MESSAGE FROM THE CHAIRMAN

Dear Stakeholders,

On behalf of the Board, I am pleased to present our ESG Report for the year ended 31 December 2023. We move forward in the constantly evolving business environment, steadfastly adhering to the strategic layout of “Single-focus, Multi-brand, Globalization”. We integrate a firm belief in sustainable development into our business, sparking new vitality for high-quality growth.

Promoting Responsible Business Operations, Building the Foundation of Corporate Governance

We firmly believe that responsible business operations are an essential foundation for the stable development of a company. We abide by the concept of “Value creation through Mutualism” by establishing a Sustainability Committee to ensure direct governance-level participation in sustainability issues, building the core values of “Mutualism with Consumers, Mutualism with Partners, Mutualism with Employees, Mutualism with the Society, and Mutualism with the Environment”. During the financial year, we enhanced the Group’s corporate governance by performing the roles of Chairman and CEO through separate management personnel. We are dedicated to creating a comprehensive internal sustainability governance system, establishing a clear ESG governance structure with distinct levels and defined responsibilities, driving the effective implementation of sustainability strategies and objectives, and delivering sustainable value to all stakeholders.

As a participant member of the United Nations Global Compact (UNGC), we pledged to support the 10 Principles of the UNGC as well as our unswerving support to the realization of 17 SDGs of the United Nations. During the financial year, we joined the UNGC’s “Forward Faster” initiative, becoming one of the first Chinese companies to join this initiative and the only participant from the textile and apparel industry, and taking the lead in making commitments towards climate action. We also became a global signatory company member of the United Nations Entity for Gender Equality and the Empowerment of Women’s Empowerment Principles (WEPs) during the financial year, striving for gender equality and the empowerment of women in the workplace, market competition, and community life.

Advancing Industry Collaboration, Creating Value through Mutualism

We are committed to creating a legal, fair, just, and clean mutualism model, working hand in hand with our partners to achieve a win-win situation. During the financial year, we joined organizations such as the Leather Working Group (LWG) and Cascale (formerly known as the Sustainable Apparel Coalition), integrating sustainable development concepts into our procurement processes, continuously strengthening the requirements for raw material traceability, and ensuring that the raw materials and products meet production standards and ESG management requirements. We collaborate with third-party organization to conduct ESG risk assessments for both our suppliers and self-operated factories, and comprehensively consider various risks during the selection process to fully maintain supply chain stability. We have also set a goal to achieve a 100% traceability ratio for sustainable leather sourcing after three years, building based on over 90% traceability ratio this year, further enhancing product safety guarantees.

We continue to pay attention to the standardization and professionalism of suppliers’ management processes and empower our supply chain partners to improve their management capability. We published the “Supplier Sustainability Management Handbook”, further clarifying the management standards in the areas of labor rights, health and safety, environmental responsibility, and sustainability management system in an effort to create a mutualism platform for building an environment- friendly, healthy, safe and efficient supply chain. We are supporting suppliers to collect carbon emissions and energy usage data through digitization to improve their planning capabilities and management efficiency. At the same time, we are also promoting the sourcing of sustainable raw materials and giving priority to suppliers with traceability and sustainability certification to create a green supply chain. Furthermore, we will develop comprehensive carbon reduction plans for the value chain in line with the Science Based Target Initiative (SBTi) requirements, assisting suppliers in transitioning to low-carbon operations to co-create a green development ecosystem. During the financial year, we had a total of 801 suppliers and conducted over 400 ESG audits completed by both our internal audit team and third-party organizations. Internal and external audits accounted for 24.4% and 75.6% respectively. We did not find any material violations during audits obtaining a grade of good or above accounts for more than 60%.

Integrating Innovative Strengths, Creating High-Quality Products

We firmly believe that product quality and technological innovation are the lifelines of our brand. Through technology research and development, we continuously inject new strength into enhancing our competitive edge and empowering sustainable development. We have joined the Zero Discharge of Hazardous Chemicals (ZDHC) Programme and have developed and disclosed the “ANTA Sports Chemicals Management Manual”, forming a comprehensive chemical management strategy. We are committed to providing consumers with high-quality products and incorporating the principles of circular fashion into our business operations, adhering to a multi-brand layout to create diversified consumer value while offering high-quality products. During the financial year, we launched various sustainable products, including the ANTA Training Series, FILA FITNESS Series, etc. We also carried out carbon footprint assessments for three products. In terms of circularity, we have recycled 570,000 shoeboxes, 18 million sheets of shoe wrapping paper or packaging paper.

Enhancing Climate Resilience, Protecting Natural Ecology

We are actively promoting the “1+3+5” strategic goals for achieving mutualism with the environment, adhering to the development of green technology transformation practices, and accelerating the clean and low-carbon transformation of our business. We actively respond to the China’s “Dual Carbon” goals, and during the financial year, we formally joined and pledged to support the commitment of the SBTi. We plan to set carbon reduction targets for our business. To better understand the climate risks and opportunities faced by the company, based on the recommendations of the TCFD and the ISSB, we have established a climate change management system and mechanism from four perspectives: Governance, Strategy, Risk Management, and Metrics and Targets. We integrate climate change responses into the entire value chain of corporate operations, seeking business models to address climate change risks. During the financial year, our 2023 total GHG emission intensity reduced by 3.6% to 3.21 tons of CO₂ equivalent/Revenue per million RMB, and total water consumption intensity reduced by 9.0% to 24.3 m³ / Revenue per million RMB, committing to achieve carbon neutrality by 2050, and mitigating climate change. On the other hand, we conducted carbon audit for self-operated facilities and developed supply chain carbon reduction roadmap, by establishing carbon reduction target plan.

Promoting Diversity and Inclusion, Accelerating Employee Development

We consistently adhere to principles of fairness and justice, striving to create a diverse, inclusive, healthy, safe and open working environment. During the financial year, we published the “Labor Policy”, committed to protecting the labor rights and fundamental rights and interests of our staff and to build a diverse and inclusive talent system. As of 31 December 2023, we had 60,500 employees with male and female employees accounting for 24.8% and 75.2%, respectively of the total, and female executives (director level and above) accounted for 36.6%. Based on our long-term development, we have dedicated considerable resources to establish an employee training system. The coverage rate of our employee training exceeded 95%. Average hours per employee of training exceeded 29 hours per year.

Fulfilling Social Responsibility, Devoting Efforts to Give Back to Society

Through a variety of public welfare activities, our public welfare covered a wide range of areas, including education, healthcare and rural revitalization. We continuously contribute to the public welfare and charitable causes through donations, public welfare activities and advocacy of social responsibility. During the financial year, we donated a total of RMB59 million in cash and the value of donated sportswear (calculated at tag value) to different charities exceeded RMB250 million.

Through the “Sturdy Growth Charity Project”, which has been implemented for many years, we have built 184 ADream Centers to provide teenagers with Adream courses. We trained 6,270 frontline physical education teachers through ANTA Physical Education Courses. The project covered over 6.62 million teenagers in 16,115 schools across 31 provincial administrative regions. We also actively participated in volunteer services, with an accumulated service time over 30,000 hours.

Persistently endeavor, across all moments and locales, to ascend to the zenith of success, never content with mediocrity, for only through ceaseless pursuit and exploration can one unveil truths and soar to unparalleled heights. ANTA Sports engraves the spirit of “Keep Moving” in its heart, and bravely and steadfastly walks the path of sustainable development. On the global market stage, driven by innovation and unwavering determination, we will brave the winds and waves amidst challenges and adversities, implement “benchmarking against high standards”, achieve high- quality growth, and strive to develop into a leading multi-brand sportswear group in the world.

Ding Shizhong
Chairman
Hong Kong SAR, 26 March 2024