CONTENTS

02
Message from Chairman

16
Creating Superior Value ThroughHigh-Quality Development

64
Sustainability Management

18 37

04
About APP China

Introduction: On the Great Cause ofPapermaking Development in China

70
Looking Forward

Circular Model Fueling Development

08
Star Employees at APPIntelligence-Driven Industrial Upgrade10
Sustainability Strategy

38
Responsible Operations fora Sustainable Business

Robust Products

71
Performance in Numbers

75
Assurance Statement

40 49

12

Sustainable Forest Management

Bravely Fighting the Battle
against the Epidemic

Ensuring Safe and Orderly Production

12 15

Practicing Sustainable Procurement

Mobilizing All Staff to Combat the Epidemic
Warm Companionship During Epidemic
Overcoming Difficulties to
Guarantee Production

78
GRI Content Index

50
Joining Forces toBring Harmony and Prosperity
52 63
Delivering Quality Service
Moving Forward with Employees
Building a Better Community81
UN Global Compact
Ten Principles Index

82
About this ReportMessage from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Message from Chairman

In 2019, we celebrated the 70th anniversary of the founding of the People's Republic ofChina. During those seven decades, China's industry has forged ahead at an unprecedented
pace. The glorious course has witnessed the booming development of China's papermaking
industry and APP China's impressive strides every step of the way. From introducing andgradually deepening the "Integration of Plantation-Pulp-Paper" industrial layout to establishinga model of clean production and green development, and to enabling transformation andupgrading through technological innovation, APP China has contributed to and accompanied
China's transition from being an ancient paper manufacturer to a strong paper manufacturing
power through concrete actions.
Nowadays, China's economic development is taking a historic turn from high speed to highquality. How to conquer challenges like oversupply, raw material shortages, and increasing
regulatory scrutiny while ensuring high-quality development is a new issue that all companies
in the papermaking industry have to learn to navigate. With full confidence and initiative, APP
China thrives on pressure and steps up efforts in the three areas of intelligent manufacturing,
environmental protection, and product innovation, endeavoring to join hands with the wider
papermaking industry in China to boost high-quality development in the new era.

02

Embrace intelligent manufacturing to foster
new drivers of high-quality development

Endorse environmental protection to provide
the basis for high-quality development

Innovate and upgrade products to guarantee
sustained high-quality development

Since Industry 4.0 was proposed in 2015,
we have been systematically delving into
intelligent manufacturing and continuously
ramping up the construction of a technologydriven, intelligent industry chain to gain afirst-mover advantage in the new roundof technology-driven industrial revolution.
We continue to automate the papermaking
equipment and processes and strive forthe realization of IT-based production data
while improving the efficiency of large-scale
production. Based on big data and otheremerging technologies, we are gradually
improving the company's information
management capabilities and will eventually
institute intelligent management throughout
our entire business process. Moreover, wehave started building intelligent industrial
bases, fully integrating artificial intelligence,
big data, 5G, and other cutting-edge
technologies from the planning stage.
We will join forces with companies of the
upstream and downstream industry chain
as well as our industry partners to quickentransformation and upgrading and boost
industrial development in terms of both
quality and speed.

We firmly believe that the rational useof the limited natural resources and theprotection of the ecological environment
on which human survival depends are
the basis for achieving high-quality
development. We respond promptly to thenational call to reduce and ban plastic.
Giving full play to our advantages as amodern papermaking company in termsof eco-friendly sourcing and technologicalleadership, we have developed a seriesof "zero plastic" degradable packaging
solutions. We continue to increase theproportion of wood pulp procurement fromcertified forests and strongly advocate
CFCC/PEFC forest certification labelingso that the concept of sustainable forest
management reaches more consumers.
At present, a growing collection of APP
China products are joining the "labelingfamily". As regards clean production,
we closely follow national and local
environmental protection requirements,
set strict environmental targets, andseek continuous improvements in ourenvironmental protection practices andperformance through measures likeequipment renovation and process andtechnology optimization.

Relying on tremendous R&D strengths
and forward-looking market deployment,
we boldly innovate and gear up to build
a beautiful, safe, and quality world of
paper for people. Focusing on the realneeds of the consumers and customers,
we relentlessly explore products that arefunctional and innovative and continuously
refine our product categories. Taking
tissues as an example, we have continued
to optimize our raw material composition
and use ingredients that are safer for thehuman body in response to consumers'
increasing concern for health and safety;
meanwhile, we have used a number ofpatented technologies to produce productswith moisturizing, anti-bacterial, andsanitizing effects to safeguard consumers'
health.

In 2020, APP people have remained fully
responsive and committed in the face ofa raging epidemic, springing into action
and demonstrating a deep sense of
responsibility and duty at a critical time. We
immediately donated RMB100 million andneeded supplies to the Overseas Chinese
Charity Foundation of China to aid in theepidemic control efforts. Meanwhile, we
implemented strict epidemic prevention
measures for reopening to ensure thehealth and safety of our employees; wemanaged to resume production against
all odds and mobilized resources toensure the smooth delivery of products
to our customers; we provided care andassistance in ways that we could to thecommunity residents and tenants of ourcommercial buildings who were affected by
the epidemic, as well as overseas Chineseand Chinese students studying abroad. In
this "smokeless war" against the epidemic,
we have braved the hardships and forgedahead, working with our stakeholders tobuild a solid line of security.

The post-epidemic era presents bothchallenges and opportunities. APP China
will continue to align efforts with its
founding purposes and walk down the pathof high-quality development with conviction.
We will bravely embrace the new digital
economy with our constantly open andinnovative attitude, promote all-rounddigital transformation, and look forward
to working with our stakeholders to makegreater contributions to the sustainable
development of the industry and wider
society.

Teguh Ganda Wijaya
Chairman and President of Sinar Mas GroupAPP China Sustainability Report 201903

Message from
ChairmanStar Employees
at APP

About APP China

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

About APP China
Company Profile
With operations dating back to 1938, Sinar
Mas Group was officially founded by theprominent Indonesian Chinese Mr. Eka
Tjipta Widjaja in 1962. The Group currently
has hundreds of legal entities and owns
seven main business pillars: Pulp & Paper,
Financial Services, Agri-business & Food,
Real Estate, Energy & Infrastructure,
Telecommunications, and Healthcare.
As a core business sector of Sinar Mas,
Asia Pulp & Paper (APP) was set up in1972 and its line of business ranges from
pulp, industrial paper, cultural paper, andtissues to various types of paper products.
APP started investing in China in 1992.
With the establishment of two seedlingresearch centers, 17 forestry companies,
267,400 hectares of plantations, andseven major pulp & paper mills, APP China
implements green-cycle development
based on the concept of "Integration ofOrganizational Chart
Plantation-Pulp-Paper", where forests
support paper, the paper industry nurtures
forests, and forests and paper are
integrated.

Shareholder Meeting

year before while confirming the goalof jointly building the China-Indonesia
Science and Technology Industrial Parkin Indonesia.

Supervisor

Board of Directors

In August 2019, four major projects,
including the APP Science andTechnology Park, were launched at
the opening ceremony of the China(Jiangsu) Pilot Free Trade Zone. Witha focus on biomedicine, artificial
intelligence, integrated circuits, highend equipment, and other fields,
Suzhou Industrial Park (SIP) and
Sinar Mas Group would spend thenext three to five years completing theearly-stage construction of the hightech industrial park which integrates
R&D, manufacturing, and headquarters
management.

Together with its parent company Sinar
Mas Group, APP China has long been
actively responding to China's Belt andRoad Initiative (BRI), fully leveraging
its advantages to contribute to BRI
development. In January 2019, theCooperation Agreement on APP Scienceand Technology Park & MOU on ChinaIndonesia "Belt and Road" Science andTechnology Park was officially signed.
It further finalized details of cooperation
laid out in the Framework Agreement
on Suzhou APP Science & Technology
Park signed between the two sides a

Decision-Making Committee

Management Committee

Personnel Review Committee

Price Committee

Corporate Headquarters

Tissue Business Unit

Pulp Business Unit

(Suzhou Gold Hongye)

China Paper Business Unit

Forestry Business Unit

Domestic Sales

As of the end of 2019, APP China has

Products marketed in over

160 countries/regions
across 6 continents

Ningbo Zhonghua was formed
through joint investment by APP of
Sinar Mas, China Strategic Holdings
Limited from Hong Kong, Ningbo
Duplex Board Factory, and China
Paper and Pulp Import and Export
Co., Ltd. and is the first mill invested
in and set up by APP in China.

1992

04

11.78

millionAbout
tons of annual capacity '

65.1

RMB
billion in
annual sales revenue

Gold Huasheng Paper (Suzhou
Industrial Park) Co., Ltd. wasestablished, and has become one of
the largest diversified cultural paper
product providers in China and Asia.

Gold Hongye Paper Group Co., Ltd.
located in Suzhou started operation.
Its Breeze™ Tissue (Qingfeng) has
become a leading brand in China's
tissue market. In the same year, APP
China Headquarters was established in
Shanghai.

1996

1998

191.4

RMB
billionin total assets

Industrial Paper

Cultural Paper

Hainan Jinhai Pulp & Paper, APP
China's first pulp mill, was officially put
into operation.

APP announced the Sustainability
Roadmap Vision 2020, placing natural
resources conservation at the centerof its business strategy.

APP China announced plans to makefull use of existing plant buildings
for rooftop photovoltaic (PV) power
generation with an overall capacity ofover 200MW.

APP China responded actively to theBelt and Road Initiative and signed astrategic agreement to build intelligent
production and R&D bases by adopting
Industry 4.0 and artificial intelligence.

The high-grade tissue industrial base ofGold Hongye was officially launched andwill be built into a world-leading paperbase that is intelligent and environmentallyfriendly. In the same year, APP China
Headquarters settled in the Shanghai
Magnolia Square, opening a new era.

2005

2012

2014

2017

2019

1995

1997

2004

2010

2013

2015

2018

2020

APP started plantations in China,
embarking on a progressive journeyof modernized papermaking.

Gold East Paper was officiallyestablished and is today one of theworld's largest coated paper mills interms of single product capacity. In
the same year, Yalong Paper Products(Kunshan) Co., Ltd. was officially put into
production and is now one of the mostimportant paper product fine-processing
companies in China.

Ningbo Asia Pulp & Paper, equippedwith one of the world's largest singlemachine production capacities andmost advanced industrial paperboard
production lines, was put into operation.

With an annual chemi-mechanicalpulp (CMP) production of 300,000
tons, the first phase of Guangxi Jingui"Integration of Plantation-Pulp-Paper"project started operations, and its
600,000-ton papermaking production
line had a grand opening.

APP published the Forest Conservation
Policy (FCP), imposing a moratoriumon all-natural forest clearance acrossits supply chain. For forests thatare of high conservation value andhigh carbon stock, APP would taketargeted protective measures based on
assessment results.

APP China moved its headquarters toShanghai ARCH and in the same year
became a global partner of the China
Pavilion at the Milan Expo 2015.

APP appeared at the first China
International Import Expo with theconcept of green-cycle "Integration of
Plantation-Pulp-Paper".

Standing united with Wuhan and thewhole China, Sinar Mas Group donated
RMB100 million and also RMB350,000
worth of Breeze™ hygienic cleansing
wipes to the Overseas Chinese Charity
Foundation of China to fight against
COVID-19. It is thus the first overseasChinese-funded enterprise to respondto the call of the All-China Federation of
Returned Overseas Chinese to makedonations to the affected areas.

APP China Sustainability Report 201905

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

IndexesAchievements and Honors

APP China

Gold East Paper

Hainan Jinhai
Pulp & Paper

Gold Huasheng

Guangxi Jingui
Pulp & Paper

06

Honors and Awards

Issuers

Honors and Awards

Issuers2019 Best Practices by Chinese Companies on Achieving SDGs

Global Compact Network China

2018 Top 50 Ningbo Taxpayers in Manufacturing Industry

The People's Government of Ningbo
Municipality

Environmentally and Socially Responsible Enterprise of 2019,
Model Enterprise for Green Development 2019

China Environment NewsAward for Environmental Friendliness

Ningbo Association of Enterprises with Foreign
Investment

Award for Responsible Brand of 2019

The 9th China Charity Festival

2018 Advanced Group for Work Safety in Beilun District,Ningbo City

Beilun District People's Government, Ningbo

2018 Model Enterprise for High-Quality Development of Zhenjiang
New Area

CPC Zhenjiang New Area Work Committee,
Zhenjiang New Area Management Committee

2017-2018 National Top 10 Corporate Newspapers ofPapermaking Industry

National Paper Industry Newspaper
Association

Top 20 Manufacturing Enterprises for Taxable Sales of 2018

Zhenjiang Municipal Bureau of Industry andInformation Technology

2018 Ningbo Municipal Voluntary Blood Donation Unit of the Year

Ningbo Municipal Office of Leading Group for
Blood Donation

Certificate for China Environmental Labeling (Type II)

China Environmental United Certification
Centre (CEC)

Top 100 Fastest-Growing Enterprises in Zhejiang Province

2018 Advanced Unit for Ecological Protection

Environmental Protection Committee of
Zhenjiang New Area

Zhejiang Province Enterprise Confederation,
Zhejiang Province Enterprise Directors
Association, Zhejiang Federation of Industrial
Economics

Unit for Outstanding Contributions to Social Welfare

Charity Federation of Zhenjiang New Area

2019 Top 100 Most Competitive Enterprises of Ningbo, 2019
Top 100 Manufacturers of Ningbo, 2019 Top 100 Comprehensive
Enterprises

Ningbo Enterprise Confederation, Ningbo
Enterprise Directors Association, Ningbo
Federation of Industrial Economics

Zhenjiang Green Factory

Zhenjiang Municipal Bureau of Industry andInformation Technology

2018 Ningbo Municipal Voluntary Blood Donation Unit of the Year

Green Raw & Auxiliary Material Product, Printing Industry Pioneerof the Times for 70th Anniversary of the Founding of the People's
Republic of China

Ningbo Municipal Office of Leading Group for
Blood Donation

China Association for Printing Technologies
2017-2018 Suzhou AA-Rated Unit for Labor Security

2019 Zhenjiang Demonstration Enterprise for Innovative
Application of Informatization-Industrialization Integration

Enterprise Informatization Association ofZhenjiangSuzhou Human Resources and Social Security
Bureau, Suzhou Office of the Leading Groupfor the Development of Social Credit System

Top 10 Papermaking Enterprises in China's Light Industry

China Light Industry Council, China Paper
Association2018 Outstanding Economic Contribution Award – Headquarters
Economy, Revenue Growth, Tax Contribution

CPC Suzhou Industrial Park Work Committee,
Suzhou Industrial Park Management
Committee

2019 Top 100 Private Enterprises in Hainan Province

Hainan Industry & Commerce Association2018 Suzhou Industrial Park AAAAA-Level Unit for Labor Security
Credit Rating

Suzhou Industrial Park Labor and Social
Security Bureau

National IPR Advantageous Enterprises

National Intellectual Property Administration

2019 Top 100 Enterprises in Hainan Province

Hainan Province Enterprise Confederation,
Hainan Province Enterprise Directors
Association

Gold Patent Award of Hainan ProvinceIntellectual Property Office of Hainan Province

Employment Training Base

Yangpu Bureau of Human Resources
Development

Certificate for China Environmental Labeling (Type II)

China Environmental United Certification
Centre (CEC)(First batch) China Forestry and Grassland Industry Innovation
Base – "Raw Material Forest Base for Integration of PlantationPulp-Paper"

Chinese Forestry Industry Association

Ningbo Asia

Ningbo Zhonghua

Suzhou Gold Hongye

Hainan Gold Hongye

BV DDS Certification

Bureau Veritas Certification Co., Ltd.

Award for Overachieving 2018 Energy Conservation Targets

Development and Reform Commission of
Hainan Province

2019 Outstanding Economic Contribution Award – Top 30 Tax
Contributions

CPC Suzhou Industrial Park Work Committee,
Suzhou Industrial Park Management
Committee

Certificate for China Environmental Labeling (Type II)

China Environmental United Certification
Centre (CEC)2018 Publicly Posted Contract- and Commitment-Compliant
Enterprise of Guangxi Zhuang Autonomous Region

Guangxi Zhuang Autonomous Region
Administration for Market Regulation

2019 Top 20 Papermaking Enterprises in China

China Pulp & Paper Industry"Guangxi Key Foreign Trade Brands for Cultivation andDevelopment" Enterprise (2019-2022)

Guangxi Zhuang Autonomous Region
Department of Commerce

2019 Water-Saving Enterprise of Autonomous Region

Department of Industry and Information
Technology of Guangxi Zhuang Autonomous
RegionGuangxi Demonstration Unit for Grassroots-Level Statistical Work
Standardization of the New Era

Guangxi Zhuang Autonomous Region Bureauof Statistics

2019 Merit Member of Qinzhou Branch of China Council for
the Promotion of International Trade (Chamber of International
Commerce)

Qinzhou Branch of China Council for the
Promotion of International Trade, Qinzhou
Branch of China Chamber of International
Commerce

AEO Advanced Certified EnterpriseNanning Customs District PRC

APP China Forestry

APP China Sustainability Report 201907

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Living Positively witha Fighting Spirit
Wang Wei impresses everyone as an
optimistic and upbeat person. However,an accident happened to him in November
2007 when he was handling a failure in the
boiler ash system at work, costing him his
right arm. Never weakened mentally by thephysical loss, he rose to his feet again witha strong will.
In 2008, Wang Wei returned to the Heat &Power Division but turned down the "special
treatment" offered by his superiors. He
started as an Industrial Safety Officer andused his own experience as an example
to raise his colleagues' awareness of safe
working practices. After that, he gradually
took on new roles as well, including Officerof the Total Productive Maintenance (TPM)
Group and Hourly Worker Manager at theHeat & Power Division. As the manager,
he takes the initiative to help supervise
cleaning of the boilers. He is always seen
offering help every time a boiler is closed
down for maintenance, even late at night.
In those two new roles, Wang Wei gets
actively involved in tasks like environmental
cleanup, safety hazard correction, labor
protection supplies management, andemployee support – no work is too trivial
for him. The results have been impressive
under his management, with zero workrelated injuries recorded for over threeconsecutive years. "He's got our back andour full trust," said his colleagues.

Yan Guilin works at Gold East Paper's
Maintenance Pulping Division of
Maintenance Department and has beenin the line of mechanical maintenancefor 27 years. He is the owner of two utility
model patents and has received an arrayof honors from the company such as
Advanced Manufacturing Worker andOutstanding Employee of the Year. With aheightened focus on technical innovation,
Yan Guilin has submitted a total of 60
rationalization suggestions. He has madenotable contributions to the company
in terms of energy conservation andconsumption reduction and helped it win
the High-Tech Enterprise Achievement
Award for developing a new drive system
for GCC (Ground Calcium Carbonate)
grinding mills.
To his colleagues, Yan Guilin is amentor and friend. As a humble andsincere person, he maintains smoothcommunication with his colleagues; as askillful worker, he has helped the company
solve one technical challenge after another.
Every department has benefited from his
services.
He lives the craftsmanship spirit of being
professional, meticulous, and grounded.
Apart from delivering solid work intechnical research and innovation, healso makes a point of "teaching, helping,and guiding". He has formulated various
rigorous equipment maintenance plans,
actively conducts on-the-job training, andpasses on his own technical experience
to his colleagues to help train more
accomplished craftsmen.

Looking Forward

There are a number of handheld scanningguns at the Organizing Department, which
are very important single small devices.
They are used for organizing informationand closely tracking the paper products.
Therefore, once they break down, thework efficiency would be undermined.
By conducting online research, studying
how the scanning gun is structured anddesigned to work, and taking apart thebroken ones, Li Zhisheng managed toacquaint himself with all of its components.
Now fully prepared, he started to purchaseparts to take on the repair himself and fixedeight scanning guns in four months. Morethan that, he also shared his experience
with other groups to pass on his repair
skills.
Li Zhisheng's constant attention todetail has allowed him to make many
improvements at the site. For instance, heattached reflective strips to the columns
that the devices might bang into when
carried in and out of the site; he made arake that was light, practical, and easy
to use to sweep sawdust from under
the devices, which was a tough spot. It
is roughly estimated that those small
improvements can help reduce expenses
by about RMB100,000 a year.

I will learn with modesty and continue
to fulfill my duties conscientiously
and to be a fighter who shines.

Wang Wei

Yan Guilin

Packaging Team ofOrganizing Department
Hainan Jinhai Pulp & Paper

Li Zhisheng

Performance in
Numbers

Assurance
Statement

Indexes

Taking the Lead in Promoting"Production-Marketing
Integration"

Li Zhisheng is in charge of work relatedwith the on-site devices and vehicles
and TPM in the Packaging Team of theOrganizing Department of Hainan Jinhai
Pulp & Paper. Others may see those duties
as too trivial to bear fruits, but Li Zhisheng
has managed to shine through those smallthings by putting in relentless work.

We should be driven by thecraftsmanship spirit, stay committed
to our work duties, and be responsible
and also good at it so that we can betruly accountable for our own rolesand deliver reliable work.
Maintenance Department
Gold East Paper

Sustainability
Management

Nothing Is Too Small

As long as you stay, I will never leave
your side.

Heat & Power Division
Gold Huasheng

08

Joining Forces toBring Harmonyand Prosperity

Living the Craftsmanship SpiritStar Employees
at APP
A company's success is inseparablefrom the hard work of all its employees.
The power of role models can be seen
everywhere at APP. Ordinary as their roles
may be, a large group of APP people
have made extraordinary achievements by
upholding honesty, diligence, and novelty
at work. Those shiny stars gather to form asplendid galaxy that illuminates APP's way
ahead.

Responsible
Operations fora Sustainable
Business

Excellence Lies in
Diligence and Thinking
Usually, Xu Zhaozhi does not give theimpression of being a salesperson upon
first meeting. He does not appear to be
eloquent or diplomatic; rather, he is highly
trusted and liked by the customers for his
diligence, sincerity, and perseverance.
During product sampling, Xu Zhaozhi would
often stay with the press operators throughthe night shifts at the customers' factories;
by day he would be communicating withworkers from production, technical, orother departments, which enables him
to understand and solve the sampling
problems in a timely manner. Whether it
is pharmaceutical packaging, handbags,
business cards or blister cards, every
time he sees a good paper product, Xu
Zhaozhi would tear it open to find out how
and where it is made; every time he seesa product made from APP paper, he would
make sure to introduce it to everyone.
Small efforts like those have translated into
an outstanding sales record for Xu Zhaozhi
and won him the honor of Excellent
Employee for three consecutive years.

A good salesperson needs to beattentive, sincere, and observant.

Xu Zhaozhi

Industrial Paper Business Unit ofWuxi Domestic Trade Co., Ltd.

As the mill manager, Yang Huizhan
is always on the frontline of exploring"production-marketing integration". He
actively drives the effective collaboration
between production and marketing so that
there is mutual understanding between the
two and sales can constantly reach newheights.
When working at the Xianyang mill, Mr.
Yang invited the marketing team to takea tour at the manufacturing site. Throughconsulting and product training sessions,he helped the frontline marketing teamgain a better knowledge of the company's
products and instilled in them a stronger
sense of belonging and confidence inthe company. Before the back-to-school
sales campaign kicked off, he invitedthe business director to give mill staff atraining session on marketing skills; hemade a "100% pure base paper shelf"that allowed customers to try out the
products; he also personally drove over
100 kilometers to bring company staff tothe campus sales outlet in Xi'an to carryout sales activities. Thanks to a number of
initiatives such as experience sharing andsales reward system, the sales campaign
was a big success. During the peak hours
on weekends and holidays, Mr. Yang would
often be seen at sales events in major
stores in Xi'an with his team, and the sales
performance of the Northwest KA (Key
Account) stores has thus been greatly
improved.

The road ahead is bound to be
full of bumps and obstacles, but I
am confident that success will beachieved in the end!

Yang Huizhan

Tianjin Mill (currently)
Gold Hongye

APP China Sustainability Report 201909

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Sustainability Strategy
Strategic Areas and Action Directions for APP China Sustainability

Sustainability Roadmap: Vision 2020
APP announced the "Sustainability Roadmap: Vision 2020" in 2013, which set forth 19
targets to be achieved by 2020 in ten key impact areas. They include fiber sourcing,reforestation, conservation & biodiversity, human rights & indigenous people, community
empowerment, climate change, emissions, water management, solid waste, and employee
welfare. Sixteen targets had been achieved by the end of 2019, with targets concerning
climate change project implementation, energy intensity reduction, and safety incidents stillin progress.

Research & Development

Scan the QR code
to learn about thedetailed progress of2020 targets

Forest Management

Sustainability Roadmap: Vision 2030
APP attaches great importance to the United Nations Sustainable Development Goals(SDGs) and actively leverages its own business to contribute to their implementation andachievement. Based on a comprehensive benchmarking against the SDGs, APP hopes
to make further sustainability commitments and plans to expand the goals further under"Sustainability Roadmap: Vision 2030". Vision 2030 focuses on three main areas closely
related to APP, namely production, forest, and people.

Target Area

Production

Forest30% reduction incarbon footprintContinuously improving thepercentage of sustainablefiber sourcing

Production
Scan the QR
code to see 2030
targets

PeopleSustainable Consumption and Reuse

Overall Target

Specifc Issues
As regards every issue,
APP sets specific goals
for 2030. For more
information, scan the QR
code.

10

Low Carbon ProductInnovate Products

Improving the
lives of millions

Fiber Sourcing

Sustainable Livelihood

Forest Protection

Workforce Management

Integrated Fire Management

Business Ethics & Conduct

Community and Philanthropy

Continuously optimizing and developing
seedling strains; actively participating inindustry exchanges to support the innovative
development of the forestry and grassland
industry; setting up a center at all the pulp
and paper production bases to continuously
introduce innovative solutions to environmental
protection and health based on a product lifecycle perspective.

Conducting forestry in strict accordance with
the APP Forest Conservation Policy (FCP);
continuing to perform CFCC/PEFC-FM (forest
management) certification, high conservation
value (HCV) assessment, and ecologicalimpact monitoring; continuing to strengthen
protection of forests against risks like fires andillegal logging to keep them safe.

Building intelligent industrial bases to improve
efficiency and reduce consumption; promoting
sustainable procurement to drive responsible
operations of suppliers; continuing toperform CFCC/PEFC-CoC (chain of custody)
certification; committed to clean production andcontinuous review, optimization, and innovationof production processes and technologies;
providing training on carbon emissions
calculation and related areas to be fully
prepared for entering China's carbon trading
market; continuing to reinforce production
safety to create a secure work environment for
employees.

Actively engaged in promoting CFCC/PEFC
forest certification labeling and spreading
the concept of forest certification, and callingon the public to help protect forests throughsustainable consumption; launching the"Paperback" waste paper recycling program
to drive public attention to and participation in
waste paper recycling.

Driven by a passion for and commitment tophilanthropy, continuing to make a positive
impact on education, youth capacity building,paper culture promotion, and other aspects;
improving community communicationand participating broadly in community
construction.

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Producing more than 10 million seedlings
annually from two large nurseries
RMB1.835 billion in annual R&D investment
Filing 117 patent applications (45 invention
patents, 41 utility model patents, and 31 design
patents)
Successfully developing a series of "Paper for
Plastic" products

Owning 246,700 hectares of certified
plantations
92.27% plantations certified
145,500 hectares of plantations HCVassessed
Providing training on forest carbon sinkcalculation to lay the groundwork for
implementing carbon-neutral projects in the
future16 affiliated entities obtaining CFCC/PEFCCoC certification
Water reuse rate of 95.94%
6.37 tons of waste water discharge per ton of
paper produced
11.62 tons of waste water discharge per tonof pulp produced
0.29 kg of COD emission per ton of paper
produced
0.63 kg of COD emission per ton of pulp
produced

The number of APP China products with theforest certification label continuing to growProcuring 198,100 tons of waste paper as
raw material
The "Paperback" program cumulatively
recycling 7.91 tons of waste paper

RMB31.97 million in total external donation
18,618 hours of volunteer time clockedGold Huasheng Paper Culture Experience
Center receiving over 3,100 person-times ofvisits from students of all ages

APP China Sustainability Report 201911

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

IndexesBravely Fighting the whole society off guard. When disasters hit, help rolls in from all directions. Enterprises
a powerful force in the fight against the epidemic. During this special period, Sinar
the Battle against are
Mas Group lost no time in becoming part of the fight; the company has put in placecomprehensive prevention measures to keep its employees and the communities safe;
the Epidemic
In January 2020, the sudden outbreak of a novel coronavirus disease (COVID-19) caught

everyone has worked together to overcome difficulties and resume work and production,
thus ensuring continuous supply of products. The epidemic will eventually pass, but we will
go forward with a sense of responsibility and do our best to give back to society.

Mobilizing All Staff to
Combat the Epidemic

After the outbreak of the epidemic, APP
President Teguh Ganda Wijaya, who wasthen in Indonesia, paid close attention toits development. On January 26, Sinar Mas
Group announced a donation of RMB100
million and also RMB350,000 worth ofBreeze™ hygienic cleansing wipes to theOverseas Chinese Charity Foundation ofChina. It is thus the first overseas-Chinesefunded enterprise to respond to the callof the All-China Federation of Returned
Overseas Chinese to make donations
to the affected areas. Meanwhile, APP
China management promptly set up an

From January 24 to March 31, 2020, Shanghai Huashan Hospital sent a totalof 273 medical staff to aid Wuhan in the battle against the epidemic, the largest
number that any hospital in China dispatched in support of Wuhan. Ten percent
of our RMB100 million donation was directed to Huashan Hospital to be used as
solatium to frontline medical workers and for setting up a fund for training young
physicians and renovating the hospital's infectious diseases building.

emergency response team for leading
epidemic prevention and control. APP
China Headquarters joined hands with all
its business units and mills and mobilized
all the staff to be part of the national fightagainst the epidemic.
Locally, APP China mills also played an
active part, making donations of money
and supplies to aid the respective regionsin their efforts to control the epidemic.
Hainan Jinhai Pulp & Paper donated 6 tonsof disinfectant produced by the company
itself to the Yangpu District Center for
Disease Control and Prevention (CDC)
to be used in local communities, public
places, streets, and other places. Ningbo
Asia and Ningbo Zhonghua cumulatively
donated 3,000 masks to neighboring
communities to give the grassrootscommunity workers better protection.
Chinese Communist Party (CCP) members
from Guangxi Jingui Pulp & Paper all took
the initiative to donate money to make theirown contributions.

Warm
Companionship
During Epidemic

APP China puts its
employees' safety andhealth first. As a responsible
employer, we promptly developed
comprehensive epidemic control
measures for safe reopening after theoutbreak to ensure a safe and healthy
workplace for our employees.
We have drawn up detailed regulations
and behavioral guidelines on employee
return, employee commuting, temperaturechecking, office disinfection, meetingarrangements, meal arrangements, visitor
control, and other matters and provided
our employees with protective equipment
such as masks and alcohol cotton as
well as flexible work hours. Moreover,
we publish daily epidemic briefings andwork to keep our employees updated,equip them with a proper knowledgeof the epidemic, and take care of theirmental wellness. Ningbo Asia and Ningbo
Zhonghua promptly responded to the callof the People's Government of Ningbo
Municipality for giving returned employees
free, rapid nucleic acid testing so that theyfelt safe back at work.
To guarantee sound customer service
during this special period, APP China
Paper Business Unit launched the "Little
A Online Classroom". It allows customers
to interact with the company in real timethrough means like video, voice andtext messaging and to take customized
courses focused on a variety of topics
such as product introduction, technicalcommunication, information sharing, andstrategic thinking.

Ningbo Asia and Ningbo Zhonghua providing
nucleic acid testing for returned employees

Shutdowns during the epidemic weighedon many industries. Some tenants in
APP's two major commercial complexesin Shanghai, namely the Shanghai ARCH
and the Shanghai Magnolia Plaza, werealso affected. In response, we offeredthem a rent reduction and free protective
supplies such as disinfectant cotton balls
and disinfectant tissues to tide them overthis difficult time.
With the epidemic's accelerated spreadoverseas, we are also paying close
attention to the safety of overseas Chineseand Chinese students studying abroad. Of
the RMB100 million donation we made,
RMB10 million has been directed to theOverseas Chinese Charity Foundation ofChina in support of their efforts to workwith local federations of overseas Chinese
to give away health packages to thosegroups. The packages contain disposable
masks and gloves and Chinese medicine(grains or capsules), among other infection
control items.

Suzhou Gold Hongye urgently producing protective equipment needed for containing the epidemic

12

APP China Sustainability Report 201913

Message from
Chairman

About APP ChinaStar Employees
at APP

Overcoming
Difficulties
to Guarantee
Production

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Paper is of high relevance to the epidemic.
Tissues, pharmaceutical packaging, foodpackaging, etc. are all essential paper
products during an epidemic. Therefore,
besides efforts to contain the epidemic,
resuming production as soon as possible
became another key task for APP China
during this time. The company had todo this by overcoming staff shortages

Responsible
Operations fora Sustainable
Businesscaused by quarantine orders as well as thechallenge with logistics and the upstream
and downstream supply chain. In thiscontext, all APP China employees haveshown great cohesion and we achieved anearly 100% resumption rate in less than
two months by going all out to coordinate
resources, optimizing work patterns, etc.

Raw Materials Crossing the "Epidemic Defense Line"In February 2020, when the epidemic wasat its worst, Gold East Paper's own port
completed a total throughput of 229,000
tons, an increase of 26.71% over thesame period last year. Behind this number
were the unremitting efforts made by thecompany to overcome the obstacles of roadclosures. Road closure is a conventional
measure for epidemic prevention andcontrol, but materials are needed to feedfactory production. For this reason, thecompany instituted a multi-departmental
coordination and cooperation mechanism.
While maintaining active communication
with the administering department for
epidemic control, the company arranged
for its logistics personnel to take turns topick up trucks at the highway entrances
every day so that a steady supply of raw
materials continued to pass through the"epidemic defense line" and reach the mill,thus ensuring continuous production.

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Staying United in an
Unwavering Commitment

Urgently Resuming Work andProduction to Meet Paper Needs

To ensure that the products reachedcustomers on time, Gold Huasheng
employees took the initiative to workovertime to overcome the shorthandedness. The production andengineering management teams held daily
communication meetings to coordinate
various matters. The supervisors
sacrificed their personal time to work on
tough problems in the workshop, suchas tracking and coordinating the arrivalof raw materials and helping employeeswith the various aspects of their life. All of
the employees of Gold Huasheng haveexhibited responsibility and commitment
through concrete actions.

In February 2020, toilet paper insupermarkets across Hong Kong was soldout as a result of the epidemic. To meet theneeds of Hong Kong citizens, Hainan Gold
Hongye resumed production with urgency
on February 7, cumulatively shipping 583
tons of tissues to Hong Kong in February.
The Logistics Department went all out
to coordinate various related parties,
managing to have the shipping company
increase their frequency of shipment toHong Kong from once a week to every
three days so as to ensure that tissue
products were delivered to Hong Kong assoon as possible.

Volunteer Delivery Squad
One top priority for Suzhou Gold Hongye
during the sudden outbreak of an epidemic
is to deliver products to customers fastwith the logistics system being limited. On
the evening of February 13, the company
called on the employees to use their own
cars for delivery, to which they responded
actively. Within 16 hours, a delivery squadof more than 1,200 employee volunteers
was formed. What they delivered to thecustomers was not just the products but
the company's sense of responsibility
as well, and it was praised highly by thecustomers.

Supporting Pharmaceutical
Packaging Companies
Jinli white cardboard produced by Ningbo
Asia and Jin Die Lan white cardboard
produced by Guangxi Jingui Pulp &Paper are the primary paper used forpharmaceutical packaging in China.
Jin Cai antibacterial white cardboard,
Jin Bei whiteboard, and Chieftain whitecardboard produced by Ningbo Mills arealso the primary packaging paper for
making medical masks. As part of theepidemic control efforts, the container
yards had all been closed as required by
the government, so no containers wereavailable for logistics. To fulfill the paper
needs of pharmaceutical packaging
companies and mask manufacturers,
Ningbo Mills managed to have fourcontainer yards reopened after repeatedcommunication with the government
and local government agencies like theMunicipal Bureau of Commerce, thus
successfully resuming product shipping.

Employees working at the port

14

APP China Sustainability Report 201915

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes01
Creating Superior Value
Through High-Quality
Development
The development of China's modern papermaking industry
is a history of continuous renovation and upgrading
underpinned by environmental protection, technology, andinnovation. As China's economy transitions from a phaseof rapid growth to a stage of high-quality development,
it embraces innovative, coordinated, green, and open
development that is for everyone. This places a higher
demand on the manufacturing industry, the paper industry
included, to pursue quality and efficiency, balance andcoordination, and sustainability in its development.
Looking back on APP China's course of growth, we havenever strayed away from green development. We took
the lead in driving the green recycling industry model
to take root in China; we actively embrace intelligent
manufacturing, using digital technologies to empower
automated, networked, and intelligent development of
the entire industry chain; we strengthen innovation and
R&D and continuously introduce quality products to meet
people's work and life needs, doing our part to boost highquality development.

16

APP China Sustainability Report 201917

Message from
Chairman

About APP ChinaStar Employees
at APP

Introduction: On
the Great Causeof Papermaking
Development in
China

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Throughout history, paper has been integral in the development and preservation ofhuman civilization. To celebrate the 70th anniversary of the founding of the People's
Republic of China, China Central Television (CCTV) released The Story of Chinese Paper .
It is a documentary that captures the invention, popularization, and application of paper
and the papermaking industry of the present day, portraying an epic picture that spans
paper's past and present. As an important witness of and participant in the development ofChina's modern paper industry, APP China took part in the shooting, using as the setting
its numerous affiliations such as Gold East Paper, Ningbo Asia, Suzhou Gold Hongye,
Hainan Jinhai Pulp & Paper, and APP China Forestry. APP China has demonstrated
the advanced manufacturing technologies and strong R&D capabilities of today's
papermaking companies in China and the dedication of generations of papermakers who
have worked hard to create a better life.
From bringing the "Integration of Plantation-Pulp-Paper" model to China in the 1990s
to large-scale production following the 12th Five-Year Plan, and to the exploration of
intelligent production and management, APP China continues to innovate and improve.
By doing so, the company helps propel China's paper industry towards high-quality
development and contributes to the preservation of China's paper civilization.

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

IndexesPioneer of "Integration of Plantation-Pulp-Paper"
In 1992, APP entered China with

Guangxi, Yunnan, and other provinces toand maturity of this industry chain havethe mission of "Implementing green

gradually map out the forestation industry.

enhanced APP China's comprehensive

cycle-based development, advancing

APP China's first pulp and paper plant, thecapabilities of resource security and risk

papermaking civilization, and improving

Hainan Jinhai Pulp & Paper, was officiallyresistance, thus ensuring sound andthe quality of life". While the concept ofopened in 2005. This has announced therobust operations. Moreover, this model"Integration of Plantation-Pulp-Paper" wasofficial formation of an integrated industry

embeds low-carbon and environmental

still quite new in China, APP China waschain combining plantations, pulping, andconsiderations throughout the entire

already making efforts to put this green,

papermaking, initiating a virtuous cycle

industry chain, thus ensuring a balance

circular development model into practice.

where forests support paper, the paper

between social and environmental benefits.

Since 1995, APP China has been growing

industry nurtures forests, and forests andplantations in Guangdong, Hainan,

paper are integrated. The completion

Doer Who Innovates and Pushes Boundaries
The year 2000 marks the beginning ofa "golden decade" for China's paperindustry, witnessing its rapid development
and the near tripling of annual paper
output. APP China continues to upgrade
the industry chain and manages tomake the "Integration of Plantation-PulpPaper" model truly excel by continuously
improving its core strengths in production
and management technology, productquality, customer service, etc. This has
set a prime example of development withconstantly improving quality and effect formodern papermaking companies in China.

APP China mills participating in documentary shootingwith high efficiency and low consumption.
In addition to the Rudong Industrial Base,2019 also saw us initiate the constructionof new projects in Ningbo (Zhejiang) and
Qinzhou (Guangxi). While expanding theGroup's industry chain deployment, we dothis to continue to boost local economy
and industrial upgrading.
To further facilitate holistic development
and optimized industrial structure, in 2019,

Sinar Mas Group started the acquisitionof Bohui Group, a leading white cardboard
paper company in China, to explore moreinnovations and breakthroughs in this field.
In the future, we will continue to follow theindustry trend of integrated development
and join hands with more Chinese paper
companies to seek new opportunities in
the new era.

APP China has established industrial
bases in Jiangsu, Hainan, Guangxi,
Zhejiang, and other places and continues
to increase investment. In 2019, APP
China launched the construction of ahigh-grade tissue industrial base in
Rudong, Jiangsu Province. Combining
technology-based manufacturing withcircular economy, the base will adopt theworld's best manufacturing technologies,
equipment, and control systems and fully
apply the principles of clean production as
it strives for the goal of green development
Concept plan of Rudong High-Grade Tissue Industrial Base18

APP China Sustainability Report 201919

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Leader of Industry Development
As China's economy phases into a
new normal where the quality of growth
outweighs the speed, papermaking
companies now need to be more innovativeand embrace transformation and upgradingin order to adapt. APP China continues
to deepen R&D and innovation andstrengthen cooperation and communication
with industry partners to explore advanced
ideas, technologies, and products. In 2019,
we had in-depth dialogues with industry
associations on topics such as China's
plastic ban and companies' strategic
restructuring and structural adjustment andmade suggestions to the 14th Five-Year
Plan regarding the papermaking industry.

development. We have begun exploring theapplication of nanocellulose technology,
conducting in-depth research and analysis
on its future evolution, application,
preparation methods, and the challenges
involved. We have had deep discussions withindustry peers from home and abroad. This
has informed our plan for future explorationof nanotechnology and lays the groundworkfor the successful application of cuttingedge technologies in the future. Moreover,
we participated in the discussions of the

China National Paper Industry Standard
Technology Association on standards
related with fluff pulp, unbleached pulp, andthe calculation of the comprehensive energy
consumption of pulp & paper companies.
We also co-hosted the 2019 China Paper
Industry Sustainability Forum themed"Green Cycle – Empowering High-Quality
Development", where we joined our industry
peers in discussions on the high-quality,
sustainable, and healthy development of thepaper industry in the future.

Following its first appearance, APP China
attended the 2nd China International
Import Expo (CIIE) again in 2019, where
we signed a deal with many companies on
the use of the APP Foopak Bio Natura™
biodegradable food cardboard. This
was a step forward for expanding APP's
innovative "Paper for Plastic" solutions in
China.

At the "Focus on Green" 2019
China Printing Industry Innovation
Conference hosted by the National
Press and Publication Administration(NPPA), APP China participated in
the signing of the Papermaking and
Printing Integrated Development

20

China Paper Industry Sustainability Forum

Initiative . By doing so, the company
pledges to share information andresponsibilities with its peers and remain

Based on the principle of "reduce, reuse and recycle", the circular economy is designed
to maximize resource efficiency and recycling. It is a fundamental shift away from thetraditional way of economic development that is high-pollution and high-consumption. APP
China embeds the concept of circular economy throughout its manufacturing process, thus
effectively reducing its environmental footprint while operating at a lower cost and higher
efficiency.

Efficient Use of Natural Resources

Promoting the Integrated Developmentof Papermaking and Printing

The papermaking industry and theprinting industry are in the same
industry chain. To improve the entire
chain entails that they integrate andthrive together. APP China has longprovided the printing industry withhigh-quality, environmentally friendly
products and superior services.
Meanwhile, the company prioritizes
fostering in-depth communicationand cooperation to continuously drive
the integration and joint innovation
between those two major industries.

In recent years, China has been prioritizing the improvement of ecological conditions andgreen development while continuing to implement a new mode of development. Suchdevelopment is driven by industrialization and information technology and embraces circular
economy and a low-carbon and energy-efficient approach. As an important provider of basic
raw materials in the national economy, the modern paper industry is also making a gradualtransition to highlight the use of renewable resources, clean production, and pollution
control. APP China has long been taking concrete actions to help build a beautiful China,
including actively exploring models of resource conservation and recycling and continuing tostrengthen the management of clean production.

Pursuing Circular Economy

Taking advantage of our expertise,
we continue to help promote industry
technology optimization and standard

Case

CircularModel Fueling
Development

steadfast in its efforts to help boost
the collaborative innovation and green
development of both industries.

With a commitment to sustainability, APP China actively explores green and circularsolutions. By developing new technologies and improving and innovating the processes,
APP China manages to reduce the use of raw materials and become resource-efficient,doing its utmost to put all resources to good use.

Case

APP China participating in the signing of
the Papermaking and Printing Integrated Development Initiative

Creative Useof Black Liquor from Pulp

Separating the cellulose requiredfor paper from the raw materials
by cooking is an important step inthe pulping process. This process
produces a large amount of waste
liquid containing lignin and alkali.
Dark in color and smelly, the liquid
is often referred to as "black liquor".
If discharged directly without being
treated, the black liquor can cause
serious environmental pollution.

APP China's pulp mills have recycled
black liquor for many years and areable to use it for steam and power
generation. And the mills continue
to explore more possibilities for its
effective use. On a daily basis, theblack liquor recycling project helps
Hainan Jinhai Pulp & Paper save
3,268.67 tons of standard coal andgenerates about 4,081 MWh ofelectricity, providing more than 90% of
the mill's energy supply.

APP China Sustainability Report 201921

Message from
Chairman

Case

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Case

Saving the Use of Long Fibers

Long fibers from conifers lend the main toughness to paper. They are consumed in large
quantities in the production of tissues, and reducing their use would lead to significant
savings in resources and costs. In 2019, we successfully reduced the amount of longfibers used per unit of product through means like upgrading technology and improving
the process, thereby reducing the use of trees.

Effective Waste Management
We have formulated the Solid Waste
Management Procedures, defining thescientific classification and orderly disposalof major wastes such as coal ashes,
sludges, gypsum, pulp residues, and wood
dust. Meanwhile, we actively optimize our
production processes and technologies
to do a continuously better job in waste
reduction and recycling. In 2019, therecycling rate of general solid waste within
APP China's reporting scope reached32.25%, an increase of over 20% from10.35% in 2018.
The production process generates waste
gases such as biogas, carbon dioxide,and sulfur dioxide. By recycling and usingchemical reactions to produce by-products,
we have reaped good economic and social
benefits while promoting resource recycling
and reducing the emission of greenhousegases and air pollutants.

Methods of Solid Waste Disposal in 2019 within Reporting Scope
4.26%

Performance in
Numbers

Assurance
Statement

Indexes

Recovery and Recycling of Flue Gas
hydrated lime solution to produce light calcium carbonate, which can replace
pulp as a raw material for cultural paper. With the assistance of a specialist
company, Gold Huasheng recycled a total of 50 million cubic meters of carbon
dioxide from the power plant's flue gas in 2019, using which it produced 66,600
tons of light calcium carbonate.

Ammonia-based desulfurization is aprocess that uses ammonia as an alkaline
absorbent to remove sulfur dioxide fromboiler flue gas. It has such advantages ashigh reaction rate, high absorbent utilization
rate, and high desulfurization efficiency.
What's more, ammonium sulfate, a byproduct of desulfurization, can also be used
as agricultural fertilizer. Gold Huashenguses ammonia-based desulfurization to
manage exhaust gas emissions, whichguarantees higher desulfurization efficiency
and favorable sales revenue from the byproducts. In 2019, Gold Huasheng sold6,024.34 tons of ammonium sulfate.

35.46%

Building Green Logistics

32.25%

Selling to external
parties for reuse

Recycling andreuse*

Incineration

Other (Including centralized treatment
by local sanitation departments)*Recycling and reuse refers to the recycling and reuse of waste through direct processing by APP China mills

Based on data analyses and forecasts
about customer demand, APP China
continuously explores economic logistics
models that are more efficient and lowercarbon as it institutes measures like
optimizing transport routes, improving
packaging recycling, increasing
the vehicles' loading efficiency, andintegrating operational processes. In
2019, we implemented the intermodaltransport mechanism between sea
and rail, effectively reducing packaging
waste that would otherwise have beencaused by secondary loading andunloading; we introduced the "Bulk Cargo
Containerization" mode to realize intensive
transport, which improved the utilizationof resources such as containers; we
continuously recycled pallets among mills
to minimize the use of wood and relatedresources; we mix-loaded different raw
materials and products to improve theloading efficiency; and we reinforced
circular transport over long distances
between different regions to reduce empty
backhauls.

Maximizing Utilization of Waste

To guarantee more effective harmless and recyclingbased treatment of sludge, Ningbo Asia installed
two circulating fluidized bed (CFB) boilers with asludge incineration capacity of 1,600 tons per day.
Meanwhile, the biogas generated during waste water
treatment is recycled after being transported to theincinerator through the pipeline. The heat of the waste
gas is also recycled to fuel production as the steam
generated from sludge incarnation gets transported
to the company's papermaking workshops. In
addition, Ningbo Asia actively communicates withlocal environmental protection departments to help
surrounding companies with sludge incineration, thus
contributing to the construction of green communities.

22

Looking Forward

Adding water to quicklime produces hydrated
lime, and carbon dioxide reacts with the28.03%or through special cooperation with third-party agencies, such as making by-products from waste.

Case

Sustainability
Management

In 2019, Ningbo Asia incinerated a total of

215,027 tons of sludge, including
8,004 tons of social sludge;
it recycled a total of

1,699,458.4 cubic meters of
biogas, which translates into

1,189.6 tons of standard coal or
RMB946,300 saved.

Commitment to Green Production
China is quickening its transition to green
manufacturing. It continuously tightens
regulations on pollution control andenvironmental protection, releasing aseries of policies and rules in recent years,
such as the Cleaner Production Promotion

Law of the People's Republic of China , theGreen Industrial Development Planning(2016-2020) , and the Plan for Energy
Conservation and Emission Reductionin the 13th Five-Year Plan Period . APP
China's mills have amplified efforts topursue clean production and establish asound management system for energy,
water resources, and waste gas emissions
to minimize the negative impact of its
operations on the environment.

APP China Sustainability Report 201923

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Improving Environmental Management
Operating on the principle of"environmentally friendly pulping and green
papermaking", APP China mills have all
set up an environmental management
system that complies with the requirementsof ISO 14001. Meanwhile, they continue
to increase investment in environmentrelated technological R&D, standard
improvement, and technical transformation
to ensure that their environmental
conditions for producing paper and pulp
and paper products meet and exceed thenational standards. APP China invested
RMB874.572 million in environmental
protection in 2019, bringing the total sum
to RMB12.758 billion.

In 2019, APP China mills continued
to strictly implement environmental
management measures to keep improving
their performance in environmental
protection. Guangxi Jingui Pulp & Paper
revised its Safety, Health, and Environment
Supervision and Management Measures .
Besides adding a monthly assessmenton the three measures of environment,
safety, and health, it also refined thefinancial reward and punishment system
for related departments. The Regulatory
Department on Environmental Protection
undertakes an assessment every year tograde companies on five metrics such as
standardized management of hazardous

waste, emission permit implementation
management, and environmental
emergency management. As a result of
the more systematic management andmotivating terms, Guangxi Jingui Pulp &Paper passed all five with high scores.
Hainan Jinhai Pulp & Paper has formed
an environmental protection committee
under the leadership of the generalmanager. Nine departments, including the
production, energy, technology, etc., havejointly formed a working group to perform
regular environmental inspections both
inside and outside the mill so that problems
could be discovered and fixed in a timely
manner.

series of initiatives such as improving whitewater utilization rate and recycling coolingand seal water, Gold Huasheng could
save 44,650 tons of fresh water annually.

In 2019, the total water withdrawal by APP
China mills within the reporting scope
decreased by 674,329 tons compared withthe previous year.

Water Resources Management

24

50

2019

11.62

National standard* limit

2019

1.6

0.29

COD emission per ton of pulp
produced (kg)

6.37

5

COD emission per ton of
paper produced (kg)20

Waste water discharge per
ton of pulp produced (tons)

The mills continue to optimize their water
use patterns and actively build watersaving mills to drive a sustained decline
in the amount of fresh water consumed
in production. In 2019, Guangxi Jingui
Pulp & Paper, Hainan Jinhai Pulp & Paper,
Ningbo Asia, and other mills undertook awater saving initiative aimed at reducing
water consumption per unit of product. It
included activities like identifying areas
to improve in the production process,
optimizing processes and technologies,
conducting regular analyses of watersaving effectiveness, and sharing handson experience with other mills. Through a

Strictly Complying with Waste Water Discharge Standards

Hainan Jinhai Pulp & Paper has built
separate waste water treatment plants
for its pulp and paper projects. Its
COD emissions in 2019, which stoodat 0.22 kg per ton of paper produced
and 1.15 kg per ton of pulp produced,
were well below the national limit
set in the Discharge Standard of
Water Pollutants for Pulp and Paper
Industry (GB3544-2008). In 2019, thecompany worked with its suppliers
to develop new chemicals for waste
water treatment, greatly improving
its efficiency. The company also
invited an external organization to
perform ecological impact monitoringon the waters near the company's
drainage outlets to gain an objective
knowledge of the plants' impact on
the surrounding waters and used themonitoring results to inform better
waste water management andecological protection. The monitoring
report produced by the Institute of
Oceanology, Chinese Academy of

Sciences in January 2019 on thewaters of the company's Port of
Yangpu showed that the waters asa whole met the Grade I sea water
quality standard.

Hainan Jinhai Pulp & Paper Waste Water Treatment Plant

Case

Waste water discharge per
ton of paper produced (tons)

Water is the source of life and also an
important resource for the pulp and paperindustry chain. It is the responsibility of
pulp and paper companies to save waterand treat waste water properly. APP China
pays close attention to the impact of water
withdrawal, consumption, and drainage inthe production process on the local water
environment and surrounding communities
and has established a sound water
resources management system. All mills
have in place a strict internal supervision
mechanism and water resourcesmanagement targets. They regularly track
the implementation and continuously
improve performance in related areas;
they maintain active communication
with the local governments, regulatory
authorities, community residents, and otherstakeholders and fully fulfill their obligationof information disclosure.

Case

Implementing Water Saving Actions

In 2019, Ningbo Asia carried out sedimentation concentration treatment of waste water.
The filtering would produce an upper layer of clear liquid that could be recycled for
production so that the water resources could be better utilized. Moreover, problems
during water use such as evaporating, emitting, dripping, or leaking were addressed rightaway, leading to increasingly better water saving results. In 2019, the company saved a
total of 234,000 tons of water, with a water reuse rate of 94.63%. The company plans to
broadly share its water saving experience both internally and externally to further deepen
the water saving measures and make them more effective.

0.63

National standard* limit*Discharge Standard of Water Pollutants for Pulp and Paper Industry (GB3544-2008).

Water Reuse

95.94
2019

100%
Water reuse rate(%)

APP China Sustainability Report 201925

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Strengthening Energy Management
The paper industry is one of the key
participants in the national carbon trading
market system. Measures such as reducing
the use of fossil fuels, improving energy
efficiency, and increasing the use ofrenewable energy are of great significanceto curbing climate change. APP China acts
in strict compliance with national, local, andindustry policies on energy conservationand consumption reduction and has set
up energy management committees andrelevant leading groups in each mill tocollectively advance efforts in this regard.
All mills actively participate in internal andexternal carbon trading training to fully
brace themselves on data and theories for
future participation in the carbon trading
system.

Case2019 Energy Mix of Mills within Reporting Scope23.40%

3.08%

Assurance
Statement

Indexes

Top-Down Coordination to
Deliver Effective Energy Management

CoalBlack liquor from pulp

1.41%

Natural gas
Power purchased

0.96%

Biomass fuels
Steam purchased
Liquefied Petroleum Gas (LPG)
DieselOther*

0.09%*Other energy sources include solar energy, fuel oil, gasoline, and kerosene.

Case

Establishing a Sound
Energy Management System

Gold Huasheng set up an energy management system in 2014 drawing on thenational standard Energy Management Systems – Requirements , which undergoes
regular audits by the China Quality Certification Center. In line with the latest
national and local environmental protection requirements, the company continuously
updates its energy management goals and formulates corresponding implementationplans. In 2019, Gold Huasheng completed the latest energy audit. The audit teamconducted a comprehensive analysis and evaluation of the company's current energy
management mechanism, energy structure, and energy use. Based on the results
and recommendations, Gold Huasheng has established new energy performancebenchmarks and goals for the next stage to further stimulate improvements in its
energy management.

Reducing
Waste Gas Emissions
APP China continues to step up efforts to
reduce air pollutant emissions to aid thenation's plan to protect the blue sky. Asof the end of 2019, the four major mills,
namely Guangxi Jingui Pulp & Paper,
Ningbo Asia, Gold East Paper, and Hainan
Jinhai Pulp & Paper, had all completed
ultra-low emission retrofitting, which could
reduce 197 tons of soot emissions, 227
tons of sulfur dioxide emissions, and 2,627
tons of nitrogen oxides every year. With thecontinued progress of the ultra-low emission
retrofitting, the total air pollutant emissions
from our mills within the reporting scope aredecreasing each year. In 2019, the sulfur
dioxide emissions dropped by 556.31 tons
from 2018, representing a year-on-year
decrease of 44.36%.

Case

Case

Saving Energy by Various Means

In 2019, Hainan Jinhai Pulp & Paper invested over RMB10 million in energy saving
renovations. For instance, the company installed an energy recycling system in theworkshops, transformed the energy utilization equipment, and carried out equipment
maintenance. Measures like those significantly improved the comprehensive energy
efficiency. In terms of energy conservation in its own power plants, the company
optimized the mix of purchased power and self-generated power based on the peak andvalley cycle of electricity consumption, thereby effectively reducing the use of raw coal.
In 2019, the raw coal consumption in Hainan Jinhai Pulp & Paper decreased by 13.15%
compared with 2018, and the boiler electricity consumption decreased by 11%.

Ultra-Low Emission RetrofittingWith a total budget of RMB143.4 million,
Gold East Paper officially started ultra-low
emission technical retrofitting of its boilers
in 2018. Based on the boiler desulfurizationand denitrification carried out in 2014,
the new retrofitting project adopted ozone
denitrification and wet electric dust removal
technology. This could further reduce theemission of nitrogen oxides, sulfur dioxide,
soot, and other pollutants and lead to fullcompliance with requirements of the StateCouncil's Three-Year Plan on Defending
the Blue Sky and of the local Zhenjiang
Atmospheric Administration. As of midJune 2019, ultra-low flue gas emissions had
been realized in all four boilers of Gold East
Paper's power plant, which could reduce
212 tons of nitrogen oxide, 13.2 tons ofsulfur dioxide, and 51.1 tons of soot every
year.

Case

26

Performance in
Numbers

4.81%

0.28%

26,040.5 MWh

Looking Forward

Guangxi Jingui Pulp & Paper has set up an energy management committee chaired by thegeneral manager, with heads of the water, electricity, and gas management departments as thegroup leaders. Under the coordinated management of the committee, the company formulated
energy saving goals and corresponding action plans, examined the progress of the goals monthly,
and reviewed and optimized the various energy saving measures. The workshops organized allstaff brainstorming sessions and energy conservation and emission reduction competitions andimplemented measures such as steam reuse and heat recycling from continuous boiler blowdown,
which led to encouraging energy saving results. In 2019, the comprehensive energy consumption
per unit product of the company's main production systems was all above the national standard.

65.62%

0.35%

Solar power
generation:

Sustainability
Management

Gold East Paper actively carrying
out ultra-low emission retrofitting

Continuing to Strengthen Odor Control

Hainan Jinhai Pulp & Paper invested over RMB150 million in 2019 for ultra-low
emission retrofitting, equipment upgrading, and odor inspection and remediation.
The company focused on improving the existing odor disposal system to eliminate
unorganized emissions of odorous gases. For the odor generated during waste
water treatment, the company built a waste water treatment plant conditioning tank
and a sludge storage tank and sealed the odor produced in the sludge dewateringroom; it also established an odor treatment facility inspection system at the waste
water treatment plant, further optimizing the operations standard management
mechanism and real-time reporting mechanism and ensuring that all treatment
measures were put in place. In 2018 and 2019, approximately 7,000 trees havebeen planted in and around the waste water plant area to improve the selfpurification rate of the environment.

APP China Sustainability Report 201927

Message from
Chairman

About APP ChinaStar Employees
at APPIntelligenceDriven Industrial
UpgradeSustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

The Made in China 2025 strategy contains the demand to "seek innovation-driven
development and apply smart technologies". Strategic documents since 2018 like thegovernment work reports have repeatedly emphasized the need to strengthen "constructionof new infrastructures", notably artificial intelligence, industrial Internet, and the Internet ofThings. Those national policies are clear signals that the cultivation of the digital economy
has become a new driver of national economic growth. For traditional manufacturingindustries such as the papermaking industry, intelligent manufacturing will become theleading force driving industrial transformation and upgrading.
APP China focuses on digital transformation as a key development strategy and works
to promote the construction of Industry 4.0 and intelligent manufacturing with an open
and innovative attitude. We are taking advantage of emerging technologies to expand ourindustrial territory and quicken the transition of the papermaking industry to "intelligent
manufacturing".

Embracing the Intelligence Revolution
APP China thoroughly implements
the Made in China 2025 strategy andcontinuously advances to the goal of"intelligent equipment, digital management,
and automated processes" by formulating
and implementing the "Industry 4.0"
roadmap. We take automation-oriented
transformation as our current focus andmake an all-out effort to promote theupgrading of papermaking equipment andprocesses; by virtue of big data technology

and scientific management, we manage
to improve our information management
capabilities and gradually foster thelinking and integration of the various
information systems for different parts of
our operations.

data digital and intelligent. With improved
efficiency and guaranteed product quality
control, we strive to reduce material andenergy consumption and thoroughly
enhance the company's ability to pursue
sustainability.

Case

Relying on a real-time database platform
and a production execution management
system, APP China is steadily pushing
forward the trilogy for making production◎ Trends forecast and optimal control◎ Big data analytics and optimization modeling◎ Real-time visibility and automated statistics

APP China Trilogy for Digitized and Intelligent Production Data

In 2019, APP China invested tens of
millions of yuan developing dozens
of automation projects. Using hightechnologies such as big data, cloudcomputing, and the Internet of Things,
we have managed to digitize informationcollection throughout the full lifecycle fromraw materials to finished products and to28

recycling, leading to better product quality
control and traceability. Meanwhile, theadoption of smart warehousing has greatly
enhanced the efficiency of warehousing
and logistics operations and management.
We have also expanded the application ofreal-time data visualization and automatic
statistics to cover more production andAutomated papermaking workshop

operations processes. The pending 5G
era will see us collect and analyze dataon consumers' purchase behavior to gaina deeper insight into consumer needs
and promote precise product R&D andinnovation upgrades.

Real-Time Database System Construction

In traditional factories, the control and management
systems of production equipment are scattered andindependent of each other, making it difficult for the
managers to have an overall grasp of the equipment's
running status. In line with the Group strategy, Guangxi
Jingui Pulp & Paper started developing the PI (Plant
Information) Real-Time Database System in 2019. The
system extracts data from different production equipment
and forms an infographic based on data processing andanalysis before presenting it on the managers' computers,
smart terminals, and other devices via wired, wireless, or
4G networks. This has notably improved the company's
capabilities of comprehensive management and rapid
response.
The system improves the company's ability to perform
equipment maintenance and fault warning, which can
reduce unplanned downtime by 10% every year, equal to
RMB7.62 million in loss reduction. Meanwhile, based on

the data analysis by the system, the company will be able to know
about the optimal raw material input ratio and the point of balanceamong steam, electricity, and water in a timely and accurate manner,thus realizing further savings in resources and energy.

Energy monitoring interface of the PI real-time database system

APP China Sustainability Report 201929

Message from
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Case

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Robust Products

Creating an Intelligent Industry Eco-Chain
APP China integrates the intelligencestrategy fully into its industrial development
plan, making full use of cutting-edge
technologies such as artificial intelligence,
big data, and cloud computing to create
an intelligent and green paper industry
ecosystem and help boost the digital andintelligent transformation of China's paperindustry.

APP China's first new intelligent
manufacturing upgrading project, theRudong High-Grade Tissue Industrial
Base, was initiated in July 2019. With
"Industry 4.0 + Artificial Intelligence"
guiding its production, it takes advantageof new technologies such as big data and
5G to automate production and realize
intelligent management and operations

and will be the most advanced of its kind in
the world. Phase I of the project will begin
operations in 2020. When put into fullproduction in 2021, the project is expected
to produce 3.96 million tons of highgrade tissues annually, and the per capita
production will be tripled compared withthe original factory.

Performance in
Numbers

Assurance
Statement

IndexesRudong High-Grade Tissue Industrial Base breaking ground

Logistics Automation at New BaseAt the new production base under construction, APP China
has launched a logistics automation project, which will create
an automated logistics model through the combined use ofvarious technologies. From 2020 to 2021, we will focus onpromoting the use of intelligent transport vehicles. Thosevehicles are equipped with advanced technologies such as

unmanned driving and lidar and are connected with a variety
of support systems, such as intelligent port system, automatedwarehousing system, automated transport system, andautomated operations system, to facilitate intelligent operations
at the new base.

Innovation is the soul that drives high-quality business development, and one important
way of product innovation for the papermaking industry is to follow the global sustainability
trend. In this era of challenges and rapid development, APP China aligns its actions with
the needs of the market and social development and constantly injects innovation intodeveloping industrial paper, cultural paper, and tissue products. At the same time, we seek
extensive cooperation and engagement with the outside world and actively promote theimplementation and wider application of best practices on issues such as "Paper for Plastic"
and sustainable consumption.

"Paper for Plastic" Starting a New Trend
Disposable plastic products are difficult
to degrade and heavily used and have a
low recycling rate. According to United
Nations statistics, at least 8 million tons ofplastic waste enter the ocean every year,
and this number is still rising. In responseto this increasingly severe pollution
problem, the Chinese government has
issued a number of policies and rules inrecent years, clearly stating that bans andrestrictions on the production, sales, anduse of certain plastic products will comeinto force in a number of regions and fields
first by the end of 2020. "Paper for Plastic"
will become an inevitable trend in food

Case

30

Looking Forward

Digital Information
End-to-End Tracking

The Radio Frequency Identification (RFID) technology stores product data in electronictags and is a type of remote automatic identification technology. APP China applies
the RFID technology in its entire production process (for example, base paper winding,rewinding, slitting, post-processing) and to its logistics and warehousing management(for example, delivery and inspection, warehousing, storage, inventory, transportation)
to realize digitized quality control. The RFID technology has such advantages as fast
information reading, contactless long-distance recognition, penetrable omnidirectionalrecognition, and high reliability. This makes it possible to comprehensively track andsynchronize data of the production, warehousing, and logistics processes, thereby realizing
full traceability of the digital information and more automated and efficient operations.

Case

Sustainability
Management

packaging, takeaway catering packaging,and other fields.
As an expert provider of paper packaging
solutions, APP China strives to be apioneer in the "Paper for Plastic" initiative
and actively promotes the R&D andproduction of plastic product alternatives.
We continue to deepen innovation in "zeroplastic" food packaging products and stepup the promotion of the degradable andrecyclable Foopak food cardboard products
for the Chinese market. Meanwhile,
companies such as Gold Huasheng andNingbo Asia have developed a series ofhigh-quality products such as "zero plastic"coated food cardboard, "zero plastic"
oilproof food cardboard, and drinking straw
base paper. In the future, we will foster
more innovations in the field of medical
packaging, plastic laminate alternatives,
paper trash bags, etc., doing our part at
the industry source to facilitate a broadertransition to a green and low-carbon
lifestyle.

"Zero Plastic" Product Promotion Taken a Step Forward

The Sinar Mas Group's Foopak Bio Natura™ biodegradable food cardboard
debuted at the first CIIE. The product can well replace traditional disposable
food packaging thanks to features like thorough degradation rate,
airtightness, and cold and heat resistance. Meanwhile, the water-basedlaminate inside of Foopak is plastic-free and fully biodegradable within 12
weeks. With technical optimization, Foopak products' performance has beenfurther improved in 2019 to withstand high temperatures up to 220 degrees
Celsius and be recycled and reused five to seven times.
At the second CIIE in 2019, the Group entered into an agreement witha number of Chinese companies to collaborate on the full range of APP
products including Foopak. This was another solid step towards the scaleup and marketization of "Paper for Plastic" technologies as represented by
Foopak and will also bring a new green consumption experience to Chinese
consumers.

Sinar Mas Group and several Chinese companies
reaching an agreement at the second CIIEAPP China Sustainability Report 201931

Message from
Chairman

Case

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Diversified "Paper for Plastic" Solutions
APP China Paper Business Unit has developed andlaunched a range of "Paper for Plastic" packaging productseries. Examples include the "zero plastic" coated foodcardboard, "zero plastic" oilproof food cardboard, drinking
straw base paper, white kraft paper for food packaging,etc., providing a variety of environmentally friendly
packaging solutions for the domestic market.

Gold Huasheng, a company engaged in special papers, has
successfully developed a drinking straw paper product thatcomplies with the restrictions set out in EU BfR (German Federal
Institute for Risk Assessment) on food contact materials. To do so,
the company conducted extensive research and testing, basedon which it determined suitable eco-friendly chemicals and pulp
processing conditions. In addition to straw paper, Gold Huashengis also developing dialysis paper that meets the requirements ofmedical packaging. The paper can withstand high-temperature
steam sterilization while also effectively blocking bacterial
penetration and is thus suitable for cases like mask packaging
and dental consumables packaging. Moreover, the developmentof plastic lamination alternatives is also an important future
direction for the product R&D at Gold Huasheng.

"Zero plastic" coated food cardboard
Waterproof and impermeable, free of plastic lamination and fluorescent agents;
recyclable, 100% industrially degradable, capable of being broken down for
pulping, compostable, and other eco-friendly properties; suitable for directly
making all kinds of paper cups, paper bowls, meal boxes, soup cans, and otherforms of takeaway food packaging.

"Zero plastic" oilproof food cardboard
Free of silicone oil or fluorine-based coatings, exceptionally oilproof, nonstick, and anti-seep because a dense coating is formed on the surface of thepaper through the use of the graphene nano-barrier technology; degradable,
recyclable, free of fluorescent agents; suitable for directly making food packaging
cartons, oilproof catering paper packaging, stamped food containers, etc.

Drinking straw base paper
Made of virgin wood pulp, recyclable and degradable; QS certified, food-grade;suitable for making paper straws, airline cups, paper bag cups, and otherproducts.

White kraft paper for food packaging
QS certified, free of fluorescent agents, food-grade; highly strong, stiff, andsmooth, highly tear- and burst-resistant, suitable for large ink full-page printing;suitable for making solid food stand-up pouches, food packaging paper bags,
takeaway packaging paper bags, tray paper, etc.

Applications of Ningbo Asia's "Paper for Plastic" product series

32

APP China Sustainability Report 201933

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Forest Certification Labeling for Products
Forests are the largest and most expansive
and biodiverse ecosystems on land andplay an irreplaceable role in conserving
water and soil, sequestering carbon andproducing oxygen, and maintaining global
ecological balance. Forests also provide
ample resources for human production
and living and are a true treasure house ofresources.

actively conducted forest certification andcontinuously promoted sustainable forest
management (FM) and chain of custody(CoC) management. On this basis, we
continue to facilitate forest certification

labeling for products to draw wider
attention to the environmental and social
impact of sustainable paper products andadvocate sustainable consumption.

246,735 hectares of plantations are CFCC/PEFC-FM-certified
92.27% of plantations are CFCC/PEFC-FM-certified

APP China is fully aware that only by
respecting and protecting forest ecology
can we ensure the long-term andsustainable use of forest resources andtruly turn "lucid waters and lush mountains"
into "invaluable assets". For years, we have

What does a CFCC/PEFC Forest Certification Label Mean?
Paper products carrying the CFCC/PEFC joint label are subject to audits bycertification bodies for the source of their wood materials, which have to be 100%from scientifically planted, legally compliant, and environmentally protected
plantations. For those products, material traceability has to be guaranteed
throughout the whole process from material input, manufacturing, transportation,
storage, and sales to consumer use. The forest label gives products the dual
qualifications of "raw material reliability" and "product traceability".

16 affiliated entities have obtained CFCC/PEFC-CoC certification
Note: For more detailed information, please refer to the Sustainability Management section.

Normalization of Product Labeling
Forest certification has been widely
recognized by the international communityand governments as an effective tool for
promoting sustainable forest management
and market access for forest products.
China Forest Certification Council (CFCC)
and the Programme for the Endorsementof Forest Certification (PEFC), a leadinginternational forest certification system,
reached mutual recognition in 2014. It
gives China's sustainable forestry products
an "international passport" while setting
stricter requirements for the managementof certified paper products in terms of

By normalizing the labeling of certified
forest products, we hope to bring moresustainable products to consumers andmake it easier for them to identify products
made from raw materials sourced fromsustainably managed forests. In this way,
we can help increase the social awarenessof sustainable consumption and thedevelopment of sustainable forestry.

Increasing Awareness of Sustainable Consumption"traceable product information, reliable
eco-friendly production, and sustainable
raw materials".
Under the guidance of the Science andTechnology Development Center of State
Forestry and Grassland Administration,
APP China has continued to promote
the labeling of certified forest products
in recent years and is the first in theindustry to carry the CFCC/PEFC label
on its products. In 2019, our Touchcare
functional tissue under the well-known
brand Breeze™ and some products under

the high-grade tissue brand EMPORIA
also started to carry the joint label, further
expanding APP China product series with
forest certification labeling. The CFCC/
PEFC joint certification and labeling will benormalized for an array of products under
EMPORIA and VIRJOY in 2020.

While continuing the efforts to advance
product labeling, APP China is also
actively popularizing sustainability ideas
represented by forest certification to
the society by undertaking publicity andadvocacy initiatives. With strong support of
the Science and Technology Development
Center of State Forestry and Grassland
Administration, a series of CFCC/PEFC
philanthropic campaigns jointly sponsoredby Nanjing Forestry University and APP
China was held on campuses and incommunities and city areas of Nanjing
in November 2019. We showcased thecompany's products with the CFCC/PEFClabel and held a lecture at Nanjing Forestry
University on forest certification. We mainly
introduced relevant practices at APP China
and called on the public to pay attention
to the conservation and sustainable
development of forests.

Lecture on forest certification at Nanjing Forestry University

EMPORIA tissue products carrying the forest certification label

34

APP China Sustainability Report 201935

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Injecting Innovation in Products
APP China continues to step up R&D
investment and technological innovationand manages to meet the increasingly
diversified paper needs by constantly
optimizing and enriching its productseries. In terms of industrial paper andcultural paper, we have developed a wide
range of high-bulk products in line withthe lightweight trend of applied paper; we

Caseconstantly adjust product formulas andproduction technologies and processes
and strive for excellence in productperformance. In terms of tissues, wehave launched a series of Healthy Family
products, which can effectively meet
people's requirements for a healthy andhygienic life.

Meeting New Demands For Health

The general trend of consumption upgrading andclassification has created a higher demand for thefunctionality and personalization of paper in our daily life.
Based on an in-depth analysis of the needs of contemporaryconsumers, Suzhou Gold Hongye has launched a seriesof functional wipes for different situations, including glasscleansing wipes, dish wipes, cooling wipes, and stain
remover wipes. For people with sensitive skin, the company
has developed a moisturizing facial tissue. Infused withmoisturizing factors and vitamin E, the tissue effectively
locks in moisture and offers a moisturizing and smooth soft
touch. For baby skin, the company has developed a seriesof special products for mothers and babies using a numberof patented technologies, such as moisturizing dry towels
for babies, baby cotton tissues, and addictive-free hand andmouth wipes for babies.

daily life. The outbreak of the epidemic has driven home
the harm of bacteria and other microorganisms and led toincreased recognition for sanitizing and antibacterial products.
With a relentless commitment to innovation, Suzhou Gold
Hongye obtained 22 patents in 2019, of which 20 were
invention patents, ushering it to China's top 500 enterprises interms of patents.

Case

In 2019, the company continued to deepen R&D and launched
an array of antibacterial products, such as antibacterial cream
paper products and 75% alcohol wipes (dish wipes), whichadequately meet people's sanitizing and cleaning needs in
Moisturizing dry towels for babies

Coated paper is commonly used in printed products such as book covers and commercial
advertisements. As people's taste improves, the traditional coated paper can no longer meet manycustomers' new requirements for paper products as they go after elegant paper color, embossed
feel, high color reproduction quality, etc. Gold Huasheng has developed the "Art Paper" productseries using optimized product formulas. This type of product offers a natural hue and excellent
color reproduction and is suitable for a variety of printing processes. In addition to ordinary paper
colors, the new product also provides special color options such as ivory white and high white,which satisfies customers' different needs in paper color and offers new possibilities for coatedpaper printing.

Case

Dish wipes

36

Dry & wet dual-use wipes

Pursuing Excellence in Fine Cultural Paper

Thermal Paper Leading to
Eco-Friendly Weight Reduction

Thermal paper is notable for its ink-free way of using chemical reactions to create colors and iscommonly found in places like cash registers, labels, and tickets. Generally speaking, the thicknessof the paper is related to its base weight – the higher the base weight, the higher the thickness
and the amount of pulp used. Gold Huasheng has developed the high-bulk thermal paper, which
reduces the base weight of finished paper by more than 20% while maintaining its thickness. This
has effectively reduced the use of pulp as a raw material and is another step in the direction ofgreener thermal paper.

APP China Sustainability Report 201937

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes02
Responsible Operations
for a Sustainable Business
Embedding sustainability into the corporate development
strategy is not only what the society expects of acompany but also an inevitable choice for a company
in order to survive and thrive in the context of global
governance. From the outset, APP China has begun to
pay attention to its economic, social, and environmental
impacts and drive the gradual incorporation ofsustainability ideas into the entire value chain. We havebeen a long-standing supporter of sustainable forest
management. We undertake various initiatives aimed at
this goal such as the forest management certification,
High Conservation Value (HCV) Forests appraisal, andecological monitoring and comprehensively strengthen
forest safety risk management. We have put in place strict
safe production management measures to effectively
protect our employees and suppliers; we deeply institutesustainable procurement practices to continuously foster
more responsible practices along the supply chain.

38

APP China Sustainability Report 201939

Message from
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About APP China

Sustainable
ForestManagement

Star Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business"Scientific, ecological, and legal forestry" is the fundamental forest management approachthat APP China adopts. On the basis of the APP Forest Conservation Policy , APP China
Forestry has drawn up a series of forestry policies to further optimize management in thisregard and ensure that its forest management is both socially and environmentally friendly.
They include the Sustainable Management Policy , the Society and Labor Policy , theEnvironmental Policy , etc. APP China Forestry fully implements its forestry policies based on
the ISO 14001 Environmental Management Systems. It works with third-party professionalorganizations to perform environmental monitoring and evaluation on a regular basis andmakes timely improvements based on the results; it takes measures to actively prevent
safety risks like fires and illegal logging. APP China Forestry also conducts regular internaland external audits in line with forest certification requirements and organizes sustainability
training for employees to continuously improve its sustainable forestry management.

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Assurance
Statement

IndexesContinuous Promotion of R&D and Innovation
APP China has built a modern seedlingnursery and R&D center dedicated tothe cultivation and planting of seedlingstrains. The company constantly improves
its capabilities of innovative R&D in areas
like the fostering of new seedling strains
and industrial development and innovation.
It also actively participates in industry
dialogues on development to continuously
contribute to the progress and developmentof the eucalyptus industry.
Based on samples from the Guangxi
Gene Bank, the R&D team developed
the RD-5, a new eucalyptus strain, which
has been successfully bred after years ofexperimental planting. A hybrid between
DH33-27 and the fine leaf eucalyptus T12,
RD-5 has such fine properties as wind
resistance, scorch resistance, fast growth,and high yield. It has been brought toforest areas in Hainan, Guangdong, andGuangxi, with 100,000 planted in 2019.
We have also introduced new strains suchas Lei-11 and Lei-40 from the Leizhou
Forestry Bureau, which are wind-resistant,fast-growing, and high-yielding, witharound 2,700 planted in Fangcheng in
2019. Additionally, we have introduced U7

A lecture on eucalyptus science and sustainable forestry development at the CIIE

from the Leizhou Forestry Bureau, which isa high-yielding and upright strain, and had
95,300 of them planted in 2019.
In 2019, APP China Forestry hosted
and participated in a number of industry
exchanges and seminars. For instance,
it initiated a conference and lecture on
eucalyptus science and sustainable
forestry development at the 2nd CIIE; it

In 2019, Hainan Jinhua Forestry was
included in the first batch of China
Forestry and Grassland Industry
Innovation Bases – "Raw Material
Forest Base for Integration of
Plantation-Pulp-Paper", the first suchbase in China. The selection was

40

Performance in
Numbers

attended industry conferences such as the
National Eucalyptus Alliance Conference
and the National Eucalyptus Industry
Development and Academic Seminar,
engaging in discussions with industry
experts on the research directions ofstrains, among many other topics.

organized by China Forestry Industry
Association to highlight companies in
the forestry and grassland industry
with an outstanding performancein innovation, innovation bases,
innovation personnel, and brandtrustworthiness in 2019.

APP China Sustainability Report 201941

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Forest Management Certification
APP China Forestry carries out CFCC/
PEFC-FM certification every year andcontinues to use the audits and evaluations
to inform better management, thus laying
a solid foundation for realizing sustainable
forestry.

well as the seedling cultivation at nurseries,
material warehousing management, andchemical control. All of the 12 forestry
companies passed the audit. Regarding
the minor nonconformities found during the

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

IndexesHigh Conservation Value Management
audit or items under observation, relevant
forestry farms have been required by theaudit team to complete rectification withina particular time limit and continue to follow
up.

In 2019, a third-party forest certification
agency undertook the annual CFCC/
PEFC-FM audit on APP China Forestry's
business units (BU) in Guangxi,
Guangdong, and Hainan and a renewal
audit on Lancang and Wenshan forest
areas in Yunnan. In accordance with theForest Certification in China – Forest
Management (GB/T28951-2012), Chinese
laws and regulations, international
conventions, and company rules andregulations, the audit team conducted astrict document audit and site audit fromthe environmental, social, and economic
perspectives respectively. During the site
audit, the audit team looked at a range ofissues based on scientific sampling suchas the forestry management procedures ofdifferent companies and forestry farms, asHigh Conservation Value (HCV) forests
refer to forest areas with one or moreparticular attributes regarding the six areasof biodiversity, landscape-level ecosystems
and ecosystem mosaics, ecosystems
and habitats, basic ecosystem services,
necessities of local communities, andcultural significance. Responsible forest
managers need to determine the HCVsof the forests they manage, monitor theeffectiveness of management, and makecorresponding behavioral improvements sothat those values are better conserved.
We pledge to protect and properly manage
the HCVs within our business scope andalso help our employees understand thosevalues in depth by means of brochures,

CFCC/PEFC-FM certification audit

Promoting andlearning about highconservation value
and its evaluation

training sessions, etc. so that we canfully operationalize our protection efforts.
APP China forest areas have devised theHigh Conservation Value Management
Measures and the High Conservation Value
Forests and Determination and Protectionof Traditional Rights and set up the HCV
working group. We determine, evaluate,
and protect the HCVs of forestlands
through data collection and analysis, forest
field surveys, stakeholder engagement,
and other approaches.

surrounding areas. Once potential HCV
attributes are detected, we will conduct
evaluation and confirmation in accordancewith the HCV determination criteria andfollow up with appropriate conservation
measures.

As of the end of 2019, 54% of ourplantations had completed HCV
assessment. APP China Forestry
will continue to pay attention to theenvironmental changes of forestlands andSetting up a working
group to develop theevaluation plan

Data collection

Forestland Carbon Inventory
Forest carbon sequestration refers to theprocess by which forest plants absorb
carbon dioxide from the atmosphereand fixate it in vegetation or soil, thereby
effectively reducing the concentration ofcarbon dioxide in the atmosphere. It is
pointed out in the Fourth Assessment
Report of the Intergovernmental Panel on
Climate Change (IPCC) that forestry is
related to both climate change mitigation
and adaptation and that increasing forestry
carbon sequestration is an important andeconomically viable measure for reducing
carbon emissions. It can be predicted that
forestry carbon sink trading will become
an important part of the future domestic
carbon trading market.
As a pioneer of "Integration of PlantationPulp-Paper", APP manages more than
27 million mu of plantations in Indonesia

42

and China. These trees have played an
important role in carbon sequestration. In
2019, we invited climate change experts
to provide training on carbon trading,carbon accounting, and carbon sinks for
all APP China Forestry business units. The
training featured a systematic introduction

to climate change trends, national climatechange policies, development of domestic
and foreign carbon markets, methods ofcarbon sink calculation, etc. It has laid thefoundation for the company's future workin forestry carbon sink calculation andimplementation of carbon-neutral projects.

Expert advice
Field survey● Stakeholder interview
and consultation●

Wider stakeholder
consultation

Report preparation●

Submission ofargumentative
statements

General process for determining high conservation value
APP China Forestry sustainability seminar and carbon sink training and field inspection

APP China Sustainability Report 201943

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Ecological Impact Monitoring

Forest Safety Risk Management

Attention to and protection of biodiversity
remains the focus of APP China during
forestland management. APP China
Forestry has drawn up a series ofmanagement measures, including the
Buffer Zone Management Measures , theGuidelines for Eco-Friendly Operations ,the Provisions on Wildlife Protection ,etc., to guide the recording, monitoring,and protection of wild animals and plants
during forestry activities. Consistent with
relevant national lists and protection
requirements of rare, threatened, andendangered species, the forest areas
have compiled albums and wallchartsof wild animals and plants that need to
be protected so that foresters can learn
about and recognize them. Each smallclass at the forestry farms undertakes abiodiversity survey at least once a year,
where they locate animals and plants
by using GPS, take photos to keep
records, and summarize and analyze
the survey and monitoring data. All of
those contribute to the establishmentof a biodiversity database that enables
a closer tracking of those animals andplants. During the 2019 biodiversity
survey, the protected plant Alsophila
spinulosa was discovered in both our
Hainan BU and Lancang Sub-BU. The
survey team has marked and recorded
the protected plants and will continue tomonitor them in the future.

Forest fires not only severely damage
the ecosystem but also cause great lossof life and property for human society.
Preventing forest fires is a top priorityof APP China Forestry's work in forest
resources management and protection.
The company has established a forest fire
prevention command, delineated forest firerisk zones, and formed a fire prevention
squad. It has also built an artificial patrol
monitoring network, information monitoring
network, and prediction and forecasting
system. Those systems, in conjunction withlocal forest fire prevention command andmeteorological department, has enabledforest fire monitoring and forecasting in
key fire prevention areas using satellite
monitoring and other high-tech means.
During high-risk fire seasons, the company
implements a 24-hour duty system and adaily reporting system to keep abreast ofchanges in forest fire risks and take prompt
control.

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexesnumber of local residents as forest rangers,
helping reduce unemployment among local
farmers. The rangers and APP employees
would go to villages near the forestry farms
and educate local people on fire prevention
in ways like home visits, radio broadcasts,
and banners, to make them better informed
and effectively prevent and control fires.

Case

Forest Fire Drills

In October 2019, forest fire drills were organized in Lingshan and Pubei forestry
farms in our Guangxi BU. Asset Managers of the forestry farms shared knowledge
about firefighting, the correct use of fire extinguishers, and the ways to save oneself
and each other when one catches fire. Then the team rehearsed the whole processfrom detecting to extinguishing a fire, putting out a 250-meter-long fire line in just
20 minutes while completing follow-up work like a safe evacuation and residualfire cleanup. The drill honed the firefighting team's emergency response ability andteamwork, leading to better firefighting skills and tactics.

Employees in the forest areas assume theimportant responsibility of guarding thesafety of the forests. In order to enhancethe employees' awareness of fire safety
and equip them with better fire-fighting
skills and emergency response abilities,
APP China Forestry organizes multiple
fire drills and competitions every year toensure timely and effective response in
the event of a fire. It has also hired a large

The fire drill

The protected plant Alsophila spinulosa in Wusha Forestry Farm of Hainan BUCase

APP China Forestry has long beenworking with Guangxi University and the
Research Institute of Tropical Forestry,
Chinese Academy of Forestry to carryout scientific research such as ecologicalmonitoring and has continuously
undertaken environmental monitoring of
the eucalyptus plantations it manages. In
2019, APP China Forestry conducted selfaudit and evaluation and developed anenvironmental impact assessment report,
summarizing its past work in environmental

management while offering suggestions
for future improvements. The assessment
mainly looked at impacts in areas like soil
erosion, soil quality, and biodiversity andshowed that the eucalyptus plantations had
certain positive ecological effects. Whilelower than that of philanthropic forests,
their ecological benefits are still greaterthan that of rubber forests and mango
forests. The plantations have also createdample employment opportunities, bringing
significant social benefits.

Building a Strong Firewall
Through Extensive Education

In September 2019, Fangcheng Forestry Farm of our Guangxi BU held the "Forest
Protection and Fire Prevention Education Week". Working with local authorities,
the forestry farm sent 5 groups, 16 people in total, to mountains and borders andto townships, villages, and communities around key forest areas. There they put
up banners and slogans and handed out publicity leaflets, among other forms of
publicity, to educate local people on forest fire prevention. According to available
statistics, over 5,000 bags and 15,000 copies of publicity material were handed out,
20 banners and over 100 slogans were put up, and over 30 warning signs were
strengthened during this campaign.

Putting up publicity banners

44

Another major risk area in forest
management is illegal logging. APP China
has set up a security team in each forest
area and works to prevent illegal logging,illegal settlement, and deforestation
through continuously strengthened daily
patrols. In addition, each forest area
actively works with local police to combat
illegal activities together and build a strong"protective wall" for the forests.

Distribution of publicity bags onforest protection and fire prevention

APP China Sustainability Report 201945

Message from
Chairman

About APP ChinaStar Employees
at APP

Ensuring Safeand Orderly
Production

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Safe production is a company's lifeblood and the prerequisite and guarantee for its normal
production activities. APP China firmly institutes a culture of production safety, continuously
strengthens management in this regard, and commits itself to creating a "zero-accident"
production environment.
APP China has established a Safety, Health and Environment (SHE) management systemcovering all employees, production and operating activities, and workplaces. In 2019, weissued the Management Measures for Abnormal SHE Events Notification and Handling and
the SHE Performance Management Measures to all mills and contractors. Through them,
we standardized and optimized the safety and health management at all levels and theprocedures for handling abnormal events, identified key performance indicators, and set
the yearly goals. APP China mills have all signed the SHE liability statement and set up asystem for continuously tracking and improving their SHE performance.
At the monthly SHE meetings, APP China Headquarters communicates with the mills
on various matters. It passes on policy requirements, reports accidents, reviews theachievement of the key performance indicators, and holds discussions on the problems
employees are faced with at work. This is done to improve the SHE management and more
effectively guard against safety accidents.

Contractors are highly mobile and havevastly different attitudes towards safety.
Continuously strengthening contractor
safety management is one of the keytasks of safety management. APP China
mills have all formulated their own rules,
such as contractor safety management
measures and safety assessment guidance,and signed a safety liability statementwith the contractors. They continuously
tighten supervision and inspection on
all the projects, programs, and daily
service contractors and intensify efforts inchecking and removing hidden hazards
and correcting behaviors. At the same time,they actively provide contractors with safety
training and regular learning sessions on
relevant national laws and regulations,
corporate safety systems and rules, andgeneral knowledge of safe production.
The number of lost hours per million working
hours at APP China was 854.70 in 2019.
There were zero work-related fatalities.

46

Case

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Safety Management:
Assigning Responsibilities and Refining Duties

To further strengthen safety management, Gold Huasheng set
up the Environment, Health and Safety (EHS) Department in
2019, launching a series of initiatives to this end and completingthe transition to the ISO 45001 Occupational Health and
Safety Management Systems certification. Out of a heightened
focus on managing the risk factors, the company in particular
substituted ammonia solution for liquid ammonia, successfully
eliminating a major risk source in the mill.
In terms of contractor safety management, the company
placed a special focus on strengthening safety training
and communication. In August 2019, the General Manager
of Gold Huasheng mill took it upon himself to convene ameeting themed "Compliance and Win-Win Cooperation" forthe responsible persons of all contractors to further stressrequirements for safety management. The company also
invited third-party safety management experts to offer special
free training on forklift safety to contractors responsible forshort barging in the Logistics Department to guarantee safer
operations.

"Compliance and Win-Win Cooperation" communication meeting

Strengthening Risk Management and Control
Lost Hours per Million Working
Hours at APP China (hours)

1,090.55

2017830.61854.70

2018

2019*

*The 2019 data do not include those of
APP China Forestry.

APP China mills have formulated
management measures for safety
inspection and hidden hazard identification.
They continuously intensify efforts to
identify and remove hidden hazards
through measures like regular safety
inspections and routine checks. The
mills make a point of undertaking hazard
identification and risk evaluation in all
workplaces, work equipment, and work
activities and take timely measures toeliminate potential hazards to avoid andreduce safety accidents. Hainan Gold
Hongye has devised the Management
Measures for Rewarding Reports of Safety
Hazards , encouraging employees to reporton-site safety hazards to department
heads, the safety department, or thecompany's primary persons in charge
through proposals, meetings, emails,

phone calls, or other channels. In 2019,the hazard correction rate in all mills stood
above 91%, reaching 100% at Ningbo
Asia, Ningbo Zhonghua, Guangxi Jingui
Pulp & Paper, and Hainan Gold Shengpu.
To fully prevent damages that fires inflicton the company and individual employees,
we continue to strengthen the identification
and removal of potential fire hazards. In
2019, we created a joint fire prevention
mechanism. Designed to be preventative,
the mechanism has the mills regularly
check on each other and work together
to identify the problems and hidden risks
related with fire safety, based on which
they will then draw up corrective measuresin a timely manner.

standards and suits the nature of theirjobs and organize education and training
sessions to ensure that all personnel
wear the equipment correctly; meanwhile,
we continuously monitor and examine
whether the safety measures areproperly implemented. The mills conduct
occupational hazard testing regularly toensure that all the indicators meet thenational standards; the employees arealso given an annual occupational healthcheckup so that their wellbeing at work istruly looked after.

We provide our employees with protective
equipment that meets the national

APP China Sustainability Report 201947

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Safety Training
In 2019, we created the APP-SHE Case
Study Repository based on the APP
Corporate University Online Learning
Management Platform. SHE accidents
that had happened over the years werecollected by the respective mills anduploaded to the online platform, available
to all users. The mills would organize casestudy sessions regularly to draw lessons
from past accidents and keep them fromhappening again.

Case

We provide safety and health training
for all employees and contractors,
which covers contents like work safetyknowledge, firefighting knowledge, andfirst-aid knowledge and skills; we invite
health professionals to give lectures on
the prevention of occupational diseases;
we organize various safety drills andknowledge competitions to improve our
employees' safety skills and awareness.
In 2019, APP China mills conducted 267

APP China incorporates sustainability throughout the procurement decision-making andmanagement processes. It gives full consideration to the social and environmental criteria
when evaluating and selecting suppliers and continuously pushes for improvements in the
suppliers' performance in fulfilling their responsibilities.
In January 2019, we officially launched our Supplier Management Platform. It has brought
online processes like supplier registration, certification, and due diligence and risk
assessment and is another step forward in the construction of an integrated procurement
control system that is efficient, transparent, compliant, and consistent.
In terms of supplier risk assessment and approval, we audit the suppliers' businessqualifications and assess their financial risks while also requiring related information inareas like technology and quality management as well as health, safety, and environmental
protection. Based on the suppliers' overall performance in those aspects, we form a risk
assessment. We have added social responsibility related clauses to the contract and signa CSR Statement and Commitment Form with our suppliers. This requires them to makecommitments in respect of compliance with business ethics, respect for human rights,
environment protection, positive impact on the community, etc. Meanwhile, we have createda supplier blacklist system to urge our suppliers to continuously improve their management
and practices in fulfilling their responsibilities.

Safety training examination

We have established a due diligence mechanism for timber source legitimacy, implementing
a series of procedures and measures such as information collection, risk assessment, andrisk mitigation to ensure the compliance and traceability of the sources of our raw materials.
In addition, when entering into contracts with our suppliers, we require an undertaking
from them that the raw materials they provide are free from disputed sources. In 2019, we
increased the proportion of internationally certified wood pulp procured to 19.8%.
As regards raw material acceptance, we have laid out strict criteria in accordance withnational and industry standards and the company's product quality requirements. For
nonconforming products, we would promptly report back to suppliers and urge revisions.
Hainan Gold Hongye has developed criteria for the acceptance and fining of raw materials.
It also holds meetings with the suppliers from time to time, working together to continuously
improve the quality of the raw materials. Gold East Paper regularly updates its raw material
acceptance criteria and has created a blind sample system, a duty separation system, and a
job rotation system to ensure the fairness and prudence of raw material inspection.

Intensifying Contractor Safety Training

Guangxi Jingui Pulp & Paper requires newly
recruited contractors to take the safety training
organized by the Industrial Safety Division andpass the examination before they can startworking. The training covers many aspects suchas national laws and regulations, company
safety regulations, traffic safety, safe operations,and accident case study. The Industrial
Safety Division carries out safety training forcontractors every month in batches and covers
all of them within the year. The company also
requires the contractors to give internal all-staff
safety training at least once a month to ensure
timely information and communication on issues
like safety regulations, accidents, and safety
inspection results.

48

Practicing
Sustainable
Procurement

Conducting Safety Training to
Improve Overall Safety AwarenessIn 2019, Ningbo Asia and Ningbo Zhonghua
organized five successive training sessions
to include all of their employees. The training
offered a systematic introduction to safety
management knowledge and safety concepts
and explained the company's reward andpunishment system for production safety; thecompany's own safety accidents were cited forcase study, which involved an in-depth analysisof their causes to help improve the employees'
safety awareness and ability to avoid accidents.
The training also included an examination,
which could assess its effectiveness whilefurther deepening the employees' awareness ofsafe production.

Case

safety drills in total. Guangxi Jingui Pulp &Paper held more than 200 training sessions
on topics such as safety hazard removal,safe use of machinery, and generalknowledge of workshop environment
safety, involving 13,519 person-times ofparticipants.

Monthly contractor safety meeting

APP China Sustainability Report 201949

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

03
Joining Forces to Bring
Harmony and Prosperity"Community of shared life" contains the harmonious
idea of "compatibility with everything" and endorses thephilosophy that people and all things come together toform an organic whole. APP China strives to join handswith its customers, employees, and communities to form
a community of shared life in which to live and thrive
together. We put our customers first and thank them fortheir trust and support through the provision of desirable
services; we regard talents as a valuable asset for bothour development and that of the wider industry; we value
every employee and offer ample opportunities to advancetheir careers; we actively give back to society, remaincommitted to doing good, and work with our community
partners to create a better future.

50

APP China Sustainability Report 201951

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Case

Delivering Quality established diversified channels for customer communication and carried out a varietyof customer engagement activities to fully understand customer needs and continuously
Service
improve the quality of our products and services based on such interactions.

We launched the "Little A Classroom"in 2018, which is a customer interaction
program. The program includes features
like information sharing, productintroduction, technical communication,
strategic thinking, and more. Over a year
into its launch, the classroom has becomea platform for the company to communicate
with the customers at zero distanceregarding cultural paper and industrial
paper. In 2019, we brought the "Little A
Classroom" to provinces like Guangxi,
Jiangsu, Guangdong, and Hunan, where
we engaged our customers in discussions
on topics such as trends in the paper andpackaging industries, product development,
customer complaint risk and management,
and printing technologies. As of the end of

The "Little A Classroom" offers flexible and diverse class formats,such as one-to-one lecturing, one-to-many product promotions, and
VIP customer communication meetings, to provide the customers
with more customized value-added services.

2019 saw our "All-Hands Marketing" strategy in full swing. Under this model, R&D,
production, finance, administration, logistics, and other departments all adopt customercentricity into their work, thereby forming a complete chain of value creation for thecustomers. "All-Hands Marketing" has given our non-sales employees more opportunities to
get into contact with the market, which has made them more perceptive of customer needs.

• One-to-one lecturing: The APP service team identifies customers'
real needs through thorough communication, sets up the "Enhanced
Classroom" jointly with the market, technology, customer service,and other departments at the mill end, custom-makes a very detailed
curriculum, and gives lectures and answers questions for customers on
the spot.

Suzhou Gold Hongye takes full advantage of WeChat features such as miniprogram, Subscription Account, and Moments to promote its products, as well as
communicate with customers. The company provided its employees with training
on products and sales skills. Direct engagement with the customers has equippedthe employees with a deeper understanding of their needs, leading to better
integration between production and marketing. The company's management also
carried out firsthand market research, discovering problems with its products thatneeded to be fixed. They also held discussions with relevant departments basedon the main findings of the research, which informed timely improvement plans.

and resources of our courses to makethe sharing and communication morenormalized, convenient, and innovative.

Assurance
Statement

Indexes• VIP customer communication meetings: We bring together top talentsof the paper industry and provide a platform for insiders to learn andtalk about the future of the paper industry by offering contents likeintroduction to frontier products and technologies, sharing of the latest
industry news, and on-site customer service.
"Little A Classroom" one-to-one lecturing

Customer satisfaction is a goal that APP
China relentlessly pursues. We attach
great importance to customers' feedback
and opinions and continue to optimize
our complaint handling mechanism andprocedure, going all out to provide ourcustomers with a better experience.
Customers can raise complaints andsuggestions about our products or services
through our website, service hotline,

Case"Little A Classroom" lecturing

52

Performance in
Numbers• One-to-many group solutions: APP's internal professional team
explains products to customers; meanwhile, upstream and downstream
experts in the paper industry are invited based on the customers'
business category and needs to offer comprehensive information on
the latest updates and future trends of the industry.

Staying Unitedin All-Hands Marketing

2019, the "Little A Classroom" had served
more than 2,000 customers. In the future,
we will continue to enrich the formats

Looking Forward"Little A Classroom" in Rich Formats

APP China goes all out to build a service system centered on customer needs. We have

Case
All-Hands Marketing is not just marketingby all employees. More importantly, it isfor all employees to be committed to theirown duties with an ownership spirit andbe guided by the purpose of "creating acommunity of shared life with customers"
so as to create more value for ourcustomers.

Sustainability
Management

customer relationship management
system, mobile phone system, email, andother channels. Relevant departments
like the Customer Complaint Department
and Logistics Department actively
take collaborative measures, such as
investigation and evidence-gathering,
analysis and verification, and satisfaction
surveys, to ensure that customer
complaints are handled promptly andproperly. In addition, we make a pointof conducting the customer satisfaction
survey to fully understand customers'
opinions and expectations of the company
in terms of brand image, product quality,
sales services, logistics services, IT
services, etc. and make improvement planson this basis.

Actively Carrying out Customer Satisfaction Survey to
Improve Quality of Service

From November to December 2019, Gold Huasheng conductedcustomer satisfaction surveys in ways like face-to-face visit,
WeChat communication, and questionnaire survey. The 2019
survey results showed an overall customer satisfaction scoreof 4.47 (out of 5), higher than 2018. The Customer Service
Department later classified the problems and opinions andreferred them to related departments, such as the Technical
Department and the Production Department, to inform joint
improvement plans. At the same time, the Customer Service
Department included customers who had offered specificopinions in the key return-visit list to better evaluate theeffectiveness of the improvement plans.
For five consecutive years, Gold East Paper has been adopting
the model of the third-party consulting firm Horizon Research to
conduct a comprehensive domestic sales satisfaction survey. In
2019, the company received a total of 353 valid questionnaires,
which showed a higher overall satisfaction rate than in 2018.
Based on customers' opinions and suggestions, the company
has taken prompt improvement actions.

APP China Sustainability Report 201953

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Case

Moving Forwardwith Employees

The collective efforts of all the employees are central to a company's growth. APP China
strictly abides by the Labor Law of the People's Republic of China, the Labor Contract Lawof the People's Republic of China , the Provisions on Collective Contracts, and other nationallaws and regulations to ensure employees' lawful rights are well protected. We ensure equalpay for equal work and respect our employees' right to freedom of association and collective
bargaining. We prohibit the use of child and forced labor and create a diverse, equal, safe,and healthy working environment for our employees.
We regard talents as the cornerstone of company development and help our employees
realize their full value by building a well-structured career development system and providing
a wealth of training resources. We make our employees feel delighted at work by fostering
open and frank communication, listening to their concerns and caring for their physical andmental wellbeing.

Cultivating Professionals
APP China has built a systematic andscientific staff training system and designed
training courses that suit the growth needs of
employees of different posts. Those courses
are designed to train employees in a varietyof areas like corporate culture, professional
knowledge, management skills, andcomprehensive competencies. We continue
to enrich our courses to equip our employeeswith well-rounded capabilities needed to
grow and advance their careers.
APP's first global learning resource
sharing platform – APP Online Learning
Management System (LMS) – was officiallylaunched in March 2019. Incorporating thefour features of online learning, training

management, global exchange, andcultural inheritance, the platform hosts over
500 courses under eight major learning
sections on subjects such as management,
professional skills, corporate culture, andthe Management by Olympic System(MBOS) feature. This allows the employees
to study quality training courses anytime
and anywhere.
Meanwhile, we continue to deepen offline
training to give employees of different
positions and levels access to quality
training resources. In 2019, the presidentof APP Corporate University and a numberof experts from the field of organizationand management provided the company's

executives and some top-performing
employees with leadership training undersuch themes as "High-PerformanceWork" and "Coaching Leadership". For
frontline technicians, we provided a seriesof training on professional knowledge
and skills to help them better adapt totheir positions. We also invited senior
trainers from outside the company togive in-depth training on teaching skills to
employee candidates for internal trainers.
While supporting the construction of thecompany's internal knowledge transfer
system, we also give employees moreroom for independent development.

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Cultivating Excellent Managers

In 2019, Suzhou Gold Hongye carried out
diversified training for different departments. The
company entered middle and senior executives
in general management courses on the LMS
online platform, which covered contents inteam management, efficient negotiation, time
management, stress management, emotional
intelligence management, and so on. For HR
supervisors of the production and marketing
departments, the company offered a training
session on Change Management and guided
the participants to have discussions about
challenging work problems and work out thesolutions. The company also held a leadershiptraining camp for production supervisors tofurther enhance their leadership and teamwork
skills.

Case

Sustainability
Management

Group discussion at the leadership training camp for production supervisors

Combining Theory with Practice to
Improve Effectiveness of Training

From October to November 2019, Hainan
Gold Hongye held the second Instrument andElectrical Class Training Camp and the third
Mechanical Class Training Camp. Designed to
improve the comprehensive competencies offrontline employees, the training camp courses
covered not only professional theoreticalknowledge but also modules such as paper
machine process flow, work-related injury casestudy, and basic management and leadership.
There was also a written test on theoreticalknowledge and a hands-on competition. Suchan arrangement prompted the participants
to combine theory with practice and apply
what they had learned to real work scenarios,
thereby stimulating their enthusiasm at work.

Skill competition of Mechanical Class Training CampAPP China has been implementing the technicalcompetency model for production positions
for five consecutive years, covering various
professional positions such as pulp production,
paper production, energy, environment, safety,
quality assurance, and maintenance. The mills haveeffectively enhanced the employees' professional
skills through systematic training and assessmentof position-specific technical competencies. In
2019, a total of 608 supervisors participated in thetechnical competency certification for production
management positions, showing notable progressin the assessment results compared with previous
years.
The 7 Habits of Highly Effective People training

54

Coaching Leadership Workshop

2019 Technical Competency Certification for Production Management Positions

APP China Sustainability Report 201955

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Employee Communication and Care
APP China respects and safeguards the legitimate rights and interests of its employees, listens
to their opinions and voices through multiple channels, and responds to their needs in a timely
manner. The company treats employees with consideration and works to foster a stronger work-lifebalance among its employees.

Listening to Employees
In 2019, following the example set by the Economic Commission in
China, the APP China Headquarters communication team launched
the "C-time" communication initiative under the leadership of theGroup Culture Development division. Taking such leisurely forms asafternoon tea, tea party, and coffee time, the initiative was designed
to be a bridge between company management and frontline
employees, where they spent time together and the employees
voiced their needs, problems, and concerns. As of the end of
2019, the Economic Commission in China and the APP China
Headquarters communication team had organized "C-time" on anumber of occasions for the three major sales teams of industrial
paper, cultural paper, and tissues. A total of 93 sales problems
were solved during those sessions, and they made the frontline
employees truly feel supported and valued by the Group.

What is C-time?
C-time = Culture time
C-time = Communication time
C-time = Coffee time

Lightening the Hearts

In April 2019, the first C-time communication meeting was held in Ningbo Asia. The APP China Economic Commission led theheadquarters communication team to have a face-to-face exchange with the employee representatives. Their conversation washeated and all-encompassing, covering everything from the many details, operating procedures, and systems concerning finance,
credit, and logistics to human resources issues like team building, talent development, and incentive systems, and to more micro
problems like transparency of the Group's various rules and regulations and the company's future strategic planning. This not only
provided support for frontline work but also drove the headquarters to think more about the future direction of its overall management
improvements.

Case

Using Collective Employee Wisdom
to Inform Company Development

Living the Group's MBOS spirit of "emulating, learning from, catching up with, helping, and surpassing each other", APP China millsorganize a variety of activities like indicator competitions, improvement activities, and exchange and sharing sessions to stimulate
in-depth employee participation in the company's development. In 2019, Hainan Gold Hongye and Hainan Gold Shengpu received
2,984 improvement proposals from employees, with 11 outstanding proposals finally selected to enter the proposal competition.
The company management selected the excellent proposals based on a comprehensive consideration of the content, overall
benefits, and presentation and offered rewards to departments for active contribution of proposals, which gave a strong boost to theemployees' enthusiasm for making suggestions.

56

We care about our employees' physicaland mental wellbeing and the happinessof their families. We organize a series ofactivities such as team building, mass
birthday parties, sports competitions,and employee family days to make our
employees and their families feel the carefrom the company.

Case

C-time special communication meeting for industrial paper sales team

Case

Caring for Employees

Taking Multiple Initiatives to Care for Employees' LifeIn 2019, Guangxi Jingui Pulp & Paper carriedout a wealth of activities to show care to its
employees and their families. On the Women'sDay, the company planned 12 programs, suchas giving exquisite gifts and group outings,
to provide diverse welfare options for thefemale employees to thank them for theircontributions to the company. On the Employee
Family Open Day, the company invited theemployees' families to the mill to experience
the environment firsthand and learn about
the history of papermaking. Children could
operate a DIY paper machine and experience
for themselves the papermaking process. At
the Mid-Autumn Festival garden party, theemployees tasted specialties such as noodles,
snacks, and mooncakes and played a numberof entertainment games like "darts", "rings", and"karaoke".

Case

Employees and children experiencing the papermaking process together

Visiting the Mills with Family Members

In 2019, Hainan Jinhai Pulp & Paper, Hainan
Gold Hongye, and Hainan Gold Shengpu
invited employees to visit the mills with
their families. They were enlightened on theestablishment and development of APP China
and its mills in Hainan, the pulp and paper
production processes, and the outstandingachievements in environmental protection. The
tour at the Hainan Jinhai Pulp & Paper Cultural
Paper Production Workshop gave them amore intuitive experience of the papermaking
equipment and processes. This event was very
well received and made our employees evenprouder of their jobs.

Family members of employees listening to
the introduction to pulp and paper products

APP China Sustainability Report 201957

Message from
Chairman

About APP China

Building
a BetterCommunity

Star Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Supporting philanthropy and giving back to society are the inherent responsibilities for APP
China as a good corporate citizen. Through the Huang Yicong Foundation, we have long
been undertaking a series of philanthropic initiatives in areas such as educational equity,philanthropic capacity building, and promotion of urban and rural integration. We also
continue to extend the influence of those projects to deliver wider benefits. APP China mills
have conducted a variety of philanthropic activities in education, environmental protection,
paper culture promotion, etc. and maintained sound interactions with the communities, doing
their part to help build a harmonious society.

Strong Support for
Philanthropy
The Huang Yicong Foundation has long
been devoted to charitable causes in
China and continues to carry on the torchof corporate philanthropy. Since its official
establishment in 2010, the Foundation
has set up a number of long-term,
sustainable branding projects with the aimof "supporting the development of China's
philanthropy, helping those in distressand in need, helping the elderly and the
young, and building a harmonious society

Scan the QR
code to learn
more about the
Huang Yicong
Foundation

58

together." In 2019, the Foundation held
19 projects in areas such as supporting
educational equity, building philanthropic
capacity among college students, andpromoting urban and rural integration.
This has benefited schools, teachers,
and students in remote and rural areas,
students in vocational schools, people withdisabilities, and college students interested
in philanthropy, among other groups.

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

The Sunshine Preschool ProjectA proper early childhood education isessential to the healthy development ofchildren in terms of intelligence, character,and literacy. In 2015, the Foundation
joined hands with a non-profit organization
specializing in early childhood education tolaunch the "Sunshine Preschool Project" in
Ximeng, a national-level poverty-stricken
county in Yunnan Province home to many
ethnic minorities. The project provided
preschool classes for local rural children
aged 3 to 6 and assisted in training earlychildhood teachers, thus helping lift local
villages out of the intergenerational cycleof poverty.
Each class adopts a mixed-age format
and complements traditional subjects withnature, music, art, and other subjects.
The teaching methodologies emphasize
developing the children's independence
and sense of responsibility.The projectfeatures a sustainable operating model of"helping people help themselves". Besides
supporting the students' early-stage growthand development, the project also offers
training to local teachers and parents toenhance their cognition and know-hows inearly childhood education and community
building. As a result, when the project ends,
the team will pass the schools down tolocal communities for future management.
As the project model continued to mature,
the Foundation began to explore ways toreplicate and expand its success to otherimpoverished areas. As part of the national"One Village, One Preschool" program,ourpreschools were set up in Funing and
Lancang of Yunnan Province in 2017 and2019 respectively at the invitation of thelocal education bureau. As of the end of
2019, the Foundation had supported 39
preschool classes in Ximeng, Funing,

Ms. Chianghua Su, Secretary General of the Foundation,
paying a visit to Preschools

and Lancang counties, benefiting 2,319
children. The project will continue todeepen the "localized teaching" modeland explore and develop more innovativeand cutting-edge educational materials tosecure a brighter future for local children
under a multitude of efforts.

"This job is full of joy. It gives every childa golden childhood and a sunny smile. I
would like to be a candle for the children
and light up their beautiful hearts."
Ms. YeTeacher at Wolong Preschool
Ximeng County

Sunshine Preschool children drawing

APP China Sustainability Report 201959

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

IndexesYicong Capacity Building Summer Camp for High School Students
Caring for the growth of young people
and helping children see and entera wider world is one of the founding
purposes of the Foundation. Since 2016,
the Foundation has been organizing the
Yicong Capacity Building Summer Campevery year for high school students inremote areas to undertake course training
and capacity building. It aims to encouragehigh school students in remote areas topursue their future dreams by building theircapacity outside of the school curriculum.
Students participating in the summer
camp are all recipients of various highschool scholarships and grants fromthe Foundation and mainly come from
Guangxi, Gansu and Fujian provinces. For
many of them, the camp is the opportunity
to leave their hometowns for the first timeand get a brand-new learning experience.
In two to three weeks' time, the students
can study through a rich selectionof subjects, participate in visits andexchanges, communicate with each other,and share their experiences and findings.
In 2019, 22 students participated in the
fourth summer camp themed "Technology
and Innovation". In the course, the students
tried programming for the first time andexperienced firsthand the creation ofmini-games and mini-programs; they
completed the town renovation challenge
under the guidance of instructors from
the Makers' Workshop, honing their own
ability to identify and solve problems;
they appreciated the beauty of traditionalart during cultural exchanges; and they
practiced their oral communication skills in
English classes.
For the originality of its operational mode
and impacts it creates, the Yicong SummerCamp was listed in the 2019 "China CSRBest Case Collection" initiated by the
China Philanthropy Times. In the future,
the summer camp will continue to optimize

its courses and activities and provide more
outstanding high school students in remoteareas with opportunities to participate
and prepare them for a broader and more
exciting life.

APP China mills have long been actively
involved in philanthropic undertakings ineducation and poverty alleviation throughmonetary and in-kind donations, event
support, and volunteer services. In 2019,
Hainan Jinhai Pulp & Paper, Ningbo Asia,

sponsorship of schools' cultural and sports
activities, cooperation with universities
to support students' social practice, andcustomized practical courses for children in
the community.

"After returning from the Yicong
Summer Camp, I feel more naturaland confident when expressing my
opinions or suggestions in front of mypeers. When I stand on the podium
facing my teachers and classmates, I
feel less frightened and worried than
before. I am now more courageous andoptimistic. This is all thanks to the great
learning experience at the camp."
Zirui Ling
Student from Guangxi

Guangxi Jingui Pulp & Paper donating computers toprimary schools in impoverished areas

Case

Students visiting the Shanghai Sinar Mas Plaza

Guangxi Jingui Pulp & Paper, Gold East
Paper, among others, carried out a numberof educational philanthropic activities,
such as scholarships and grants, funds forpreschool education, donations of schoolsupplies and teaching equipment, andSummer Camp Makers' Workshop

Ningbo Asia and Ningbo Zhonghua Summer Practice classfor community children"Forever Love with Papers"

Suzhou Gold Hongye and the Suzhou Charity
Federation signed an agreement in September
2019 to donate RMB500,000 worth of tissues
to the "Swap Campus Waste Paper for Toilet
Paper" project. The goal was to improve
the public health on campus and combine
philanthropic and environmental protection
with education. Suzhou Gold Hongye has been
carrying out the "Forever Love with Papers"charitable activity for many years, donating
tissues to many primary and middle schools
and undertaking educational campaigns under
the theme of "Using Paper Scientifically".
Donation ceremony of "Swap Campus Waste Paper for Toilet Paper" project60

APP China Sustainability Report 201961

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Facilitating Development of Vocational Education
Case
APP China launched the "Dream Plan"project in 2018. The project works withprofessional colleges and universities toprovide academically outstanding students
in remote areas with all the tuition andaccommodation fees and part of the living
and transportation expenses needed
while they are in school and offer them
employment opportunities upon graduation.

and Food of Guangxi University and
Zhejiang University of Science andTechnology. The second "Dream Plan"
in 2019 prioritized students from middle
schools in remote rural areas, enrolling 42
in total. The "Dream Plan" was qualified
for the list of the First Batch of Pilot

Construction and Cultivation of IndustryEducation Integrated Enterprises of
Guangxi Zhuang Autonomous Region. It
will continue to go to impoverished areasin the future to help more students get
schooling and become great assets for thepaper industry.

As of the end of 2019, the "Dream Plan"
had jointly set up classes with Guangxi
Vocational and Technical Institute ofIndustry and the Mechatronics majorof Nantong Vocational University. It has
also offered professional courses on pulp
making and papermaking collaboratively
with College of Light Chemical Engineering
Outreach training of "Dream Plan" Guangxi APP Class

Case

Lighting up Professional Dreams

Hainan Jinhai Pulp & Paper has been in a great cooperative partnership with Yangpu
Technical School since 2008. The company has participated in the preparatory workfor the school's construction and provides financial support for high-achieving students
from impoverished families. As of the end of 2019, a total of 550 students from Yangpu
Technical School had been awarded the "APP Scholarship" by the company. The
company also serves as a social practice location for universities and receives regular
visits from university teachers and students.
In March 2019, Suzhou Gold Hongye received over 130 students from Shaanxi
University of Science and Technology for a two-day visit to the Suzhou mill. The students
regarded the event as an excellent opportunity to gain a better understanding of thepaper industry and become more appreciative of and interested in this professional field.

Environmental
Protection Advocacy
With high regard for environmental
management, we maintain close
communication with the communityand encourage the public to participate
in environmental monitoring. We haveconducted a variety of philanthropic
activities such as educational campaigns
on environmental protection, volunteer tree
planting, low-carbon cycling, and garbage
collection, calling on people to work
together to help build a better community.

62

Case

Passing on Positive Energy of Environmental Protection

In 2019, Guangxi Jingui Pulp &Paper took an active part in the
Qinzhou Environmental Protection
and Energy Conservation Publicity
Week & Opening of Environmental
Protection Facilities to the Public
event. It organized Qinzhou citizens
and primary school teachers andstudents to visit the mill. The employee
volunteers recounted in detail thecompany's pulping and papermaking
processes, environmental protection
measures, and sustainability ideas tothe visitors.

catchy remarks conveyed in a humorous
way, the company imparted knowledge
about energy conservation and emission
reduction, low-carbon development,
and environmental protection. It also

At the cultural event co-hosted by
the Publicity Department of Qinzhou
Municipal Committee, the Qinzhou
Municipal Bureau of Ecological
Environment, and other units,
Guangxi Jingui Pulp & Paper gave a
performance in the language category
named "Environmental Protection in
Three and a Half Sentences". Throughcommunicated the approaches that thecompany had adhered to all along in its
environmental protection efforts. The
performance was highly applauded by
the audience.

Students visiting Guangxi Jingui Pulp & Paper Mill

Bringing Warmth to Community"APP Scholarship" Award Ceremony

Maintaining Community
Communication to
Build a Better HomeIn April 2019, Ningbo Asia led a group of about 40 people, who were resident
representatives of the Dongsheng Community, on the "Heading for Green Civilization,
Creating Harmony and Goodness" trip to the ancient town of Qiantong. They were given
an explanation of the local river treatment and demonstration of simple device operations
and came to understand the principle of the environmentally friendly practice of "turning
waste water into clean water". Meanwhile, the company employees updated therepresentatives on the company's recent work on environmental protection.
The normalized exchanges between Ningbo Asia and the community on environmental
protection date back several years. In 2015, the company set up a team of volunteer
environmental supervisors. The six supervisors came from different communities, andtheir extensive connections with the residents made them highly representative of theresidents' opinions. In turn, the company's feedback and responses can also be promptly
communicated to the residents through them. At the Volunteer Environmental Supervisors'
Meeting held in July 2019, the company gave a detailed introduction to the government's
environmental requirements and the company's work in related fields. The supervisors
showed recognition of the company's performance in environmental protection.

APP China seeks actively to build
harmonious and friendly community
relations. Our mills are regularly open
to community residents so that people
have more opportunities to learn about
them firsthand. We carry out activities
on important occasions to build a closer
rapport with the community. For example,

Case

we give away Spring Festival couplets
for the Spring Festival and make rice
dumplings for the Dragon Boat Festival. In
addition, we provide volunteer services andsupport community activities as needed
to do our part to assist with community
development.

Actively Involved in Volunteering

Gold East Paper has a long history of donating funds in areas such as regional
construction, emergency response, and community development while encouraging
employee volunteering. The company has set up a charitable club back in 2006 anddeveloped its own volunteer information management system in 2008. Every year,
a large number of company employee volunteers offer help in places like museums,
communities, railway stations, hospitals, and welfare homes, forming a beautiful
landscape to behold in the construction of harmonious communities in Zhenjiang.
As of the end of 2019, Gold East Paper employees had clocked more than 360,000
hours of volunteer service.

Case

Buildinga Happy
Community

In June 2019, Ningbo Zhonghua
employee volunteers and Xiaocao
Community staff visited the Fire
Squadron on Yinfeng Road, bringing
the firefighters holiday greetings andblessings for their service on thefrontline all year round. The volunteers
taught the firefighters how to make rice
dumplings and sew sachets for the
Dragon Boat Festival, making themfeel the warmth of home when they
were on duty and away from home.

Volunteers teaching firefighters how
to make rice dumplings

APP China Sustainability Report 201963

Message from
Chairman

About APP ChinaStar Employees
at APP

Bravely Fighting
the Battle against
the Epidemic

Sustainability
Strategy

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Sustainability Certificates

Sustainability Management

CFCC/PEFC-FM Certification* at APP China

Integrity and ComplianceContinuing to Intensify Integrity and Compliance Management
Integrity and compliance are the cornerstones of
APP China's corporate culture. We hold up the ethicalprinciples of "integrity and commitment" in everything
APP China Integrity Management Framework
Resolutions and commitments by top managementthat we do. We developed the APP China Integrity
Management Framework in 2018 in accordance with
use the framework as the guidance as we provide anticorruption training for employees at all levels, perform
risk assessment and due diligence on our projects andbusiness partners, implement corrective measuresagainst non-compliance risks, and follow up the
improvement actions of relevant business departments.
The framework was formally implemented acrossthe Group in 2019, with a priority on incorporating
integrity and compliance throughout every level of our

Systems Data Procedures Personnel

Bribery and Embezzlement and Integrity Risk Evaluation and Monitoring

Prevention

Discovery

Employee Code of Ethics

Active, good-will whistleblowing;keeping
whistleblowers confidential and protected

Event management

Relevant policies,
standards, and control
procedures

Due diligence; sunshine declaration

Investigation and casemanagement

Personnel selection andappointment, supervision,and motivation

Self-examination, compliance review
and audit

Stop-loss measures

Education and training,and culture building

Data analysis

Corrective actions

Responsebusiness activities to lay the groundwork for the fullInternal and external communication; reporting and feedback

implementation of the framework.

Keeping everyone involved. Shouldering responsibilities

We have a dedicated email and telephone number

Becoming a world-class benchmark forcorporate integrity culture practices

Committee for Moral Disciplines and functional compliance department

the ISO 37001 Anti-Bribery Management Systems. We

by the investigation department will be presented to the company's senior management tofor reporting violations. In 2019, we unified theensure that they are handled in a fair manner.

emails and telephone numbers of our business unitsNo.

APP China Forestry Companies

CFCC/PEFC-FM Certificate No.

1

Hainan Jinhua Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000003

2

Heyuan Jinmei Science & Technology Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000030

3

Leizhou Jin-taiyang Science and Tech Forestry Ltd.

CFCC/PEFC-FM-ZTFC-000030

4

Yangjiang Jin-taiyang Science and Tech Forestry Ltd.

CFCC/PEFC-FM-ZTFC-000030

5

Jin-Qingyuan Timberland (Paper mill) Ltd.

CFCC/PEFC-FM-ZTFC-000007

6

Shaoguan Jin-Shaoguan First Quality Timberland (Paper mill) Ltd.

CFCC/PEFC-FM-ZTFC-000008

7

Guangxi Jin Gui Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000005

8

Guangxi Jin Qinzhou High-Yield Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000006

9

Guangxi Xing Guilin Agriculture Technology Co., Ltd.

CFCC/PEFC-FM-ZTFC-000031

10

Guangxi Jin Taiyang Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000031

11

Wenshan Jin Wenshan High-Yield Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000017

12

Simao Jin Lancang High-Yield Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000018*CFCC/PEFC-FM certification refers to CFCC/PEFC Forest Management certification.

CFCC/PEFC-CoC Certification* at APP ChinaNo.

APP China Affiliates

Certificate No.

1Gold East Paper (Jiangsu) Co., Ltd.

SGS-CFCC/PEFC-COC-001002

2Gold Huasheng Paper (Suzhou Industrial Park) Co., Ltd.

SGS-CFCC/PEFC-COC-001026

3

Ningbo Zhonghua Paper Co., Ltd.

SGS-CFCC/PEFC-COC-001030

4

Ningbo Asia Pulp and Paper Co., Ltd.

SGS-CFCC/PEFC-COC-001031

5

Hainan Jinhai Pulp & Paper Co., Ltd.

SGS-CFCC/PEFC-COC-001058

6Gold HongYe Paper Group Co., Ltd.

SGS-CFCC/PEFC-COC-001032

7

Hainan Gold Hong Ye Paper Co., Ltd.

SGS-CFCC/PEFC-COC-001084

and mills for reporting to optimize the report handling

We have put in place an objective, systematic, and standardized risk assessment andprocedure. Both internal and external personnel ofcompliance process for our suppliers and customers. We conduct in-depth and prudent

the Group can file a report by email (GRW@app.

investigations on customers with high risks or high line of credit and carry out regular or adcom.cn) or telephone (021-22839763). The contents

hoc reviews on existing customers to effectively prevent conflicts of interest and risks of fraud.

8Gold Hongye Trading (Hong Kong) Co., Ltd.

SGS-PEFC/COC-1463

of the report include but are not limited to corruption,

On the supplier side, we have established three risk control lines, namely quality, compliance,

9

Guangxi Jingui Pulp & Paper Co., Ltd.

SGS-CFCC/PEFC-COC-001013

malpractice, theft, forgery, commercial bribery, andand audit, to ensure that all suppliers are reviewed for authenticity and legality, and further

10

Hainan Jinhai Trading (Hong Kong) Co., Ltd.

SGS-PEFC/COC-1467

conflict of interest. All cases verified and confirmed

compliance investigations are conducted on suppliers assessed to be of high risk.

11Gold East Trading (Hong Kong) Co., Ltd.

SGS-PEFC/COC-0249

12Gold Shengpu Paper Products (Suzhou Industrial Park) Co., Ltd.

SGS-CFCC/PEFC-COC-001037

13

Yalong Paper Products (Kunshan) Co., Ltd.

SGS-CFCC/PEFC-COC-001059

14Gold Huasheng Trading (Hong Kong) Co., Ltd.

SGS-PEFC/COC-1464

The establishment of an honest and compliant business requires the concerted efforts of all the15

Ningbo Yajiang Trading (Hong Kong) Co., Ltd.

SGS-PEFC/COC-1465

employees. APP China has formulated codes of conduct and policies, such as the Provisions on

16

Jinxin (Qingyuan) Paper Industry Pte.,Ltd.

SGS-PEFC/COC-1764

the Prohibition of Accepting Gifts and Hospitality , to drive all employees to uphold integrity, self-*CFCC/PEFC-CoC certification refers to CFCC/PEFC Chain of Custody certification.

Building a Culture of Integrity

discipline, and honesty in their professional life. We have instituted a reward and punishment
system, where individuals or units responsible for any non-compliance issues are publicly criticized
and receive a financial penalty.

2019 Sustainability Management System Certification at APP China
OHSAS 18001

ISO 45001*

CFCC/PEFC-CoC

compliance. In 2019, we compiled malpractice cases into our training materials and communicatedGold East Paper

Periodic audit Certificate renewal

ISO 9001/

New Certificate Transition

Periodic audit

them to employees through morning classes, special training, group discussions, short promotional

Gold Huasheng

Periodic audit Certificate renewal/

New Certificate Transition

Periodic audit

New Certificate Transition Certificate renewal

We have carried out a series of educational activities on compliance advocacy to foster a culture of
Employees studying the reporting of
malpractice

videos, etc. to raise their awareness of compliance.

Suzhou Gold Hongye

Periodic audit

Periodic audit/

From November to December 2019, we held the Group-wide "Sunshine Integrity Month" event

Ningbo Zhonghua

Periodic audit

Periodic audit

Periodic audit/

Periodic audit

themed "Integrity and Commitment". The activities took such varied forms as themed training,

Ningbo Asia

Periodic audit

Periodic audit

Periodic audit/

Periodic audit

Hainan Jinhai Pulp & Paper

Periodic audit

Periodic audit

Periodic audit/

Periodic audit

Guangxi Jingui Pulp & Paper

Periodic audit

Periodic audit

Periodic audit/

Periodic audit

core values promotion, case study, short video, and online knowledge contest and were designed
to enhance employees' awareness of risk prevention and integrity. A total of 1,397 level-eight
employees or above participated in the monthly integrity training, and the online competitions
Guangxi Jingui Pulp & Paper employees
participating in Integrity Month training64

ISO 14001

covered most of the employees nationwide. The satisfaction rate for the Integrity Month training
was 9.5 (out of 10).

*In 2019, Gold East Paper, Gold Huasheng, Suzhou Gold Hongye upgraded their management system on occupational health andsafety, and successfully switched from OHSAS 18001 Standards to ISO 45001 Standards. Hainan Jinhai Pulp & Paper, Guangxi
Jingui Pulp & Paper, Ningbo Asia and Ningbo Zhonghua will also complete the certification transition in the future.

APP China Sustainability Report 201965

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Stakeholder Engagement
Drawing on an array of internal informationcollection, communication, and interviews,
we have identified ten key stakeholder
groups. Each of our functional departments
engages directly and maintains close
contact with a range of stakeholder groups

Stakeholders

through multiple channels. They manage
to respond promptly to stakeholder
expectations and concerns andcontinuously improve their management
and practices in this process.

Top Concerns

In 2019, we participated in a number of
exchange activities, such as the Second
CIIE, China Paper Industry Sustainability
Forum, China Printing Industry Innovation
Conference, and International Paper
Technical Conference. We engaged in in-

Engagement Channels- Company intranet, internal magazine

Employees- Employee representative meetings- Occupational health and safety- Employee communication meetings- Employment- Executive mailbox- Economic performance- MBOS Conference/Contest- Business ethics- APP Online Learning Management System- Human rights- Family opening day, book club, etc.

depth discussions with governments andregulatory agencies, industry experts
and scholars, customers, and partners
on a range of topics including the R&D
and innovation of environmentally friendly
products, the integrated development

Stakeholders

Top Concerns

Community
representatives- Water management- Business ethics- Community relations andcultural popularization- Waste management- Business ethics- Product quality and safety- Sustainable forest management- Human rights- Occupational health and safety- Engagement meetings/activities

Industry
associations- Product quality and safety- Industry conferences/events- Win-win cooperation- Customer satisfaction surveys- Energy conservation- Customer service hotline/mailand emission reduction- Company website- Economic performance- Sustainability reports- Resource effectiveness- WeChat Official AccountSuppliers/
contractors- Business ethics- Supplier/Contractor meetings- Human rights- Cooperative R&D mechanism- Customer service quality- Supplier/Contractor training- Responsible supply chain- Regular supervision and inspection- Environmental compliance- Email, phone, and other daily communication channels- Air pollutant emissions- Sustainability reports

Banks

Academic
institutions- Responsible supply chain- Environmental compliance- Water management

NGOs- Daily communication meetings- Economic performance- Cooperative agreement- Occupational health and safety- Sustainability reports- Employment- Company website- Sustainable forest management

Government
agencies

66- Product quality and safety- R&D and innovation- Business ethics- Air pollutant emissions

Engagement Channels- Daily visits- Community opinion processing and feedback- Community representatives' supervision and engagement- Mill visits- Community charitable activities- Sustainable forest management- WeChat Official Account- Customer visits, store visits- Environmental compliance- Win-win cooperation- Sustainability reports

Customers
and consumersof papermaking and printing, and thesustainable development of the industry.

- Industry communication meetings- Regular visits- Industry exhibitions and forums- Awards and recognition- Research and cooperation- Industry publications- Sustainability reports- Cooperative R&D mechanism- Talent cultivation- Company website- Sustainability reports- Occupational health and safety- Employee training and- Communication on specific topics

development- Charity projects donation and cooperation- Waste management- Sustainability reports- Energy conservation- Company website

and emission reduction- WeChat Official Account- Supporting philanthropy

Media- Sustainable forest management- Government communication meetings- Biodiversity- Governmental inspection and supervision- Product quality and safety- Air pollutant emissions- Information disclosure and reporting- Air pollutant emissions- Waste management- Regular visits- R&D and innovation- Water management- Awards and recognition- Sustainable forest management- Energy conservation- Sustainability reports- Energy conservationand emission reduction- Company website

and emission reduction- Resource effectiveness- Media coverage- Participation in meetings and forums- Press conferences- Company website- WeChat Official Account- Executive interviews

APP China Sustainability Report 201967

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

High Materiality Issues
7

Significance to stakeholders

Moderate Materiality Issues

High

18 Biodiversity

22 Business ethics

17 Sustainable forest management51

Product quality and safety

16 Water management

11 Community relations and cultural popularization

3

Economic performance

10 Human rights

12 Supporting philanthropy

13 Environmental compliance2

Customer service quality

8

6

Responsible supply chain

Employment

Win-win cooperation

Business ethics

Integrity and Compliance●

Product quality and safety

Robust Products●

Economic performance

About APP China
Performance in Numbers●

Environmental compliance

Circular Model Fueling Development
Performance in Numbers●

Employment

Moving Forward with Employees
Performance in Numbers●

Air pollutant emissions

Circular Model Fueling Development
Performance in Numbers●

Sustainable forest management

Sustainable Forest Management●

Water management

Circular Model Fueling Development
Performance in Numbers●

Human rights

Ensuring Safe and Orderly Production
Practicing Sustainable Procurement
Moving Forward with Employees
Building a Better Community●

Customer service quality

Delivering Quality Service●●

Responsible supply chain

Robust Products
Practicing Sustainable Procurement
Performance in Numbers●●

Waste management

Circular Model Fueling Development
Performance in Numbers●

Employee training anddevelopment

Star Employees at APPMoving Forward with Employees
Performance in Numbers●

Energy conservationand emission reduction

Circular Model Fueling Development
Performance in Numbers●

R&D and innovation

Intelligence-Driven Industrial Upgrade
Robust Products
Looking Forward

●

●

●

●

Compliance management
and risk control

Sustainability Management

●

●

●

●

Resource effectiveness

Circular Model Fueling Development
Robust Products●●

Biodiversity

Sustainable Forest Management

●

●

●

●

Win-win cooperation

Intelligence-Driven Industrial Upgrade
Practicing Sustainable Procurement

●

●

●

●

Community relations and cultural
popularization

Building a Better Community●●

Supporting philanthropy

Building a Better Community
Performance in Numbers●●

Employee training and development

19 Energy conservation and emission reduction
4

R&D and innovation

21 Compliance management and risk control
20 Resource effectiveness

68

External boundaries●

15 Waste management
9

IndexesWarm Companionship During Epidemic
Ensuring Safe and Orderly Production
Performance in Numbers

Low Materiality Issues

14 Air pollutant emissions

Occupational health and safety

Assurance
Statement

Occupational health and safety
High

Significance of economic, environmental, and social impacts

Performance in
Numbers

Internal
boundaries

Materiality Analysis

Low

Looking Forward

Contents in report

IssuesDrawing reference from the GRI Standards,
the Global Compact Ten Principles, thelatest national and industry policies, and key
industry sustainability issues, we identified
22 issues closely related to the company's
development. Compared to 2018, "resource
effectiveness" is added to the material issues
list, in response to the policy and industry
trends of circular economy and "Paper for
Plastic"; other than the merging of certain
issues and refining the description, such as
the inclusion of "responsible raw material
sourcing" and "supplier social assessment" in"responsible supply chain" and the adjustmentof "anti-corruption" to "business ethics", etc.
No significant changes have taken place inissue boundaries. In 2019, we conducted
online and offline surveys regarding thesignificance of the issues to stakeholders.
A total of 1,554 valid questionnaires werecollected. The issues have been arranged inorder of materiality based on discussions withinternal and external experts.

Sustainability
Management

Customers
and consumers

Suppliers

Community

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

APP China Sustainability Report 201969

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Performance in
Numbers

Looking Forward

Assurance
Statement

Indexes

Performance in Numbers
Economic performance

Looking Forward
China is seeing an accelerating fusion between the real economy and digital economy anda prevailing trend for the manufacturing industry to be digitized, networked, and intelligent.
APP China actively promotes transformation and upgrading and has made a good start on
the key development strategy of digital transformation. In the future, we will undertake digital
exploration even more resolutely to build up new competitiveness for the company in the eraof digital economy. We will strive to empower enterprises to pursue high-quality development
and contribute innovative solutions to drive the industry's intelligent development.
We will further promote the construction of an integrated intelligent management systemand open up the Group-wide business system that covers everything from planning to
production, warehousing, logistics, and sales to realize interruption-free information flow
and interaction for the whole process. We will rely on the intelligent manufacturing upgrading
project represented by Rudong High-Grade Tissue Industrial Base to comprehensively
improve the automation level of production equipment and processes, personnel
management, logistics and transportation, energy management, etc. Meanwhile, we will be
exploring the innovative application of emerging technologies like artificial intelligence, theInternet of Things, and 5G in the field of intelligent manufacturing to truly realize production
automation and intelligent management.
We will be an active player in the digital marketing field and explore brand-new possibilities
for our business model. First, emerging online channels such as live streaming and shortvideos will help us create new ways to directly engage with our consumers, thus enablingcustomers to have a more intuitive and interesting shopping experience. Second, based on
the data-driven innovative thinking, we will analyze market insights by leveraging big data
and use the results to guide our product innovation so that our products can meet the needsof consumers more precisely.
No one is isolated in the digital era. While improving our own digital competencies, we also
look forward to working with more industry partners and stakeholders to push thedigitalization of China's paper industry to new heights.

Indirect economic impact

Indicator

Unit

2019

2018

2017

Indicator

Unit

2019

2018

2017

Total assets

RMB100
million

1,914

1,726

1,582

Employeevolunteer time

Hours

18,61831,01826,645

Total taxes paid

RMB100
million

30

30

26

Donations*

RMB10,000

3,197

3,207

3,066

Sales revenue

RMB100
million

651

590

553

Total profit

RMB100
million

48

30

36

Net profit

RMB100
million

39

23

26

*Data scope includes APP China Headquarters, Suzhou Gold Hongye,Gold Huasheng, Gold East Paper, Ningbo Asia, Ningbo Zhonghua,
Guangxi Jingui Pulp & Paper, Hainan Jinhai Pulp & Paper, and APP
China Forestry. The 2017 and 2018 data of donations have beencorrected. The data disclosed before did not include donations to support
relevant research conducted by domestic universities.

APP China sources of pulp procurement*

Materials

Region

2019

2018

2017

Indicator

Unit

2019

2018

2017

North America

25.7%

23.9%

27.0%

Total volume of pulp
purchased

10,000tons

564.94534.38573.25South America

1.1%

2.8%

3.8%

Total volume ofcertified pulp
purchased

10,000tons

111.88

76.07

98.71

Europe

2.8%

1.1%

2.2%

Proportion ofcertified pulp in total
pulp purchased

%

19.80

14.23

17.22

—

—

0.1%

%

19.41

17.45

16.90

Other Asian regions

26.6%

22.7%

23.2%

Proportion ofcertified wood fiberin total wood fiberpurchased*

China

43.8%

49.4%

43.4%

Volume of waste
paper purchased

10,000
tons

19.81

38.19

44.08

—

0.1%

0.3%

South Africa

Oceania*The change in the proportion of different locations mainly resulted fromthe quality and market price of pulp.

*In 2019, wood fiber was used in Hainan Jinhai Pulp & Paper, Guangxi
Jingui Pulp & Paper, and Gold East Paper. The data of this indicator
include those of Hainan Jinhai Pulp & Paper and Guangxi Jingui Pulp &Paper.

Energy70

Indicator

Unit

2019

2018

2017

Indicator

Unit

2019

2018

2017

Coal

Tons

4,999,054.08

5,035,063.85

5,195,476.17

Kerosene

Tons

0.96

2.24

2.09

Gasoline

Tons

464.35581.74687.50Powerpurchased

10,000kWh133,309.85

157,975.17

149,857.23

DieselTons

10,306.70

10,065.11

8,155.76

Steampurchased

GJ

1,490,357.25

2,455,775.16

1,455,093.24

Fuel oilTons

846.51144.35

26,112.59

Black liquorfrom pulp

Tons

2,735,798.96

2,592,609.55

2,527,691.50

Natural gas

10,000cubic
meters21,396.76

21,859.78

19,400.94

Biomass fuelTons

295,426.22

240,512.46

272,813.88

LPG

Tons

10,985.74

9,126.50

7,350.49

Solar power
generation

10,000kWh2,604.05

2,964.05

2,355.62

APP China Sustainability Report 201971

Message from
ChairmanStar Employees
at APP

About APP China

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Water resources and waste water*

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Waste

Indicator

Unit

2019

2018

2017

Indicator

Unit

2019

2018

Total water withdrawal**

Tons

125,397,098

130,935,175

118,173,907

General waste generated

Tons

1,592,579.39

1,743,836.25

Total waste water discharge***Tons

88,160,320

90,097,689

84,968,795

General waste disposed ofTons

1,592,473.46

1,738,064.25

Waste water discharge per ton of paper produced

Tons

6.37

6.79

6.35

Recycling and reuse

Tons

513,583.54

179,793.10

Waste water discharge per ton of pulp produced

Tons

11.62

12.68

13.90

Incineration

Tons

446,418.20

539,570.50

COD emission per ton of paper produced

Kg

0.29

0.23

0.26

Selling to external parties for reuse

Tons

564,674.86

1,011,777.75

COD emission per ton of pulp produced

Kg

0.63

0.94

1.99

Centralized treatment by local sanitation departments

Tons

5,653.00

6,747.70

Hazardous waste generated

Tons

883.84989.81

Hazardous waste disposed ofTons

1,003.65

939.54

Environmental investment

Environmental compliance*Not including data from APP China Headquarters and APP China Forestry.
**98.31% came from surface water, 1.69% from third-party facilities.
***In 2019, there were zero incidents of major water body pollution at APP China.

Water reuse

Indicator

Amount of reused water (tons)

2019

2018

2017

Gold East Paper

573,048,504

567,192,412

581,093,529

Hainan Jinhai Pulp & Paper

981,208,947

1,290,127,756

1,046,378,081

Ningbo Zhonghua

135,490,647

134,936,133

135,358,599

Ningbo Asia

269,558,416

269,995,863

219,904,179

Gold Huasheng*

377,985,044

372,484,717

368,663,480

Guangxi Jingui Pulp & Paper

596,060,424

322,287,500

Hainan Gold Hongye

67,569,742

Hainan Gold Shengpu

61,526,999

RMB10,000

2019

2018

2017

Indicator

Total SO2 emissions

Tons

697.801,254.11

2,622.63

Total NOx emissions

Tons

5,362.75

5,715.42

6,883.50

Indicator

Unit

2019

2018

Total soot emissions

Tons

429.06502.6264,083.68

82,593.16

Employees directly andindirectly employed

Number

20,46021,381

Employees directly employed

Number

18,909445,290,787

Male employees directly
employed

Number

82,413,167

65,982,500

Female employees directly
employed

59,984,587

56,721,070

2019

2018

2017

Environmental fines

RMB

90,0001,620,000

977,400

Unit

2019

2018

2017

23,633

Employee turnover
rate

%

12.88

16.20

15.77

19,976

21,746

Male employee
turnover rate

%

11.54

15.38

15.09

14,003

14,507

15,779Female employee
turnover rate

%

16.48

18.31

17.50

Number

4,906

5,469

5,967

Employees indirectly employed Number

1,551

1,405

1,887

Number

1,107

870

1,156

Female employees indirectly Number
employed

444

535

731

Number

1,773

1,514

2,259

Employee retention after maternity/paternity leave

New male employees

Number

1,256

1,064

1,473

Indicator

New female employees

Number

517

450

822

Number

2,796

3,862

3,786

35.63

Male employees who
voluntarily resigned

Number

1,274

1,282

1,274

Number

645

626

Soot

Gold East Paper

142.75377.76

49.61

Hainan Jinhai Pulp &Paper**

330.84

3,093.24

194.83237.24

Unit

Indicator

NOx

21.09

Indicator

Employee turnover rate
2017

SO2

Ningbo Zhonghua

87,457.18

2018

Male employees indirectly
employed

Exhaust gas emissions(tons)

2017

Employment*

New employees

Unit

2018

2019

Air pollutant emissions*Indicator

2019

Unit

*The data of Gold Huasheng include those of Suzhou Gold Hongye.

Employee turnover

Unit

2019

2018

2017

Female employees who
took maternity leave

Number

373

530

634

Female employees who
returned to work aftermaternity leave

Number

340

479

568

698

Female employees who
resigned after maternity
leave

Number31

44

50

Ningbo Asia

48.17

635.8428.10

Female employees who
voluntarily resigned

Gold Huasheng***

55.57

344.3056.82

Male employees who
involuntarily resigned

Number

544

1,341

1,301

Male employees who
took paternity leave

Number

447

808

991

Guangxi Jingui Pulp & Paper

99.38

674.3764.07

Female employees who
involuntarily resigned

Number

265

557

460

Number

425

756

943

Male employees who retired

Number9

13

23

Male employees who
returned to work after
paternity leave

Female employees who
retiredNumber59

43

30

Male employees who
resigned after paternity
leave

Number20

41

31*Not including the data of APP China Headquarters and APP China
Forestry.
**The data of Hainan Jinhai Pulp & Paper include those of Hainan Gold
Hongye and Hainan Gold Shengpu.
***The data of Gold Huasheng include those of Suzhou Gold Hongye.

72

Environmental
investment

Unit*The employment data are within the reporting scope.
APP China Sustainability Report 201973

Message from
Chairman

About APP ChinaStar Employees
at APP

Bravely Fighting
the Battle against
the Epidemic

Sustainability
Strategy

Employee composition by level
Unit

2019

2018

2017

Percentage
of senior-level
managers%

11Percentage of
middle-level
manager%

10

Percentage of linelevel employees

%

89

1

Employee safety
training time

Hours

10

9

Total investment inprotective gears

RMB10,000

578.74630.35615.5589

90

Lost hours per
million working
hours

Hours

854.70830.61

1,090.55

Work-related injuriesof employees**

Persontimes

51

50

79

Number of workrelated fatalities of
employees

Number0

1

1

Work-related injuries
of contractors**

Persontimes

3

—

—

Unit

2019

2018

2017

Percentage offemale employees

%

25.97

27.38

27.44

Number of female
employees inmanagement

Number

573

560

528

Percentage offemale employees inmanagement

%

26.69

25.85

24.28

Employee composition by age

2019

2018

2019

2018

Indicator

Percentage of employees aged
30 and below

%

16.33

20.66

Percentage of employees aged
between 31 and 50

%

79.27

75.79

Percentage of employees aged
51 and above

%

4.40

3.55

Employee training
2019

2018

RMB10,000

475.42523.14396.50Total employee
training time

Hours

762,701

717,135

762,557

Number of
employees who
participated incompany-paid
diploma programs

NumberTotal investment
in company-paid
diploma programsfor employees

RMB10,000

11.20

12.77

29.51

Average training
time for senior-level
managers

Hours

29.53

21.08

28.77

Average training
time for middle-level
managers

Hours

46.03

41.82

32.71

Average training
time for line-level
employees

Hours

39.79

35.43

34.39

35

78

96

Indexes

Independent Verification Statement

This Independent Verification Statement is based on the data and information collected by APP China and provided to TÜV SÜD. The scopeof verification is limited to the said information. APP China shall be held accountable for authenticity and completeness of the provided dataand information.

Unit

2019

Number of governance agency
members reached by anti-corruption
policies and procedures

Number13

Percentage of governance agency
members reached by anti-corruption
policies and procedures%

100

Number of governance agency
members receiving anti-corruption
training

Number13

Percentage of governance agency
members receiving anti-corruption
training%

100

Number of senior-level managers
receiving anti-corruption training

Number188

Percentage of senior-level managers
receiving anti-corruption training%

Number of middle-level managers
receiving anti-corruption training

Number

1,548

%

79.02

Number of line-level employees
receiving anti-corruption training

Number15,804

Percentage of line-level employees
receiving anti-corruption training

%

94.28

Percentage of middle-level managers
receiving anti-corruption training

Assurance
Statement

TÜV SÜD Certification and Testing (China) Co., Ltd. Shanghai Branch (hereinafter referred to as “TÜV SÜD”) has been engaged by Sinar
Mas Paper (China) Investment Co., Ltd. (hereinafter referred to as “APP China” or “the Company”) to perform an independent third-party
verification on APP China Sustainability Report 2019 (hereinafter referred to as “the Report"). During this verification, TÜV SÜD's verificationteam strictly abided by the contract signed with APP China and provided verification regarding the Report in accordance with the provisions
agreed by both parties and within the authorized scope stipulated in the contract.

2017

Total training
investment

Performance in
Numbers

333,033 294,354.45 206,759.50

Anti-corruption*

Unit

Looking Forward

2017*The 2019 data do not include those of APP China Forestry.
**According to APP China's Group Management Measures , workrelated injuries are determined based on assessments by the Labor
Department.

Indicator

Sustainability
Management

Assurance Statement

Unit

Indicator

74

Joining Forces toBring Harmonyand Prosperity

Indicator

Employee composition by gender

Unit

Responsible
Operations fora Sustainable
Business

Occupational health and safety*

Indicator

Indicator

Creating Superior
Value ThroughHigh-Quality
Development

100

Scope of Verification

Time frame of this verification: The Report contains the data disclosed by APP China during the reporting period from January 1st, 2019 to December 31th,
2019, including economic, environmental and social information and data, methods for management of substantial issues,actions/measures and the Company's sustainable development performance during the reporting period.
Physical boundary of this verification:
 Except for Zhonghua Pulp & Paper Co., Ltd., the subject and address of the on-site verification are the same with those specified
in the report.
The following information and data are beyond the scope of this verification:
 Any information and contents beyond the reporting period of this Report; and The financial data and information disclosed in this Report that have been audited by an independent third party are not verified
again herein.

Limitations
This verification was performed at aforementioned sites, and no other branch or subsidiary was visited during the aforesaid
verification; and

The Company's standpoint, opinions, forward-looking statements and predictive information as well as the historical data andinformation before January 1st, 2019 are beyond the scope of this verification.

Basis for the Verification

This verification process was conducted by TÜV SÜD's expert team who are highly experienced in the corporate social responsibility,
economic, social, environmental and other relevant issues and this team drew the conclusions thereof. The verification referred to thefollowing standards:
 Global Reporting Initiative: Sustainability Reporting Standards (GRI Standards) (2018) TÜV SÜD Procedure of Verification on Sustainability Report
In order to perform adequate verification in accordance with the contract and provide reasonable verification for the conclusions, theverification team conducted the following activities:
TUV SUD Certification and Testing(China) Co., Ltd. Shanghai Branch
No.151 Heng Tong Road,
Shanghai 200070

Page 1 of 3
Tel: +86 21-61410737
Fax: +86 21-61408600
Web: http://www.tuv-sud.cn*During supplier registration, APP China requests suppliers to sign ananti-corruption statement. The percentage of suppliers that APP China's
anti-corruption policies have been communicated to is 100%.

APP China Sustainability Report 201975

Message from
Chairman

About APP China







Star Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Preliminary investigation of the relevant information before the verification;
Confirmation of the presence of the highly substantial issues and performance in the Report;
On-the-spot review of all supporting documents, data and other information provided APP China; tracing and verification of key
performance information;
Interviews were carried out with the management of APP China, and with the employees who are engaged in collecting,organizing and reporting the disclosed information; andOther procedures deemed necessary by the verification team.

Verification Conclusions

Based on the verification, we believe that the reports prepared by APP China are reliable, consistent and substantive; the information
disclosure is made in an objective, truthful, complete and clear manner, without systematic or material issues. this Report can be used by
the stakeholders of APP China.
As to this report, the verification team has come to the following conclusions:
Stakeholder
InclusivenessSustainable
Context
Materiality

CompletenessAccuracy
Balance
ClarityComparability
Reliability

TimelinessIn the Report, internal and external stakeholders have been fully identified; direct communications with themwere maintained through multiple channels. In this report, sufficient responses to the stakeholders' highly
concerned issues are provided.
The Report displays the company's influence on economy, environment and society in a broader context ofsustainable development.
The Report discloses the company's process of analyzing substantive issues, including identification of thesubstantive issues and their boundaries, where the priority substantive issues are identified based on thesignificance thereof to the stakeholders and sustainability, while the materiality level of some issues can befurther promoted, such as toxic emissions and water stewardship.
The Report discloses the scope of the materiality issues' influences; as well as how the company is involvedin these influences. Generally, the information collection process of the company is appropriate andreasonable.
Upon on-site verification and confirmation, it is believed that the company utilizes a reasonable datacollection system. The reported information is authentic, objective and valid; the data used are accurate andtraceable.
During the process of preparing the Report, the balance of the Report was adequately considered, where
both positive information and negative information are disclosed.
In the Report, diversified expression means of pictures, diagrams and texts are used; terminologies andacronyms are clearly interpreted; the ways of directly accessing the report are also disclosed.
In the Report, comparability of the information and data is fully considered, with the data over the recent 3
years clearly displayed, for convenience of the stakeholders and other organizations.
In the Report, the statistical caliber of data, assumptions and calculation and estimation methods are
specified. Sources of the data used are provided, but there is still room for improving the consistency ofstatistical caliber.
The Company publishes reports to the stakeholders on an annual basis. The time frame of the Report isconsistent with the annual report, so the stakeholders can obtain information in a timely manner to makedecisions.

TUV SUD Certification and Testing(China) Co., Ltd. Shanghai Branch
No.151 Heng Tong Road,
Shanghai 200070

76

Page 2 of 3
Tel: +86 21-61410737
Fax: +86 21-61408600
Web: http://www.tuv-sud.cn

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

Recommendations on Continuous Improvement


The Company is recommended to continue to improve data collection system, to ensure the consistency of statistical caliber;

The Company is recommended to promote the materiality level of toxic emissions and water stewardship issues, for example,
adding indicators of emission concentration of waste gases, emission load and concentrations of NH3-N, TP and TN in the waste
water, as well as continue to monitor the annual trend of emissions.

Statement on Independence and Verification Capability

TÜV SÜD is a trusted partner of choice for safety, security and sustainability solutions. It specialises in testing, certification, auditing and advisory services.
Since 1866, TÜV SÜD has remained committed to its purpose of enabling progress by protecting people, the environment and assets from technologyrelated risks. Today, TÜV SÜD is present in over 1,000 locations worldwide with its headquarters in Munich, Germany. TÜV SÜD has been committed tosustainable development and actively promotes environmental protection related projects. Over the years, TÜV SÜD has been actively expanding its
performance in energy management, renewable resources, and electric automobiles, etc., helping its customers meet sustainable development needs.
TÜV SÜD Certification and Testing (China) Co., Ltd. Shanghai Branch is one of TÜV SÜD 's global branches and has an expert team whose members haveprofessional background and rich industrial experiences.
TÜV SÜD and APP China are two entities independent of each other and both TÜV SÜD and APP China and their branches or stakeholders have noconflict of interest. No member of the verification team has business relationship with the company. The verification is completely neutral. All the data andinformation in the Report are provided by APP China. TÜV SÜD has not been involved in preparation and drafting of the Report, except for the verification
itself and issuance of the verification statement.

Signature:
On Behalf of TÜV SÜD Certification and Testing (China) Co., Ltd. Shanghai Branch

Zhu Wenjun
TÜV SÜD Sustainability Product Manager
Date October 15th, 2020
Note: In case of any inconsistency or discrepancy, the simplified Chinese version of this verification statement shall prevail, while the English translation and the traditional
Chinese version are used for reference only.

TUV SUD Certification and Testing(China) Co., Ltd. Shanghai Branch
No.151 Heng Tong Road,
Shanghai 200070

Page 3 of 3
Tel: +86 21-61410737
Fax: +86 21-61408600
Web: http://www.tuv-sud.cn

APP China Sustainability Report 201977

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

GRI Content Index
GRI Standards

Disclosure

Page numbers/Reasons for omission

External Assurance

General Disclosures

GRI 103: Management approach 2016

4; 82

√

102-2 Activities, brands, products, and services

4√102-3 Location of the headquarter5; back cover√

102-4 Location of operations

4-5√

Materials

102-5 Ownership and legal form

4√

GRI 103: Management approach 2016102-6 Markets served

4√102-7 Scale of the organization

4-5; 19√102-8 Information on employees and other workers

73-74

√

Energy102-9 Supply chain

49; 71√

GRI 103: Management approach 2016

102-10 Significant changes to the organization and its supply chain

4-5; 82; no significant changes√

102-11 Precautionary principle or approach

11; 64√102-12 External initiatives

11; 65√

GRI 205: Anti-corruption 2016

GRI 301: Materials 2016

GRI 302: Energy 201664
205-2 Communication and training about anti-corruption policies and 64; 74
procedures√√

21-27; 49√

301-1 Materials used by weight or volume71√

301-2 Recycled input materials used

71√

23-24; 26-27√

302-1 Energy consumption within the organization

71√

302-2 Energy consumption outside of the organization

71√

302-4 Reduction of energy consumption

26; 71√

Water and Effluents

√

23-25

√

102-14 Statement from senior decision-maker

2-3√

303-1 Interactions with water as a shared resource

24-25

√

102-15 Key impacts, risks, and opportunities

2-3; 10-11; 68; 70√

303-2 Management of water discharge-related impacts

24-25

√

303-3 Water withdrawal

72

√

√

303-4 Water discharge

24; 72√√303-5 Water consumption

24; 72√

GRI 103: Management approach 2016

GRI 303: Water and Effluents 2018

Ethics and Integrity
102-16 Values, principles, standards, and norms of behavior
102-17 Mechanisms for advice and concerns about ethics

64
64

Biodiversity

Governance102-18 Governance structure5√102-40 List of stakeholder groups

66-67

√

102-41 Collective bargaining agreements

54√102-42 Identifying and selecting stakeholders

66-67

√

102-43 Approach to stakeholder engagement

66-67; 68√

Emissions102-44 Key topics and concerns raised

66-67; 68-69√

GRI 103: Management approach 2016

Reporting Practice82√102-46 Defining report content and topic Boundaries

69; 82√102-47 List of material topics

68√

102-48 Restatements of information

71√

102-49 Changes in reporting

No significant changes√

102-50 Reporting period
102-51 Date of most recent report

82
82
82

√

82

√

102-54 Claims of reporting in accordance with the GRI Standards

82√102-55 GRI content index

78-80

√

102-56 External assurance

75-77

√

Materiality Issues
Economic Performance
GRI 103: Management approach 2016

4-5; 16√

GRI 201: Economic performance 2016 201-1 Direct economic value generated and distributed

4; 71

√

10-11; 12-15; 16; 18; 58-61; 71√

19-20; 28-30; 68; 70-71

√

49

√

71

√

Indirect Economic Impacts

203-2 Significant indirect economic impacts

Procurement Practices
GRI 103: Management approach 2016
204-1 Proportion of spending on local suppliers

43-44

√

304-2 Significant impacts of activities, products, and services on
biodiversity

43-44

√

23-24; 27√

27; 72√305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and othersignificant air emissions

22-24

√

306-1 Water discharge by quality and destination

24; 72√306-2 Waste by type and disposal method

22; 73√306-3 Significant spills

None

√

306-5 Water bodies affected by water discharges and/or runoff

25

√

23

√

73

√

GRI 103: Management approach 2016

GRI 306: Effluents and waste 2016√102-53 Contact point for questions regarding the report√

Effluents and Waste√

102-52 Reporting cycle

GRI 103: Management approach 2016

GRI 304: Biodiversity 2016

GRI 305: Emissions 2016

102-45 Entities included in the consolidated financial statements

40; 43-44
304-1 Operational sites owned, leased, managed in, or adjacentto, protected areas and areas of high biodiversity value outside
protected areas

GRI 103: Management approach 2016

Stakeholder Engagement

78

External Assurance

6-7

Strategy

GRI 204: Procurement practices 2016

Page numbers/Reasons for omission

Anti-Corruption

102-1 Name of the organization

102-13 Membership of associations

GRI 203: Indirect economic impacts
2016

Disclosure

Materiality Issues
Organizational Profile

GRI 102: General disclosures 2016

GRI Standards

Environmental Compliance
GRI 103: Management approach 2016
GRI 307: Environmental
compliance 2016

307-1 Non-compliance with environmental laws and regulations

Supplier Environmental Assessment
49√

308-1 New suppliers that were screened using environmental criteria 49√

308-2 Negative environmental impacts in the supply chain andactions taken

49√

GRI 103: Management approach 2016
GRI 308: Supplier environmental
assessment 2016
Employment

54-57

√

401-1 New employee hires and employee turnover73√

401-2 Benefits provided to full-time employees that are not provided
to temporary or part-time employees

56-57

√

401-3 Parental leave73√

GRI 103: Management approach 2016

GRI 401: Employment 2016

APP China Sustainability Report 201979

Message from
Chairman

About APP ChinaStar Employees
at APP

Sustainability
Strategy

Bravely Fighting
the Battle against
the Epidemic

Creating Superior
Value ThroughHigh-Quality
Development

Responsible
Operations fora Sustainable
Business

Joining Forces toBring Harmonyand Prosperity

Sustainability
Management

Looking Forward

Performance in
Numbers

Assurance
Statement

Indexes

UN Global Compact Ten Principles Index
GRI Standards

Disclosure

Page numbers/Reasons for omission

External AssuranceNo.

Principle

Page Numbers

Principle 1

Businesses should support and respect
the protection of internationally proclaimed
human rights

46-49; 54; 58-61; 73-74

Principle 2Make sure that they are not complicit inhuman rights abuses

46-49; 54

Principle 3

Businesses should uphold the freedom of
association and the effective recognition of
the right to collective bargaining

54

Principle 4

The elimination of all forms of forced andcompulsory labor

49; 54

Principle 5

The effective abolition of child labor

54

Principle 6

The elimination of discrimination in respect of49; 54
employment and occupation

Materiality Issues
Occupational Health and Safety

Human Rights

GRI 103: Management approach 2016403-1 Occupational health and safety management system

GRI 403: Occupational health andsafety 2018

46-48

√

46

√

403-2 Hazard identification, risk assessment, and incident
investigation

47√403-3 Occupational health services

13; 47√403-4 Worker participation, consultation, and communication on
occupational health and safety47√403-5 Worker training on occupational health and safety

48; 74√403-6 Promotion of worker health47√403-7 Prevention and mitigation of occupational health and safety
impacts directly linked by business relationships

48√

403-8 Workers covered by an occupational health and safety
management system

65√403-9 Work-related injuries

74

√

54-55

√

404-1 Average hours of training per year per employee

74√404-2 Programs for upgrading employee skills and transition
assistance programs

54-55; 74√

Training and Education
GRI 103: Management approach 2016
GRI 404: Training andeducation 2016

Labor

Diversity and Equal Opportunity
54

√

74

√

54

√

49; no such incidents occurred

√

54

√

49

√

54

√

49

√

12; 35; 58-61√

413-1 Operations with local community engagement, impact
assessments, and development programs

12; 35; 58-61√

413-2 Operations with significant actual and potential negative
impacts on local communities

44-45; 73√

GRI 103: Management approach 2016
GRI 405: Diversity and equal
opportunity 2016405-1 Diversity of governance bodies and employees

Non-Discrimination
GRI 103: Management approach 2016
GRI 406: Non-discrimination 2016406-1 Incidents of discrimination and corrective actions taken

Environment

Child LaborGRI 103: Management approach 2016
GRI 408: Child labor 2016408-1 Operations and suppliers at significant risk for incidents ofchild labor

Principle 7

Businesses should support a precautionary
approach to environmental challenges

31-37; 42-44; 49; 71-73

Principle 8

Undertake initiatives to promote greater
environmental responsibility

31-37; 42-44; 49

Principle 9

Encourage the development and diffusion ofenvironmentally friendly technologies

31-37

Forced or Compulsory LaborGRI 103: Management approach 2016
GRI 409: Forced or compulsory labor2016409-1 Operations and suppliers at significant risk for incidents offorced or compulsory labor

Local Communities
GRI 103: Management approach 2016

GRI 413: Local communities 2016

Principle 10

Supplier Social Assessment
46; 49; 64√

414-1 New suppliers that were screened using social criteria

49; 64√414-2 Negative social impacts in the supply chain and actions taken

46; 49√34-37; 52-53

√

None

√

34-35

√

GRI 103: Management approach 2016
GRI 414: Supplier social assessment
2016

Anti-Corruption
Businesses should work against corruption in64
all its forms, including extortion and bribery

Customer Health and Safety
GRI 103: Management approach 2016
GRI 416: Customer health and safety2016416-2 Incidents of non-compliance concerning the health and safety
impacts of products and services

Marketing and Labeling
GRI 103: Management approach 2016

GRI 417: Marketing and labeling 2016 417-1 Requirements for product and service information and labeling 34-35; 65

80√

APP China Sustainability Report 201981

About this Report

This is the 13th Sustainability Report issued by Sinar Mas Paper (China) Investment Co., Ltd. andthe group of companies under its direct investment in China (herein referred to as APP China). The
report is released in both Chinese and English. The English report is translated from the Chinese
report. If there is any discrepancy between the two reports, the Chinese version shall prevail.

Reporting Boundary
and Scope

The time span of this report is from January 1, 2019 to December 31, 2019. The chapter "Bravely
Fighting the Battle against the Epidemic" contains events and actions that took place in 2020. Ourlast Sustainability Report was published in November 2019. Data in "Company Profile", "Economic
Performance", "APP China sources of pulp procurement", and "Materials" relate to Sinar Mas
Paper (China) Investment Co., Ltd. and the group of companies under its direct investment in
China; cases and other data in the report are collected from APP China Headquarters, nine pulp &paper mills, and APP China Forestry Business Unit, unless otherwise stated.
◎ APP China Headquarters◎ Gold East Paper (Jiangsu) Co., Ltd. (Gold East Paper)◎ Hainan Jinhai Pulp & Paper Co., Ltd. (Hainan Jinhai Pulp & Paper)◎ Guangxi Jingui Pulp & Paper Co., Ltd. (Guangxi Jingui Pulp & Paper)◎ Ningbo Zhonghua Pulp & Paper Co., Ltd. (Ningbo Zhonghua)◎ Ningbo Asia Pulp & Paper Co., Ltd. (Ningbo Asia)◎ Gold Huasheng Paper (Suzhou Industrial Park) Co., Ltd. (Gold Huasheng)◎ Gold Hongye Paper Group Co., Ltd. (Suzhou Gold Hongye, including Suzhou Mill and Sales &Marketing)◎ Hainan Gold Hongye Paper Co., Ltd. (Hainan Gold Hongye)◎ Hainan Gold Shengpu Paper Co., Ltd. (Hainan Gold Shengpu)◎ APP China Forestry Business Unit (APP China Forestry, including Forestry Business
Headquarters, Hainan, Guangxi, and Guangdong BUs, and Lancang, Wenshan, Ganzhou andHenan Sub-BUs)

Reporting
Frameworks

The report has been prepared in accordance with the core option of the GRI Standards (2018)
issued by the Global Sustainability Standards Board (GSSB). Additionally, the report refers to
the Global Compact Ten Principles and papermaking industry clean production and emissions
standards.

Content
and Indicator Selection

This report was prepared in accordance with the GRI principles of materiality, stakeholder
inclusiveness, sustainability context, completeness, etc. At the preliminary stage, our work groupconducted policy analysis, industry issues analysis, stakeholder surveys, and field visits to ourheadquarters and pulp & paper mills to collect the management approaches, specific practices andperformance indicators on sustainability issues most relevant to APP China.

Report Assurance

APP China commissioned Technischer Überwachungs-Verein (TÜV) to assess the reliability,
objectivity, and transparency of this report. Please refer to the Assurance Statement for further
details.

Contact Us

82

We sincerely welcome readers' comments and suggestions regarding this report and our work.
Readers can contact us by email: csr@app.com.cn.

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Website: www.app.com.cn

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