Value

Chain (Scope 3) Accounting and Reporting Standard. During the process the Company defined 11 applicable categories of Scope 3

Climate-related Opportunities emissions and conducted a pilot collection of emission data from 66 suppliers. In the future M&G will continue to optimize the calculating

mechanism and data quality for Scope 3 emissions.Opportunity Opportunity Description Impact Main Response Measures

Type Time

* With the increasing awareness of green and * Enhance the R&D of green products and M&G GHG Emissions Data5

low-carbon among consumers their demand have successively launched a series of green

Opportunities for quality sustainable products is also growing. Short- products such as the carbon-neutral stationery

for green Strengthening the development and supply of medium- series the "Carbon Emission Reduction Plan"

product and long- Indicator Unit 2021 2022 2023green products can meet consumers' diversified series and the "Endangered Animals" series.innovation consumption needs and help the Company term

enhance its competitiveness. * M&G has gradually formulated its own

definition of sustainable products focusing on Scope 1 GHG emissions tCO2e 2481 2170 2115

green design sustainable materials green

packaging and green advocacy. It plans to

apply the concept to more product categories Scope 2 GHG emissions tCO2e 88876 46668 45940

and develop a larger sustainable products

portfolio.Total GHG emissions (Scope 1 + Scope 2) tCO e 91357 48838 48055

* Companies need to strengthen the * Strengthen the utilization of renewable energy; 2

management of energy and resources to implement a series of energy-saving renovation

Opportunities realize their carbon reduction goals. The Medium- to projects such as equipment optimization

for energy implementation of relevant measures will long-term and upgrading waste heat recovery etc. to GHG emission intensity tCO2e/million RMB of revenue 5.2 2.4 2.1

and resource increase costs in the short term but achieve improve energy efficiency.efficiency cost reduction in the medium and long term

thus realizing a win-win situation for economic * Actively promote green logistics and green

and environmental benefits. office and strengthen energy conservation

and emission reduction efforts in various key 5 The data scope covers M&G Stationery Shanghai production and distribution center Shanghai headquarters office building South China production and

operational processes. distribution center North China distribution center Axus Stationery M&G Colipu and Jiumu Store.

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M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

In 2023 the Company continued to advance the

construction of photovoltaic power generation Practicing Green Operations

at production bases including the expansion

of photovoltaic power generation capacity and

switching some of the street lights into solar M&G actively responds to the government initiative for ecological and environmental protection and the carbon peaking and carbon

powered lights further increasing the proportion neutrality policies continuously improving energy management and the management of emissions effluents and waste in its production

of renewable energy. As of the end of 2023 the process accelerating the implementation of green logistics and green office practices and increasingly strengthening its focus on

total installed capacity of photovoltaic power biodiversity.generation capacity of M&G Shanghai production

and distribution center and Axus Stationery reached

15700 kilowatts and the total consumption of Environmental Management System

photovoltaic electricity was 35.24 million kilowatt-

hours which is equivalent to the reduction of M&G strictly complies with the requirements of the Environmental Protection Law of the People's Republic of China and other

approximately 13000 tons of carbon dioxide laws and regulations and continuously optimizes its environmental management system. The Company has formulated a number

emissions. of environmental management policies such as the Environmental and Safety Management Operation Control Procedures the

Environmental Factor Identification and Control Procedures and makes continuous efforts to strengthen the identification evaluation

6 and risk control of key environmental factors in the production process. M&G Shanghai production base has passed the ISO 14001 2020-2023 Photovoltaic Electricity Consumption of M&G Environmental Management System certification and will receive a renewal audit in 2024.

In September 2023 the Company conducted an internal audit of its environmental management system focusing on the initiatives

operational processes and implementation measures and emergency preparedness related to environmental management covering

3524 product design development production and services. The internal audit identified two incidents of minor non-conformity and both had

Annual photovoltaic electricity consumption (10000 kWh) been rectified with timely improvement measures.Cumulative photovoltaic electricity consumption (10000 kWh)

Axus Stationery has established and continuously optimizes the Environmental Health and Safety (EHS) management system and

2202 formulated the EHS Management Manual and the EHS Social Responsibility and Management Policy to provide specific guidelines in all

aspects including the identification evaluation and control of environmental factors legal and regulatory requirements objectives and

targets setting training and capacity building emergency preparedness and response inspection and rectification EHS management

1291 1322 system audit etc.

876911

Energy Management

415415

M&G has summarized its energy management principles as "standardized management

2020 2021 2022 2023 compliance with regulations technological innovation green research and development

energy conservation and emission reduction and shared responsibility". Adhering to

these principles the Company has formulated the M&G Stationery Energy Management Number of energy-saving projects

Manual in accordance with the ISO 50001:2018 Energy Management Systems - implemented in 2023

Requirements with Guidance for Use as well as relevant laws and regulations aiming 11

to establish a measurable traceable assessable and continuously improving energy

In 2023 M&G joined the "Decarbonization-Friendly Actions" and management mechanism. The Company's energy management system has passed the

the "Sustainable Solutions Alliance" collaborating with like-minded ISO 50001 certification.corporates in promoting carbon reduction in the value chain. The

Company also actively participated in a number of events and activities In 2023 the Company further explored the potential for energy conservation and carbon

such as the China International Consumer Products Expo the United reduction with the implementation of 11 projects in various aspects such as photovoltaic

Nations Sustainable Development Goals Summit the 28th Conference power generation air compressor energy saving waste heat recovery injection molding

of the Parties to the United Nations Framework Convention on machines upgrade and water pump motors optimization. All of these projects have

Climate Change (COP28) etc. using these occasions to share M&G's achieved significant energy-saving results.innovative solutions and engage in in-depth discussions with regard to

climate change and other sustainability topics.Ms. Poppy Chen Chief Sustainability Officer of M&G

making a speech at COP28

6 The data scope of photovoltaic electricity consumption includes M&G Stationery Shanghai production and distribution center and Axus Stationery.

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Water Resource Management

M&G strictly complies with relevant laws regulations and standards related to water resource management such as the Water Law of

the People's Republic of China the Water Pollution Prevention and Control Law of the People's Republic of China and the Shanghai

Optimizing Energy Structure with Photovoltaic Power Generation Integrated Wastewater Discharge Standard. The Company strives to continuously optimize water efficiency ensure compliant discharge

of wastewater and integrate the concept of sustainable use of water resources into its production and operation process.Using photovoltaic power is a key measure for optimizing energy structure. M&G started constructing photovoltaic power The Company closely watches its water use conditions by monitoring key indicators such as the total consumption of municipal water

generation facilities in Guangming and Qingcun production parks of its Shanghai base in 2020. In 2023 the Company total amount of recycled and reused water as well as wastewater discharge statistics and continuously optimizes water utilization

expanded the installation of photovoltaic power generation facilities in the distribution center with an installed capacity efficiency with various campaigns and upgrade projects on the reduction recycling and reuse of water. In 2023 the Company

of 5700 kilowatts and an expected annual power generation of 6 million kilowatt-hours. As of the end of 2023 the total implemented a leak detection and renovation project over the fire protection water supply system identified five leakage points and

installed capacity within the Company reached 15700 kilowatts. In addition the Company replaced traditional lighting in promptly completed the necessary corrections.Qingcun park with 86 solar powered lights which could save 86000 kilowatt-hours of electricity equivalent to reducing

carbon dioxide emissions by 36 tons. Regarding wastewater treatment the Company has formulated the M&G Stationery Water Treatment Facility Operation Manual which

specifies the procedures and processes for wastewater treatment facilities including equipment operation operation management

Axus Stationery started installing distributed rooftop photovoltaic power generation facilities in 2021. In 2023 these units process maintenance and water quality management. The Company has also developed a wastewater treatment process flowchart and

generated a total of 1.91 million kilowatt-hours of electricity equivalent to reducing carbon dioxide emissions by 802 tons. rigorously carries out staged treatment of production wastewater accordingly. Third-party wastewater compliance testing is conducted

Axus Stationery is planning to expand photovoltaic power generation facilities to cover the rooftops of office buildings with annually to ensure strict compliance with applicable discharge standards before the wastewater enters the municipal sewage system. By

an expected installed capacity of 2464 kilowatts. adding a water treatment system that redirects wastewater to the condensing tower for recycling wastewater discharge can be reduced

by one ton per day.Waste Management

M&G strictly complies with national laws and regulations regarding waste management such as the Solid Waste Pollution Prevention

and Control Law of the People's Republic of China and has formulated waste management systems and policies such as the Solid

Waste Control Plan the Hazardous Waste Storage Facility Management System and the Hazardous Waste Pollution Prevention

and Control Responsibility System to specify the supervisory responsibilities of various departments regarding the management of

hazardous waste. M&G continuously optimizes the management of solid waste hazardous waste and relevant storage facilities

aiming towards standardized safe and economical disposal of waste. The Company also regularly conducts training for environmental

management personnel on standardized management of solid waste.M&G requires that all solid waste generated during the production process shall be properly disposed of in accordance with relevant

laws regulations and standards. Solid waste is categorized into hazardous waste recyclable waste and non-recyclable waste with

different statistics and management approaches accordingly.Recyclable waste will be processed by waste recycling companies. Non-recyclable waste and domestic garbage are collected and

disposed of by qualified companies. Hazardous waste is handled by properly licensed third parties in compliance with relevant

Rooftop photovoltaic power generation units at M&G Shanghai base regulations.Efficient Utilization of Plastic Materials

Achieving Cost and Efficiency Benefits with Air Compressor Energy-saving Upgrades

With a consistent dedication to reducing plastic waste and promoting plastic recycling in the production process M&G

A key measure for energy saving and carbon reduction at M&G Shanghai base is reducing the energy consumption of air focuses its research and testing efforts on plastic materials with recycling potentials in order to maximize the reuse of plastic

compressors which used to consume 17.8% of the total energy consumption of the base. After conducting in-depth research materials while ensuring product quality and safety.on the working conditions of the air compressor systems we developed a series of optimization plans focusing mainly on

reducing air duct operating pressure and reducing waste due to small leaks. With nearly three years of continuous efforts The Company recycles and reuses plastic scraps from the injection molding process of M&G K35 gel pens. The new

the energy consumption of air compressor systems was reduced to 12.6% of the total energy consumption of the base a material to recycled material ratios have reached 1:1 for pen neck 1:2 for refill and pen barrel and 1:3 for pen clip

decrease of about 5% compared to 2021. This significant energy saving also generated a cost reduction of RMB4.23 million. protective sleeve and rotating wheel achieving both higher material reuse rate and lower waste generation.

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Air Pollutants Control

M&G manages exhaust gas emissions strictly in accordance with relevant laws regulations and standards such as the Regulations of

Shanghai Municipality on Prevention and Control of Air Pollution and the Integrated Emission Standard of Air Pollutants. The Company M&G Colipu Recycling and Reusing Cardboard Boxes and Pallets

continuously upgrades and optimizes air pollution control facilities to eliminate or mitigate the adverse impact on the atmospheric

environment as much as possible. In 2023 Axus Stationery carried out pipeline and process improvement projects for dust control

effectively solving the problem of dust accumulation and improving the working environment at the operation site. M&G Colipu requires its warehouses to implement categorized management of recycled cardboard boxes. Boxes from

suppliers are sorted and stored according to different sizes and types in the product receiving process and in the order

packaging process on-site workers prioritize the use of recycled cardboard boxes that match the product size. In 2023 the

Green Logistics reuse rate of recycled cardboard boxes of M&G Colipu reached 49.3%. In addition other than the pallets used in designated

areas within the warehouse M&G Colipu also shares some printer paper pallets with carriers and requires them to return

M&G vigorously explores best practices in green packaging and green transportation and strives to build a modern green logistics the pallets after use achieving circular utilization of materials.system with efforts such as logistics packaging improvement and energy-saving and carbon reduction in logistics processes.Green Logistics Packaging Building Energy-efficient Logistics

In 2023 M&G carried out packaging optimization and used boxes recycling projects to

realize greater reduction and recycling of logistics packaging. The logistics industry is a significant source of global carbon emissions. In 2023 M&G focused on reducing carbon emissions as a main

task for the logistics process and carried out a number of specific projects to reduce logistics energy consumption.Packaging optimization: The Logistics Center piloted packaging optimization on a

rubber product collaborating with multiple functions including ordering production and The Shanghai production and distribution center optimized the operation mode of equipment for better energy conservation in

quality to test different ways to optimize product packaging. By removing unnecessary Number of cardboard boxes saved in 2023 warehousing. RGVs were operated for shorter durations or temporarily shut off when workload was low to avoid unnecessary power

cartons and inner boxes and using turnover boxes the project resulted in the saving of consumption. The lighting mode of the aisles of the automated warehouse were also optimized with lights shut-off during daytime and 6000 large cardboard boxes

6000 large cardboard boxes and 324000 small cardboard boxes during the year. The half-lit at night saving approximately 515 kilowatt-hours of electricity per day. In addition a total of 11 diesel powered forklifts were

packaging optimization project was expanded to another three products in November replaced with electric forklifts effectively reducing fuel consumption.which is expected to further reduce the amount of cardboard boxes used in 2024. 324000 small cardboard boxes

Regarding self-operated transportation the Company has made various efforts such as route optimization and vehicle scheduling

Recycling of used boxes: The Logistics Center arranged dedicated personnel to collect optimization to minimize unnecessary shipping. Regarding third-party shipping carriers a comprehensive assessment of their routing

and recycle cardboard boxes used for storage and replenishment. A total of 640000 service and warehousing was carried out to identify optimization opportunities. Based on the locations coverage and shipment Number of cardboard boxes recycled

used cardboard boxes were recycled during this year. Other than being used for product requirements of M&G's regional distribution centers a number of measures have been implemented to improve transportation efficiency

shipping recycled boxes were also sent to retail stores for reuse raising the employees' including adjusting shipment ratio adjusting the quantity of goods received at different warehouses and increasing the proportion of 640000

awareness about recycling while reducing packaging waste. direct shipments to customers etc. These measures are expected to help reduce fuel consumption by 240000 liters per year.Green Logistics Initiatives of M&G Colipu

M&G Colipu East China Warehouse replaced its shipping fleet with

10 newly purchased new energy vehicles which not only effectively

reduced the emissions of pollutants but also lowered the shipping

cost from approximately RMB1 per kilometer to RMB0.5 per

kilometer.Recycling of logistics cardboard boxes

M&G Colipu's warehouses use an intelligent system to closely

monitor the operations and energy consumption of vehicles. Drivers

have their daily routes optimized based on shipment quantities

and customer locations prior their departure to avoid unnecessary

shipping distance and reduce energy consumption.M&G Colipu's new energy delivery vehicles

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Green Office Operation Biodiversity Conservation

M&G vigorously promotes the concept of green office operation and is committed to enhancing employees' awareness of energy Biodiversity has become a focus in global environmental governance. The Chinese government has named biodiversity conservation as

conservation and environmental protection while cultivating green and low-carbon behavior habits. With the implementation of electricity a strategic topic of the country and formulated relevant biodiversity conservation strategy and action plan for 2030. The wastewater and

water and paper conservation campaigns M&G headquarters office building reduced approximately 48840 kilograms of carbon dioxide pollutants generated during the production and disposal of plastic products can cause negative impacts on land and marine ecosystems

equivalent in 2023. and threaten biodiversity. As a stationery manufacturer M&G attaches great importance to the sustainability of raw materials and strives

to minimize the environmental harm caused by product disposal. The Company actively explores solutions to reduce plastic usage

researches and develops biodegradable materials and vigorously promotes the importance of biodiversity conservation to young

Green Building consumers through marketing channels product advocacy and consumer communications encouraging the public to pay greater

attention to biodiversity and participate in conservation activities.The G60 Science and Technology Innovation Corridor in Songjiang District Shanghai where M&G headquarters office

building is located has obtained the LEED Platinum certification the highest level of the LEED international green building M&G collaborated with the Mangrove Wetlands Conservation Foundation (MCF) to launch the "Endangered Animals: Wetland" series

rating system exceeding in green and low-carbon facilities and operations. of gel pens which were made with PLA biodegradable materials and recycled materials to reduce plastic waste and pollution thus

minimizing the risk of animals ingesting or getting entangled in plastic waste. This series also used five endangered wetland animals as

Green Workplace the inspiration for its packaging design. The Company further invited more people to pay attention to endangered animals and raise their

awareness of biodiversity by means of bird-watching tours in-store education VR experiences and interactive H5. In addition M&G has

The Company conducts monthly workplace environment donated part of the revenue from this product series to support MCF's wetland conservation and environmental education programs.inspections to encourage all departments to actively

implement the "Building a Beautiful Home" campaign.The inspection focuses on four areas including bottled

water consumption electricity consumption printer paper

consumption and workplace sanitation. The results are

announced on the monthly meetings of the Sustainability

Ambassadors and shared with all senior executives to

provide greater incentives for more positive actions.In 2023 the Company also organized two stair climbing The green office proposal of M&G

events as a fun way to raise employees' awareness of

the low-carbon concept. Employees from 23 departments

participated in these events climbing a total of 60006

floors of stairs collectively."Lights Out Hour" Campaign

In August 2023 the Company started implementing the "Lights Out Hour" campaign. Lights in elevator halls and office areas M&G organized wetland bird-

watching tours for consumer families

were turned off for an hour during the lunch break. As the result a total of 115000 kilowatt-hours of electricity was saved by

the end of year.Reducing Bottled Water Use

The Company encourages employees to reduce the use of bottled water. Bottled water is no longer served at internal

meetings and participants are encouraged to bring their own water bottles. Receptions of external guests can still serve

bottled water but only with prior application via the OA system. Since the launch of this campaign the use of a total of 4648

bottles of bottled water were avoided a 56% reduction compared to the same period before the campaign.Axus Stationery attaches great importance to sustainable forest management and biodiversity conservation. As early as 2009 Axus

Stationery successfully overcame the technical challenges of "using fast-growing poplar to replace basswood in making pencil shafts"

Reducing Office Paper Use and has been continuously conducting research on more sustainable tree species. As of the end of 2023 all of the 2396 mu of forest

land owned by Axus Stationery had obtained the FSC Certification. In its Sustainability Management Policy Axus Stationery specifies

In August 2023 M&G launched a campaign to encourage employees to prioritize the use of electronic documents reduce its commitment to never using non-certified tropical rainforest timber. It does not use chemical fertilizers in plantation management and

unnecessary printing and photocopying use double-sided printing and reuse recycled printing paper with a blank side. The carried out pilot drip irrigation projects to reduce soil erosion. Forest rangers conduct weekly inspections of the forest and continuously

Company also set the default configuration of all office printers to use double-sided printing. The campaign resulted in a monitor the biodiversity conditions of its forest land. Prior to construction Axus Stationery provides training to its contractors on operation

saving of 66 packs of printer paper an 8.7% reduction compared to the same period before the campaign. procedures and forest protection to enhance their awareness of biodiversity conservation.

65 66Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

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Social Responsibility

M&G Stationery actively fulfills its social responsibility and collaborates

with stakeholders such as employees consumers and suppliers to

create social value together. We practice responsible procurement by

evaluating training and communicating with suppliers to continuously

optimize supply chain sustainability management. We respect employee

rights and attach great importance to employee development and growth

and strive to create an equal inclusive healthy and safe working

environment. With a consumer-centric mindset we take product and

service quality as our top priority. We also actively participate in a variety

of public welfare activities to fulfill our responsibilities and pay back to

society.

2023 Performance Highlights

* Revised the Employee Handbook in accordance with international

human rights conventions and added multi-dimensional employee

communication channels to ensure the effective protection of

employee rights

* Optimized the remuneration system providing all employees with

performance-based variable compensation

* Introduced comprehensive health insurance for all employees

upgraded the living conditions in factory dormitories and

achieved an overall employee satisfaction score of 92% for office

environment

* Average training time per employee increased to 11.8 hours with

an employee training coverage rate of 93%

* Launched the M&G online learning platform offering 85 courses

covering workplace skills management skills corporate culture

and business knowledge; the cumulative online learning time over

the platform reached 10000 hours

* Charitable donations totaling RMB6.08 million

* M&G Charity carried out educational public welfare initiatives in 42

cities in 19 provinces benefiting nearly 1 million students and over

3000 teachers

* 3787 employees participated in public welfare activities including

all M&G executives

Addressing Sustainable Development Goals (SDGs):

This chapter responds to the Sustainable Supply Chain and Empowering

Employees and Communities pillars of M&G Stationery's sustainable

development strategy.

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M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

Sustainable Supply Chain

Striving to build a responsible supply chain M&G continuously consolidates and optimizes its supplier management system with the Supplier on-site audit was a new focus of M&G's supply chain ESG evaluation in 2023

increasing integration of ESG factors. The Company provides suppliers with capacity building trainings to guide suppliers to better fulfill which focused on the supplier's management capabilities in areas such as labor and

their environmental and social responsibilities ensuring the high-quality and sustainable development of its supply chain. employment environmental compliance health and safety and quality management.The supplier's self-assessment and on-site audit scores were consolidated into a Number of key suppliers receiving ESG

comprehensive score rating. Suppliers who failed the on-site audit should develop and evaluation from M&G

Supply Chain Management Mechanism implement a rectification action plan based on the audit results and undergo another 71assessment after rectification completed. In 2023 the Company conducted ESG

evaluation on 71 key suppliers with 27 of them receiving on-site audits. The pass rate

for supplier rectification efforts exceeded 80%.Over the years M&G has established a robust supplier management system and formulated policies such as the Supplier Management Number of on-site audits

Method Supplier Evaluation Management Method New Supplier Development and Introduction Management Method and Supplier In 2023 M&G also integrated ESG management into the annual performance evaluation 27

Code of Conduct. These documents clearly define the classification evaluation and assessment of suppliers as well as the for key suppliers. In addition the Company refined the ESG assessment criteria in

management procedures and key control points for introducing new suppliers effectively controlling supply chain risks. the comprehensive evaluation of new supplier development and introduction placing

ESG assessment ahead of the formulation of partnership. In the future M&G will

M&G has established a fair supplier introduction mechanism. The seven-step process includes application wide selection preliminary Pass rate for supplier rectification continue to deepen the ESG evaluation and management of key suppliers which will be

screening sample testing and review field review etc. A total of six departments are involved in the review and approval process efforts exceedinggradually expanded to cover all suppliers and potential suppliers to enhance the overall

including the Legal Affairs Department the Audit Department the Technical Center and the departments overseeing procurement. sustainability of its supply chain. 80%

Qualified suppliers still face a comprehensive assessment on their capabilities in various areas including pricing management

capabilities technical R&D sales capabilities production capacity and equipment warehouse management and quality assurance

systems. The Company ensures the stability security and competitiveness of its supply chain with dynamic evaluations covering six

areas including management quality cost delivery service and technology of the suppliers.· Questionnaire distribution · Self-assessment scoring

Supply Chain ESG Management · Supporting documents collection

In 2022 M&G initiated the process to build an ESG evaluation system for its supply chain developing a preliminary set of standards

and carrying out pilot ESG evaluations of suppliers. In 2023 the Company further optimized the supplier ESG evaluation standards and 01

indicators and formulated a number of relevant policies such as the Supplier ESG On-site Audit Protocol and the ESG Audit Checklist

with evaluation focusing on five aspects: labor and employment environmental protection health and safety business ethics and Self-assessment

management systems making continuous improvements of its supply chain ESG management system. questionnaire

· Developing a rectification · Data verification

action plan

05 02 · Communication and

M&G's 2025 Sustainable Supply Chain Goals · Progress tracking M&G's Supplier collection of additional information

Rectification Document

· Reviewing rectification ESG Evaluation plan review

results Process · Score review

· Rating update · Self-assessment rating

To implement responsible procurement keep optimizing supply chain management raise

Qualitative awareness about sustainable supply chain and optimize the management of chemicals in the

supply chain.

0403

Rating On-site audit

· Comprehensive score rating (self-assessment · Selection of suppliers to be audited · On-site audit

Quantitative To meet M&G ESG guidelines by 2025 for 100% key suppliers. + on-site audit)

· Document review · Personnel interview

· Result feedback

· Report compilation

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Supplier Capacity Building Employee Rights and Benefits

M&G regularly communicates with suppliers regarding topics such as cost operational plans quality control and implementation status M&G prioritizes a "people-oriented" principle placing great emphasis on employee experience and corporate culture and is committed

to deepen mutual understanding and coordination in areas like product demand process improvement and production and supply plan to growing together with its employees. The Company strives to create an open and inclusive corporate culture with innovative

synchronization. M&G's procurement team constantly collaborate and support suppliers in overcoming practical challenges in production measures explore employee empowerment and development models and build a strong employer brand for the new generation.and logistics monitoring improvements in bottleneck processes or sharing peer best practices to identify gaps support rectification and In 2023 M&G won the "Top Human Resources Management Awards—Outstanding Employer" by 51job and the "Digital Intelligence

enhance quality management. Beyond daily business interactions the Company holds supply chain conferences annually facilitating Organization Development Award" at the 16th Management Action Force by the Business Review.focused and in-depth communication with supply chain partners. In addition the Company also organizes ad hoc meetings regarding

specific key issues identified in the supply chain.M&G is committed to providing support for the Company's procurement staff and

suppliers regarding ESG management. In 2023 the Sustainability Office conducted

training on the supplier ESG assessment system for about 100 employees from

the Procurement Department to enhance their ESG competency. For suppliers the

Company not only provides training on key issues during the ESG evaluation process

but also supports suppliers to develop customized and practical improvement plans

based on their specific conditions to help them further enhance their ESG management

capabilities.To ensure smooth cooperation and win-win outcomes with suppliers the Company

distributes the M&G Stationery Supplier Questionnaire annually to inquire about Number of procurement staff

suppliers' sustainability certifications environmental reporting and satisfaction levels participating in the supplier ESG

throughout cooperation etc. to help improve any potential issues in the cooperation assessment system training

process.

100

"Top Human Resources Management "Digital Intelligence Organization

Awards—Outstanding Employer" by 51job Development Award" by Business Review

Supply Chain Conference Management Action Force

Protecting Employee Rights

M&G has been holding its Supply Chain Conference for 11 consecutive years engaging in in-depth discussions with supply

chain partners on topics such as quality cooperation and corporate management. The conference is an important annual

M&G strictly abides by the Labor Law of the People's Republic of China the Labor

event for M&G and suppliers to review the work of the previous year and look forward to future collaborations.Contract Law of the People's Republic of China and other labor and employment

laws and regulations. Adhering to the seven core International Labour Organization

M&G organized the 2023 Supply Chain Conference (ILO) conventions approved by China including the Equal Remuneration Convention

with a total of 155 supplier participants. The the Minimum Age Convention the Worst Forms of Child Labour Convention the

conference arranged a dedicated ESG training Discrimination (Employment and Occupation) Convention the Forced Labour Convention

session during which the Company emphasized its the Abolition of Forced Labour Convention and the Occupational Safety and Health

2025 goals for sustainable supply chain and urged Convention the Company has formulated the Code of Business Conduct the Employee

its suppliers to improve their ESG performances so Handbook and other policies and systems regarding employment. M&G is committed

as to continuously enhance supply chain resilience to treating all employees with respect recognition and care and firmly prohibits forced

and risk mitigation capabilities. The conference labor child labor and any infringement of employees' legitimate rights and interests. The

also established the "Supplier ESG Progress Company ensures fair remuneration and benefits for employees and makes recruitment

Award" to commend suppliers who had made salary promotion performance management disciplinary action dismissal and other

outstanding contributions in energy conservation employment related decisions based on employees' job value abilities and performance.environmental protection safety management The Company prohibits any forms of discrimination including discrimination based

employee rights protection and social welfare on gender region ethnicity religion age pregnancy or marital status disability and

contributions encouraging all suppliers to work other legally protected characteristics and maintains a zero-tolerance attitude towards M&G supplier received the "ESG Progress Award"

together in building a sustainable supply chain. harassment violence or bullying behaviors. Percentage of employees joining the

M&G strictly abides by the Trade Union Law of the People's Republic of China and strives labor union

to build harmonious labor relations establishing open and equal consultation channels

internally. As of the end of 2023 100% of the Company's employees are union members. 100%

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M&G attaches great importance to safeguarding the rights and interests

Comprehensively Updating the Employee Handbook of female employees and is committed to supporting them to achieve

career development and work-life balance. In addition to ensuring that

employees have the rights to maternity nursing and parental leaves M&G

In 2023 M&G updated its Employee Handbook after a has furbished nursing rooms in its office building providing nursing mothers

comprehensive review of its human resources management with the amenities and privacy. Every year the Company offers the "Parent-

policies as well as the requirements of relevant laws and Child Mother EQ Course" helping new moms to deal with the pressure of

regulations and the trends of external business environment. The parenting and achieve work-life balance with knowledge sharing practical

content of the handbook was expanded to include specified rights tools and communication skills on parenting.and obligations of M&G employees further standardizing the

human resources management of the Company.After referencing with international human rights conventions

the new Employee Handbook added provisions against

workplace discrimination and harassment commitment to equal

remuneration strict prohibition of child labor and any form of

forced labor and requirements for multi-dimensional employee

communication channels. It also included 14 revised policy

documents as attachment including the holiday and leave policy

and the performance management policy.The revision process followed democratic decision-making and Flowers for female employees on Women's Day

consultation procedures with suggestions from employees

fully incorporated. Over 40 employee suggestions regarding

the revised content were received and more than 30 employee

representatives participated in the discussion. The revised

Employee Handbook officially took effect after proper employee Moms for Temps Program

M&G and Me—the M&G Employee Handbook revised

consultation and acknowledgement. in 2023

M&G strives to provide equal employment opportunities for different groups and help create a fair employment environment.M&G Shanghai base launched the Moms for Temps program providing temporary stationery assembly and packaging job

opportunities for moms from neighboring communities. Workers on this post worked six hours a day and five days a week.In 2023 a total of 100 moms were recruited through this program. The program not only helped these moms increase their

Diversity and Equal Opportunities family income while allowing them to pick up and drop off their children at kindergartens or schools but also effectively

supplemented the Company's labor demand during peak seasons.M&G regards "openness and inclusiveness" as one of its core values and is

committed to creating a diverse equal and inclusive workplace that is free from

discrimination or harassment for all employees. The Company also strives to

provide employees with fair and equitable career development opportunities

and the necessary empowerment to support its employees to fully unleash their

potentials and achieve self-development.In 2023 M&G focused its corporate culture building efforts on "openness and

inclusiveness". Senior management were required to take the lead in setting

examples discussing and formulating the Code of Conduct for Executives

which advocates behaviors such as listening with an open mind and valuing

mutual recognition and encouragement. The Company printed out and placed

this document on the desks of all senior executives constantly reminding them

to lead by example in fostering an open and inclusive workplace. The Company

plans to keep promoting the awareness acceptance and belief in the value

of openness and inclusiveness among all employees in the future using a

variety of approaches such as promotion articles cultural activities and special 2023 recruits of the Moms for Temps program

cultural month campaign to steadily guide employees to "see it remember it Desktop display of the M&G's Code of Conduct

and practice it". for Executives

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Compensation and Benefits

M&G continuously optimizes its compensation and benefits system. The Company strives to unleash the potential of employees with M&G Employee Benefits System

reasonable compensations and incentives while building a unique employee benefits system to provide support to employees both in

their work and personal life.* Cash allowances and subsidies such as communication allowance meal allowance seniority

Employee Compensation and Incentives allowance overseas allowance etc.;

* Successful application of RMB300000 in government allowance for special talents for applicable

Adhering to the principles of "fairness motivation and equal pay for equal work" M&G is committed to providing fair scientific and Allowances and employees in 2023.reasonable compensation for all employees. The Company strictly complies with national laws regulations and local policies of where subsidies

it operates to ensure that its compensation exceeds local minimum wage standards. The Company sets its compensation standards

based on the value creation capabilities and performance requirements for each position as well as benchmark results with industry

peers and dynamically adjusts the employee compensation system to ensure its competitiveness in comparison with industry peers and

other local businesses. * Annual physical examinations;

The Company has developed a performance-based variable compensation mechanism for all employees. According to the Company’s * Gym facilities at the M&G headquarters office building;

Performance Management System a closed-loop management of performance goal setting performance coaching performance

evaluation and application of evaluation results is carried out on an annual basis. The performance review results will be applied * Various sports clubs such as badminton basketball football and board games; annual sports

to calculate employees' performance bonuses and year-end bonuses as well as position and salary adjustments. This mechanism games;

provides an effective guidance and motivation to help employees align their career development goals with the Company's strategic Health and * Health and well-being activities such as stair climbing weight loss campaigns and health lectures

goals. To better motivate employees the Company developed and launched a number of compensation incentive programs in 2023 well-being to ensure the physical and mental health of employees.such as granting equity incentives to middle and senior management and establishing a sales performance-based compensation

incentive scheme for sales staff.Employee Benefits and Care * Paying basic pension insurance basic medical insurance unemployment insurance work-related

injury insurance maternity insurance and housing provident fund for employees;

Besides providing various social insurance and housing provident fund for employees in compliance with state and local laws and * Additional commercial health insurance for all employees launched in 2023 with comprehensive

regulations M&G has also established a unique employee benefits system. In addition the Company organized various interest clubs protection against death from disease critical illness accidental injury and accidental medical

and activities to enrich the leisure time of employees. Every year the Company organizes physical examinations and medical services Protection treatment; additional cost-effective optional insurance products for employees and their families.such as traditional Chinese medicine consultations and provides employees who work in overseas markets with medical and casualty against risks

insurances fully ensuring the health and safety of all employees.M&G has built a staff residential area at its Shanghai production base and has

established the "VOC" employee feedback platform to collect suggestions and opinions

from employees regarding the administrative and facility management within the factory Number of dormitory rooms renovated

area. In 2023 the Company renovated 527 dormitory rooms creating cleaner and more * Maternity leave paternity leave nursing leave childcare leave additional leave for factory workers

comfortable accommodation and convenience for employees with optimized rooms 527 during Spring Festival etc. aside from statutory annual leaves.housekeeping services environment and layout.Paid leaves

* Dormitories and apartments and rental subsidies for qualified employees.Accommodations

75 76Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

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M&G organizes a variety of cultural and sports activities to enrich employees' leisure time and enhance team spirit. Special celebration Employee Communication

activities are organized at both the M&G group and subsidiaries at home and abroad such as M&G Colipu and Jiumu Store on

occasions such as New Year's Day Women's Day Mother's Day Mid-Autumn Festival National Day Qixi Festival Christmas etc. In

2023 the Company held the Family Open Day event arranging family visits for factory employees. Employees shared their work with M&G highly values the demands and opinions of the employees.

their families and participated in parent-child fun activities together enhancing communication with their families. The Company has established an open transparent and smooth

communication channel and a standardized and fair complaint handling

mechanism to ensure employee feedback and opinions are timely

responded and handled. Employees can communicate their complaints

through various channels including WeCom Human Resources Center

email HR-related report email and anti-fraud report email. The Company

requires that employee complaints shall be responded and handled

within certain timeframes and that the progress of the handling shall be

communicated to the employees. As of the end of 2023 the Company

received 618 employee feedback and suggestions through the employee

feedback platform all of which were closed loop processed. Regarding the

management of working environment and facilities the Company not only

conducts a semi-annual satisfaction survey but also posts the QR code

for satisfaction survey in restroom lounge and cafeteria areas to collect

feedback from employees on a daily basis. In 2023 the overall employee

satisfaction rate was 92%.Employee Sports Game lebration Employee feedback platform

New Year's Day C

e In 2023 M&G launched an internal corporate culture platform for timely

communication of company news corporate culture stories of outstanding

employees etc. The Company also created the "GuangHeJiang" IP a

dedicated WeChat account to interact with employees and ensure that the

information about M&G cultural values is effectively communicated.Employee Cultivation and Development

M&G highly values the growth and development of employees. The Company has developed a comprehensive promotion mechanism

with scientific performance evaluations encouraging employees to continuously improve their professional competitiveness. The

M Company strives to cultivate talents at multiple levels in multiple areas and across different fields by continuously improving its talent &G Colipu

C h ei mld pre loyee activity fo development and employee training system and providing targeted training customized to the diverse needs of employees.n's Day r

Employee birthday party

Talent Introduction and Cultivation

M&G continuously optimizes its talent recruitment mechanism. In 2023 the Company formulated the Recruitment Management Policy

to further refine the principles and standards for talent recruitment and specify recruiting processes and procedures. The Company also

intensified its cooperation with universities and launched the "Future Leaders" program for MBA graduates in 2023 promoting two-way

communication with students through "enterprise open day" events or "campus roadshows".M&G is committed to building a fair and robust promotion mechanism and position system and providing employees with scientific

transparent and diversified career development channels. The Company has established various promotion mechanisms including

annual promotion on-the-job promotion management trainee promotion and management staff promotion and continuously expands

the career development channels for employees aiming to motivate capable and willing employees to pursue better career development

Mid-Autumn Festival celebration Jiumu Store 7th anniversary team building opportunities. The Company encourages employees to apply for positions and provides abundant opportunities for job rotation and

promotion for outstanding employees allowing them to fully utilize their talents.

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Employee Training and Development

M&G empowers employees through multi-level and diverse training opportunities of various formats enhancing their overall abilities In 2023 M&G launched a company-wide M&G e-learning platform which offers a wide range of self-learning resources in leadership

and skills and supporting their career development. The Company offers a variety of training programs customized to the growth needs workplace skills company policies and events corporate culture and sustainable development. Departments can also share their

of employees at different levels and growth stages such as new employee orientation training training for management trainees internal training materials on this platform to ensure greater interdepartmental knowledge sharing. There are currently 85 online courses

leadership training etc. Each department organizes targeted training according to job requirements to promote continuous improvement available. As of the end of 2023 the cumulative learning time of M&G e-learning platform reached 10000 hours with over 67% of

of employees' professional capabilities. In 2023 in support of the rapid development of live streaming business the Company carried employees including 2052 active users using the platform for self-improvement.out a series of training focusing on live streaming skills such as anchor training short video training and operation training. Subsidiaries

such as Jiumu Store M&G Colipu and Axus Stationery also offer targeted employee capability training programs based on their own

business characteristics. For example M&G Colipu continuously empowers employees' career development with a comprehensive The Company strongly encourages employees to improve their professional skills through continued education to meet both their

series of training programs including new employee orientation training skills training management training leadership training personal growth and the Company's development needs. The Company provides financial support for employees applying for certain

campus recruitment and management trainee training etc. certification programs. For example fee reimbursement is offered for employees at the Finance Center who passed relevant financial

certificate exams. For factory employees the Company also offers similar fee reimbursement incentives for vocational qualification

certificates related to seven job categories such as forklift operators and electricians. In 2023 a total of 32 employees received

certificate reimbursement support. The Company also provides the "Executive Growth Management Fund" degree training program for

executives providing funding support for executives to participate in education and training programs to achieve self-improvement.Management Trainee Development Program

Monthly training at the Sales Center Anchoring training at the Live Streaming Sales Department Every year M&G carries out a management trainee development program following the principles of "competitive selection

balance and timeliness" aiming to help newly graduated trainees better integrate into the workplace and become qualified

backbone/management talents. In 2023 the M&G management trainee development program conducted a total of 20

2023 M&G Employee Training Data training sessions for 97 management trainees from 12 departments.

Percentage of employees covered by Average training hours per Number of online courses available on The Company organized a one-week orientation training for newly recruited management trainees inviting industry

employee training system employee the M&G e-learning platform experts to share their business knowledge and experiences to help the trainees set the right course for growth. In the next

two weeks trainees participated in job rotation to quickly understand the Company's business and get used to the work

93% 11.8 85 environment. After the trainees were assigned to their formal positions each business unit or department assigned mentors

to assist the trainees in their early career development.The Company also made efforts to help the management trainees realize their long-term potentials. Exceptional trainees

Jiumu Store Empowerment Training with outstanding learning willingness reflective ability and influence would have promotion opportunities to support them in

pursuing their career dreams.In 2023 Jiumu Store organized 23 empowerment training sessions

focusing on corporate culture and values for new employees functional

department employees and middle-level managers aiming to create a

positive and proactive team spirit.* 88 functional department employees participated in the updated

corporate culture course—"Building Trust"

"Building Trust" corporate culture course

* 37 young employees were invited to the Executive Roundtable listening

to corporate culture stories shared by company executives

* Middle-level managers participated in leadership courses such as "One-

Minute Manager" "Crucial Conversations" and "Effective Delegation"

* Hosted 10 Values Co-creation Workshops to help employees better

understand and practice company values

M&G management trainee program in 2023

Jiumu Store's Values Co-creation Workshop

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Occupational Health and Safety

M&G is committed to creating a healthy and safe work environment for employees. The Company prioritizes building a robust safety

production system and ensuring the occupational health of employees and continuously optimizes its safety management system to

Leadership Training ensure production safety.M&G has developed customized leadership training programs for managers at different levels to help them more effectively Strengthening Production Safety System

manage their teams. In 2023 the Company conducted a total of 47 leadership training sessions for 996 participants from 32

departments. M&G strictly complies with the Labor Law of the People's Republic of China Production Safety Law of the People's Republic of China

and other relevant laws and regulations. Following the principles of "prevention as priority response as supplement effective control and

"Bootcamp for New Managers" continuous improvement" the Company has established effective emergency plans and occupational health and safety management

"Bootcamp for New Managers" was a series of courses offered by M&G to help newly promoted managers accelerate their plans and formulated policies and systems such as the Environmental and Safety Management Operation Control Procedures and

transition from professional employees into junior managers. The program included a five-month online courses and in- the Safety Management Standards providing specific requirements for safety management safety inspections and acceptance and

person workshops to help new managers take the first step right in their new management roles. The training consisted accident handling in order to fundamentally eliminate or reduce occupational health and safety risks and ensure the occupational health

of five modules: role change/self motivation achieving results coaching team members efficient collaboration and team of employees. The Company has established a robust production safety responsibility system covering managers at all levels with

building. clearly defined safety management responsibilities. With its strict and comprehensive system requirements and implementation M&G's

safety management system has obtained the ISO 45001 Occupational Health and Safety Management System Certification.Executive Leadership Workshops

For safety management in production bases the Company has formulated clear

M&G provides rich leadership training and workshops for requirements for safety and environment management signs forklift safety aisle

core executives to enhance their strategic decision-making planning temperature setting etc. High-risk operations in factory areas need prior

and team management capabilities. In 2023 the Company approval and are subject to full-process supervision of dedicated personnel. The

organized a "Strategic Leadership Sandbox Workshop" Company also conducts regular and ad hoc safety inspections in both office buildings

using sandbox simulations to help executives improve self- and production bases with the identified safety hazards or unsafe factors promptly

awareness and explore strategic plans to establish core rectified and regular fire emergency drills.competitiveness and develop differentiated advantages.The Company provides professional training for employees at production bases in

The Company also invited Global Leadership Summit (GLS)

compliance with the requirements of the laws and regulations. Specialty operators and

lecturers and CEO coaches from CEIBS to organize a GLS

Leadership training for executives key safety position personnel are required to complete the relevant certification process workshop for executives focusing on innovative thinking

before taking up their positions. On top of the mandatory safety trainings the Company

and leadership. In addition the Company used the Hogan

also provides dedicated safety trainings for factory safety management personnel to

personality assessment tool and conducted assessments

enhance their safety awareness and safety management capabilities. Ad hoc safety

and team workshops to guide executives to rethink about

education is offered to on-site workers during daily production operations to enhance Total hours of safety training in 2023

business direction organizational design mechanism

their safety awareness in order to promptly identify and rectify safety risks. In 2023

and processes and incentive mechanisms promoting the 20220

M&G provided a total of 20220 hours of safety training.continuous improvement of the organizational effectiveness

of the Company.Occupational Health Management

To ensure the occupational health and safety of employees M&G strictly complies with relevant laws and regulations such as the Law

of the People's Republic of China on the Prevention and Control of Occupational Disease the Regulations of the People's Republic of

China on Work-Related Injury Insurance and the Classification for Hazards of Occupational Exposure. The Company has formulated a

series of system documents including the Occupational Health Management Policy the Occupational Disease Prevention Management

Policy the Occupational Hazard Prevention and Control Responsibility Policy and the Occupational Disease Hazard Monitoring and

Evaluation Policy. With the implementation of various policies and measures M&G continuously optimizes its working conditions to

ensure the physical and mental health of employees.The Company has formulated and vigorously implements occupational disease prevention and control plans and implementation plans.Regular monitoring and assessment is conducted focusing on occupational disease hazard factors such as dust toxic gases and

noise. There is also regular inspection maintenance and upkeep of occupational disease prevention and control equipment to ensure

that they function properly. Employees are properly equipped with personal protective equipment and employees with occupational

contraindications are prohibited from engaging in work with occupational disease hazards. Occupational health records and annual

physical examinations are in place for employees.

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Product and Service Quality

The Company also vigorously carries out awareness raising and education activities regarding occupational disease prevention and For M&G providing society with quality products and services is not an ongoing pursuit but also the cornerstone of the Company's

control providing EHS-related training for safety management personnel including job safety analysis (JSA) occupational health and high-quality and sustainable development. With a customer-centric mindset M&G strictly controls product quality and safety with

protection training safety awareness and management capability training etc. high standards for both itself and its suppliers. The Company also actively engages in responsible marketing maintains smooth

communication with consumers and customers and strives to continuously improve the quality and efficiency of customer service.Noise Control Improvement Product Quality Management

In 2023 M&G Shanghai production base carried out a noise control improvement project improving noise control M&G Stationery strictly complies with national laws regulations and standards related to product quality such as the Product Quality

comprehensively with five approaches of elimination reduction absorption diversion and isolation. Specific measures Law of the People's Republic of China the Request in Common Use of Security for Student's Articles and the Hygienic Requirements

included adding cushion pads and soundproof covers reducing the operating speed of pneumatic workstations adding of Study Products for Myopia Prevention and Control in Children and Adolescents while actively implementing national and regulatory

sound-absorbing covers using silent fans selecting low-noise vacuum generators etc. The successful implementation of requirements such as the Outline to Improve Quality of Development and the Work Plan for the Safety Protection of Children and

this project significantly reduced the number of employees exposed to noise. Student Supplies. The Company continuously upgrades internal inspection standards and has established the M&G quality management

system to ensure higher requirements and standards for quality control. The system includes a number of relevant policies such as

Sharing sessions were organized to promote the improvement measures to more workshops. As of the end of 2023 the the Management and Control Procedure for Product Safety the M&G Product Audit Sampling Mechanism (Trial) the Product Safety

noise issues were improved in 8 assembly workshops and 7 flip-flop workshops. Requirements Checklist - Student Supplies and the Product Safety Requirements Checklist - Office Supplies and Office Equipment

as well as specific safety control processes audit and sampling mechanisms for various types of new products high-risk products and

regular products. The system also specifies the disposal mechanism for non-conforming products. In 2023 the Company formulated the

Operational Specification for Outsourced Product Safety Testing which standardizes the testing process for outsourced products further

strengthening the standardization of third-party testing for all self-made and outsourced products. M&G has passed the ISO 9001:2015

quality management system certification. Third-party supervision and audit of the Company's system are conducted annually. In 2023

Preventing Occupational Hazards in Paper Production the Company had no occurrence of any significant safety or quality incidents related to its products or services.M&G has established and continuously improved a comprehensive quality control system throughout the entire process. From raw

material procurement and manufacturing to the delivery of finished products all steps are strictly monitored and managed to ensure and

Preventing dust hazards and improving working environment improve the stability of product quality. The Company conducts in-depth research of consumer demands and uses the insight to develop

better and safer products. The product initiation flow management approach is adopted during the product development stage to identify

Dust generated in paper-making process is collected using suction of negative pressure. But the process still leaves a potential risks for improvement.significant amount of flying dust in the workshop. The paper production workshop of the M&G Shanghai base installed dust

extraction units inside the machines directly extracting paper dust from the machine. This upgrade has effectively eliminated

visible dust particles in the workshop and reduced the potential health risks caused by dust exposure. M&G Quality Control System

Deploying stacking robot to reduce lower back injury risk Research Ensuring preventive control of product quality by conducting technical feasibility assessment on the

and

development safety compliance use environment user experience and extreme use conditions of products in the

Packaged boxes of notebook stage planning R&D and design stages of new products.products are quite heavy. To move

about 25 tons of products requires

a worker to bend over about

1000 times in a day which is

likely to cause lower back injuries. Production Requiring production guarantee for new products in product validation and production stages and

In 2023 the paper production stage continuously carrying out process improvement in production.workshop deployed an automatic

stacking robot to replace manual

handling effectively reducing the

labor intensity of employees. Distribution Initiating improvement projects for quality issues identified in incoming inspection logistics and storage

and sales

Automatic stacking robot in the paper production workshop stage and feedback and improvement stage and ensuring closed-loop management of customer complaints.

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In 2023 the Company established the Quality Center formally separating quality inspection from production as an independent function.The Quality Center is responsible for independent inspection of the product manufacturing process and the internal/external inspection

during product warehousing report collection and confirmation as well as the submission and sample

collection for annual inspections and external inspections. The Quality Center has established a

quality management system consisting of QC (Quality Control) QA (Quality Assurance) and QE

(Quality Engineering). Under each section the Quality Center carries out various work such as product Qualified rate of finished

inspection quality non-conforming incident handling process quality improvement and establishment products before warehousing

of good product conditions. In 2023 the Company established a standardized QC operating

procedure based on "one process one standard and one method" comprehensively improving its 99.97%

product quality management. The Company also regularly organizes activities such as quality review

meetings and quality improvement weeks. By collecting and analyzing quality data common problems

are identified and become the focuses of targeted improvement activities and preventive measures One-time pass rate of full

are taken to address key quality issues to avoid future incidents. In 2023 the Company handled and inspection

resolved 43 product quality non-conforming incidents. The qualified rate of finished products before

warehousing was 99.97% and the one-time pass rate of full inspection was 99.75%. 99.75% M&G supply chain quality improvement training camp

Supplier Product Quality Management Responsible Marketing

M&G continuously optimizes the product quality management system for suppliers and has established a robust system of policies

regarding defective products and product quality risk control strictly ensuring the quality of purchased products from the source. The M&G strictly complies with the Advertising Law the Copyright Law and other relevant laws and regulations and has formulated relevant

Company has issued the Management Measures for Comprehensive Improvement of Supplier's Factory Inspection and Performance internal system policies such as the Measures for the Administration of Trademark Applications the Product Specification Manual (Document)

in order to reduce the occurrence of quality issues in incoming goods by setting the product shipment inspection standards and Compliance Audit Standard and the Notice on Further Standardizing Product Graphic Design Elements. To protect consumer rights all

strengthening the self-checking capabilities of suppliers. As of the end of 2023 the qualified rate of purchased products reached 99%. packaging and promotional information of products must go through internal review so that the advertising is legitimate and in compliance

In 2023 M&G organized two quality improvement training camps for suppliers inviting external lecturers to provide targeted quality with relevant laws and regulations and the marketing and sales information is transparent and accurate. The Company has also formulated

improvement guidance for 32 suppliers. In addition the Company regularly visited suppliers to provide on-site quality management and the M&G Social Media Platform Content Guidelines to lay out the specific requirements for regulating social media communication content. It

improvement support. is required that "all content published on social media platforms shall be truthful legitimate healthy and accurate and must not contain false

or misleading information or deceive or mislead consumers". The Company has also formulated the M&G Media Relations Guidelines which

M&G Supplier Product Quality Control System stipulates that when M&G employees communicate with the media or influencers they shall base their communication on facts with honesty

clarity and candidness and actively practice responsible marketing.Clarifying the responsibilities of various functional departments regarding the

Bulk Sample Approval Process approval of bulk samples including the scope timeframe and process of

approval ensuring the quality of bulk products. The M&G "Brand Messenger" Project

Standardizing the regular self-inspection process for product quality risk control

Product Compliance Self-check

Management System continuously reducing product quality risks optimizing product quality and In October 2023 M&G launched the "Brand Messenger" project. The project aimed at standardizing the Company's brand

ensuring that product quality meets company requirements. management in areas such as social media visual identification system (VI) and crisis response by forming an internal

community of "brand messengers" and a communication mechanism. All brand messengers were provided with regular

Code of Practice for Internal and Clarifying the pre-launch inspection processes both internal inspection and third- trainings on brand management awareness to improve capabilities to better prevent relevant risks and to protect the

External Inspection of Outsourced party inspections for all product categories improving the efficiency of new product

Products Company's brand image.development and shortening the development and launch cycle of new products.More than 40 brand messengers from various departments participated in the program. They shared ideas on brand

Standardizing supervising and managing the return process for three types of

Defective Product Return management and brand image maintenance co-created the Brand Messenger Declaration and signed the Brand

Management Procedure defective products: recalls due to quality issues customer complaints and incoming Messenger Commitment together committing to playing the role of brand owners actively promoting the M&G brand and

inspection failures.jointly building a warm and sustainable M&G brand.Key Level 2 Material Control Process Clarifying the control process of key secondary material for suppliers to ensure

product quality stability and cost optimization.Standardizing the regular inspection mechanism for quality risk control of various

Quality Risk Control Regular

Verification Management System product categories reducing product quality risks and ensuring that outsourced

products meet national standards and company requirements.Standardizing the daily pre-launch management of new outsourced products

New Product Launch Development

Management System including planning designing prototyping internal and external inspection

M&G Brand Messengers

quotation and sealing stages shortening the time to market for new products.

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Compliance Training on Social Media Platform Operation Empowering Partners

M&G adheres to the core value of "Benefiting Others" and the business philosophy

of "Partnership for a Shared Future" and is committed to forming a stable and win-

In November 2023 M&G organized a compliance training on social

win cooperation mechanism with channel partners at all levels. The Company strives

media platform operation. A total of 61 employees participated in the

to build a high-level partner ecosystem and grow together with partners providing

training online and offline. The training mainly focused on material

comprehensive support for channel partners to help them achieve progress in

usage advertising and promotional activities and VI requirements

business management and technological improvement.aiming to enhance the compliance awareness of social media

operation teams and designers prevent risks and maintain the The Company organizes a number of activities and events for partners such as

Company's brand image and interests in social media operations. annual marketing conferences and elite training camps. Channel partners can use

Social media operation team leaders signed the Platform Content Self- this opportunities to learn about new M&G products and marketing strategies for the

Discipline Commitment during the training. Compliance training on social media platform next year and communicate with the Company on sales related issues. In 2023

operation the Company held four partner meetings with over 4000 attendees. The Company

also regularly conducts market visits and store visits to help stores identify and solve

problems and better support their operations and development. Introducing new products to channel partners

Providing Quality Services

Store Partner Training and Empowerment

Adhering to the consumer-centric philosophy M&G actively listens to the voices of customers and consumers and gathers feedback M&G actively empowers retail store customers. In November 2023 the

taking consumer suggestions and criticism as opportunities to further improve its products and services. The Company handles the sales team visited the headquarters of Dingjia Stationery in Xinxiang City

received feedback in a timely manner and develops new products or optimizes existing ones based on market demand. Henan Province to provide category planning training for more than 20 store

managers and purchasing personnel. The training on aesthetic appearance

and product display skills helped the participants improve product display

The Company has established operational standards for the M&G Customer Complaint Platform clarifying the at their stores with the efficient presentation of product appearance

complaint submission process to reduce re-submission of complaints due to incomplete information or improper performance and features to store consumers. The themed pop-up store in Xinyulou

Channel information input ensuring the timely and efficient handling of complaints from channel partners regarding product Hebei Province

Partners quality delivery shortages or damages and other issues. In 2023 the Company conducted a satisfaction survey M&G also actively explores new opportunities of stationery sales with key retail customers such as setting up flagship pop-

of 36 channel partners. The survey covered various aspects such as product quality timely delivery new product up stores to achieve the rapid sales turnover of in-store products during the peak sales season. In August 2023 the Company

supply information communication service attitude and after-sales service. The overall satisfaction score was 83.5. successfully opened its first themed pop-up store in the flagship store of Xinyulou Department Store in Cangzhou City Hebei

Province. A 60-square-meter pop-up area was set up and popular short video influencers from Douyin were invited to conduct

on-site promotion. The event attracted much attention and generated significant sales growth.Jiumu Store has established a comprehensive customer complaint handling process with standardized full-channel

handling and analysis processes for customer complaints as well as relevant rules for complaint escalation.Retail

Stores Customer complaints are categorized into general complaints urgent complaints and major complaints each

category with specific handling processes accordingly to ensure more timely complete and efficient responses and

better after-sales service. Social Philanthropy

For e-commerce channels M&G has formulated policies such as the Customer Complaint Handling Standards to Throughout its history M&G has demonstrated a strong commitment to fulfilling social responsibilities

specify the responsibilities for handling pre-sales sales and after-sales complaints. The Company standardizes and paying back to society. The Company established the M&G Rainbow Charity Fund in 2015

the full-process management of e-commerce sales through measures such as pre-sales data dashboards and daily

E-commerce and Shanghai M&G Charity Foundation (hereinafter referred to as "M&G Charity") was officially

Platforms review meetings continuous follow-up communication during sales and daily report on key after-sales indicators. At registered in 2020. Adhering to the philanthropic concept of "promoting quality education and Number of students benefiting

the beginning of each month the Company reviews and categorizes the complaints received in the previous month empowering inclusive community development" M&G Charity carries out a variety of philanthropic from the M&G philanthropic

and conducts follow-up reviews over quality-related complaints continuously optimizing the complaint handling programs in the fields of quality education environmental protection and humanitarian care. programs

process and response speed to improve the quality of e-commerce services.M&G Charity not only leverages the corporate resources of M&G to focus on supporting rural art Nearly 1 million

education caring for groups with special needs and other philanthropic causes but also raises

In 2023 M&G Colipu conducted a satisfaction survey for corporate customers using a combination of various the awareness and encourages actions of the public to work together to address social issues

M&G forms such as telephone communication social media platform surveys and questionnaires distributed in customer contributing to the harmonious development of society. As of the end of 2023 M&G Charity had Number of teachers benefiting

Colipu groups. The survey result was used to continuously optimize the service experience of customers aiming to improve carried out educational charity initiatives in 19 provinces and 42 cities across China benefiting from the M&G philanthropic

customer satisfaction. nearly a million students and over 3000 teachers. In 2023 M&G donated RMB6.08 million in total programs

including in-kind donations to support philanthropic programs and a total of 3787 employees

participated in public welfare activities with a total of volunteer service duration of 5730 hours. 3000+

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Golden Seed Plan M&G Charity actively leverages the business advantages of M&G to support public welfare. In 2023 for the first time the art teacher

training program developed by the M&G Children's Art and Creativity Division for rural art teachers through online live streaming. The

courses were viewed for 14000 times during the year allowing many rural art teachers to use the program to grow their teaching

Launched by M&G Charity in 2015 the "Golden Seed Plan" is a public welfare initiative that donates customized stationery gift packages abilities. We also leveraged M&G's resources and capabilities of organizing nationwide painting competitions and partnered with the

tailored to the learning needs of rural students for 1-2 school years. As of the end of 2023 the "Golden Seed Plan" had been carried out One Foundation to launch a rural painting competition. The competition participated by nearly 120000 rural children provided a

in more than 1000 schools and social service institutions distributing over 500000 Golden Seed stationery gift packages and benefiting platform for them to showcase their artwork and motivated rural schools to attach greater importance to art education. In addition the

100000 rural students with high-quality stationery. competition not only benefited rural students with improvement in their art education abilities but also functioned as an evaluation of the

effectiveness of the art teacher training program.M&G Charity also actively responds to China's "Belt and Road" initiative and has

extended the "Golden Seed Plan" to help students in overseas markets such as Laos To further promote rural art education in November 2023 on the occasion of World Children's Day the Company aired short video

and Kenya. M&G also encourages its channel partners subsidiaries and other like- Total value of donations including in- clips of interviews with 20 rural students from Sichuan Yunnan Guizhou and other places and invited influencers to expand impact

minded companies from the industry to join the efforts for doing good driving a total kind donations of the "Golden Seed through short video platforms. The campaign brought these children's real-life stories with rural art education classes and M&G Charity's

donation of over RMB1.5 million including in-kind donations. Plan" exceeding philanthropic concept of "Gathering Twilight Warming Childhood" to a greater audience registering over 10.24 million views. The

Company also set up a dedicated philanthropy section at large-scale exhibitions such as the Frankfurt Stationery Exhibition showcasing

RMB1.5 million both M&G's philanthropic creative products as well as the philanthropic efforts of M&G Charity in promoting art education.M&G Charity donating Golden Seed stationery gift packages to students in Laos and Kenya

Art Education Plan M&G Charity distributing philanthropic posters on The philanthropy section of the M&G booth at the Frankfurt Stationery

World Children's Day Exhibition

Along with the implementation of the national strategy of rural revitalization the Chinese government has been actively promoting rural

art education in recent years. The Ministry of Education issued a number of policy documents accordingly such as the Guidelines for Autism Support Program

Public Art Courses in Higher Education Institutions and the Notice on the Establishment of the First National Primary and Secondary

School Art Education Teaching Guidance Professional Committee. All sectors of society are encouraged to increase their support for art

education and contribute to improving the quality of education for rural children. Supporting the growth and social integration of groups with special needs is

one of the focuses of M&G Charity. In 2017 M&G Charity cooperated with

In response to the national policy calling for supporting rural art the Shanghai Charity Education and Training Center and jointly launched

education M&G Charity consolidated its resources and launched the Autism Support Program supporting the rehabilitation training of autistic

the "Art Education Plan" for rural children in view of the unbalanced children with artistic creation. Over 2000 autistic children received regular

distribution of art education resources. The program aims to build a services to help them improve their Autism Support Program to better express

rural art education network in order to promote rural revitalization how they feel think and say with creative artwork. Each year a number of

and provide quality rural art education. M&G Charity partnered with outstanding works are selected and used on product packaging of M&G's

the One Foundation the Jack Ma Foundation the Huochaibox the philanthropic products to allow a greater audience to witness and appreciate

Shanghai Charity Education and Training Center as well as other the special talents of these children. Currently M&G has developed and

like-minded partners and jointly launched the "Art Education Plan" launched seven philanthropic products with all profits donated to support the Deputy Minister of Civil Affairs acknowledging M&G

program. With comprehensive efforts such as teacher resource operation of this program. Charity's Autism Support Program

matching art lesson development and community art classes the

program benefits an increasingly number of students with quality In 2023 the Autism Support Program started covering autistic population of older ages with special attention given to the developmental

art education resources through a variety of activities. As of the needs of different age groups with autism. M&G Charity in collaboration with partners such as China Construction Bank set up

end of 2023 the program had been carried out in 153 rural primary workshops in special needs schools helping adult autistic students to learning to do artistic reiteration of rural intangible cultural heritage

schools and 20 community child service centers benefiting a total works. Their selected works were also used in M&G products with profits donated to help individuals with autism and craftswomen in

of over 330000 person-times. M&G Charity art education class rural areas with more employment opportunities and better quality of life.

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M&G Colipu actively collaborates with its value chain partners to participate in

the caring for people with autism. In September 2023 M&G Colipu participated A charity gala the first for M&G was hosted during the

in the charity exhibition of paintings and calligraphy works of people with autism "99 Giving Day" event. Nearly 600 people from 250 retail

organized by the CPIC Blue Foundation supporting autistic children to realize terminals across the country attended the gala. Five

their dreams with the donation of 1000 customized stationery kits. paintings all painted by children helped by M&G Charity's

charitable programs were auctioned with all proceeds used

to support these programs. This event built a bridge between

M&G and its channel partners forging a partnership not only

Everyone for Charity The charity exhibition of works of people with autism in business but also in philanthropy.M&G Charity strives to foster a corporate culture of everyone for charity with a variety of activities. In 2023 M&G Charity further

expanded the channels to encourage more employees and partners to participate and support charitable programs including the "99 M&G charity gala during the "99 Giving Day" event

Giving Day Rural Children Art Education Fundraising" event the "E.G.G Walkathon" charity walk and volunteering opportunities as art

education tutors. In the volunteering program designed for senior executives all M&G executives visited a beneficiary school of M&G

Charity's charitable programs to interact with the students allowing them to better understand and appreciate of the Company's value of

"Benefiting Others". "E.G.G Walkathon" Charity Walk

Arbor Day Employee Charity Event

M&G Charity has been participating in the "E.G.G Walkathon"

charity walk for consecutive years. In 2023 nearly 150

Since 2020 M&G Charity has been working together with Gansu Qingsuo executives and employees from various departments of M&G

Philanthropy Development Center to grow 1000 mu of Haloxylon ammodendron M&G Colipu and Jiumu Store formed eight charity teams to

shrubs in the Tengger Desert in Changning Town Minqin County Gansu challenge themselves to finish a 50-kilometer trekking within

Province. To support this program M&G Charity contributed RMB350000 12 hours raising a total of over RMB130000 for the Autism

while individual M&G employees contributed close to RMB130000 in addition. Support Program which would be used to provide better

The program aims to help sand fixation in the northwest region and reduce the growth and development opportunities for people with special

impact of sandstorms on the environment and local residents. needs.On Arbor Day 2023 M&G Charity invited Mr. Ma Junhe the founder of Gansu

Qingsuo Philanthropy Development Center to visit the M&G headquarters in

Shanghai. Mr. Ma shared his first-hand experience of greening the desert land M&G executives and employees participating in the

as well as environmental governance knowledge with M&G Stationery and M&G "E.G.G Walkathon"

Colipu employees. M&G Colipu also used this occasion to join the "Volunteer

Oasis Action" to contribute efforts towards windbreak and sand fixation. M&G Colipu employees receiving green plant at the Arbor Day event With its unwavering dedication to and support for philanthropic causes M&G Stationery continuously received recognition and awards

in 2023 such as the 18th People.cn's "Corporate Social Responsibility Award" and Southern Weekend's "For Good Company" Award. In

the future the Company will continuously respond to the national call for rural revitalization expand the breadth and depth of charitable

"99 Giving Day" Fundraising Event programs and promote the cultivation of a corporate culture of philanthropy.During the "99 Giving Day" annual national philanthropy event M&G Charity

and the One Foundation jointly launched a fundraising campaign for art

education for rural children. Using "A box of art supplies for RMB19.9" as the

slogan the campaign aimed to encourage public participation and cultivate a

culture of philanthropy by signifying that a small amount of donation could help "Corporate Social Responsibility Award" by People.cn

a child to have a box of painting tools and creative art classes. The campaign

was promoted through various channels including M&G's corporate WeChat "For Good Company" Award by Southern Weekend

account its short video platform accounts and Weibo account as well as

posters displayed in Jiumu Stores nationwide. During the campaign a variety

of activities were organized to maximize public participation. With flea market

charity sales in office buildings and production bases and a philanthropy corner

at the channel partner conference we encouraged consumers employees

and partners to join us in participating in philanthropic activities. During the

"99 Giving Day" event a total of 1260 people participated in our fundraising

campaigns raising over RMB150000 in total which could be used to bring the Flea market charity sales market at M&G

M&G Art Education Plan to more than 15000 children. headquarters

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Sustainability Performance

Environmental Performance

Environmental Investment

Indicator Unit 2022 2023 Indicator Unit 2021 2022 2023

Environmental investment RMB10000 222 239 Wood ton / / 495

Pencil lead ton / / 2247

Energy Consumption and Carbon Emissions1

ton/million RMB of

Material usage intensity 2.8 2.1 1.9

revenue

Indicator Unit 2021 2022 2023

Gasoline ton 56 45 89 Packaging Materials

Diesel ton 566 485 414

Indicator Unit 2023

Purchased electricity kWh 107153156 94360791 92582027

Total packaging materials usage3 ton 24114

Photovoltaic electricity consumption kWh 8757050 9114718 13222559

Paper ton 21010

Scope 1 GHG emissions tCO2e 2481 2170 2115

Plastic ton 2577

Scope 2 GHG emissions tCO2e 88876 46668 45940

Other (such as metal etc.) ton 527

Total GHG emissions (Scope 1 + Scope 2) tCO2e 91357 48838 48055

Total logistics packaging materials reused4 ton 3316

tCO e/million RMB of

GHG emission intensity 2 5.2 2.4 2.1

revenue Wood ton 2697

Plastic ton 619

Materials2

Water

Indicator Unit 2021 2022 2023

Total materials usage ton 48818 42401 44498 Indicator Unit 2021 2022 2023

Plastic ton 28010 21000 23286 Total water consumption5 ton 596000 546100 570185

Paper ton 16030 18000 15356 Recycled and reused water6 ton 50000 45000 49772

Ink ton 4778 3401 3114

3 The packaging material data for 2023 covers M&G Stationery's Shanghai production and distribution center South China production and distribution

center North China distribution center Axus Stationery M&G Colipu and Jiumu Store. In addition to expanding the scope of data disclosure compared to

1 In 2023 based on ISO 14064-1:2018 Specification with Guidance at the Organization Level for Quantification and Reporting of Greenhouse Gas previous years we have also optimized the data calculation method and added the disclosure of breakdown indicators in 2023. Therefore historical data for

Emissions and Removals China's General Guideline of the Greenhouse Gas Emissions Accounting and Reporting for Industrial Enterprises (GB/T 32150- 2021 and 2022 are not provided in this report due to the lack of base for comparability as a result of the above-mentioned updates.

2015) and the 2019 Refinement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories M&G conducted a systematic accounting of Scope

4

1 and Scope 2 greenhouse gas emissions at the company level. The accounting scope covered M&G Stationery Shanghai production and distribution Logistics packaging materials reused refer to reusable wooden pallets turnover boxes etc. The data scope of this indicator in 2023 includes the M&G

center Shanghai headquarters office building South China production and distribution center North China distribution center Axus Stationery M&G Colipu Stationery Shanghai production and distribution center.and Jiumu Store. The energy consumption and carbon emissions data disclosed in this report for the years 2021 to 2023 are based on the methodology 5 The data scope of "tap water consumption" in 2021 and 2022 includes the M&G Stationery Shanghai production and distribution center. This indicator is

and scope determined in this accounting process. Therefore certain data disclosed in previous reports are restated accordingly. renamed as "total water consumption" in 2023 with its data scope expanded to include the M&G Shanghai headquarters office building and Axus Stationery.

2 The scope of materials-related data for 2021 and 2022 includes the M&G Stationery Shanghai production and distribution center while in 2023 the scope 6 The data scope of "recycled and reused water" in 2021 and 2022 includes the M&G Stationery Shanghai production and distribution center and has

of data also includes the South China production and distribution center and Axus Stationery. expanded to include Axus Stationery in 2023.

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Effluents and Waste7

Indicator Unit 2021 2022 2023

Indicator Unit 2021 2022 2023

Total number of employees on parental leave person / 30 78

Total solid waste ton 1020 728 663

Number of employees on parental leave by gender

Hazardous waste ton 20 28 29

Male person / 7 28

General waste (non-hazardous waste) ton 1000 700 634

Female person / 23 50

Wastewater discharged ton 2800 2000 1876 Number of employees who returned to work after parental leave during the reporting period and remained employed for 12 months or

more by gender

Male person / 6 26

Social Performance

Female person / 22 48

Return-to-work rate and retention rate of employees who took parental leave by gender

Employment Male % / 86 92

Female % / 96 96

Indicator Unit 2021 2022 2023 Percentage of members of Board of Directors and Board of Supervisors by age8

Total number of employees person 5527 5574 5839 Under 30 years old % 0 0 0

Number of employees by age 30–50 years old % 30 30 30

Under 30 years old person / 1527 2080 Over 50 years old % 70 70 70

30–50 years old person / 3642 3311 Percentage of members of Board of Directors and Board of Supervisors by gender8

Over 50 years old person / 405 448 Male % 60 63 70

Number of employees by educational background Female % 40 37 30

Bachelor's (college) degree or above person 3210 3401 3621 Ratio of basic salary and compensation for male employees

High school vocational school person 1094 997 964 Basic salary % / 66 66

Other person 1223 1176 1254 Additional compensation % / 34 34

Number of employees by level Ratio of basic salary and compensation for female employees

Non-management staff person / / 4506 Basic salary % / 77 77

Management staff person / / 1333 Additional compensation % / 23 23

Number of ethnic minority employees person / / 183

Number of senior management personnel by gender

Male person / 86 101

Female person / 24 28

8 The data scope of "percentage of board members and senior management by age" and "percentage of board members and senior management by

gender" in 2021 and 2022 reports includes directors supervisors and senior executives. In 2023 the scope of both indicators has been changed to exclude

senior executive due to an adjustment to the statistical methods and the names of the indicators as well as data value for 2021 and 2022 have also been

7 The data scope of "effluents and waste" includes the M&G Stationery Shanghai production and distribution center. adjusted to reflect the change.

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Indicator Unit 2021 2022 2023 Indicator Unit 2023

Percentage of vacancies filled by internal Average training hours per capita by level

%//20

candidates (internal recruitment)

Non-management employees hours 12.5

Employee turnover rate % / 13.4 11.9

Middle-level management personnel hours 10.2

Percentage of employees covered by the

%/100100

trade union Senior management personnel hours 6.0

Employee Training9 Performance Assessment

Indicator Unit 2023 Indicator Unit 2021 2022 2023

Number of employees trained by gender Percentage of employees receiving regular % 90 100 100

performance assessment

Male person 1873

Female person 1711

Occupational Health and Safety10

Percentage of employees trained by gender

Male % 94

Indicator Unit 2021 2022 2023

Female % 92

Number of workers covered by occupational health

Number of employees trained by level person / 818 1140and safety management system

Non-management employees person 2920 Total working hours hour 2068524 1992995 3597498

Middle-level management personnel person 569 Fatalities caused by work-related injuries case 0 0 0

Senior management personnel person 95 Rate of fatalities caused by work-related injuries % 0 0 0

Percentage of employees trained by level Severe work-related injuries (excluding fatalities) case / 0 0

Non-management employees % 92 Severe work-related injury rate (excluding fatalities) % / 0 0

Middle-level management personnel % 98 Recordable work-related injuries case 13 18 21

Senior management personnel % 100 Recordable work-related injury rate (per million

/6.39.05.8

working hours)

Average training hours per capita hour 11.8

Work-related injuries (male) person 8 14 16

Average training hours per capita by gender

Work-related injuries (female) person 5 4 5

Male hour 13.7

Total safety training hours hour 18000 18000 20220

Female hour 9.8

Total number of employees who received safety

person 200000 200000 202020

training

Investment in labor protection RMB10000 253 222 208

9 The data scope of employee training indicators in 2021 and 2022 includes M&G Corporation M&G Office Stationery Jiumu Store and More-Than-Fun

which has been expanded in 2023 to also include M&G Colipu. In addition the statistical method for employee training has also been optimized such as

replacing "person-time" with "person". Therefore the employee training data for 2021 and 2022 is not disclosed in this report for lack of comparability due to 10 The data scope of "occupational health and safety" in 2021 and 2022 includes the M&G Stationery Shanghai production and distribution center which

this adjustment. has been expanded in 2023 to also include Axus Stationery.

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Products and Services Intellectual Property and Technological Innovation

Indicator Unit 2021 2022 2023 Indicator Unit 2021 2022 2023

Number of health and safety violations related to Number of patent filings during the year item 258 275 212

case 0 0 1

products and services

Number of patents granted during the year item 210 312 148

Customer satisfaction by average satisfaction score score 88 88 83.5

Number of valid patents item / / 1211

Cumulative patent filings item 2116 2391 2612

Charitable and Philanthropic Activities11

Cumulative patents granted item 1923 2235 2407

Technological improvement innovation and R&D

Indicator Unit 2021 2022 2023 RMB10000 18875 18355 17752investment

Total cash donations RMB10000 611 425 303

Total in-kind donations RMB10000 249 108 305 Supply Chain Management

Number of participants in volunteer services person-time / / 3778

Volunteer service hours hour / / 5730 Indicator Unit 2022 2023

Number of suppliers participating in ESG audit

number 70 71

Governance and Economic Performance during the year

Percentage of key suppliers participating in ESG

%/100

audit during the year

Business Ethics Number of assessed suppliers with substantial

number / 6

actual/potential negative impacts

Indicator Unit 2023

Number of operational sites covered by business ethics audits number 22

Rate of operational sites covered by business ethics audits % 100

Anti-corruption12

Indicator Unit 2021 2022 2023

Number of public legal cases regarding corruption brought

case 0 0 0

against the Company or its employees

Total number of employees participating in anti-

person 70 313 2364

corruption training

Non-management employees person / / 1786

Middle-level management personnel person / / 534

Senior management personnel person / / 44

11 The data scope of "charitable and philanthropic activities" in 2023 includes Shanghai M&G Charity Foundation M&G Colipu and Jiumu Store.

12 The data scope of "anti-corruption" in 2021 and 2022 includes M&G Corporation M&G Office Stationery Jiumu Store and More-Than-Fun which has been

expanded in 2023 to also include M&G Colipu. We have also added the disclosure of anti-corruption training by level in 2023.

99 100Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

GRI Standards (2021) Content Index

Statement of use M&G Stationery has reported the information cited in this GRI content index for the period January 1 2023

to December 31 2023 with reference to the GRI Standards.GRI Standard Disclosure Pages

GRI 1 used GRI 1: Foundation 2021

2-24 Embedding policy commitments 11; 41-44

GRI 2:

General Disclosures 2-28 Membership associations 51

GRI Standard Disclosure Pages 2021 2-29 Approach to stakeholder engagement 17-18

2-1 Organizational details 1-2 3-1 Process to determine material topics 15-16

Entities included in the organization's sustainability GRI 3:

2-2 1-2 3-2 List of material topics 15-16

reporting Material Topics 2021

3-3 Management of material topics 15-18; 38-44; 47-92

2-3 Reporting period frequency and contact point 1-2

2-4 Restatements of information 93-100 GRI 201:

201-1 Direct economic value generated and distributed 7-8

Economic Performance Financial implications and other risks and

External assurance has 2016 201-2 55-59

2-5 External assurance opportunities due to climate change

not been conducted

GRI 202: Ratios of standard entry level wage by gender

Activities value chain and other business 202-1 75-77

2-6 7-8; 17-18 Market Presence 2016 compared to local minimum wage

relationships

GRI 204:

2-7 Employees 95-97 Procurement Practices 204-1 Proportion of spending on local suppliers 41-44

2-8 Workers who are not employees 69-71; 88 2016

2-9 Governance structure and composition 35-37 GRI 205: Communication and training about anti-corruption 205-2 43-44

Anti-corruption 2016 policies and procedures

Nomination and selection of the highest governance

GRI 2: body GRI 206: Legal actions for anti-competitive behavior anti-trust

General Disclosures Anti-competitive Behavior 206-1 41-42Role of the highest governance body in overseeing and monopoly practices

2021 2-12 3-4; 11; 17-18 2016the management of impacts

2-13 Delegation of responsibility for managing impacts 11 GRI 301:

301-1 Materials used by weight or volume 93-94

Materials 2016 301-2 Recycled input materials used 62

Role of the highest governance body in sustainability

reporting 302-1 Energy consumption within the organization 58-59; 93

GRI 302:

2-15 Conflicts of interest 37 302-2 Energy consumption outside of the organization 93

Energy 2016

2-16 Communication of critical concerns 11 302-4 Reduction of energy consumption 60-61

2-17 Collective knowledge of the highest governance body 11 303-1 Interactions with water as a shared resource 62

Evaluation of the performance of the highest 303-2 Management of water discharge-related impacts 62

2-18 37 GRI 303:

governance body Water and Effluents 2018 303-4 Water discharge 95

2-19 Remuneration policies 37

303-5 Water consumption 94

2-20 Process to determine remuneration 35-37

Significant impacts of activities products and services

304-225-27;66

2-22 Statement on sustainable development strategy 12-13 GRI 304: on biodiversity

Biodiversity 2016

2-23 Policy commitments 17-18; 41-42; 72-73 304-3 Habitats protected or restored 66

101 102Sustainable Development Focus: Developing Governance and Environmental Social Performance Data

M&G Stationery 2023 Environmental Social and Governance Report Opening Strategy and Management Sustainable Products Business Growth Development Responsibility and Index

GRI Standard Disclosure Pages GRI Standard Disclosure Pages

305-1 Direct (Scope 1) GHG emissions 58-59; 93 404-1 Average hours of training per year per employee 79-81; 98

305-2 Energy indirect (Scope 2) GHG emissions 58-59; 93 GRI 404: Programs for upgrading employee skills and transition

GRI 305: Training and Education

404-279-81

assistance programs

305-3 Other indirect (Scope 3) GHG emissions 58-59

Emissions 2016 2016 Percentage of employees receiving regular

305-4 GHG emissions intensity 58-59; 93 404-3 98performance and career development reviews

305-5 Reduction of GHG emissions 58-59

GRI 405: 405-1 Diversity of governance bodies and employees 95-97

Waste generation and significant waste-related Diversity and Equal

306-1 62 Ratio of basic salary and remuneration of women to

impacts Opportunity 2016 405-2 97men

306-2 Management of significant waste-related impacts 62

GRI 306: GRI 413: Operations with local community engagement impact 413-1 88-92

Waste 2020 306-3 Waste generated 95 Local Communities 2016 assessments and development programs

306-4 Waste diverted from disposal 93-94 GRI 414: 414-1 New suppliers that were screened using social criteria 69-71

Supplier Social

306-5 Waste directed to disposal 95 Negative social impacts in the supply chain and Assessment 2016 414-2 69-71actions taken

New suppliers that were screened using

GRI 308: 308-1 69-70environmental criteria Assessment of the health and safety impacts of 416-1 28-32; 84-88

Supplier Environmental GRI 416: product and service categories

Assessment 2016 Negative environmental impacts in the supply chain Customer Health and 308-2 69-70

and actions taken Safety 2016 Incidents of non-compliance concerning the health 416-2 99

and safety impacts of products and services

401-1 New employee hires and employee turnover 97

GRI 417:

Requirements for product and service information and

GRI 401: Benefits provided to full-time employees that are not Marketing and Labeling 417-1 86-87

401-2 75-77 labeling

Employment 2016 provided to temporary or part-time employees 2016

401-3 Parental leave 96 GRI 418: Substantiated complaints concerning breaches of

Customer Privacy 2016 customer privacy and losses of customer data

403-1 Occupational health and safety management system 82-83

Hazard identification risk assessment and incident

investigation

403-3 Occupational health services 82-83

403-5 Worker training on occupational health and safety 82-83

GRI 403: 403-6 Promotion of worker health 75-77

Occupational Health and

Safety 2018 Prevention and mitigation of occupational health

403-7 and safety impacts directly linked by business 82-83

relationships

Workers covered by an occupational health and

safety management system

403-9 Work-related injuries 99

403-10 Work-related ill health 82-83

103 104Website: www.mg-pen.com

Address: No. 5 Lane 288 Qianfan Road Xinqiao Town Songjiang District Shanghai

Email: ESG@mg-pen.com