2021

Taking Dreams as Maps to a Sustainable Future
APP China Sustainability/ESG Report

Green Transformation and
Digital & Intelligent Transformation
Writing A New Chapter of Sustainability

Our Annual Performance Highlights
Governance and Economic

Products marketed in over

160 countries/regions
across 6 continents

RMB

246.5 billion

in total assets
RMB

97.3 billion

in annual sales revenue

RMB

2.436 billion

in R&D investment

An annual output of

15.92 million
seedlings

Owning22

forestry companies

270,900

hectares of plantations

Proportion of woodchips

Coverage of employee anti-corruption

21.13 %

100 %sourced from certified forests:

training:

Proportion of wood pulp sourced

Percentage of suppliers to whom anti-corruption

17.96 %

100 %from certified forests:

policies were communicated:

Environmental
Environmental investment
in 2021: over

RMB

1.031 billion

Cumulative environmental
investment: over
RMB

13.5

billionCumulative carbon sequestration

Percentage of HCV-

Proportion of

42.395 million tons

54 %26.65 % ,capacity of plantations:(as of the end of 2020)

Total area of CFCC/PEFC-FMcertified plantations:

246,257 hectares,
accounting forassessed plantations:

3 subsidiaries wererecognized as National

renewable energy:up

44.12 %

year on year

Green Factories

Launched

Average industrial water

Breeze and EMPORIA products were among

24,406.6
reuse rate:

95.74

MWh

%

Comprehensive utilization rate of
non-hazardous solid waste:

90.9 %"carbon neutral"

Solar power generation:

tissue product series

the first tissue products in China to obtain the

China Green Product
Certification

99.25 %of total plantations

SocialPercentage of female

Total employee training

23.27

RMB

employees:%

investment: over

5.62

Percentage of female

Total employee

18.62 %

753,012

employees in management:

training hours:

million

Nearly70

positions provided forpeople with disabilities

Percentage of workers

covered by Occupational
Health and Safety

Management System:

100 %Number of emergency drills:

Charitable giving:

Average hazard correction rate:

Cumulative charitable giving: close to500+

98.87 %

RMB

RMB

46.763 million

1.2 billion

APP China Sustainability/ESG Report 2021

02

Message from Chairman

22

In a Time of Change
2304

About APP China

28

04

Company Profile

36

06

Milestones

05
08

Organizational Chart

42

Achievements and Honors

50
12

Our Strategy
12
13
14
16
19

6

"Two Transformations and One Exceptional" Strategy
Sustainability/ESG Strategy

Undertaking Sustainability Certification
Stakeholder Engagement

Addressing Climate Change ThroughDecarbonization and Green Solutions

Accelerating Digital and Intelligent Transformationand Empowering High-Quality Development

58

Cleaner Production Management70

Safety and Health76

Customer Relationship Management

77

Passing on Corporate Culture and Moving Forwardwith Employees

Forest Resources Management

Social:Creating a Harmonious Happy Life75

Evolving with the Times: Providing Paper Solutionsfor Society

Environmental:
Fostering a Beautiful and Clean Nature
52

68

78

84

Product Responsibility

Community Engagement
Charity and Philanthropy

92

Performance in Numbers

99

Assurance Statement

103

GRI Content Index

107

UN Global Compact Ten Principles Index

108

TCFD Index

Governance:
Committed to Doing Business with Integrity
86

Risk Management

90

Supply Chain Management

87
91

Business Integrity and Ethics
Information Security Management

Materiality Assessment

01

APP China Sustainability/ESG Report 2021

Message from Chairman
The physical impact of climate change is being increasingly felt, withoverall resource efficiency. Other production bases are also rapidly

livelihoods across the globe. Accelerating optimization of the industrial

great economic benefits but also facilitates our transition to a greener

extreme weather events frequently threatening productivity andstructure and energy mix and shifting towards a green development
approach are therefore important responsibilities of today's

becoming more automated and intelligent, which not only generates
growth path.

enterprises, who are also subject to increasingly rigorous regulatory

After concluding the acquisition of Shandong Bohui Paper Co., Ltd.

announcement of the 30-60 Goals. However, it needs to be seen that inexternal discussions on ESG-related concepts and trends that had been

scrutiny regarding energy saving and carbon reduction following thethis unprecedented "green revolution", challenges always go hand inhand with opportunities. Ride the wave and innovate. This is the thinking
behind our new "Two Transformations and One Exceptional" strategy,

namely green transformation, digital and intelligent transformation, andexceptional economic performance. It provides a clear roadmap for theCompany's high-quality development in the years to come.

As one of the first papermaking companies in China to introduce and("Bohui Paper") in 2020, we extensively researched and had internal andtopics of avid domestic and international interest in recent years. In 2021,

we integrated ESG into the Company's sustainability strategy framework,
gearing up to obtain an objective assessment of our sustainability

management and practices, including through ESG capacity building

and alignment with international ESG assessment systems. We will thenuse such knowledge to drive better performance in key ESG areas, so as
to create more value for our stakeholders.

implement the "Integration of Plantation-Pulp-Paper" model, we

Clear goals drive resolute actions. A pivotal year for the 14th FYP, 2022

of forestry, we are committed to a sustainable approach, with our

high-quality development and collectively builds a new development

constantly seek to improve our environmental performance. In terms
plantations continuing to be an effective source of carbon sequestration.
In terms of production, we comply with all applicable environmental
policies and regulations and hold our business operations to higher

standards than national and local requirements, redoubling efforts tominimize our environmental footprint. A number of our subsidiaries,

including Ningbo Asia, Gold East Paper, and Guangxi Jingui Pulp & Paper,
have been recognized as National Green Factories, and Bohui Paper

has been named a Green Factory in Zibo City. In terms of products, wewill also be a critical year for China's paper industry as it transitions topattern. It will coincidently be the 30th year since APP entered China. As

a new chapter unfolds, APP China will stay motivated to push limits andpursue excellence. We will seize the ample opportunities presented bynational strategies while placing the green transformation and digitaland intelligent transformation strategies front and center in company
development, working together with our stakeholders to create asustainable future for the paper industry.

keep investing in the R&D of recyclable and biodegradable "Zero Plastic"

paper products, and our Breeze and EMPORIA are among the first greencertified tissue brands in China. As 30-60 Goals took effect for the firstyear in 2021, we set up the Group-level Carbon Neutral Working Groupto coordinate and deploy climate-related efforts in areas such as carbon
2021 marks the first year of the 14th Five-Year Plan (the "14th FYP") in China and a time whentimeframes of the "Two Centenary Goals" converge. With carbon peaking and carbon neutrality

Digital and intelligent transformation is another important strategic area

agenda at this new stage of development, transitioning to green and low-carbon growth andstepped into Digital 2.0, where the large volume of data accumulated

goals (the "30-60 Goals") incorporated into the national economic and social development

pursuing sustainable development have become key imperatives for companies aiming for highquality development. Meanwhile, the lingering COVID-19 has disrupted economies and societies,
leading to an all-pervading recognition of the absolute importance of operating sustainably. It

also challenges companies to do their utmost to stay resilient and environmentally and socially
responsible in a post-pandemic world.

02

targets, energy mix shift, carbon trading, and capacity building.

for APP China. After years of exploration and experimentation, we haveat stage 1.0 will be translated into more valuable applications to inform
more effective decision-making, management, and innovation. The

Rudong High-Grade Tissue Industrial Base started operation in 2021,

whose "Industry 4.0 + Artificial Intelligence (AI)" production model has
enabled significant improvements in paper machine productivity andTeguh Ganda Widjaja

Chairman and President of Sinar Mas Group03

APP China Sustainability/ESG Report 2021

About APP China
Company Profile

Sinar Mas Group was founded by the prominent Indonesian Chinese

Sinar Mas Paper (China) Investment Co., Ltd. acquired a 100% equity

like Asia, North America, Europe, and Australia today. Based on years

scale and resource allocation of APP China while promoting the high-

Mr. Eka Tjipta Widjaja in 1938, with investments spanning continents

of innovation-driven development, the Group has built seven businesspillars: Pulp & Paper, Financial Services, Agri-Business & Food, Real

Estate, Energy & Infrastructure, Telecommunications, and Healthcare.
Asia Pulp & Paper Co., Ltd. (APP), a pulp and paper subsidiary ofSinar Mas Group, was founded in 1972 and has grown into a world

leader in papermaking through decades of dedicated work. APP has
dozens of pulp and paper companies and over one million hectaresof fast-growing plantations in Indonesia, China, etc. APP's products

interest in Bohui Paper in 2020. The acquisition helps optimize theOrganizational Chart
Shareholder Meeting

quality development of the Company and the wider paper industry in
China.

APP China and its parent company Sinar Mas Group are also engaged

Supervisor

in the development of sustainable urban complexes and technology

parks to diversify the allocation of resources. So far, the Company has
developed two large-scale urban complexes in Shanghai: the Sinar

Board of Directors

Mas Plaza and the Shanghai Arch.

and business spread across the globe, with businesses ranging fromplantations and pulp to industrial paper, cultural paper, tissues, andvarious types of paper products.

APP China is short for Sinar Mas Paper (China) Investment Co., Ltd. andAs of the end of 2021, APP China had

its entry into China in 1992, the Company has been committed to a

Products marketed

cycle by operationalizing the "Integration of Plantation-Pulp-Paper"160

the group of companies under its direct investment in China. Since

sustainable development strategy and worked to establish a green

approach. APP China has set up multiple functional units within the
Company such as Forestry Business Unit, Pulp Business Unit, Paper
Business Unit, and Tissue Business Unit.

in overcountries/regions
across6 continents

RMB

246.5 billion

RMB

97.3 billion

Decision-making
Committee

Management
Committee

Price
Committee

in total assets

Corporate Headquarters

in annual sales revenue

New Project Base

Real Estate Business
Unit

Tissue Business Unit

Paper Business Unit

Pulp Business Unit

Forestry Business Unit

Industrial Paper

04

Personnel Review
Committee

Cultural Paper

05

APP China Sustainability/ESG Report 2021

Milestones

1992
•

1995

Ningbo Zhonghua is formed through a joint

investment by APP, China Strategic Holdings

•

2020

APP begins establishing plantations in China,•

embarking on a progressive journey to modernize
papermaking in the country.

Limited from Hong Kong, Ningbo Duplex Board
Factory, and China Paper and Pulp Import and

2021

The foundation stone laying ceremony of the•Sinar Mas Group Yancheng Cellulose Fiber

Integration Industrial Base is held at the Binhai

an annual high-grade tissue production capacityof 3.96 million tons. It is divided into three phasesof construction, and its first paper machine starts

established by APP in China.

producing paper in June.

1997
•

1996

Gold East Paper is officially established with a

total investment of RMB20 billion; with an annual
production capacity of 2 million tons, it is one of

the world's largest coated paper mills in terms of
single product capacity.

Yalong Paper Products (Kunshan) Co., Ltd.

begins operations; with an annual paper productcapacity of 200,000 tons, it is an important paper
deep-processing enterprise in China.

•

Gold Hongye Paper Group Co., Ltd. begins
operations, activating 23 fully automated•Gold Huasheng Paper (Suzhou Industrial Park)
Co., Ltd. is established. It is one of the leading

diversified cultural paper product suppliers in
China and Asia.

2019
•

2017

Gold East Paper (China) Investment Co., Ltd. andBohui Group sign a Letter of Intent for Equity

Transfer , transferring 100% of Bohui Group's

equity to Gold East Paper; in September 2020,Gold East Paper takes over management of Bohui
Group in full after its tender offer is completed.

1998•

operations with a total investment of RMB45

billion, a planned site area of 567 hectares, andPort Industrial Park, Yancheng, Jiangsu Province.

Export Co., Ltd. It is the first mill invested in and

The Sinar Mas – APP Rudong Tissue Base starts

2004•

Ningbo Asia Pulp & Paper is put into operation,equipped with one of the world's largest singlemachine production capacities and mostadvanced industrial paperboard production lines.

•

APP China responds to the Belt and Road

Initiative by signing a strategic agreement withseveral cities in Jiangsu Province to build largescale production and R&D bases for tissues,

industrial paper, and viscose fiber that adopt
Industry 4.0 and artificial intelligence.

2005•

Hainan Jinhai Pulp & Paper Co., Ltd., APP China's
first pulp mill, officially begins operations.

2010•

With an annual chemi-mechanical pulp (CMP)
production of 300,000 tons, the first phase of
Guangxi Jingui's Integrated Plantation-PulpPaper project starts operations. The plant's

600,000-ton papermaking production also starts
operations.

assembly lines simultaneously; it currently

has an annual capacity of over 1.2 million tonsof tissue base paper and over 800,000 tons offinished products, and its Breeze tissue brand hassince become a leading brand in China's tissue
market.

06

07

APP China Sustainability/ESG Report 2021

Achievements and Honors
ReceiverAPP China

Honors and Awards

2021 Digital Transformation Impetus Award

2020 Outstanding Contribution to Pandemic Prevention
2021 Responsible Enterprise

2021 Outstanding Public Welfare Practice Award
2020 Special Corporate Contribution Award in the 100-Day Growth
Stabilization Initiative of Yangpu Economic Development Zone

Overachiever in Hainan Province's "13th FYP" Energy Efficiency
Review of Key Energy Consumers

Caring about Yangpu and Doing a Great Service
HainanJinhai

Pulp & Paper

2021 Top 100 Private Enterprises in Hainan Province (No. 3)
2021 Top 100 Enterprises in Hainan Province (No. 12), 2021 Top 35
Enterprises of Manufacturing Industry in Hainan Province (No. 4)
High-Tech Enterprise
2021 Top 50 Private Enterprises in Hainan Province for R&D
Investment (No. 2)2020 Top 10 Enterprises for Tax Contributions in Zhenjiang New Area
2020 Golden Mountain AwardStar Enterprise for Industrial Information Security Protection
Green Corporate Development Leader in Jiangsu ProvinceGold East
Paper

Certificate for China Environmental Labeling (Type II)

Advanced Grassroots Party Organization of Jiangsu Province

Top 10 Enterprises in the "13th Five-Year Plan" Enterprise Case
Selection in Jiangsu Paper Industry
Outstanding Organization Award

2020 Top 10 Papermaking Enterprises of China's Light Industry
Top 200 Enterprises of China's Light Industry

08

Issuers

The 10th Financial Summit

ReceiverThe 10th China Charity Festival

The 4th Social Responsibility ConferenceManagement Committee

Committee, Yangpu Economic Development Zone
Bureau of Social Development

Development and Reform Commission, Department

Investment in Qinzhou City

Committee, CPC Yangpu Economic Development ZoneCPC Yangpu Economic Development Zone Work

"Cleaner Production Enterprise" of Guangxi Zhuang Autonomous
2020 Outstanding Contribution Award for Utilization of Foreign

CPC Yangpu Economic Development Zone Work

Province

Issuers

RegionThe 17th China Corporate Social Responsibility Forum

Development and Reform Commission of Hainan

Honors and Awards

Jingui

Pulp & Paper

Province

Directors Association

RegionTop 200 Enterprises of China's Light Industry
Top 10 Papermaking Enterprises of China's Light Industry

2020 Contract Abiding and Trustworthy Enterprise of Guangxi

Department of Science and Technology of Hainan

Province, Department of Finance of Hainan Province,

Top 100 High-Tech Enterprises in Guangxi

Hainan Provincial Tax Service of the State Taxation
Administration

National Green Factory

Federation of Industry and Commerce of Hainan

2020 Top 100 Innovative High-Tech Enterprises in Zhejiang Province

Province, Science and Technology Department ofHainan Province2020 Top 50 Tax Contributors of Ningbo's Manufacturing Industry

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

2021 Top 10 Best Practices in Water Conservation Action in Ningbo

Municipal People's Government

2021 Outstanding Enterprise for Papermaking Standardization

Jiangsu

Improvement in Ningbo City

CPC Zhenjiang Municipal Committee, Zhenjiang
Industry and Information Technology Department of

2021 Five-Star Enterprise for Business Management Innovation and

Department of Ecology and Environment of Jiangsu
Province, Federation of Industry and Commerce of
Jiangsu Province

China Environmental United Certification Center (CEC)CPC Jiangsu Provincial Committee

Jiangsu Province Paper Industry Association
Jiangsu Province Paper Industry Association

China National Light Industry Council, China Paper
Association

China National Light Industry Council, China Paper
Association

Ningbo Asia

Qinzhou Municipal Commerce Bureau

Industry

Industry-Leading Enterprises in Guangxi (First Batch)

Hainan Enterprise Confederation, Hainan Enterprise

Autonomous Region

China Paper Association

Top 20 Papermaking Enterprises in China

Federation of Industry and Commerce of Hainanof Ecology and Environment of Guangxi Zhuang

2020 Top 30 National Key Papermakers for Output

Autonomous Region-Level Key Leading Enterprise of Forestry
Guangxi

Industry and Information Technology Department,

2020 Top 500 Enterprises of China's Manufacturing Industry
Ningbo Asia's Industrial Paper Associated News was awarded 2019-2020 Top 10 Corporate Newspapers in China's Paper Industry
Green Factory in Ningbo City
2020 Top 10 Exporters in Ningbo City
Advanced Grassroots Party Organization
2020 Top 50 Enterprises of Ningbo's Manufacturing Industry

2020 Top 10 Papermaking Enterprises of China's Light Industry (No. 8)
Top 200 Enterprises of China's Light Industry (No. 32)

Department of Forestry of Guangxi Zhuang Autonomous
China National Light Industry Council

China National Light Industry Council, China Paper
Association

China Pulp & Paper Industry (CPPI) Magazine

Industry and Information Technology Department of
Guangxi Zhuang Autonomous Region

Administration for Market Regulation of Guangxi Zhuang
Autonomous Region

Guangxi High-Tech Enterprise Association, Beijing Great
Wall Enterprise Institute

Ministry of Industry and Information Technology
Zhejiang High-Tech Enterprise Association
Ningbo Municipal People's Government

Ningbo Water Authority, National Office of Water
Conservation

National Technical Committee on Papermaking Industryof Standardization Administration of China

Ningbo Municipal Economic and Information
Technology Bureau

China Enterprise Confederation, China Enterprise
Directors Association

National Association of Paper Industry Press
Ningbo Office of the Leading Group for Building a
Beautiful Ningbo

Ningbo Special Export TeamCPC Ningbo Industrial Investment Group Co., Ltd.
Committee

Ningbo Municipal People's Government
China Paper Association

China National Light Industry Council

09

APP China Sustainability/ESG Report 2021

ReceiverNingbo Asia

Honors and Awards

Issuers

Receiver

Honors and Awards

Issuers

Top 100 Comprehensive Enterprises of Ningbo City (No. 32), 2021

Directors Association, Ningbo Federation of Industrial

Gold Hongye

Enterprises of Hainan's Manufacturing Industry

Directors Association

2021 Top 100 Competitive Enterprises of Ningbo City (No. 61), 2021
Top 100 Manufacturing Enterprises of Ningbo City (No. 20)

2021 Model Enterprise for Water Conservation in Zhejiang Province

six other departments

2021 Excellent Enterprise of Informatization and Industrialization

Shandong Informatization and Industrialization

Municipal-level Green Factory (First Batch)

Top 10 Enterprises in the "13th Five-Year Plan" Enterprise Case
Selection in Jiangsu Paper Industry

2020 Five-Star Enterprise of Star-Excellence, 2020 Top SalesEnterprise of Star-Excellence2020 Tax Contribution Award Over RMB100 Million, 2020 StarEnterprise (Five-Star) of Dafeng District, Yancheng City

Outstanding Contribution Award of the "13th Five-Year Plan" period2020 Advanced Unit for Statistical Work in Suzhou Industrial Park
2020 Outstanding Economic Contribution Award – Top 30 Tax
Contributions, Top 30 Headquarters Economy

2020 ChnBrand Trustworthy Brand Award of Tissue Industry
2021 National Model Enterprise for Trustworthy Product and Service
Quality, 2021 Stable and Qualified Products in National Quality

Inspection, 2021 Top-Quality Enterprise of China's Tissue Industry,
2021 Top-Quality Brand of China's Tissue Industry, 2021 China
Quality Credit Model Enterprise
Paper

Water Resources Department of Zhejiang Province andChina Pulp & Paper Industry (CPPI) Magazine

Integration in Shandong ProvinceGold Hongye

Economics

Top 20 Paper Enterprises in China

2021 Top 10 Enterprises

Bohui Paper

Ningbo Enterprises Confederation, Ningbo Enterprise

2021 Top Brand in ChnBrand C-BPI's Tissue Category
2021 ChnBrand Innovative Brand Award in Tissue Industry
Top 10 Enterprises in the "13th Five-Year Plan" Enterprise Case
Selection in Jiangsu Paper Industry

Shanghai Qualified Enterprise for Harmonious Labor Relations

Shandong Paper Association

Integration Promotion Center

HainanRudongBase

APP China
Forestry2021 Top 100 Enterprises in Hainan Province, 2021 Top 35
Nantong May 1st Labor Award

2021 Major Project High-Quality Construction Award of the City – Top
10 Projects for Foreign Investment Attraction

2021 Top 100 Private Enterprises in Haikou (No. 60)

Provincial Leading Enterprise of Forestry and Grassland Industry
Leading Enterprise in Guangdong Province

Hainan Enterprise Confederation, Hainan Enterprise
Nantong Federation of Trade Unions

CPC Nantong Municipal Committee, Nantong Municipal
People's Government

Haikou Federation of Industry and Commerce
Yunnan Forestry and Grassland Bureau

Forestry Administration of Guangdong Province

Bureau of Industry and Information Technology of Zibo
Jiangsu Province Paper Industry Association
Yancheng Municipal People's Government
Committee of the CPC Dafeng District and People's
Government of Dafeng District, Yancheng City

Private Enterprise Chamber of Commerce of Dafeng
District, Yancheng City

Suzhou Industrial Park Office of Statistics

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

Organizing Committee of the 7th China Brand
Innovation and Development Forum

China Association for Quality Inspection
China Brand Power Index

Organizing Committee of the 8th China Industry
Influence Brand Summit

Jiangsu Province Paper Industry Association
Shanghai Municipal Human Resources and Social

Security Bureau, Shanghai Federation of Trade Unions,
Shanghai Enterprises Confederation, ShanghaiEnterprise Directors Association, Shanghai Federation ofIndustry and Commerce

FMCG 2021 (Fall) Best-Selling Premium Products
2021 Responsible Brand Award at the 11th Philanthropy Festival

10

China (Shanghai) Premium Products Promotion
Organizing Committee

Organizing Committee of the 11th Philanthropy Festival

11

APP China Sustainability/ESG Report 2021

Our Strategy"Two Transformations and One Exceptional" Strategy

Sustainability/ESG Strategy

In everything we do, we have always acted to serve increased social productivity, greater comprehensive national power, better livelihoods, theIn 2021, APP China developed the 2030 Sustainability Strategy Framework and defined a three-year ESG roadmap under it. APP released the

reduced income inequality, and greater stability and harmony ("five serves"). Consistent with our commitment in those regards and drawing on aemission reduction, forest conservation, and community development. To APP China, the SRV 2030 has been an important guidance for developing

establishment of a low-carbon, eco-friendly, circular, economical, and sustainable green development system, and optimized social structure,

study of the growing trends on the global, national, and industry scales, we have formulated a new strategy at APP China built on two directions oftransformation and one area of exceptional performance ("Two Transformations and One Exceptional"), namely green transformation, digital andintelligent transformation, and exceptional economic performance. With the Four-Wheel Drive as our foothold, we will make every effort in the years"Sustainability Roadmap: Vision 2030" ("SRV 2030") in 2020, specifying three major sustainability focuses for the next decade: energy saving andthe sustainability strategy. By incorporating ESG factors into the sustainability strategy, APP China seeks to advance management practices in thefocus areas of the papermaking industry to continuously improve our sustainability performance.

ahead to bring our new strategy to materialize.

"Two Transformations and One Exceptional"Greentransformation

Digital and intelligent
transformation

Culture & MBOS
The corporate culture and MBOS benchmarking

We push for organizational change and use digital

shape a self-driven team.

system for talent attraction and development.

means to improve efficiency; we have built a soundDigital Transformation

Technological Innovation

product and service, business model, customer

atmosphere where "everyone wants to innovate

new marketing, and new technologies to meet theneeds for business development and improve theefficiency of production and management.

12

Community

conservation

development

Over half a million hectares

Improve the lives ofof natural forests conserved

millions

APP China's 2030 Sustainability Framework• 30% reduction in product carbon
footprint• Peak carbon emissions by 2030

• Continuously promote "carbon※ Provide ESG training• Contribute to the "over half amillion hectares of natural forests
conserved" goal

neutral" products• Fully advance ESG-related practices,deliver on the three-year ESG

roadmap, and continuously improve
performance

Driven by R&D and technological innovation,

experience, etc.; we engage in new manufacturing,

footprintof millions" goal

We use digital means to drive customer-centric

restructuring of and innovation in the business process,

30% reduction in carbon• Contribute to the "improve the lives

Four-Wheel
Drive

ForestEnergy saving andemission reduction

Exceptional economic
performance

Organization and Talentmechanism serve to motivate our employees and

APP's 2030 Sustainability Goals※ Conduct ESG ratings• Undertake plantation-based CCER

(China Certified Emission Reduction)
projects• Adjust energy mix at production bases※ Develop and implement improvement plans based on ESG ratings

we promote all-round innovation; we create an
and everything can be innovated".

Green transformation and digital and intelligent transformation are APP China's core development strategies at present. We hope that in the three

years implementing our ESG roadmap, we will gradually align the Company's overall sustainability management with international ESG assessmentand management systems. In addition to a clearer self-evaluation, this will also pinpoint areas where our management can be further improved tohelp bring our development strategy to fruition.

13

APP China Sustainability/ESG Report 2021

Undertaking Sustainability Certification
Over the years, APP China's forest farms and mills have actively worked to obtain sustainability certifications so that the reviews and audits can drive
improvement in our management systems and capabilities and lay a solid foundation for continuously improving our sustainability performance.

CFCC/PEFC-FM Certification* at APP ChinaNo.

APP China Forestry Companies

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 Asia Pulp and Paper Co., Ltd.

SGS-CFCC/PEFC-COC-001031

14

No.

APP China Affiliates

Certificate No.

4

Hainan Jinhai Pulp & Paper Co., Ltd.

SGS-CFCC/PEFC-COC-001058

5Gold HongYe Paper Group Co., Ltd.

BV-CFCC/PEFC-COC-12246465

6

Hainan Gold Hong Ye Paper Co., Ltd.

BV-CFCC/PEFC-COC-12246465-B

7Gold Hongye Trading (Hong Kong) Co., Ltd.

SGS-PEFC/COC-1463

8

Guangxi Jingui Pulp & Paper Co., Ltd.

SGS-CFCC/PEFC-COC-001013

9

Shandong Bohui Paper Co., Ltd.

SGS-CFCC/PEFC-COC-001115

10

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

SGS-PEFC/COC-1467

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

15

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

SGS-PEFC/COC-1465

16

Jinxin (Qingyuan) Paper Industry Pte., Ltd.

SGS-CFCC/PEFC-COC-001098*CFCC/PEFC-CoC certification refers to CFCC/PEFC Chain of Custody certification.

2021 Main Sustainability Management System Certification at APP China
ISO9001

ISO14001

ISO45001

ISO50001

CFCC/PEFC-CoC

Gold East Paper

Re-certificate audit

Periodic audit

Periodic audit

Periodic audit

Periodic audit

Gold Hongye Paper

Certificate renewal

Periodic audit--

Periodic audit

Ningbo Asia

Re-certificate audit

Re-certificate audit

Re-certificate audit-

Periodic audit

Hainan Jinhai Pulp & Paper

Periodic audit

Periodic audit

Periodic audit

Periodic audit

Periodic audit

Guangxi Jingui Pulp & Paper

Periodic audit

Periodic audit

Periodic audit-

Periodic audit

Shandong Base of Bohui Paper

Periodic audit

Periodic audit

Periodic audit

Initial audit

Periodic audit

Jiangsu Base of Bohui Paper

Periodic audit--

Periodic audit-

15

APP China Sustainability/ESG Report 2021

Stakeholder Engagement
APP China uses a variety of channels to stay connected with the stakeholders, who we have divided into 10 categories. The communication channels
set up by different departments allow us to understand the expectations and demands of each stakeholder group in a timely manner and actively
respond by making improvements to our management and practices.

Stakeholders

Top Concerns

Engagement Channels

Employees

Occupational health and safety• Company internal magazine

Corporate governance and business• Employee representative

Environmental complianceethicsWater management
Human rights
Customers andconsumers• APP Culture Voice platform• MBOS proposal competition• Training activities on different
topicsmeetings• Diversified employee activities

meetings• WeChat Official Account• Employee communication• Executive mailbox• Customer visits• Customer service hotline/mailCustomer relationship management• Little A Classroom• Sustainability reports

Sustainable forest management
Climate strategy

Water management• Engagement meetings• Industry conferences/events• Customer satisfaction surveys• Company website

Contractors• Supplier/Contractor meetings• Regular supervision and

Employment relations• Supplier/Contractor training• Sustainability reports

Environmental compliance• Cooperative R&D mechanism

Community

Product quality and safety• Community opinion processing

Climate strategy• Community representatives'

Philanthropy and common• Mill visits

representatives

Water management
prosperity
Industry

associations

inspection

Professional
institutions• Daily communication meetings• Cooperative agreement• Sustainability reports• Company website

16

Corporate governance and business• Industry-University-Research• Training activities

Product quality and safety• Joint talent cultivation• Sustainability reports

ethicsNGOs

Cooperation• Professional exchange and on-• Company website

site research activities

Waste management• Communication on specific

Biodiversity• Charity projects donation andEnvironmental compliance• Sustainability reports

Air pollutant emissions• On-site participation in events

Water management

R&D and innovation

Sustainable forest management• Government communication• Regular visits

Water management• Government inspections and• Sustainability reports

Energy management• Information disclosure andAir pollutant emissions• Awards and recognition• Industry publications

Biodiversity

Environmental compliance

Climate strategy• Sustainability reports

and thematic forums

Air pollutant emissions

Talent training and development
Product quality and safety

platform

Risk and compliance management

Occupational health and safety

agencies

popularization activities• Regular visits

R&D and innovation

Energy management

Government

volunteer activities• Papermaking culture

Product quality and safety

Sustainable forest management

Customer relationship management

Responsible supply chain• WeChat communication• Charitable activities and• Research and cooperation

Environmental compliance

Economic performance

Win-win cooperation

supervision and engagement• Project cooperation• Industrial exhibitions, seminars,

Digital and intelligent development

Win-win cooperation

Water management

Customer relationship management

and feedback

Economic performance

R&D and innovation

Product quality and safety

Banks

Environmental compliance

Climate strategy

Occupational health and safety
Win-win cooperation

Engagement Channels• WeChat Official Account

Biodiversity
Suppliers/

Top Concerns• Sustainability reports

Environmental compliance
Product quality and safety

Stakeholders

meetings

field visits
reporting• Thematic training• Awards and recognition• Company website

Media

Product quality and safety
Water management
Climate strategy

R&D and innovation

topics• Company website• WeChat Official Accountcooperation• Meetings, exhibitions, forums,
etc.

• WeChat Official Account• Executive interviews• Company website

Environmental compliance
Energy management

17

APP China Sustainability/ESG Report 2021

Materiality Assessment

The Story of Paper in China Becoming Part of Permanent Collection at NLC and CNMEThe Story of Paper in China , a documentary about the

The Story of Paper in China is the first major documentary

footages of Gold East Paper, Ningbo Asia, Gold Hongye,

papermaking technology from a cultural perspective shot

development of paper industry in China, consists ofHainan Jinhai Pulp & Paper, and APP China Forestry,

among other companies. It was shortlisted for the 2021

Beijing Ethnographic Film Festival and has become partof the permanent collection at both the National Libraryof China (NLC) and the Chinese National Museum of
Ethnology (CNME).

in China about the origins and development of Chinese

by a CCTV (China Central Television) team. As a corporate

representative of China's paper industry, APP China displays
its advanced production technologies, products, and high-performing workforce in the documentary. The film gives a

realistic and vivid presentation of the century-long revival of
China's modern papermaking industry.

Every year, APP China conducts a materiality assessment to understandchange" into "climate strategy" and "energy management" and changing

launching the APP China ESG strategy, we incorporated an ESG lens into

Some topics have been rephrased to align with our strategic priorities.

the importance of our sustainability issues to different stakeholders. After"supporting philanthropy" to "philanthropy and common prosperity".

the identification of material topics. While continuing to follow the GRI

Standards, the SASB Standards for Pulp & Paper Products and Forestry

The 2021 survey was conducted as an online questionnaire, with 1,282

into account the focal issues of the forest and paper industry as outlined

those issues from the two dimensions of "significance to APP China" andManagement, and the major development trends in China, we also took

valid responses collected from key stakeholders. We scored and analyzed

in mainstream ESG rating systems such as the S&P Global CSA (Corporate"significance to stakeholders". We then prioritized the issues based on a

Sustainability Assessment). Those efforts led us to identify 23 sustainability/

combination of the scores and input from internal and external experts.

ESG issues that are highly relevant to APP China. A few changes havebeen made compared to 2020, including breaking "addressing climate

16

Supporting Charitable Cause for Biodiversity
230g and 280g bag paper, both provided by APP China.

in the Clouds Again" at the Sinar Mas Plaza in September

biodiversity protection. The Company also bought one

hosted a six-week paper art exhibition entitled "Sound

2021. The works on display were made of simple white
paper, but were artistically sculpted such that theybreathed "life back" into 20+ bird species that had become
extinct or were endangered in the last few centuries

around the world. The paper used included Gold Ball

21

Significance to stakeholders

Together with a few Chinese paper artists, APP China

9

The event was intended to raise public awareness ofartwork about an extinct bird. It will sell it for charityand donate all the proceeds to SEE Foundation's SEE

Free Flying Wings program, a comprehensive ecologicalconservation program dedicated to protecting the mostendangered waterbirds and their habitats in China.

23

12

4
10

3

5

13

22 19
20

18

2

15

14

17

7

1

11
6

8

Significance to APP China

16
9
7

21
4

17
19
"Sound in the Clouds Again" paper artworks

18

22High materiality issues

Environmental compliance20

safety12

Occupational health andProduct quality and safety
Water management

Corporate governance andbusiness ethics

Climate strategy

Air pollutant emissions
Sustainable forest
management

10
18
23
11
3
2
1
8
5
6

Medium materiality issues
Waste management

Employment relations
Human rights

Energy management
Biodiversity

15
13
14

Low materiality issues
Win-win cooperation

Philanthropy and common
prosperity

Community relations andcultural communication

Talent training and development
R&D and innovation

Digital and intelligent development
Economic performance

Customer relationship management
Risk and compliance management
Responsible supply chain

19

APP China Sustainability/ESG Report 2021

IssuesContents in report

Economic

Company Profile

performance

Digital andintelligent

development

Performance in Numbers
Company Profile

Internal

boundaries

External boundaries
Customers andconsumers

Suppliers●

Community●

Our Strategy

Addressing Climate Change Through Decarbonization
and Green Solutions

Accelerating Digital and Intelligent Transformation and●●prosperity

Community
relations

Addressing Climate Change Through Decarbonization
R&D andinnovation

Corporate

governance andbusiness ethics

Accelerating Digital and Intelligent Transformation andEmpowering High-Quality Development

Evolving with the Times: Providing Paper Solutions for

Business Integrity and Ethics
Supply Chain Management

Risk andRisk Management

management

Performance in Numbers

compliance

Responsible

supply chain

and cultural
●

●

●

●

Business Integrity and Ethics

●

●

●

●

●

●

●

●

Our Strategy

Addressing Climate Change Through Decarbonization
and Green Solutions

Supply Chain Management

●

●

●

Product quality
and safety
Customer

relationshipmanagement
Occupational

health and safety
Employment
relations
Talenttraining anddevelopment
Human rights

20

Society

Product Responsibility

Supply Chain Management
Product Responsibility

Customer Relationship Management
Safety and HealthPerformance in Numbers

Passing on Corporate Culture and Moving Forward with
Employees

Performance in Numbers

Passing on Corporate Culture and Moving Forward with
Employees

Performance in Numbers

Passing on Corporate Culture and Moving Forward with
Employees

Win-winEnvironmental
compliance

Climate strategy●●●

Air pollutant
emissions●

Wastemanagement
Water

management●

Sustainable
forestmanagement●●●

Charity and Philanthropy●

Suppliers

Community●●

Performance in Numbers

Charity and Philanthropy
Performance in Numbers

Community Engagement
Charity and Philanthropy

Stakeholder Engagement

Evolving with the Times: Providing Paper Solutions forSociety

Forest Resources Management

Cleaner Production Management
Performance in Numbers
Our Strategy

Addressing Climate Change Through Decarbonization
and Green Solutions

Accelerating Digital and Intelligent Transformation andEmpowering High-Quality Development

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

and Green Solutions

Accelerating Digital and Intelligent Transformation andEmpowering High-Quality Development

●

●

●

●

Cleaner Production Management●●

Community Engagement

consumers

Addressing Climate Change Through Decarbonization
management●

Supply Chain Management

Customers and

Our Strategy
Energy●boundaries

External boundaries

Cleaner Production Management●

Performance in Numbers

Evolving with the Times: Providing Paper Solutions forcommunicationcooperation

Society

About APP China

Human rights

and common

Information Security Management

Contents in report
Safety and HealthPhilanthropy●

Empowering High-Quality Development

and Green Solutions

IssuesInternal●

Biodiversity

Performance in Numbers

Cleaner Production Management
Performance in Numbers

Cleaner Production Management
Performance in Numbers

Cleaner Production Management
Performance in Numbers
Our Strategy

Addressing Climate Change Through Decarbonization
and Green Solutions

Forest Resources Management
Forest Resources Management

●

●

●

●

●

●

●

●

●

●

●

●

●

●

21

Addressing Climate Change ThroughDecarbonization and Green Solutions

In a Time of
Change"Carbon Neutral" Products Stimulating Low-Carbon Consumption
The transition to a green and low-carbon

authorized by the Certification andmanagement. Back in November 2019,

for achieving the 30-60 Goals. APP China

conducted a cradle-to-gate Productaccounting project in our plantations,

lifestyle is an important pillar and driver
pays close attention to GHG emissions
throughout the product lifecycle andstrives to provide consumers with a

The world is undergoing profound changes: scientists have been

As a backbone of the national economy, the manufacturing industry is

continues to worsen and threaten our livelihoods; digital technologies

sustainable development will depend to a large extent on how well itsounding the alarm on global warming while climate change

are creating an economic upheaval and becoming a strategic key toindustry leadership; technological innovation continues to play abigger role in the achievement of sustainable development around theglobe, and industries are competing to stay proactive in the changing
landscape of innovation. Such instability and uncertainty have beenfurther fueled by the COVID-19 pandemic that is increasingly becoming
part of life. It thus remains highly critical for today's enterprises tocarefully consider the transformation they need to go through to be
optimally positioned to adapt and respond to such changes.

Highlight of the Yearalso facing huge challenges in this time of change. Its high-quality andcan turn those challenges into opportunities. As the 14th FYP period
unfolds, China has made revitalizing the manufacturing industry,

especially advanced manufacturing, a top priority in the establishmentof a new development pattern. China has set out a list of goals

broader selection of green and lowcarbon products. In May 2021, APP

China released the Group's first "carbonneutral" tissue series to raise awarenessof the importance of carbon neutrality
and encourage public engagement indecarbonization actions.

and tasks centered around the high-quality development of the

The first collection of "carbon neutral"and upgrading efforts.

Kingdoms Series Breeze ™ Primary-Color

manufacturing industry to guide companies in their transformation
As a pulp and paper company with a global vision and a footholdin China, APP China maintains an unwavering commitment tosustainability, acts to support national development strategies,

and actively works towards a low-carbon transition based on the"Integration of Plantation-Pulp-Paper" green cycle model; seeks
digital and intelligent upgrading of the entire industry chain toempower value creation; explores opportunities of innovation andtissue products includes the Three

IF 3-Layer 120-Piece 24 Packs, Three

Kingdoms Series Breeze ™ Primary-Color
HK 4-Layer 7-Piece 12 Packs, EMPORIA
Boxed Facial Tissue 3-Layer 4 Boxes,

Accreditation Administration (CNCA),
Carbon Footprint (PCF) assessment on
APP China's tissue products throughthe three major stages of raw material

production, raw material transportation,and manufacturing. It also issued theProduct Carbon Footprint Certificate
to Gold Hongye. In August 2021,

numerous product series of various

specifications from Gold Hongye suchas toilet paper, facial tissues, napkins,

paper handkerchiefs, and wipes underbrands like Breeze ™ and EMPORIA ™

were granted the China Green Product

Certification by an accredited third-party
organization. They are among the firsttissue products to be green certified in
the Chinese market.

Breeze ™ Alcohol Base Disinfecting

The "carbon neutral" products have

Shanghai Co., Ltd., a third-party agency

rapid progress in carbon emissions

Wipes Family Size 40 Wipes, etc. Ti Group

we started the perform carbon sinkand from it we have gained a full grasp of

the combined carbon sink of all 270,000+
hectares of our plantations. At thesame time, we have been continuously

driving down our energy use and carbon
emissions by adopting advanced

processes, technologies, and equipment

whilst undertaking initiatives designed to
improve energy efficiency and optimize
the energy mix. Going forward, we willfurther explore our "carbon neutral"potential to extend the concept to moreproduct series under all three categories
of tissues, industrial paper, and cultural

paper, and we will join hands with morebusiness partners and consumers to build
a green and low-carbon future.

been possible because of APP China's

green product solutions; strengthens corporate culture, fosters strong

solidarity between employees and the Company, and gives employees
vast room to grow, thrive, and realize their career aspirations. We

will continuously fulfill our social responsibilities as a major industry
player, getting behind the wheel and heading in the right direction

amidst this tidal wave of change. We will stand in solidarity with our

stakeholders and with the wider papermaking industry in China andmove forward to a beautiful future.

Some of APP China's "carbon neutral" products

22

23

APP China Sustainability/ESG Report 2021

Managing ClimateRelated Risks andOpportunities

Climate change is a major challenge facing all humanity today. For the papermaking industry,
the low-carbon transition is both a necessary step for meeting challenges of the times and ahistorical opportunity for companies to refresh their core competencies. Our long-standing
commitment to the "Integration of Plantation-Pulp-Paper" model has built "green" into

our DNA; in alignment with the national 30-60 Goals, we proactively explore climate action

strategies to advance the Company-wide green and low-carbon transition at a strategic level

and continuously build stronger climate change mitigation and adaptation capabilities while
exploring green development opportunities to do our part to help realize carbon neutrality.

APP China's Board of Directors and management team place a strong emphasis on climate-

related risks and opportunities and make it a top priority in our green transformation strategy

to realize the "carbon neutrality" goal. We strive to make meaningful contributions to reaching
peak carbon emissions and carbon neutrality in many and varied ways, as reflected in thefollowing efforts: we identified and assessed the challenges and potential impacts of climaterelated factors on our production and operations and formulated low-carbon transition

strategies based on our business development plan; leveraged our plantations, which are part ofour "green DNA", and optimized our energy mix; strengthened carbon emissions management
capabilities and intensified efforts to develop low-carbon products.

Governance System for Addressing Climate Change

Scan the QR code to read the
APP China Addressing Climate Change Report

In 2021, APP China's Board of Directors led aa team leader and several members. The

transformation efforts. A Carbon Neutral

related work and plans to work out thesystematic planning process to deploy green
Working Group was set up that spanned ourPaper BU, Tissue BU, Forestry BU, and all theheadquarters departments, each assigningteam assessed the core modules of climate"carbon neutral" strategic roadmap plan by2022.

APP China's Governance System for Addressing Climate Change
Board of Directors

Sustainability Department

Carbon Neutral Working Group

Strategic Planning Department

Set the strategic direction of the Company's green transformation.

Develop a localized 2030 sustainability roadmap (including addressing climate change)
both consistent with APP's SRV 2030 and customized to China's specific realities.

Lead and oversee the overall advancement of APP China's green transformation efforts.

Lead the development of APP China's low-carbon transition strategy and establish
specific targets and action pathways for realizing "carbon neutrality".

APP China Forestry's carbon sink is based on cell and tissue culture of seedlings and science- and technology-based forest management

Risk and Opportunity Management Actions

As China strives towards the 30-60 Goals,

passively respond. Instead, all enterprises

policy system has been gathering pace.

to the global sustainability agenda. This is athe construction of a national "1+N"
In May 2021, the Central Committeeof the Communist Party of China andthe State Council issued the Working

Guidance for Carbon Dioxide Peaking

and Carbon Neutrality in Full and Faithfulproduction bases) andheadquarters departments

Carry out carbon neutral capacity building, carbon accounting, carbon emission
quota trading, product carbon footprint accounting, energy saving and carbon

reduction, carbon asset development, green financial product development, etc.

to our future generations. We believe thatnew opportunities will come along as wework towards such a future.

As well as implementing climate change

policy. The "N" policies that include industry-change is also important for APP China.

Philosophy , constituting the "1" overarchingand sector-specific implementationplans, along with a set of supportingplans, are expected to be released in thenear future. Meanwhile, China has been
evolving its carbon pricing mechanism

to provide a market-based incentive forcompanies to lower their energy use andcarbon emissions. It is thus foreseeable

constraints on energy consumption and
GHG emissions and carbon compliancecosts will continue to rise for key emitters.
What needs to be seen is that the goal of

limiting global warming to 1.5 ° C should not
be perceived by enterprises as a pressure to24

precious opportunity to bring real benefits

Implementation of the New Development

that, companies will face more stringent
BUs (including theare obliged to take the initiative to contributemitigation actions, adapting to climate

We have more than 270,000 hectares ofplantations in China, and their growth has
every relevance to the climate. Frequent
extreme weather events such as hightemperatures, typhoons, and heavy rainfall

continue to inflict varying degrees of damage
on forests. In addition, our production bases
are primarily located in coastal areas, which
exposes them to weather-related risks likeflooding, typhoons, and sea level rise in themedium to long term. For all those reasonsand more, implementing effective climatechange adaptation initiatives is also an area
we need to pay more attention to in the
future.

25

APP China Sustainability/ESG Report 2021

We have launched a series of climate-related initiatives so far andare actively exploring opportunities that may arise from our green

and low-carbon transformation. Drawing on the Company's "carbon

neutral" strategic roadmap, we will continuously optimize our climaterelated indicators and targets and formulate specific implementationplans towards the achievement of the targets.

Developing Green Products and Advocating Green

Strengthening Energy Management

Consumption

APP China continues to invest in environmental protection

overall energy mix. Rudong Base is currently exploring theWe have made considerable investment in developing

adopting advanced low-carbon technologies, implementing

power, among other types of clean energy.

release of high-bulk products, ultrahigh-bulk products,

and constantly strives towards an optimal energy mix byenergy-efficiency retrofits of technologies and processes,

application of offshore wind power and coastal mudflats PV

increasing the proportion of renewable energy, andWe also continued to pursue digital development. Starting

expanded the uptake of low-carbon technologies anddevelopment at a predominant position. It is currently

improving management processes. In 2021, we further
equipment at our mills, including and the applicationof magnetic levitation fans, lithium bromide absorption

chillers, the multi-effect evaporation technology, magneticlevitation vacuum pumps, and lithium bromide absorption
heat pumps, among others, which stands to considerably

reduce carbon emissions. Under the Group's guidance, ourmills also started to initiate or expand rooftop photovoltaic(PV) projects while increasing the ratio of biomass in fuelprocurement and consumption, thereby continuously
increasing the proportion of renewable energy in ourfrom the planning stage, Rudong Base had put digitalbuilding a suite of smart projects to be the Group's

benchmark. At the same time, our mills have entered stage

2.0 on the digital transition journey. Real-time data tracking
and monitoring at this stage empowers us to performaccurate energy and resource management, which has led
to notable reductions in the use of electricity and water,

and promoting environmentally friendly products. The

biodegradable and recyclable products, etc. has generated

positive environmental impacts like reduced consumption of

resources and plastic. Meanwhile, APP China mills have been
undertaking CFCC/PEFC Chain of Custody certification foryears to ensure reliable raw material sourcing. We launcheda "carbon neutral" tissue series in 2021 and plan to embed
this concept into more product categories in the future tohelp direct people towards green consumption and a lowcarbon lifestyle.

paper loss ratio, and unplanned equipment downtime. For
more details, please refer to the "Accelerating Digital andIntelligent Transformation and Empowering High-Quality
Development " section.

• Six Gold Hongye products obtained the Carbon• Footprint certificate in May 2021•

By the end of 2021, APP China's plantations totaled an

We continue to evolve our carbon emissions monitoring,

PEFC. Continuous certification helps us closely monitor

enhance comprehensive carbon emissions management.

enhance their carbon sequestration capacity. In recent years,
have completed an accounting of the cumulative carbon

sink of our plantations as of the end of 2020. In 2021, APP

China Forestry took our carbon sink efforts to the next level.
The company conducted exhaustive research on national

carbon inclusion before communicating them at all of ourforest areas through study sessions and discussions. It went
on to formulate proposals for several carbon sink projects,
making full preparation for undertaking plantation-based
CCER projects in the future.

In the meantime, APP China Forestry continued developing
new seedling strains resistant to wind, frost, drought, or
insect pests to increase the resilience of our plantations
to climate change and other changes in the naturalenvironment. Since August 2020, APP China Forestry has
been working with Hainan Jinhai Pulp & Paper and the

Eucalyptus Center to conduct research related to the pulp
cooking performance of different eucalyptus varieties,

completing a series of pulp yield tests on new strains in
2021. They intend to use such research to find ways toimprove pulp production quality so that forest resources
can be more efficiently utilized.

value of energy used and the carbon content per unitof calorific value, to increase the accuracy of the carbon

emissions data. Our Paper BU coordinates and manages its

in 2020*

1

1
2,

31

97

,2 2 1,9.66 tons o

6 tons
8 8.2

of

fC
O
C

2

e

mills' participation in carbon trading and has formed specificworking groups, such as the Policy Group, the Energy Saving
and Emission Reduction Group, the Biomass Fuel Group,and the Carbon Neutral Certification Group, to reinforce
carbon management capabilities.

63

In recent years, we have been working to unify the carbon
quota management of all the APP China mills included in

the national emissions trading scheme (EST) at the Grouplevel. In the Company's MBOS proposal competition, ouremployees presented a multitude of practical improvement
plans around energy saving and carbon reduction afterstudiously researching the topic. Several improvement
project teams have been formed at the mills, tasked

with exploring room for reducing energy use and carbon
emissions and finding ways to deliver on both carbon
reduction and carbon profits. Guangxi Jingui Pulp &Paper has developed assessment targets and an incentive

mechanism specially for quota surplus, linking quota surplus
with the performance review of relevant departmental heads
while establishing incentives for meeting the targets. In 2021,
APP China fulfilled all of its carbon emissions complianceobligations in the first compliance cycle (2019-2020) of thenational EST.

3,

8,and local policies on carbon trading, carbon sinks, andmeasurement program, independently testing the calorific

GHG emissions by the eight mills within the scope of reportingeO2

we are placing a growing focus on forest carbon sink andOur mills carry out an ongoing elemental carbon

Certification in September 2021

Total emissions

23 3.39 tons o

Scope 1O
fC

e

and manage the sustainability risks in our plantations andreporting, and verification management mechanism toin the industry to obtain the Green Product2

area of 270,900 hectares, with 90.9% certified to CFCC/• Gold Hongye's products were among the first

4

Carbon Emissions Monitoring and Carbon Quota Management

3,

Conserving and Utilizing Forestry Resources

Scope 2

* As of the completion of this report, the GHG emissions data of most mills
for the year 2021 were still being calculated, so the emissions disclosed
in this report are for the year before, i.e., January 1, 2020 to December
31, 2020. The scope of data covers Gold East Paper, Ningbo Asia, Guangxi
Jingui Pulp & Paper, Hainan Jinhai Pulp & Paper, Hainan Gold Hongye,
Hainan Gold Shengpu, Shandong Base of Bohui Paper, and Jiangsu Baseof Bohui Paper. As to the other mills, Rudong Base became officiallyoperational in the second half of 2021; Gold Huasheng and Suzhou Gold
Hongye were shut down in April 2022. The GHG emissions data for thosemills are not included in the scope of this report therefore not disclosed
as most of them are no longer available. The carbon accounting at Ningbo
Asia was performed in accordance with the ISO 14064-1:2018, while othermills used the Greenhouse Gas Emissions Accounting Methodology andReporting Guidelines for Paper and Paper Product Manufacturers (forTrial Implementation) issued by the National Development and Reform
Commission and the Corporate Greenhouse Gas Emissions Accounting
Methodology and Reporting Guidelines for Power Generation Facilities
issued by the Ministry of Ecology and Environment.

We are currently working with financial institutions to explore

opportunities to develop green bonds focused on "carbon neutrality".
We hope to leverage the Group's ability to allocate green resources
to provide financial support for green projects that contribute tocarbon reductions and facilitate a green and low-carbon transition inindustrial structure, energy mix, and lifestyle.

26

27

APP China Sustainability/ESG Report 2021

Accelerating Digital and Intelligent Transformation andEmpowering High-Quality Development

Highlight of the YearA Closer Look at the Sinar Mas Rudong High-Grade Tissue Industrial Base
After the No. 1 production line of thethe Base has a total annual design

and processing to logistics. This enables

Sinar Mas Gold Hongye (Nantong) Co.,

grade tissues and will be mainly used

manufacturing, smart services, and smart

High-Grade Tissue Industrial Base ofLtd. ("Rudong Base" for short) started
operation in June 2021, eight paper

capacity of 3.96 million tons of high-for producing tissue products such as
Breeze, VIRJOY, and EMPORIA.

machines were turning out paper

products by the end of the year at a

The project adopts an "Industry 4.0 + AI"

is expected to reach 780,000 tons whena world-leading smart and eco-friendly

total capacity of 240,000 tons. Capacity

phase I construction is completed in 2022.
With a total planned area of 8,500 mu ,Rudong Base has been built following
an investment made by Gold Hongye

Paper Group Co., Ltd. at the Yangkou Port.

Divided into three phases of construction,

production model and strives to become
paper production base. The adoption ofvarious digital technologies like big data,

5G, and cloud computing, combined withadvanced smart equipment and system
software, systematically integrates of all

stages of production from papermaking

an operating model where smart

management are closely knitted together.
It thus realizes "data-based information,
modular management, and automatedproduction" and a fully digitalized supply
chain that goes from suppliers to pulp
and paper mills and all the way to theend customers. All of those serve toremarkably enhance the overall efficiencyof the supply chain while keeping theconsumption of energy and resources atmuch lower levels.

Building Smart Logistics at Rudong Base

As a key component of Rudong Base construction, the purpose

Rudong Base balances smart and green considerations in its

integrated supply chain and enable information flows across all

flow. It has been designed to avoid overlapping or detour,of developing smart logistics is to create an end-to-end

stages from suppliers to production and to customers. Rudong

Base made further automation and intelligence upgrades of its
logistics system in 2021 and will achieve 5G coverage in 2022.

Key technologies in logistics

Smart• Strengthen the maturation

production

mills
Smart officesecurity

converters to save energy and reduce carbon emissions.

New equipment in logistics

system, centralized control centerbase paper RGVs (rail guided vehicles), base paper RFID

packaging material AGVs (automated guided vehicles),(radio frequency identification) technology, automatedwarehouses for finished products, AI+3D vision
depalletizing robots

equipment, process optimization,
management changes, andmassive data so that they can bebuildings

Smartefficiently. The Base also takes advantage of frequency

Unmanned weighbridge, mobile handling robots –and application of software,lines

which ensures the storage and transportation system operates

Smart logistics equipment system, production processcontrol system, smart data analysis and monitoring

5G

development. One example is the design of the logistical trafficturned into new capabilities.

Nine focusesof the digitalconstruction at
Rudong Base

Lean

management
systemplantsSmart water

management

Projectmanagement
softwareproduction equipment and use

industrial and logistics robots at
scale.

• Establish an expert knowledge
Smart

Smart power• Continuously update smart

logistics

base, perform online monitoringof key data such as the operating
status of equipment, fault

diagnosis, and product quality,
provide swift solutions, andgradually realize automatedmonitoring.

• Harness the data analysis

capabilities of 5G and AI to makesmart diagnosis of such indicators
as energy consumption, water

consumption, and raw material

Automated sizing line

Fully automated sealing and palletizing assembly line

consumption.

28

29

APP China Sustainability/ESG Report 2021

"Restructuring"
Effect ofDigitalization

The ever-advancing digital technologies are driving rapid economic change. The 14th FYP calls

Unmanned Weighbridge System

for "accelerating digitized development and building a digital China", shifting China's digitaltransformation and digital construction into higher gear. As most traditional manufacturing enterprises
undergo varying degrees of digital transformation, China's manufacturing industry is entering an eraof "smart manufacturing" driven by digital technologies and technological innovation.

In May 2021, nine unmanned intelligent weighbridges at Guangxi

As a pulp and paper company with a global presence and a rich portfolio of paper products, APP

underpinned by a number of cutting-edge technologies such as

Jingui Pulp & Paper became fully operational. The system,

AI and big data, enables quick and accurate weighing of vehicles

China has been making a smart and digital shift in our operating model. We have incorporated digital

without human assistance. It automatically detects vehicles withtransformation and technological innovation into the Group's Four-Wheel Drive strategy and madeabnormal tare weight to prevent fraud or cheating while performing

digital and intelligent transformation one of the Group's two objectives of strategic transformation. In

fully automated collection, identification, and control of thethe longer term, we look to restructure four areas of business, namely business processes, customer

weighing readings. Since the system was put into use, the accuracy

experience, product structure and services, and business model, as we pivot to fully leverage therate of weighing has remained at 100%; the average weighing time

digital economy.

has been halved from an average of 4 minutes per vehicle whenmanual handling was used, and so has the number of operators

During Digital 1.0, APP China has moved a large amount of business online and broken the barriers

needed, which has gone down from 4 to 2, saving 50% in manpower

between business departments. In this process, we accumulated a large body of data covering theneeded.

various modules of sales, production, operations, logistics, finance, customer management, etc. andrealized standardized, systematic, and visualized management. In 2021, we started to gradually phase

into Digital 2.0 period, where we are to turn the business data collected in the previous stage into morevaluable applications to inform better management decisions; we will also accelerate the applicationof big data and AI to achieve more breakthroughs in smart manufacturing, user demand analysis andresponse, etc.

In December 2021, the fully automated modern stereoscopic

that of ordinary warehouses. Moreover, the adoption of theoperation. It is a new generation of stereoscopic warehouse that

System (WMS) has made possible the automated and unmanned

warehouse of Guangxi Jingui Pulp & Paper was officially put into

Upgraded the customer relationshipmanagement (CRM) platform to fully digitalize

utilizes high-level aisle stacker technology. The warehouse hasorder information management, with customer

a floor space of 24,000 square meters and is over 30 meters tall,

self-help ordering rate topping

80

A Fully Automated Modern Stereoscopic Warehouseallowing for a storage space utilization rate of over four times%

Warehouse Control System (WCS) and the Warehouse Management
movement of inventory into and out of the warehouse, further

digitalizing logistics while improving the overall efficiency, safety,
and accuracy of warehousing.

Advanced the management of the various

scenarios such as procurement, access control
weighbridge, inspection, and settlement,
realizing integrated automation of over300

scenarios

The acquisition, tracking, and timely management of real-time data led to significant energy
savings and consumption reductions at the mills:
Water use reduced by

8.8%

Guangxi Jingui Pulp & Paper statistics from
July to October 2021

External power consumption reduced by25%

Hainan Jinhai Pulp & Paper statistics from2019 to 2021

Ratio efficiency of paper loss
optimization increased by

40%

Guangxi Jingui Pulp & Paper's automated stereoscopic warehouse

Ningbo Asia statistics from June 2020 to
October 2021

30

31

APP China Sustainability/ESG Report 2021

Bohui Paper Making a Comprehensive Digital Move

Developing Smart Forestry

Bohui Paper launched Digital 1.0 project in May 2021 in

In keeping with the Group's digital and intelligent transformation strategy, APP China

preliminarily intelligent operations. The main objective

the company accelerated mechanized operations, applying them to multiple forestry

pursuit of accurate management based on digital andForestry continues to make progress in automated and smart forestry. For one thing,of the project is to integrate the end-to-end businessprocesses such as planting, fertilization, weeding, and timber collection; it also

processes to form a closed-loop system spanning master

expanded the use of drones throughout the forestry lifecycle to continuously leveragedata management, full-lifecycle quality management

their role in protecting forest resources and promoting their rational use.

from raw materials to finished products, warehousing andlogistics management, implementation and integration

Some of APP China Forestry's applications of drone technologyof research achievements, employee recruitment anddevelopment, etc. The project will officially begin
operation in 2022.

Integrating Data Chain to Improve Productivity

Applied

Piloted• Outlining and• Pre-planting

calculating the areaof various types ofHainan Jinhai Pulp & Paper has established an evolving

plantations

production execution management system and a logistics
management system to fully connect the data of all

chemical weeding*• Disease and insect
pest control• Plantation patrols• Fire prevention andprocesses from the receiving of raw materials to thedisaster relief

shipment of finished products, which has greatly boosted• Evidence collection

the productivity while reducing energy consumption. The

for illegal logging

company's data collection system can be connected to the
production management system so that the key energy
consumption parameters of each system and process

In test• Accurate

measurement oftree height• Calculation offorest stock volume

In planning• Measuring soil

moisture content**• Monitoring the
growth healthindex of eucalyptus

in combination• Disease and insect

models• Classification ofwith growthpest monitoring
surface features* Pre-planting chemical weeding: Chemical weed removal before planting.
** Soil moisture content: The amount of water present in the soil.

can be integrated to enable real-time tracking of energy
consumption in the production process. Additionally,
improvements made to the system monitoring allow
managers to stay updated on the operating status ofimportant mechanical and electrical equipment at the millto ensure workplace safety.

Gold East Paper Receiving AAA-Level Standard Implementation Certification for Integration of Informationalization andIndustrialization Management Systemorder placement, raw material input, make-to-order production,facing Chinese companies in advancing digital transformationtransportation. Using the system allows the business processes

and an effective way to promote industrial restructuring andupgrading. By virtue of its "on-time order delivery management

capability", Gold East Paper passed the Standard Implementation
Certification for Integration of Informationalization andIndustrialization Management System (AAA-Level). "On-time orderdelivery management" refers to the implementation of digitaland integrated management throughout all processes from32

Preventing forest fires and illegal forest activities such as

The integration of informationalization and industrialization
is an important means of breaking through the bottlenecks

Promoting Forest Security with Digital Apps

quality control, and warehouse management to logistics andto be better integrated, enables more efficient allocation of

resources, and guarantees timely delivery of orders. The AAAlevel (process level) is currently the highest certification level

for the integration of informationalization and industrialization

management system. Gold East Paper is the first paper company
in China to pass this level of certification.

illegal logging and deforestation is an important part ofprotecting forest resources, and human patrols are often

undermined by challenges like steep and difficult trails in

the woods, bad transportation, low efficiency, and limited

protection capacity. In 2021, APP China Forestry, employing

technological means like drones and video surveillance, wasable to become aware of and activate timely response to anumber of forest fires and incidents of illegal logging, thereby
saving forest resources from potential damage.

33

APP China Sustainability/ESG Report 2021

Using SCRM to "Customize" High-Quality Products for Consumers

Gold Hongye Paper has set up the Social Customer Relationship

Based on the SCRM platform, Gold Hongye Paper released the

Picks. Inside the SCRM consumer review model, consumers arethat was so popular among young consumers that it ran out ofManagement (SCRM) platform on its online shopping app Breeze
also the brand's followers, listeners, advisors, and co-creators.

Breeze Young Two-Color Dazzling Tissue in 2021, a hit product

When the Breeze Young Two-Color Dazzling Tissue was still in the creative

direction research phase, Gold Hongye Paper received over 50,000 consumer
inputs. Those inputs provided meaningful insights into young people's greatest

stock at one point during pre-sale.

concerns in respect of a product's visual, tactile, olfactory, and entertainment

attributes, among others. This helped the company identify the four highlights of
the new "hit" product:

SCRM Review Process

Tissue color

Sweet and fruity

Functional properties

Surface appearance

moisturizing paper, especiallyclover patternHigh-coating cream

Incubation

R&D

BeforeperiodreleasereleaseReach out to consumers

Prepare questionnaires

Host warm-up sessions

Undertake follow-up

topic discussion to

directions of new

to spark voluntaryof products on a regularthrough initiatives likeinvolve them in productR&D and motivatethem to share everyday
scenarios where theirpaper needs are unmet
and what those needsareCollect consumer

demands for upgrades
and improvements inexisting products

according to the

product development,
or interact with

consumers by offering
free trial of new
products

before product releasepromotion and sharing
by consumers

suitable when having colds orEmbossed four-leaf

rhinitis; soft and skin-friendly,

AfterperiodTissue smell

One pack pink, one pack blue

can be used as beauty tissues

monitoring and tracking
basis to inform productupgrades or new

product developmentin the futureAdjust productdevelopment

directions based on acomprehensive analysis
of collected data andinformation to bestalign the new andupgraded products with
consumers' needs

Breeze Young Two-Color Dazzling Tissue

34

35

APP China Sustainability/ESG Report 2021

Evolving with the Times:
Providing Paper Solutions for Society

Highlight of the Year

Bringing "Zero Plastic" Cups into Millions of Homes
The National Development and Reform

restriction order" fueled a strong push forcups, paper bowls, food containers, soup

and Environment jointly issued thesolutions across many sectors. It is in thispackages without the need to also apply

Commission and the Ministry of Ecology

Opinions on Further Strengthening theControl of Plastic Pollution in January
2020. It imposed a total ban on non-exploring plastic reduction or substitution
context that a "green revolution" in the

packaging sector kicked into full swing.

degradable single-use plastic straws in

In 2020, Ningbo Asia developed andend of 2020 and mandated a decrease(EPP paper) that is 100% free of plastic.

the catering industry nationwide by theof 30% in the consumption intensity

of non-degradable disposable plastic

tableware in the food takeaway sector incities above the prefecture level by 2025.
The introduction of the new "plastic

introduced the "Zero Plastic" cup paper
Applying a coating of food-grade eco-friendly polymers to the paper during
manufacturing gave its surface goodbuckets, and other food and beverage

EPP paper cups

PE lamination. Packaging products

made of EPP paper are fluorescent-free,recyclable, 100% industrially degradable,

Cups in use

repulpable, and compostable. Safe andenvironmentally friendly, such products

are perfectly aligned with the megatrends
for recyclable and green packaging

Paper remaking

materials.

barrier and heat-sealing properties suchthat it could be used to make paper

Why Aren't Traditional Paper

Cups Environmentally Friendly?

Paper cups on the market areusually made of PE-laminatedpaper. While laminating base paperwith a layer of PE can separate thepaper from water thus saving itfrom being wetted or soaked, it has
obvious drawbacks:» It is extremely difficult toseparate the PE coating frompaper cups, making them hardly

recyclable, so they will end up in

landfills or incinerators as waste.

How Can EPP Paper Contribute toa Low-Carbon Life?

» If recycled: Can be recycled 6times after entering the waste
paper recycling system, withat least 0.9 tons of high-quality
paper fiber recycled per ton of

Cup repulping

discarded into specialized
recycling bins

EPP paper.

» If not recycled: Can be almost
completely degraded within
8 weeks; can be completely"Small Cycle" of EPP paper products

degraded within 106 days whenmixed with compost, ending up
as good as ordinary soil.

» PE coating is non-biodegradable,

In May 2021, APP China's EPP paper

degradability testing, eco-toxicity testing,standard was officially released by China

will add to plastic pollution.

third-party testing and certification

specific migration limits) testing.

is China's first standard for water-basedso paper cups carelessly dumped

was granted the DIN CERTCO by theservice provider TÜV Rheinland Group

PFCs POPs testing, and SML (T) (total

and received the European Bioplastics

To promote the unification of industry

certificate. Our "Zero Plastic" series

cups, Ningbo Asia actively participated in

Association Industrial Composting

were now granted all relevant domestic
and international certifications after

passing such tests as compostability and

36

Cups labelled "Zero Plastic"

standards for EPP paper and finishedthe development of the group standard
for Water-Based Coated Cups (Water-

Based Coated Cup Paper Included) . The

Paper Association in December 2021. Itcoated paper products and includes thefirst set of rules for the recyclability ofwater-based coated paper products. Its
release gave a major push to regulated
efforts by papermaking companies tomake environmentally friendly products.

37

APP China Sustainability/ESG Report 2021

R&D and Innovation
Management

Science and technology are the greatest productivity booster. APP China highly values R&D andinnovation and fosters a strong atmosphere of technology and innovation inside the Company byconstantly improving the R&D management system and increasing investment and support in R&D. In
2021, the R&D investment of all units within the scope of reporting totaled RMB2.436 billion; a total of

103 patents were filed, including 33 invention patents, 55 utility model patents, and 15 design patents.
As of the end of 2021, we had 176 patents in the process of application.
In 2021

As of the end of 2021

R&D investment:

992

RMB

2.436

billion458

invention patents

4

assigned invention
patents

404

utility model patents

126

China revised theIntellectual Property Management Measures and theOperating Rules for PatentManagement , further optimizing our IP management process and increasing the rewards for patents

customers and consumers paper products that are green, safe, and of high quality.

APP China's Industrial Paper BU and Cultural

2021 by 49kg compared with May in theand optimize their high-bulk and ultrahigh-ultrahigh-bulk coated food-grade board. Our

Paper BU have been investing to develop
bulk paper product series in recent years
to harness the growing popularity oflightweight paper products. By redesigning
the formula and processes, Guangxi Jingui

Pulp & Paper reduced the average unit pulp

consumption between June and December

development of JGCU, a single-sided

BUs also take people's health needs intofull account and continue to deliver quality
products that give our consumers peace ofmind and an exceptional experience withpaper.

Eco-Friendly High-Grade Pure-Quality Paper

At the same time, APP China maintains close collaboration with external partners in exploring cutting-high-grade pure-quality paper. It features natural-white

excellent uniformity, the paper has been very well received by

APP China Forestry has partnered with

Bohui Paper collaborated with Tianjin

renowned chemical company, to engage

build a doctoral workstation and partnered with

Institute of Chemical Industry of Forest Products

friendly packaging materials.

design and R&D while continuously optimizing and enriching its product offerings, working to offer

to reduce the use of chemical additives. The paper also

In September 2021, APP entered into a strategic

contribute to creating an ecosystem of eco-

China invests heavily in exploring the possibilities of resource conservation and recycling in productWith a focus on health, environmental friendliness, and eye

high-quality development of the papermaking industry.

paper-based packaging materials and jointly

green and healthy have become important labels for sustainable paper products. For this reason, APP

to stimulate increased employee participation in R&D, innovation, and patent application.

edge fields that promise potential for innovation to find more feasible pathways to promoting thein cooperative endeavors in developing

people's growing demands for paper products. As sustainability becomes an increasing global focus,

design patents

Scientific and technical personnel are the driver and source of a company's innovation. In 2021, APP

partnership with SK Geo Centric, a world-

APP China maintains an unwavering commitment to providing high-quality products to meet

Making Environmentally Friendly and Healthy Products

patents was validly authorized

including

Product R&D and
Innovation

Guangdong Eco-Engineering Polytechnic to

the Research Institute of Tropical Forestry of theChinese Academy of Forestry to build a scienceand technology demonstration base. They

are to share resources in terms of technicalteams and talent training and establish close
cooperation in the R&D and innovation of
seedling strains, the implementation ofresearch findings, and the research on theenvironmental impact of plantations so as toprotection, Gold East Paper has developed an eco-friendly
shades that help relieve visual fatigue, and its production

process is free from fluorescent whitening agents (FWAs).

While adjusting the paper uniformity, the company managed

boasts a high pulp yield. With a natural and soft color andour customers and used for printing party- and governmentrelated books and important documents.

University of Science and Technology and theof the Chinese Academy of Forestry respectively
to research and develop new technologies inchemi-mechanical pulping. Once applied, the
new technologies will help improve productquality while considerably increasing theutilization rate of wood raw materials andreducing energy and resource consumption in
the production process.

realize "mutually beneficial college-enterprisecooperation".

38

The eco-friendly high-grade pure-quality paper is used for printing important documents

39

APP China Sustainability/ESG Report 2021

Innovative "Paper in Place of Plastic" Products

Yunfan White Cardboard
In 2021, Bohui Paper launched the Yunfan white cardboard, a cost-effective

new product. It is made of 100% pure wood pulp and uses the company's selfmade natural-color chemi-mechanical pulp as the primary source of fiber,

thereby scaling back the use of bleaching chemicals in the production process
while reducing COD concentrations in wastewater discharge; it also has such
added benefits as a higher pulp yield and maximized fiber strength while
maintaining the same bulk, which give it a good quality.

The Yunfan natural-white cardboard has a higher bulk with a smoother, finer,

While the modern pulp and paper industry

industry to work together in shaping theboard (OPB), antibacterial fresh produce

Plantation-Pulp-Paper" model has graduallyalso pinpointing important areas of future(WXS), lamination-free kraft paper, and basecentered around the "Integration offormed a green and sustainable "big cycle",the "Zero Plastic" papermaking processecological landscape of our planet whilecommitments.

consisting of production, consumption,

In addition to EPP paper, APP China has

cycle" that can save a lot of wood. The

packaging products in recent years that alignrecycling, and repulping can form a "small
idea of "Paper in Place of Plastic" presents
an opportunity for the pulp and paper

also launched an array of paper-basedwith the sustainable development trend,such as "Zero Plastic" oil-proof food-grade

wrapping paper (OPBs), straw base paper

paper. All the paper cups, paper bags, lunchboxes, etc. made from our "Zero Plastic"

paper series are capable of being recycled,

repulped, and re-papered or composted for
degradation, providing the pulp and paperindustry with another pathway to carbon
neutrality and carbon reduction.

and cleaner surface than traditional white cardboard products with a graybackground. It also has great printability, which reduces printer downtime

and scrap. Reductions are also achieved in paper grammage, paper loss, ink

use, and varnish use, leading to much higher resource efficiency. All of those
attributes have made the new product widely popular on the market.

Exploring Lamination-Free Products to Reduce the Use of Plastic• Greater strength but lower smoothness• Excellent color reproductivity and
Coatedpaper

handbags

Antibacterial Kitchen Paper Towel
Given that kitchens allow microorganisms to easily breed,damages to the cell wall and cell membrane of bacteria, thus

towel. Besides basic properties like oil and water absorbency,

an accredited third-party testing organization indicate thatGold Hongye Paper developed an antibacterial kitchen paper
the paper towel also contains a blue antibacterial factor,

whose unique molecular structure enables it to do multiple

inhibiting their growth and reproduction. Tests conducted by
the paper towel kills over 99% of staphylococcus aureus andis harmless to the human body.

printability.

• Smaller strength than uncoatedpaper and usually treated with a backlamination to enhance strength-related
properties such as bursting and tearing

paper

due to lack of front coating; printability
outperformed by coated paper.

handbags

resistance; yet laminating kraft paper
requires the use of plastic particles.

Kraft paper handbags available on the market are mainly
divided into coated and uncoated ones. How can we improve
the surface performance and printability of uncoated kraft
paper while maintaining its strength so that it has zero plastic
and broad applicability? This is the question that guided Gold
East Paper to develop the plan for food packaging (uncoated)kraft paper. Through steps like process optimization andadjustment, formula adjustment, and paper machineand equipment optimization, the company successfully
developed plastic-free uncoated kraft paper. Today, theproduct has been widely used in a variety of food packaging
solutions such as stand-up pouches for solid food, foodpackaging paper bags, take-out packaging paper bags, tray
pads, handbags, tote bags, and bread bags.

Driven by a focus on plastic reduction, Hainan Jinhai Pulp &Paper developed eco-friendly uncoated white kraft paper andlamination-free silicone-coated base paper in 2021.

Lamination-free silicone-coated base paper: The
structure of the finished product is mainly formed by virginwood pulp fibers and natural calcium carbonate, making
it biodegradable; its excellent smoothness allows for direct
silicon coating on the surface without the need for PE particle
lamination.

Eco-friendly uncoated white kraft paper: Restructured
and upgraded existing equipment and processes, usedchemical pulp as the primary raw material, and applied paper
surface finishing by super calenders after surface sizing togive the product a strong processing performance and great
printability; it is a biodegradable and eco-friendly productmainly used for file bags, handbags, and shopping bags.

40

Uncoated

41

APP China Sustainability/ESG Report 2021

Passing on Corporate Culture andMoving Forward with Employees
Highlight of the Year

Corporate Culture Driving Change and Creating Unity
We use corporate culture to guide thesystem. This was the inception of thethe organizational transformation

benchmarking and a go-getter spirit

culture. In the past five years, we have

Cultural Navigators, demonstration ofCompany's development and endorse

grand journey of APP China's corporate

among employees to prompt individual

made our corporate culture "publicized,

growth, drive initiative and creativity,of integrity and ethics, core values, vision,as the Cultural Workshop for Managers,"innovation" at the core and advanced

Moral

Foundation

42

them to solve work problems at the root andbecome the true navigators of our culture.

• Develop an action plan for employee

correspondents or culture commissioners.

Visionfully-integrated forestry, pulp, paper and tissue,• Share behaviors of applying corporate

green-cycle businessculture.

• This can be done at routine work meetings,
MBOS meetings, cultural seminars, etc.

Mission

FocusedOwnersResultOrientedManagement by Olympic System

Code of Ethics

Honesty and Integrity

MBOS meetings, cultural seminars, etc.

Continuous

Improvement"8 As"

Action ofManagers

as Cultural

Navigators

Practice the green-cycle based development, inherit the civilization of

Act Like

behaviors.

A sharing

APP will continuously be the world's premier

Customerconsensus and guidance on improvable• This can be done at routine work meetings,

papermaking, and improve the quality of living

Systemculture in a systematic way, thus enabling

corporate culture within the team.

published through the organization's culture

SharedManagement

and business practices with the corporate• A positive act of encouraging the practice of

culture to management work, and have it

Goal

Guidelines

the managers tie in their management

An encouragement or guidance

A case (individual)• Write a case of one applying corporate

CommonBehavioral

Spirit examination. Those activities helped

we held a series of Managers as Culturalexperience essay contest, and the Iron Army

Culture 2.0 in 2021, we put "people" andAPP China's Corporate Culture System

Responsibilities

catalyst driving cultural change. In 2021,

a multitude of meaningful activities suchand new APP cultural creations.

2.0. As we pivoted to build Corporate

cultural interviews for managers, learning

corporate culture and are the greatestthe "8 As" action guidelines. We also hosted

the digitalization of cultural platforms,

Contest, taking it from stage 1.0 toManagers play a central role in shaping

Navigators initiatives in 2021 and formed

teams, strategic change communication,

campaigns and the Culture Ambassador

consolidated our unique MBOSManagers as Cultural
Navigators

Models, the construction of big cultural

through initiatives like awareness

common goal. In 2016, we systematicallyand mission into our corporate culture

Culture Ambassadors/Hard-Worker

imprinted, embraced, and applied"

and align team efforts towards a(Management by Olympic System), code

through initiatives like Managers as

A case (team)• Find a positive case within a team.

• Find an improvable case within a team.

A lecture• Personally give a lecture on culture within
the organization.

• Share thoughts on the long- and short-term

significance of each value for the Company's
business growth, team collaboration, andindividual growth.

A communication• Interpret the implications of APP's corporate
culture and share management approach

along with insights and reflection on cultural
A discussion• Conduct a team discussion on cultural

phenomena to encourage positive behaviors
that display the corporate culture.

• Develop an action plan for employee

consensus and guidance on improvablebehaviors.

• This can be done at routine work meetings,
MBOS meetings, cultural seminars, etc.

phenomena in the form of an interview/video
to inspire the audience to think.
A dialogue• Personally participate in a dialogue topublicize and interpret important company
strategies and business goals to ensure

they are clear to employees of all levels andembedded into their daily work, thus driving
concerted efforts towards the goals.

43

APP China Sustainability/ESG Report 2021

Highlight of the Year

Establishing Corporate
Culture Platforms

In 2021, some 600 managers
participated in Cultural Workshop
for Managers, where they had

In 2021, we launched APP Culture Voice,communication and sharing, and interest-

mobile platform for corporate culturenews reports updated throughout the year.

an innovative, WeChat for Business-based
education and employee communication.

As a digital way to engage all employees inheated discussions on culturecollectively shaping the corporate culture,and management, culture andbusiness, and other related topics.

APP Culture Voice consists of six content

modules such as knowledge acquisition,

per month and 1,478 per day

put forward the Four-Wheel Drive strategy

employees and promote their exemplarywith "people and innovation" at the core.

This further reinforced APP China's resolveon pursuing high-quality development

and going digital. With corporate culture

as the compass, all APP people continue

to demonstrate solidarity and resilience. In
this process, we have witnessed a wave of
exceptional workers stand out and shine.

In 2021, a pivotal year for building Corporate
Culture 2.0 at APP China, we hosted anotherbiennial Culture Ambassador Contest. As

employees.

Classroom: 14 strategy learning

Reports: 566 articles posted,learners recorded

per day

averaging 47 per month and 1-2

courses uploaded, with 7,615

part of a regular business, the event looks tocommunication and learning among

1,300 per day

interactions, averaging 44,900

Sinar Mas Group, Mr. Teguh Ganda Widjaja,

but also an important facilitator of internal

over 40,000 per month and overrecorded around 539,600

In 2021, the Chairman and President of

APP Corporate Culture 2.0 construction

throughout the year, averaging

active users and cumulatively

Finding the Role Models
Around You

The platform is not only an innovation ofVisits: around 484,900

	 APP Culture Voice had 23,039

Cultural Workshop for Managers

based interaction, with the latest relevant

find model workers from among ordinary

character. The contest sets awards in the six

areas of "Customer First", "Entrepreneurship– Technology Entrepreneurship", "Result

Orientation", "Continuous Improvement –Innovation and Breakthrough", "Integrity",and "Leading by Example". Over 30,000
employees across the Group went

through rounds of selection such as teamrecommendation, departmental selection,

management review, and Group leadershipteam appraisal, and 28 culture ambassadorsand nominees were picked out in the end.

MBOS: Pushing
People Forward

MBOS is the key driver behind the Group's

Those activities allowed employees

important aspect of our corporate culture.

cases and internalize MBOS ideas to be a

Four-Wheel Drive strategy and the mostIn the spirit of MBOS, APP China's BUscarried out an array of activities such as
Improvement Proposal Competition,

MBOS Competition, MBOS Conference,and regular achievement sharing sessions.

Annual MBOS Proposal Competition

to share outstanding experiences andshared ethos while motivating them to see
possibilities of innovation in the smallest

detail and contribute ideas to help move theorganization forward.

MBOS Competition for Management Trainees

Consistent with the ethos of our 2021 All-Hands Innovation

To test the 2020 class of management trainees on theinnovated", Hainan Gold Hongye and Hainan Gold Shengpu

hosted the annual MBOS Competition in June 2021,

Year that "everyone is innovative and everything can beheld an annual proposal competition in December 2021. The
atmosphere was euphoric and the proposals highly varied

and creative. After a comprehensive review by the judges, 18
proposals stood out, covering such topics as power saving
improvement and equipment improvement. They offered

extremely valuable suggestions on how to further improvethe company's production and operations in the future.

knowledge and skills they had been taught, Ningbo Asia
where departmental heads and mentors sat down withthe trainees in sharing and communication sessions. The
trainees had been actively involved in the rich variety ofactivities hosted by the company during the past year of
training and education. They had kept on growing andshining in their own roles, with some recognized as starsof their posts and some selected as corporate cultureambassadors. In the MBOS competition, the trainees shared
their growth and gains at work and offered suggestions on

business development and thoughts about their own career
Annual award ceremony of the Culture Ambassador Contest

44

development, among other things.

45

APP China Sustainability/ESG Report 2021

Talent Training andDevelopment

Human resources are the most valuable asset for any organization. APP China incorporates talentdevelopment into the Group's Four-Wheel Drive strategy and continues to strengthen the career

pathing initiatives to help employees move forward. We offer customized professional training tocontinuously grow our employees' comprehensive skills and competitiveness and help them reach
their full potential and career goals as the Company goes through a period of transformation. In

compliance with relevant national laws and regulations such as theLabor Law, the Labor Contract

Law , and the Civil Code of the People's Republic of China, we are committed to offering equal pay for
equal work, engaging in lawful employment, continuously optimizing the employee benefits plan,and giving voice to employee concerns to fully protect their rights and interests.

We have devised an evolving talent

Successor Plan, and the Talent Retention

East Paper, Ningbo Asia, and APP China

our transformation needs and keep

rolled out the plans in relevant departments

rotation program to help employees identify

development strategy aligned with

Special Fund. In a planned fashion, we have

improving our talent development andand subsidiaries to optimize our incentive

management mechanism, including bysystem whilst putting employees on well-

regularly assessing the workforce structure,designed career paths so that we canidentifying potential talent loss risks, andretain and bring out the best in our top

building a comprehensive talent pool. In

talent. In 2021, APP China conducted anterms of employee performance appraisal,assessment and tracking of employees in

we adopt a mix of measurements such

Forestry all implemented an internal job

Jiaotong College, and Jiangsu Aviation Technical College, while

only broadens students' career choices but also promotes

other cities and provinces. In April 2021, Gold East Paper set up

developed the "internship + employment" model that not
integration between university and corporate resources andhelps build a strong talent pipeline. In 2021, Gold East Paper
set up the Zhenjiang Youth Internship Base and the Jiangsu

competencies and interests. A total of 2,341
positions were opened up throughout theyear, with 45% filled by internal hires andtransfers.

performance in the short, medium, and longterm. As regards performance incentives,
we have combined our Company-wide

performance-based bonus system with akey positions and high-potential employees,

partnerships and the cultivation of internationally oriented talent.
In 2021, Gold East Paper brought in a total of 97 interns from 20
colleges and universities across the country.

Talent Development

We give priority to building a high-knowledge training, and hands-on projectsuite of training programs tailored tocamp, offering both online and in-personof business. We also plan to build a digitalsenior executive teams and ensure a highInternal hire andIn 2021, Hainan Jinhai Pulp & Paper, Guangxi

45

Jingui Pulp & Paper, Rudong Base, Goldfurther cooperation and exploration in industry-college-academia

employees at all levels and in different lines

Development Plans (IDPs). The IDPs arecaliber of talent at all levels.

Nanjing Forestry University, and the two sides are to engage inthe varied career development needs ofplans, which led us to form the Individual
intended to fully upskill the middle andincluding Zhenjiang Vocational Technical College, Jiangsu

an internship base for international students in cooperation withperforming workforce. We offer a systematic

before devising corresponding succession

comprehensively measure employee

a partnership with a number of colleges located in Zhenjiang,

actively exploring opportunities to set up co-ops with colleges in

the career choices that best suited their

key positions and high-potential employees

as KPI, OKR, and 360-degree reviews andsuch as the Talent Retention Plan, theWhile exploring the co-op approach, Gold East Paper has

Jiaotong College Internship Base. The company also entered into

Human Capital Management

number of schemes specially designed for

Establishing Co-Ops and Internship Basestransfer rate:%

academy in the future, working to deepen

cooperation with external institutions andexperts to fast-track talent cultivation andthe continuous optimization of the human resource management

and regulations, and with reference to the framework of the

Guidelines for Comprehensive Risk Management of Central
Risk Identification

Risk Assessmentof the Company from four dimensions: risk identification, risk

assessment, policy development and continuous improvement.
Policy Development

Continuous Improvement

Develop a human resource

Develop a human resource

Work out corresponding

Ensure effective risk

identifying risks inexpert group, conducting

for different risk levels,

the identification-risk list by comprehensively
employee recruitment,
assignment, appraisal,training, and retention.

risk map by establishing an
risk assessment based on

the possibility of occurrence

risk mitigation strategies
and formulate relevant
policies such as theand the degree of impact,

Recruitment Management

high-, medium-, and low-

Management Policy , andand categorizing risks intolevel groups.

46

Our mills have all developed a detailed
improve the human capital risk analyses mechanism. It ensures

Policy , the Training

giving the trainees a wonderful start in theirprofessional careers.

the Group in 2020. For example, in 2021,

recent years to build a strong talent pool.

Guidelines for Enterprise Internal Control and other laws

Basic Standard for Enterprise Internal Control , theSupporting

training delivered by external instructors,

intelligent transformation and green

trainee program across the Group inEnterprises , Bohui Paper has established and continues tohands-on practice and internal training with

APP Learning and Development Center began

employees for achieving our digital andWe have been expanding the management

In accordance with theLabor Law , theLabor Contract Law , theclasses, combines theoretical learning withensure a continuing supply of qualified
transformation goals.

Implement Human Capital Risk Analyses

training. The management trainee training

training plan and a dedicated training

system for management trainees. We also
have a mentorship program where senior
employees are matched with trainees

to help them learn about their jobs andadapt to the new environment. All thetrainees would go through three stages oftraining, namely on-the-job training, general

to offer special training programs within

it organized the Leapfrog Plan – Executive

Leadership Development Program, the Looking
to the Future – 2021 APP Case Competition,and the Coaching and Guidance Techniques
Workshop. To continuously improve thecore skill base of employees in professional
and technical functions, APP China mills

continue to offer professional skills training
for employees in manufacturing jobs androle-based competency model assessment
and certification while creating incentives
to stimulate employee participation in
professional title evaluation.

management by repeatingassessment-policy updateprocess and updating

the risk list and risk map
annually.

the Occupational HealthManagement Policy .

Gold East Paper Management Trainee Training Camp47

APP China Sustainability/ESG Report 2021

Key 2021 Training Programs at APP Learning and Development Center
Leapfrog Plan – Executive Leadership Development ProgramThis is a leadership training program designed for the
management team of the APP China Paper BU. The
program, in both online and in-person formats, uses
training workshops, staged reviews, mid-term testing,online exercises, and 360 assessments, among othermethods, to enhance the participants' management
thinking and leadership skills and create a strong and

Looking to the Future – 2021 APP Case Competition

Around 70 employees from APP China Headquarters
and mills participated in the second "Looking to the
Future" Case Competition. The event aimed to hone
the participants' case development skills, sharpen theirinsights and reflective thinking, and help them build

We have established multiple employee

overall satisfaction rate was 81.64%. Theof perks and benefits befitting their own

talks, satisfaction surveys, etc. to give voice

report based on the survey results to identify

temperature allowances, commercial

communication channels. We use formal
well-coordinated management team. Two sessions
were hosted in 2021, covering nearly 50 managers andrecording an average of 30 in-person learning hours and48 online learning hours per person. The sessions lookedat over 200 real-scenario business topics and generated
more than 500 study and growth journals.

Training on the Application of Coaching and Guidance Techniques
In 2021, the Learning and Development Center hosted
four Coaching and Guidance Techniques Workshops.
Each included a two-day workshop, 30-day after-classcoaching, and post-training follow-up meetings. Over
120 middle and senior managers from the headquarters

Employee Communication and Careand mills participated in the training. They gained better
hands-on coaching skills besides a deeper theoreticalknowledge, which helped them become better coachingstyle managers. During the training, the participants
produced 120+ practice articles.

mental models to integrate business innovation withstrategic transformation. Two two-day sessions were
hosted that included in-person workshops and on-site live
classes, producing 64 cases and one copy of Collection of
Top 20 Cases and training 20 case experts.

to our employees' opinions and concernsand encourage proactive employee input
on the Company's policy and strategy

company will then develop an analysis

areas of improvement and make changes
accordingly.

development. In 2021, Guangxi Jingui

We make contributions to the five social

satisfaction survey to fully understandemployees as required by law and continue

Pulp & Paper conducted a company-wide
employees' concerns in 11 dimensions.

The participation rate was 98.7%, and theinsurances and the housing fund for ourto optimize our compensation and benefits
plan. Our mills provide a rich assortment

conditions such as meal allowances, highinsurances, employee dormitories, prenatal

care leave, elder care leave for only children,and scholarships for employees' children.
Employees can also enjoy an array of fun

activities on a regular basis such as sports

games, group birthday parties, and reading
sharing sessions, which bring them closer
together and greatly boost team morale.

Providing Dormitories for
Married-Couple Employees

Outreach Activities for Interns

Based on a survey of married-couple employees,

Rudong Base had its first group of production

dormitories in 2021 to suit their accommodation needs.

production process of some Breeze products. Before the

Ningbo Asia renovated some of its bachelors'

This move made their lives exceedingly convenient andwas greatly welcomed by the employees. As of the endof 2021, 19 couples had moved into the dormitories.

management interns in 2021, who were involved in the
Mid-Autumn Festival, the Base hosted the "Let Breeze

into Interns' Homes" event, sending those products tothe interns' homes, along with thank-you and greetingcards carefully prepared for their parents.

Increasing Employee Leaves
In November 2021, the 32nd session of the 13th

New Apprenticeship Training Class

Standing Committee of the National People's Congressof Zhejiang Province passed a proposal to revise theRegulations of Zhejiang Province on Population andTo further improve the skills and competencies of the technical

Family Planning . One of the revisions was the addition

personnel, Hainan Gold Hongye and Hainan Gold Shengpu

of parental leave and elder care leave for only children.

initiated the New Apprenticeship training program in 2021 in

Ningbo Asia closely followed policy changes relevant

response to the national call. The courses mainly focused on

to its employees and arranged for studies of the latest

three areas of development, namely generic skills, professional

implementation rules. It plans to officially instituteskills, and operational skills; the teaching plans were developed

the new policy in the first half of 2022 to allow eligible

to match the companies' real needs and help employees apply

employees to enjoy the new leaves and benefits they

theoretical knowledge to specific tasks in real work settings.

are entitled to.

This model allowed school teachers to go to the mills andlearn firsthand the pain points and needs in the real industrial

Gold East Paper began to provide prenatal careproduction process so that they could help address them byleave for pregnant employees who were in theireffecting change in education. Meanwhile, by learning about

third trimester and for whom going into work werethe latest developments in academia through communication
with the schools, the company was empowered to train talentequipped with both an in-depth knowledge and a practicalknowhow.

Gold East Paper organized reading sharing sessions

becoming too demanding, while paying them
Hainan Gold Hongye and Hainan Gold Shengpu held the New
Apprenticeship training class

80% of the standard salary. This move enabled theemployees to make life and work arrangements withgreater peace of mind.

Employee Mountain Climbing Competition

48

49

APP China Sustainability/ESG Report 2021

Environmental:

Fosteringa Beautiful
and Clean
NatureBased on the "Integration of PlantationPulp-Paper" model, we lay a solid

foundation for the Company's green
transformation through a variety of

initiatives such as sustainable forest

management, energy mix optimization,and energy saving and emission reduction
technology upgrades.

Forest Resources Management

Cleaner Production Management

50

52
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51

APP China Sustainability/ESG Report 2021

Forest Resources Management
With sustainability at the heart of its

Forest Certification in China – Forest

management approach, APP China

Management (GB/T 28951-2021), andsocial, economic, and ecologicalis to align its forestry management

Forestry works to deliver balanced

benefits through scientific managementof modern artificial timber forests.

In 2021, APP China Forestry released
the third edition of the APP China

Management System Compliance toefforts with the evolving national, local,

with relevant laws and regulations.

and industry policies and the Group's
development requirements.

The business units of APP China Forestry

forestry transformation, a mandate

latest environment-related national,

to observe all requirements of theContinuously
Strengthening
Internal and External
Audits

Evaluation Form on Environmental

increasing forest carbon sink. The goal

Forestry Vision, Mission, and Policies ,incorporating topics like smart

requirements. They developed an

make a point of staying updated on thelocal, and industry regulations andconduct self-inspections on compliance
All seven forest areas performed

forest resources monitoring in 2021
as to the environmental impact offorestry activities, forest health, natural
disasters, forest fires, biodiversity,

etc., based on which they drafted amonitoring plan for 2022.

In 2021, 12 forestry companies under APP China Forestry carried out the CFCC/PEFC-FM
forestry certification, and six went through the ISO14001 Environmental Management

System certification process. By continuously strengthening internal and external audits, they

completed a comprehensive review of the current sustainability management system in termsof compliance, legality, appropriateness, and effectiveness. The sustainability team of APP China

The recommended national standard Forest Certification in China – Forest Management

Forestry organized internal audits, where the forest areas and departments worked together to
identify problems and gaps that existed and took timely measures to address them. As regards(revised version, GB/T 28951-2021) attributed to the National Forest Sustainable Management

operations in accordance with the Forest Certification in China – Forest Management (GB/T

2021 and took effect on December 1, 2021. APP China Forestry engaged the sustainability teamexternal audits, a third-party auditing organization audited every aspect of the forest areas'and Forest Certification Standardization Technical Committee was officially released in May

28951-2021), including internal document audit and field operation on-site audit. The auditorsof each company in an in-depth study session where the new standard was interpreted andacknowledged APP China Forestry's progress and offered suggestions for future improvement.

communicated. It also developed training materials that used real-life forestry operations to

APP China Forestry built those suggestions into its overall work plans, laying a solid foundation

help employees clearly see the differences between the old and the new standards while getting

for the sustainable development and management of forests.

prepared for the new version of CFCC/PEFC-FM forest certification in 2022.

Total area of CFCC/PEFC-FM-certified plantations:

246,257.2

hectares

Percentage of CFCC/PEFC-FM-certified plantations:

90.9

%

Percentage of CFCC/PEFC-FM-certified raw

wood materials supplied by our plantations
to APP China's pulp mills:

100%

Percentage of ISO14001-certified plantations:67%

External experts conducted an audit for the CFCC/PEFC forest certification

52

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APP China Sustainability/ESG Report 2021

Forestry Risk
Management

The primary risks associated with forest management include fire, wind, frost, diseases andpests, etc. The area affected by fires in 2021 exceeded 2020 by 7,208 mu ; the area lost due

to typhoon and wind damage in 2021 was 28,176 mu higher than that in 2020; the area lost

due to frost was 110,216 mu higher. APP China Forestry has established emergency response

procedures for disasters, specifying the response measures for the various types of disasters. In
case of a disaster, a response plan will be immediately activated to provide disaster relief andinsurance claims will be filed to minimize the losses.

The intensifying climate change has been fueling extreme weather events, thus causing

increasing disturbances to forest management. In response, APP China Forestry has redoubled
efforts in recent years in the R&D of different seedling strains resistant to wind, flooding, frost,
diseases and pests, etc., plus high-yielding varieties. By starting mitigation at the seedling

production stage, the company takes a proactive approach to guarding against potential risks
while realizing efficient utilization of forest resources.

APP China Forestry's Key Measures for Mitigating Forestry Risks

Forest fire prevention

Wind damage response• Worked closely with local governments toadvocate fire safety awareness in villagesaround our forest areas and establishedan effective fire control mechanism withthe villages characterized by supervisionby the government, prevention by thecompany, and active participation ofcommunity members.

• Strengthened research and experimenton wind-resistant eucalyptus varieties.

• Organized forest fire safety education
sessions and fire drills at regular intervals
to continuously strengthen employees'
fire safety awareness and preparedness
for forest fires.
• Built proper fire lines: cut 2- to 3-meterwide fine lines in large contiguous forest
areas and forest areas near farmland, dry
land, villages, temples and other areas ofgreater fire risk to create a combustiblefree space.

• Avoided planting during typhoonseasons to ensure the survival rate ofsprout forests.
• Enhanced the forests' wind resistanceby increasing plant density andimplementing deep planting in affectedareas.
• Pruned in advance upon early warnings
of incoming typhoons to mitigate winddamage, and activated response plansright after to implement relief efforts
within the first 72 hours.
• Purchased forest insurance.

• Purchased forest insurance.
Frost protection• Strengthened research and experimenton frost-resistant eucalyptus strains.
• Established a frost monitoring andearly warning system, followed
weather forecasts, and strengthened
communication with local weather
bureaus to ensure timely response tofrost damage.
• Improved the trees' resilience against
frost by checking and strengthening
the stabilization of the roots in soil,
conducting proper pruning, applying
antifreeze and anti-frost controls tothe soil, wrapping tress with burlap,
increasing nurturing and fertilizing, etc.,
after receiving weather alerts.
• Purchased forest insurance.

Disease and pest control• Strengthened the cultivation of highquality seedling strains resistant todiseases and pests.
• Strictly implemented planting andprotection techniques and forest
monitoring to ensure scientific, effective,
and targeted control.
• Regulated the ecological environment tocreate an environment conducive to thesurvival of plants and predators of pests toprevent diseases and pests.
• Maintained hybrid strains and tree species.
• Developed a monthly disease and pest
control calendar to enable early prevention
and mitigation at the front lines.
• Purchased forest insurance.

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55

APP China Sustainability/ESG Report 2021

High Conservation
Value MonitoringHigh conservation value (HCV) forests are forests that are important because of their highenvironmental, social, economic, biodiversity, or landscape values. Management activities

in HCV forests shall maintain or enhance the attributes which define such forests, and theirprotection shall always be a consideration in any decision-making process. The value of HCV

forests mainly lies in six areas, namely biodiversity, landscape-level ecosystems and ecosystem
mosaics, ecosystems and habitats, basic ecosystem services, necessities of local communities,

and cultural significance. Over the years, APP China Forestry has closely monitored the existenceof HCV in our plantations, with regulations and SOPs in place for its identification, monitoring,and protection, which helps ensure effective management is implemented whenever HCV isdetected.

As of the end of 2021, 54% of our plantations had completed an HCV assessment. The

Conducted ecological survey and monitoring

protected species Alsophila spinulosa was found in our Lancang and Hainan plantations. Our
staff have marked those areas, created buffer zones, and conducted proper monitoring andsuch as the Wildlife (RTE Species* Included) Protection Regulations and the Measures for the

documentation in subsequent patrols.

Biodiversity
Protection

Administration of Biodiversity Conservation and Monitoring . On a more specific level, our efforts
include performing ecological and environmental impact monitoring and HCV monitoring

and conducting biodiversity research, among others. In 2021, APP China Forestry incorporated

Forests are home to many species, and their ecosystems play an important role in the global

relevant parameters such as biodiversity conservation and the maintenance of ecosystemecosystem. In the Global Assessment Report on Biodiversity and Ecosystem Services released instability into its annual environmental indicator system and started to assess the performanceon a weekly, monthly, and quarterly basis. It also joined hands with a number of colleges,

2019, the UN Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services

universities, and research institutes, such as Guangxi Academy of Sciences, Hainan University,(IPBES) suggests that 1 million species already face extinction, many within decades, as a result

and Guangdong Eco-Engineering Polytechnic, in carrying out projects on ecological monitoring,of human actions. Protecting biodiversity has become one of the most pressing issues of ourplant diversity monitoring, etc. Our forest areas also conducted monitoring of core ecologicaltime. The UN Biodiversity Conference (CBD COP 15) (Part 1) took place in Kunming, Yunnan

factors of the eucalyptus forests such as biodiversity, soil, water quality, and growth to provide

Province, China in October 2021. It was the first UN global conference themed "Ecologicaldetailed data that could translate into better forestry management and practices.

Civilization" and marked a new start in global biodiversity conservation.

*RTE Species: A collective term for rare, threatened, and endangered species.

With a long-standing commitment to protecting biodiversity, APP China complies with allapplicable national laws and regulations, such as the Forest Law , the Environmental Protection

Law , and the Wildlife Conservation Law , and has formulated a number of internal policies

APP China Forestry's Key Biodiversity Conservation Measures

Forestland selection stage

Conducted ecological survey and monitoring with researchers

56• Only commercial forestland defined by the government is accepted.

Afforestation planningstage• Conduct biodiversity monitoring and communicate with local forestry bureaus, forestry stations, andvillage committees to learn whether any protected wildlife is ever detected in the forestland; any wildlife
detected is clearly marked on the planning map and documented, with noticeable signs placed on site for
identification and protection.

Before operations• Train contractors and operational workers in wildlife protection and fire safety during production activities.
• Prohibit contractors and workers from using fire for production in the forestland, such as burning
vegetated land or performing controlled burns.

During forestry
activities• Prohibit contractors and workers from hunting or trading wild animals, indiscreetly gathering or digging
protected wild plants, or destroying the habitats of wild animals.

During daily patrols• Increase awareness of animal and plant protection.
• Initiate timely protective measures for any protected plants or animals detected.

Ecological monitoring• Engage in long-term cooperation with independent third parties in carrying out ecological monitoringof plantations and strengthen protective measures or modify forestry practices in accordance with themonitoring results they provide every year.

57

APP China Sustainability/ESG Report 2021

Cleaner Production Management
Cleaner production is an importantcomprehensive transition to greener

management systems and explores

environmental damage, and the

China puts cleaner production at theemission reduction while increasing themeans of reducing resource input,

generation of pollution and carbon
emissions while enhancing theoverall efficiency. It also drives agreener production approach and aEnvironmental
Management

economic and social development. APP
core of our manufacturing approach

and, consistent with the requirements
for building green factories,

continuously optimizes environmental

the potential for energy savings anduptake of advanced green production

technologies, processes, and equipment
to ensure continued progress in ourenvironmental performance.

APP China mills have all established an evolving environmental management system basedon the ISO14001:2015, continuing to enhance environmental management in terms of energy,
water, air pollution, waste, etc. and strive towards modern industrial operations characterized
by low consumption, eco-friendliness, and high efficiency. Ningbo Asia, Gold East Paper, andGuangxi Jingui Pulp & Paper have been recognized as National Green Factories, and Bohui Paper
was among the first to be named a Green Factory in Zibo City in 2021.

In 2021, our mills set up several interdepartmental improvement project teams tasked with
exploiting the potential for energy savings and emission reduction throughout all stagesof production. Guangxi Jingui Pulp & Paper collected 35 proposals from its plants for the

improvement of equipment effectiveness, of which 25 have been implemented as planned,
leading to over RMB4.5 million in economic benefits.

Environmental investment

3

National Green Factories

in 2021: over
RMB

1.031

billionOur mills have developed policies and systems around issues such as environmental risk factor
identification and assessment, hazard source identification and assessment, environmental

hazards, and environmental emergency response plans, thereby incorporating environmental
risk and opportunity assessments into day-to-day environmental management. We havealso created a set of targeted initiatives for improving environmental performance while

hosting environmental emergency drills to continuously build stronger preparedness andStrengthening Cleaner Production Audits

response capacities. In 2021, Bohui Paper compiled a risk assessment report on environmental
emergencies, which offered insights into its environmental risk profile and the appropriate

Following the objectives and requirements of cleaner production

audit campaign, which covered all of its production units andefficiency enhancement", Guangxi Jingui Pulp & Paper invested

cleaner production before the audit, which helped the Company

for "energy savings, emission and waste reduction, andin implementing upgrades in the production technologies andprocesses, resource utilization methods, etc., making notableinroads in cleaner production. Since initiating cleaner production
audits in 2019, the company has implemented 11 cleaner

production schemes, achieving approximately RMB83.634 million
in economic benefits with a total investment of approximately
RMB30.862 million.

From November 2020 to December 2021, Shandong Baseof Bohui Paper conducted an extensive cleaner production

ancillary facilities. The Company was already a global leader infurther optimize its cleaner production organizational structure
as well as policies, and formulate work plans and targets formeasures for preventing and controlling environmental risks and responding to emergencies.
Guangxi Jingui Pulp & Paper started a departmental self-assessment and self-correction

initiative targeting the identified environmental risks, which led to the resolution of a series ofenvironmental risks and hazards. In 2021, there were zero major environmental accidents at APP
China mills.

cleaner production for the next step. After collecting suggestions

The ever-stricter national environmental regulations entail an ongoing commitment byon-site guidance of industry experts, the Company has put

turning plans into actions. In 2021, APP China mills participated in a number of internal andfrom employees, consulting auditors, and learning from theforward 13 cleaner production projects, which are expected tohelp the Company further reduce electricity and raw material

consumption, and discharge less wastewater and exhaust gas
once implemented.

enterprises to staying up to date, constantly improving environmental management, andexternal training and communication events centered on varied topics such as standardized

management of hazardous waste, self-monitoring and management of sources of pollution,

air pollution prevention and control, energy saving and carbon reduction, and carbon trading

capacity building. Guangxi Jingui Pulp & Paper scheduled a Policy Interpretation and Response
training program focused on the series of environmental policies already in force in 2021 andto be enforced in 2022; Hainan Jinhai Pulp & Paper organized a number of training sessions onenvironmental regulations to enhance employees' environmental awareness and response toenvironmental risks.

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APP China Sustainability/ESG Report 2021

Building Green Logistics

With a commitment to advancing the green transformation of the whole industry chain, APP
China continuously optimizes the modes of transportation, increases container shipping

efficiency, builds green ports, and recycles packaging materials to achieve robust and balanced
economic and environmental benefits.

Exploring New Green Logistics Pattern: Ocean-rail Intermodal Transportation
In 2021, Bohui Paper collaborated with Yantai Port and Shandong

traditional rail and road transportation, the ocean-rail intermodal

cost, high efficiency, and low loss. In November, 50 40-footof traffic safety, cargo management, efficiency improvement,

Port Shipping Group on green logistics solutions featuring low
containers of wood chips, which were used to be shipped inbulk, departed from Yantai Port on the "Yantai-Huantai" Express
via ocean-rail intermodal transportation, marking the official

Building Green Ports

launch of the Yantai-Zibo two-way logistics channel combinedwith ports, shipping, railway, and land ports. In comparison with

The shore power project at Hainan Jinhai Pulp & Paper's exclusive

traditional two-quadrant converters. The system can thus fulfill

2021, making Hainan Yangpu the first port where ships plugged

filters.

terminal was successfully commissioned for the first time in April
in on a shore power system. The project would pave the way fortransportation model can realize the integrated management

resource saving, and environmental protection. In the future, theCompany will continuously mobilize resources and innovate on
green, digital, and intelligent logistics solutions to realize value
innovation across the whole supply chain.

the power demands of moored ships without the use of wave

realizing zero fuel consumption, zero emissions, and zero noises

at berth, thereby notably reducing GHG and pollutant emissions
for ships at berth.

The terminal is installed with 13 sets of shore power that

supply electricity to all 14 berths. The project adopts advanced
intelligent shore power supply technologies, such as one-click
start and undisturbed grid-connected technology. It also uses

four-quadrant power converters, which offer greater reliability
and much higher chances of successful grid connection thanThe shore power project at Hainan Jinhai Pulp & Paper's exclusive terminal was successfully commissioned for the first time

60

"Yantai-Huantai" Express via ocean-rail intermodal transportation departing from Yantai Port61

APP China Sustainability/ESG Report 2021

EnergyManagement

Energy mix transition plays a key role in realizing the 30-60 Goals. APP China continues tostrengthen energy management and gradually advances the green transition by exploring the

24,406.6

In 2021, APP China began stepping up

every year. Compared with the traditional

identify future directions for internal decarbonization efforts.

reduction programs at the Group level,vacuum pumps do not need to be liquid-

0.43%

MWh

renewable energy:

26.59%

44.12

from 2020%

49.19%

Purchased electricity
Purchased steam

9.27%

Biomass fuels*
Other*

9.00%

other energy sources include gasoline, diesel, fuel oil, liquefied petroleum gas (LPG),
kerosene, and solar energy.

Establishing an Energy Saving and Carbon Reduction Management Mechanism
In 2021, APP China bolstered theand responsibilities assigned to eachefforts. Moving forward, we will continuously

emissions related issues at the Groupthe past few years, our mills have eachmanagement mechanism in alignment withlevel, setting up a top-down management
system and mechanism directly headedby the Board of Directors, with clear roles• Guangxi Jingui Pulp & Paper has set up

an energy saving and emission reduction

management committee led by the generalestablished a dedicated energy management
committee to push for solid progress inleading group headed by the generalmanager and formulated the Energy

manager to coordinate the formulation

Efficiency Management Rules , laying down

strategies, energy consumption targets,

accountability, energy measurement,of the company's energy management

and implementation plans, the statistics,

accounting, and analysis of data on carbon
emissions, energy consumption, etc.,

the assessment and planning of energy
efficiency projects, and the adoption ofenergy saving technologies, among otherefforts.

requirements in respect of formalizedenergy statistics management, and the

management of electricity, steam, oil, andwater consumption, among other metrics,
to advance energy saving and emission

reduction efforts; its Energy Saving Target

Evaluation Scheme links the achievementof energy efficiency targets with employees'base salary and bonuses, thus creating a

positive incentive instrument that boosts
energy savings and emission reduction.

62

optimize the energy and carbon emissions
the 30-60 Goals strategy.

their energy saving and carbon reduction• Bohui Paper has formed an energy efficiency

After a successful pilot in 2020, magnetic
levitation fans and the lithium bromide

absorption refrigeration technology havethe former standing to save at least 5,929,872
kWh of electricity every year and the latterapproximately 22,517 tons of standard coal

• Rudong Base has established an energy

management committee led by the generalmanager and relevant executive heads tocoordinate energy management efforts.

The committee combines daily calculationof energy consumption with monthly

reviews to gain informed and timely insights
into the potential for energy savings andconsumption reduction, thus maximizing
energy efficiency.

liquid ring vacuum pump system, turbine

sealed, nor do they require a liquid-cooling
circulation system. With higher efficiency

and fewer machines needed, they deliver
remarkable energy saving benefits. Afterbeing applied at Rudong Base in 2021, thetechnology reduced its energy consumption
by 25% compared with liquid ring vacuum
pumps. In addition, Hainan Gold Hongyeplans to bring in the magnetic levitation
double-connected turbine technology,

which promises great potential for energy
savings.

Energy savings from energy efficiency retrofits implemented in 2021

24,4395.53%

headquarters department and BU. Over

broader uptake of low-carbon technologies,

Guangxi Jingui Pulp & Paper* Biomass fuels include black liquor (accounting for approximately 93%), wood chips, etc.;

management of energy and carbon

optimization, equipment renovation,

been adopted at more APP China mills, with

Natural gas

up

upgrades at our mills. They included process
etc., leading to significant energy savings.

Coal

%,

efforts to advance energy saving and carbon
implementing a variety of energy efficiency

Energy Mix of Mills Within Reporting Scope in 2021

Proportion of

26.65

potential for energy savings and carbon reduction and increasing the use of clean energy. The
year 2022 will see APP China commence implementing the 30-60 Goals strategy and further

Solar power generation:

Exploring Potential for Energy Savings and Carbon Reduction

tons of standard coal/year

Hainan Jinhai Pulp & Paper

9,568

tons of standard coal/year

Ningbo Asia

75,000tons of standard coal/yearGold East Paper

20,000tons of standard coal/year

Hainan Gold Hongye and Hainan Gold

Thanks to more energy efficiency initiatives, the

1,944

25

Shengpu

tons of standard coal/year

actual energy consumption of Rudong Base was%less than the projected amount in the energy

technology evaluation conducted at the designphaseNingbo Asia No. 3 Unit Connected to Grid forPower Generation
Ningbo Asia No. 3 Unit was connected to the grid starting to generate powerin February 2021. This indicated that Ningbo Asia had officially completed theenergy-saving retrofit of its incinerator desuperheating and depressurization
station, which was one of its comprehensive energy-saving and efficiency

improvement projects. At the retrofitted station, the No. 3 Unit replaced thedesuperheating and decompression devices, and extraction back-pressure
steam turbines were used for heat supply and power generation. Thismaximized the utilization of the heat energy of high-grade steam, thus realizing
tiered, and more reasonable energy use and notably reducing energy waste,saving over 75,000 tons of standard coal per year.

63

APP China Sustainability/ESG Report 2021

Increasing Use of Clean Energy
Proportion of biomass fuels:

26.59

%,

up

44.11
from 2020

Shifting away from the energy mix

planning their own PV power generation

reducing GHG emissions and realizing themeasurement of available PV areas.

dominated by fossil fuels is the key to

Carbon Neutrality goals. Our commitment in%

Active efforts at APP China mills to pushuse of clean energy, which will continue far

effectively ramped up their proportion in

into the future.

Harnessing its premium rooftop resources,
Gold East Paper completed the Phase I
20-MW and Phase II 10-MW rooftop PV

power generation projects in 2016 and2017 respectively, and its Phase III 20-MW
project currently under way is expected

to be put into operation by the end of 2022

upon completion. Meanwhile, Hainan Jinhai

Pulp & Paper and Ningbo Asia have both been

Water Management

plant managed to keep its seal waterflowing without being discharged by using

projects, while other mills have completed athis regard is reflected in our ongoing efforts
to reduce the use of coal and increase the• Guangxi Jingui Pulp & Paper's alkali recovery
independent seal water return pipes etc.,

recycling around 2,000 cubic meters of sealwater per day and generating RMB2.6 million
in annual economic benefits; to realize 100%for increased use of biomass fuels in 2021

seal water recycling and reuse across themill, the company organized a study tour

our energy mix. At Hainan Jinhai Pulp &to demonstrate to the various departments

Paper, biomass fuels such as black liquor,

how the alkali recovery plant recycled andbark, and woodchips accounted for 59.9%%

and dilute the pulp stream, clean paper

machines, etc., which reduced both the useof clear water and the total effluent volume.
The consumption of clear water per tonof finished products was estimated to beeight cubic meters, which complied with thenational water quota for the paper industry.

retrofit, increasing the mill's total recycled

seal water to about 4,000 cubic meters perfrom non-hazardous industrial solid waste

day, attaining a 70% reuse rate.

for power generation. APP China willcontinue to increase the use of biomass fuels
in 2021 and plans to start using those fromour own plantations.

Addressing water shortages and realizing sustainable water use are important aspects ofbuilding an ecological civilization. China has intensified efforts in recent years to promoteagricultural, industrial, and urban water conservation and continues to strengthen water"Three Wastes"
Management

For manufacturing enterprises to realize greener production and circular economy, thecomprehensive management of the "three wastes" is essential. In compliance with nationallaws and regulations such as the Law on the Prevention and Control of Water Pollution , the Lawon the Prevention and Control of Atmospheric Pollution , the Law on the Prevention and Control
of Environment Pollution Caused by Solid Wastes , the Law on the Prevention and Control ofSoil Pollution , and the Hazardous Chemicals Safety Management Regulations , APP China works

strategic significance of water conservation and pledging to use measures like tightening water

95.74

water in the papermaking process to washplants had completed a seal water reuse

experimenting with the use of fuels derived

Optimization of Water Conservation Systems and Policies in December 2021, underlining thereuse rate:

to the reuse of white water and used whitereused seal water. As of the end of 2021, 11of the energy mix. Ningbo Asia has been

management . The Ministry of Water Resources issued the Guidance on the Establishment andAverage industrial water• Rudong Base attached great importanceuse constraints and improving capacity for intensive and economical water use to promote theto drive continuous progress in "three wastes" treatment by applying "reduction at the source,

implementation of water conservation practices on all fronts.

control through the process, and end-of-pipe treatment".

APP China mills work diligently to optimize their water management mechanisms. We have set

In the treatment of wastewater and air pollution, APP China mills follow the principle ofefficiency by scaling up water reuse, conducting water-saving technology upgrades, recycling

disclose the various pollutant indicators and periodically have them audited by accredited third

up several water conservation improvement project teams, continuing to improve water use"scientific pollution treatment and compliant emissions". We closely monitor and voluntarily

rainwater, etc. The average industrial water reuse rate of APP China mills within the scope ofparties. We also undertake a series of wastewater infrastructure retrofits such as wastewater

reporting was 95.74% in 2021.

treatment system optimization and wastewater treatment capacity enhancement to improve

the overall performance. We are thus able to keep the concentration and volume of wastewaterand air pollutant emissions at far lower levels than the permitted limits while maintaining high• Gold East Paper set the goals of reducing

water consumption by 2% every year to 6.5

tons of water used per ton of paper produced
and increasing the reclaimed water reuserate to 50% through continuous explorations.
In October 2021, the company entered intoa water rights trading agreement with theneighboring mill Zhenjiang Chi Mei ChemicalCo., Ltd. to offer it 3 million cubic metersof water rights trading volume every year
during the agreement period.

pulp and paper yields. Thanks to its outstanding emissions compliance performance, Guangxi

Jingui Pulp & Paper received approximately RMB1.127 million in environmental tax cuts in 2021.

• Through measures like water use

management, technology and equipment
upgrades, and industry benchmarking
management of water consumption

indicators, Ningbo Asia developed industryleading water-saving practices and wasnamed a "2021 Provincial Water-Saving

Benchmark of Zhejiang". Its water-saving

initiatives in 2021 could save 8.774 million
tons of water per year, equivalent to

RMB13.16 million in economic benefits. Its
outstanding water-saving performance isestimated to translate into RMB5.4 million inwater cost savings between 2022 and 2024.

Indicators

Wastewater discharge per ton of paper produced (National standard* limit: 20 tons)

Wastewater discharge per ton of pulp produced (National standard limit for pulp companies:
50 tons; national standard limit for pulp & paper companies: 40 tons)

COD emissions per ton of paper produced (National standard limit: 1.6kg)

COD emissions per ton of pulp produced (National standard limit for pulp companies:
5kg; national standard limit for pulp & paper companies: 3.6kg)

Unit

2021

2020

2019

tons

12.46

12.50

11.62

kg

0.24

0.22

0.29

kg

0.86

0.85

0.63

tons

5.88

6.20

6.37

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

64

65

APP China Sustainability/ESG Report 2021

Guangxi Jingui Pulp & Paper's pollutant emissions in 2021
Wastewater/

Indicators

Exhaust gases

Permitted limit

Emissions in 2021

2,024

817.43(tons)COD

Wastewater

Ammonia nitrogen

58

Total nitrogen

262.8

SO2

1,086

Soot

270.6

902

NOX

Exhaust gases(tons)

Proportion(emissions in 2021/permitted limit)

40.4%

10.26

16.1%

42.24

185.8

612.48

74.59

17.7%

67.9%

17.1%
27.6%

Promoting Comprehensive Utilization of Wastewater Sludge

Cumulative use of
biogas surpassed

6,550,000

generating economic
benefits over
RMB

3.1

millioncubic meters,

Ningbo Asia has two bubbling fluidized bed (BFB) incinerators with a design
sludge processing capacity of 1,600 tons/day. They mainly burn wastewatersludge, blended with raw coal and biomass fuels at a certain ratio to maintainstable combustion. The biogas produced during wastewater treatment is alsotransferred to the incinerators for combustion, which reduces the amount of

raw coal and biomass fuels used. The company also supports local community
by assisting to incinerate the wastewater sludge produced by other companies
in the neighborhood, generating considerable social benefits.

In 2021, the company incinerated 335,921 tons of sludge, including 17,250 tonsof sludge produced by external companies, and burned 805,318 cubic metersof biogas produced during wastewater treatment, equivalent to saving 572

As to solid waste, our mills have established management procedures for non-hazardous
industrial solid waste and hazardous waste. The non-hazardous industrial solid waste

Comprehensive utilization
rate of non-hazardous

generated during the manufacturing process includes fly ash, slag, sludge, lime sludge, gypsum,solid waste

99.25

woodchips, slurry, etc., which the mills recycle and comprehensively utilize by selling to external
parties for reuse or through internal reuse, among other methods. Hazardous waste includes%

heavy metal waste, waste chemicals, radioactive waste, waste mineral oils, waste paints, organic
resin wastes, waste lamps, etc., which the mills commission qualified third parties to dispose oftons of standard coal. From 2018 to the end of 2021, the company cumulatively
burned 6.55 million cubic meters of biogas, generating over RMB3.1 million
in total economic benefits. Its chemi-mechanical pulp (CMP) project withan annual production capacity of 300,000 tons was put into operation in thesecond half of 2021, and the biogas generated therein started to be transferredto the sludge incinerators in December 2021 for co-firing. This is expected to
double the amount of biogas use in the future.

in a legal and compliant manner. In 2021, the comprehensive utilization rate of non-hazardous
solid waste at APP China mills within the scope of reporting reached 99.25%.

Methods of Non-hazardous Solid Waste Disposal
at Mills Within Reporting Scope in 2021

0.39%

18.77%

Recycling and reuse*

Energy Recovery from Solid Waste Incineration

0.92%

With energy recovery

Incineration

Selling to external

Without energy recovery

parties for reuse
Other*

42.20%

38.64%* "Recycling and reuse" refers to the recycling and reuseof waste through direct processing by APP China mills or

99.08%

through special cooperation with third-party agencies, suchas making by-products from waste. Other disposal methods
are mainly comprised of centralized treatment by local
sanitation departments.

66

67

APP China Sustainability/ESG Report 2021

Social:Creating a
Harmonious
Happy LifeWe are committed to "giving back tosociety what society has given us" andcontinue to intensify efforts in safety
and health, product responsibility,

customer relationship management,

community engagement, and charity andphilanthropy, among other areas, doing

our part as a corporate citizen to promotesocial progress.

Safety and Health70

Customer Relationship Management76

Product Responsibility

Community Engagement

Charity and Philanthropy

68

75
77
78

69

APP China Sustainability/ESG Report 2021

Safety and HealthWorkplace safety is about protecting

risk classification and control and hazard

and Safety Management System and

APP China mills have all set up a Safety Management Committee led by the general managers anda top business priority. The revised Law

workplace safety standardization. All

standardization, we continue to improvespecific operational safety rules, and the workplace safety reward and punishment system, amongpeople's lives and should always remainof the People's Republic of China on Work

Safety came into force in September

2021. It underlines the establishment of acompany-wide work safety accountability

detection and elimination and to advanceof those requirements are intended

legally requires employers to establish ahealth, and environment. In line withdual prevention mechanism consisting of

Building a Safety
Management
Systemreview system. We have progressively built out a long-standing safety management mechanism

safe workplace. Meanwhile, we highlythat keeps us disciplined, evolving, and improving.

prioritize the prevention and control

national laws and regulations on safety,
the ISO45001 Occupational Healthsystem, hazard detection system, risk management and control system, and all-staff performanceput safety first at all times to ensure a

accountability for work safety.

APP China abides by all applicableof major safety risks at the source; it also

others. Our efforts also went into enhancing existing systems such as the safety standardization

workplace safety management andto further formalize employers'system and the prevention and resolution

formulated a set of policies and systems, including workplace safety rules and regulations, job-

the requirements for workplace safetyof occupational diseases, amplifying

efforts to create a safe and healthful work
environment.

Pushing Forward Workplace Safety Standardization

Consistent with the "safety first, prevention-centered, and comprehensive management" safety

approach, APP China has established a unified and Group-wide Safety, Health, and Environment

Ningbo Asia formulated the Implementation Plan for

In April 2021, the review panel of the China Waterborne

implementation using the dynamic PDCA (Plan–Do–

the People's Republic of China carried out an on-site Grade-1(SHE) management system that covers all workers, facilities, and worksites. This system, together

Workplace Safety Standardization and facilitated its

among others, serves to drive effective safety accountability across the Group and continual

Check–Act) cycle; formulated a set of highly executablewith the SHE corporate standard management system and the emergency management system,
improvement in our safety management.

safety management policies, such as the Hazardous

Operations Safety Management Measures , Workplace

Transport Research Institute of the Ministry of Transport ofwork safety standardization review of Gold East Paper's

terminal. The evaluation was carried out in accordance with
the Implementation Rules for Work Safety Standardization

APP China set targets for seven key performance indicators (KPIs) in 2021 based on our SHE

Safety Accountability , Hazard Detection and Elimination,

Evaluation of Terminal General Cargo Operators . The new

million hours worked, injury severity rate, number of fire accidents, workers with occupational

Standard Operating Procedure for Confined Spaces , to further

16 major subjects, a 30%+ increase in content. Based on a

imposed by government. The BUs and mills then broke those targets down into specific work

thorough inspection and rectification of the safety measureperformance in 2020. The KPIs we selected included occupational fatalities, lost-time injuries perdiseases, number of safety training hours per employee, and number of administrative penalties
indicators and objectives. We also instituted a regional joint prevention and mutual inspection
program and a cross-mill SHE MBOS competition platform to stimulate mutual supervisionand benchmarking and drive timely remediation of the problems identified in workplace safety
management.

In 2021, the Group amended the notice and rectification procedures for abnormal SHE events.

the Company Comprehensive Emergency Plan , and thestandardize workplace safety management; conducted amanagement at the worksites. In March 2021, Ningbo Asia

was certified to second-level standardization of the Standard

for Work Safety Standardization of Papermaking Enterprises ,indicating that the company now has the highest work safety
rating of A.

edition of the evaluation included 188 specific rules underthorough, careful, and strict assessment of terminal safetyparameters such as safety systems, safety measures, hazard
detection and elimination, and emergency response, thepanel gave a total sore of 920 (out of 1,000) and granted Gold

East Paper's terminal the certification for Grade-1 work safety
standardization.

Changes included adding a special reporting line that moves from the mills' general managers

to BU CEOs and to the shareholders and devising an APP-SHE meeting plan scheduling monthly

meetings, random subject-matter meetings, and end-of-year review meetings to further standardize
our SHE meeting system, strengthen the research, analysis, and review of SHE management status,and promote SHE communication among different mills. To further systematize the Group's SHE
efforts, we have formed the interdepartmental improvement project team for "Hazard Detection
and Elimination System" digitalization to build unified systems and processes at the Group level.

As we work to further systematize and digitalize key modules such as accident management, risk

control, hazardous work approval, and safety education and training, we will progressively move all
those operations online and extend such efforts across the Group.
Key modules of the SHE Hazard Detection and Elimination Platform

Accident

management

70

Risk

control

Safety training
management

Hazardous

operations
approval

Rules,

regulations,and standards

Chemicalsmanagement

Environmental
monitoring

Wastemanagement

Gold East Paper's terminal passed the Grade-1 work safety standardization review

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APP China Sustainability/ESG Report 2021

Safety Risk
Management

To deliver on our safety commitments, APP China Headquarters regularly interprets andcommunicates safety-related laws, regulations, and policies to the mills to help them turnrelevant requirements into procedures and systems that best suit their conditions. The mills haveestablished policies and processes around hazard identification and risk assessment, safety risk

Eliminating Safety Hazards

classification and control, safety education and training, major accident handling, work-related

Safety hazards could be very trivial, so the elimination andthe impact they may bring.

and sense of responsibility for all employees. In order toaccident management, etc., making an all-out effort to prevent workplace accidents and minimize

prevention of safety hazards need a strong safety awarenessmotivate the employees to take initiative, and effectively

implement the on-site inspection system, Shandong Base of
Bohui Paper launched the Project Screwdriver, promoting

Providing Safety Education and Raising Safety Awareness
Safety training hours:

450,918

APP China has in place a mandatory three-array of educational activities, including

and an annual refresher to ensure ourcontests, and major accident warninglevel pre-job safety training program
employees remain apprised of theirworking environment and all the safety
hazards present therein to stay safe on
their jobs. Our mills work to foster aregular and deeply embedded awarenessaround workplace safety through a richmeetings, training, performance reviews,
sessions, combined with themed activities
like the Workplace Safety Month and thecollectively recorded at all the mills within
the scope of reporting.

variety of hazard inspections, as varied asanchored in risk identification and control.

targeted inspections, holiday inspections,workplace safety risks and hazards every
year based on an ongoing process to

identify and assess the sources of hazards
and apply hazard detection, tracking, andday-to-day supervision and inspections,shift inspections, workshop inspections,department head-led inspections, crossinspections, etc. The average hazard
correction rate was 98.87% in 2021.

correction procedures, thereby tying our

In addition, emergency drills are held

our mills, including Hainan Jinhai Pulp &

different scenarios such as fires, car andsafety efforts into a closed loop. Some ofPaper, Hainan Gold Hongye, and Hainan
Gold Shengpu, have formulated the

Implementation Plan for Workplace Safety
Risk Classification and Management .

Drawing on a comprehensive identification
and assessment, they implement

differentiated and standardized safety
risk management as suited to the risk
level and severity. Our mills employ ainspections and use handy tools such as a screwdriver to deal
with the hazards in a timely manner before their escalation.
From June to August 2021, the Shandong Base effectively

identified and rectified 291 safety hazards, and a total of 291
employees were commended.

Hainan Gold Hongye carried out a major safety inspection

450,918 hours of safety training were

APP China continues to optimize theWe thoroughly examine and address

employees to identify minor anomalies during on-site

Fire Safety Awareness Month. In 2021,

Prioritizing Risk Identification and Strengthening Risk Governancehazard detection and elimination system

improvement with proposal contests, and encouraging

every year at each mill simulating

forklift accidents, chemical spills, steam
explosions, typhoons, and floods. APP

China Headquarters would also arrange
for the mills to study and evaluate eachContractor Safety Management
The high mobility of contractors and theholding them to the same safety standards

and operational standards are among the

Headquarters set out detailed requirements

great variations in their safety awarenessuncertainties that make them a stakeholder
group with considerable safety risks. The
safety management of contractors thus

becomes a business imperative. Moreover,as APP China took on a growing number of

new projects, the Company issued the Noticeon Strengthening Contractor Management
to formalize related accountability. The

Company has included contractors into
the Group's SHE management system,as our own employees. In 2021, APP China
regulating contractor management at

our mills, which cover ten areas including
qualification review, the signing ofsafety management agreements, theestablishment of a contractor directory,
safety training and notice, contractor

meetings, safety inspections and hazard
elimination, safety performance review,accident reporting, etc.

Major Contractor Safety Inspection

other's practices to strengthen the

Guangxi Jingui Pulp & Paper carried out a major contractor safety inspectionof employees. In 2021, a total of 521

safety accountability, and eliminate contractors' exposure to safety hazards.

emergency preparedness and response
emergency drills were conducted at ourmills within the scope of reporting.

in August 2021 to further strengthen contractor safety management, formalize
Twenty-eight contractors were thoroughly inspected as to workplacesafety accountability mechanism, hazard detection and elimination, risk

identification and control, education and training, and operating procedures,among other aspects. In the end, 27 problems were identified and no major

Average safety hazard

Number of emergency

98.87

521

correction rate:72%

drills:hazards were found. The company prompted relevant contractors to take
immediate corrective measures, with 22 problems fully addressed by theend of 2021. During the inspection, the company's leaders underscored theimportance of workplace safety for the contractors' management teams andcalled on all the workers to stay careful at work and make every effort to help
ensure a safe workplace.

73

APP China Sustainability/ESG Report 2021

Occupational HealthManagement

We are committed to keeping our workers safe and make a point of preventing, controlling,and eliminating occupational hazards at the source. In compliance with the Law of the People's

Republic of China on Prevention and Control of Occupational Diseases , the Company implements
a management system consisting of "oversight by headquarters, accountability by facilities, and

Red Cross First Aid Training

management at different levels". APP China Headquarters has instituted the Code of Occupational

In September 2021, Ningbo Asia invited experts from thealong with a set of management measures for protecting against occupational diseases. Thosea two-day first aid training session to its employees. They

Health Surveillance Management , and each mill has an Occupational Health and Safety Committee,
procedures are the basis on which we carry out systematic safety work ranging from occupational
hazard prevention and health checks to workplace management and occupational healtheducation and training to effectively protect our workers' health and related rights and interests.

Red Cross Emergency Rescue Center of Beilun District to givelearned, and mastered, different kinds of care techniquessuch as how to perform CPR (cardiopulmonary resuscitation)and the Heimlich Maneuver, how to use an AED (automatedexternal defibrillator), how to administer first aid for traumas,
and how to treat common emergencies and accidental

Safeguarding Occupational Healthinjuries. This fostered an increased safety awareness in theworkplace and better prepared the employees for accidental

Every mill has an Occupational Healthits proper use. We also maintain medical

monitors occupational hazards in theproviding health checks before, during, andManagement Department that regularly
workplace every year such as noise, dust,

and high temperature, and such monitoringalso covers our contractors' workplace. We
provide all employees, new and current,with occupational health training, plus

surveillance files for our employees,

job. In 2021, there were zero incidents ofoccupational diseases at APP China.

year to those exposed to hazards on theirof China on Prevention and Control ofhazards exist. We provide employees withengaging employees in training, lectures,personal protective equipment that meetsthe requirements of the Provision Standard

for Personal Protective Equipment andcontinue to intensify inspections to ensure

hosted the Law of the People's Republicfrom manufacturing and processing

complaints. We also actively carry out

online quizzes, videos about typical cases

ISO9001:2015 Quality Management

and warehousing. To make high-quality

building a stronger quality awarenessof occupational diseases, posters aboutoccupational health, etc. to further increase
their health awareness at work.

a part of our daily routine. They include, fortraining was also offered at Ningbo Asia andbusiness travelers and visitors, distributionof protective supplies such as masks,

alcohol, and hand sanitizers to employees,
and mass nucleic acid testing among

employees. Those measures are intended to74

System and authoritative testing

protocols. We also implement a quality
management mechanism that runs
through the entire product lifecycle

to finished products and their testingproducts would take constant polishingand optimization. We make targeted

improvements to our product quality

based on careful analyses of customer

ensure a safe workplace. Red Cross rescue
Rudong Base to give employees the skills

needed for responding to emergencies andenable them to save themselves and theircolleagues and prevent and avoid hazards so
as to ensure adequate emergency response

capacity across different business functions

independent quality inspections whileamong employees and encouraging them
to be a significant part of our quality
improvement efforts.

Pulp Quality Improvement
Initiative

Continuous Product Quality
Improvement

In 2021, APP China set up several improvement

Bohui Paper has formulated its own quality

continuously exploring ways to improve our products.

19001-2016 quality management system standards,

project teams dedicated to pulp quality management,
Under the "Stabilizing Group's Pulp Quality andReducing Internal Marketing Customer Complaints"
the Group's pulp and paper mills on pulp-related

safeguard employee health and hygiene andscreening, information registration formaterials to the standards set by the

initiative, we regularly conducted joint analyses withAs COVID-19 continues to linger, measures toexample, office disinfection, temperature

Product Responsibility
APP China mills hold the quality of raw

treatment for employees

prevent and contain its spread have become

Red Cross First Aid training was offered at Rudong Base

Occupational Diseases Awareness Week,

Guangxi Jingui Pulp & Paper provided lectures on chronic disease prevention andCaring for Employee Wellbeing

written test and professional skills test.

occupational contraindications to another

From April 26 to May 1, 2021, our mills

jobs, while putting up warning signs whereobtained the Red Cross First Aid Certification after passing theafter deployment and shifting those withregular training sessions on occupational

hazard prevention offered throughout the

injuries and unexpected disasters. In the end, 26 trainees

customer complaints. We examined the causes

from multiple angles, such as pulp quality, testing
methods, and business activities, based on which
we proposed a series of improvement actions. By

improving the equipment, processes, and equipment
parameters, Ningbo Asia and Guangxi Jingui Pulp &Paper achieved notable progress not only in the qualityof chemi-mechanical pulp but in energy and watersavings as well.

management system based on the national GB/T
and established control procedures covering raw
material inspection, finished product inspection
and testing, and finished product storage andtransportation. The Company regularly carries
out internal self-inspection of product quality,

and the relevant improvement in accordance with
the inspection results. In 2021, Jiangsu Base of

Bohui Paper started the construction of the new

Technology Center and the R&D Laboratory, andcarried out a number of quality improvement

projects, which effectively improved product quality

with a 98.8% product A Grade rate, increased by 1.3%
compared with that of 2020.

within the Company.

75

APP China Sustainability/ESG Report 2021

Customer Relationship Management

Community Engagement"Customer First" is one of the core

APP China maintains a customer

popular among our customers. In

APP China cares deeply about

guidelines" within the corporate culture

fields of industrial paper, cultural paper,"Little A Classroom" with over 600

to foster supportive and trusting

aspects of APP China's "behavior

system. Driven by an unwaveringcommitment to serving customer needs,
we constantly strive to provide products
and services that our customers are

happy with. Our BUs have all set up a
professional and efficient customer

service team. We continue to optimize
the customer complaint handlingprocedure and strengthen customer

communication to ensure the delivery

of exceptional pre-sales, sales, and aftersales services.

In 2021, we continued to carry out asatisfaction survey system in all three

and tissues. Every year, we conduct online
surveys, field visits, and correspondence

surveys to understand what our customers
think of our products and services inrespect of product quality, sales service,
logistics service, technical service, andbrand image, among other dimensions.

We then use the survey results to inform
improvement plans to ensure customer
concerns are effectively addressed.
Since its introduction in 2018, the"Little A Classroom" has been very

2021, we hosted 25 sessions of theparticipants. The event enables ourcustomers to learn about the latest

industry trends and the latest APP China
products and provides a platform forour manufacturing, technical R&D, andcustomer service teams to have in-depth communication with them to help

community engagement and works
connections with community residents.
Our mills and forest farms maintaina regular dialogue with surrounding
communities, welcome theirsupervision, and act swiftly to verify oraddress the problems they raise.

address the problems they encounter

Enhancing Community Engagement and Protecting
Community Rights
APP China Forestry instituted the Administrative Measures for Community

Engagement in 2016, setting out a mechanism for engaging with local

communities, especially ethnic minority groups. Our forest farms have each
set up an engagement mechanism working group assuming responsibility
for devising community engagement plans and staying in touch with local

villagers through visits, notices, and exchange meetings; conducting thoroughcommunication with community members before undertaking forestry

operations to ensure no major negative impact is caused by harvesting andin production. As we continue to holdtransportation, plantations survey, or other related activities; monitoring andthe "Little A Classroom" in the future,evaluating the engagement mechanism in a timely manner. The forest farms

carried out a biennial social impact survey in the fourth quarter of 2020, which

we will offer more customized content

they compiled into a summary report in 2021 to inform future work.

designed around the specific needs ofour customers.

diverse array of customer engagement

activities, such as production and sales

meetings, customer visits and exchanges,

exhibitions, customer satisfaction surveys,
and the "Little A Classroom", to fully

understand our customers' expectations
and demands. We also incorporated

considerations of issues such as customer
satisfaction improvement and customer

Forest farm staff communicated with local residents on topics such as village roadcomplaint rate reduction into the MBOS

transportation and afforestation

Proposal Competition and set up several

project improvement teams to implement
interdepartmental improvements.

Award ceremony of the Ningbo Asia MBOS Proposal Competition

On a random basis, APP China mills hostan Open Mill Day inviting neighboring

Live Broadcast of Breeze Production Basecommunities, schools, and media tocome in for a guided tour. Ningbo Asia's

Green Paper Culture Center opened to the

In March 2021, our Gold Hongye Breeze Livestream Team went

public in April 2021. During the summer

to APP China's forest farm and production bases in Hainan,vacation, the company held a variety ofusing cameras to capture and present the entire papermaking

education activities on paper culture forjourney from sapling to finished tissue products, in a bid tostudents to give them a glimpse into thefind new ways to engage and interact with the consumers.

history of paper and papermaking as

The live broadcast went on for two days, drawing over 300,000

well as APP China's course and model ofviewers. Live footages of three bases, namely the forest farm,development. The students also had an

the pulp mill, and the processing mill in Hainan, allowed

opportunity to participate in the hand-consumers to see the scale of the Breeze production base andthe modern papermaking technologies that underpinned thehigh quality of our products.

Live interview at the production basepapermaking process to make paper by

their own hands. As of the end of 2021, theGreen Paper Culture Center had hosted 84
visits totaling over 900 visitors.

76

Students were experiencing hand-papermaking at the Green Paper Culture Center

77

APP China Sustainability/ESG Report 2021

Charity and Philanthropy"Blood is thicker than water, and theethnic Chinese and overseas Chinese

are always the ones who care the mostabout the people of their motherland."This has been one of the guiding

principles followed by the Chairman andPresident of Sinar Mas Group, Mr. Teguh
Ganda Widjaja, over the years of doing

business in China. Under his leadership,
APP China has been committed to theprinciple of "giving back to society

what society has given us" and actively

Tomoroe Career Class

involved in charitable causes whilepursuing economic growth. APP

China has built up a four-pronged CSR
system consisting of national public
emergencies, culture, sports, andeducation, community development,

Cumulative charitable giving:close toRMB

1.2

billionThe Foundation has been funding Tomoroe Education's

who participated in Tomoroe's Career Class had a good run

aims to instruct high school students, especially those in

Education. Of all the 451 students who participated in the

Tomoroe Career Class program since 2018. The program
remote areas, in the different career options available intoday's society to better prepare them for college and life after

contest between 2019 and 2021, 45 received an award.

graduation. As of the end of 2021, the program had offered 124
hours of career lectures to 14,310 students in seven schools,

and rural revitalization, integrating CSR

sharing information on a broad range of vocations such as

deeply into our corporate culture. As of

economic researchers, journalists, lawyers, doctors, writers,

the end of 2021, APP China had donatedarchitects, captains, and hypnotists.

close to RMB1.2 billion in charitablegiving in China.

In 2020, the Foundation supported Tomoroe Educationin launching the Guide to Choosing a Major program. The

program covered over 60 colleges and universities and over 70
majors and invited 78 volunteers to give sharing sessions toyoung students, serving around 50,000 participants. Students

Foundation:
A Deep Commitment
to Sustainable
Philanthropy

in the "Tomoroe Class" essay contest hosted by Tomoroe

Interaction in a Tomoroe Career Class

Guided by its mission to "support the development of philanthropy in China, help the frail,
the needy, the elderly, and the young, and build a harmonious society", the Huang Yicong

Foundation (hereinafter referred to as "the Foundation") has devised the SPIC (Sustainable,

Participation, Innovation, and Care) development strategy. In 2021, the Foundation implemented
24 programs designed to promote equity in education, support youth development, assist

Smart Classroom

research advancement, etc., with a total donation of around RMB46.763 million.

To help under-resourced rural schools reap the benefits of theWith a long-standing commitment to education, the Foundation has developed a diverse range

resources, the Foundation funded the introduction of Beijing

of influential programs spreading across different regions over the years. The Foundation

extended its focus to the medical field in 2021 and will work with hospitals and medical experts
to help defray the medical expenses for patients from remote areas and use digital means toimprove the public's healthcare knowledge. In general, the Foundation will continue to follow

the healthy and virtuous cycle that has been formed while exploring more long-term and solid
charitable practices.

digital era and give rural students access to better educational
No. 4 High School (BHSF)'s Smart Classroom into Yicong

Middle School in Luoxi Town, Quanzhou, Fujian Province.

First started in September 2021, the project has been rolled

out in 23 classes in the first and second grades of junior highschool and the first grade of senior high school. It equips

every teacher and student with a learning tablet and every

Smart Classroom teacher with a teaching advisor appointed
by BHSF who keeps track of their lectures and offers one-on-one coaching to help them quickly get comfortable using
the new platform. The project also offers Smart Classroom
demonstration classes, research classes, and exchange

Number of projects carried out
by the Foundation:

classes every week.

24

The Smart Classroom has greatly enhanced the digital literacyof the teachers and students. It has also drawn visits from

Charitable giving:
RMB

46.763

million

Scan the QR code
to see more of
the Foundation's
practicesother schools, who have been so impressed that they havealso decided to bring it in. In the future, the Foundation will
regularly engage with BHSF to address problems identified

Smart Classroom at Yicong Middle Schoolin the teaching and learning process and constantly optimize
the project model to give more students access to quality
educational resources.

78

79

APP China Sustainability/ESG Report 2021

APP China's
Charity Journey:
Public Emergencies

At APP China, we have a dedicated CSR emergency response mechanism. Our move to digitalin the past few years has brought about continuous optimization in our collaboration system,
which enables our mills to quickly mobilize resources and logistics to provide relief to theaffected areas when disasters occur. We have been an active part of the response and relief

efforts in public emergencies such as the COVID-19 pandemic and natural disasters, continuing
to fulfill our duties as a responsible corporate citizen.

Contributing to Beijing Winter Olympic Games
Initiated in May 2020, the Overseas Chinese Ice-Snow

Museum, which is located in Chongli District, Zhangjiakou

City, Hebei Province, started a soft opening in early October

2021. As one of the key cultural heritages of the 2022 Beijing
Winter Olympic Games, the museum is not only the largest
ice and snow-themed museum in China and one with the

Aiding Font Lines of Disaster Relief

largest collection of works, but also the first museum in China
themed around ice and snow and the Winter Olympics. It is

In July 2021, Henan Province was hit by extreme rainfall,

Following the Shanxi flooding in October 2021, Gold Hongye

Weihui, and some other cities. Responding to the call ofand hygiene products and donated them to the affected areas

which caused massive flooding in Zhengzhou, Xinxiang,

the Shanghai Federation of Returned Overseas Chinese fordisaster relief, APP China promptly donated RMB10 million
worth of supplies through the Shanghai Overseas Chinese

Foundation to affected areas in Henan Province, including

tissues, disinfecting wipes, sanitary napkins, and other daily
necessities, to help ensure people's basic needs could be

Paper immediately gathered RMB600,000 worth of tissues

through the China Soong Ching Ling Foundation to help local
people get back on their feet soon. When Yangzhou faced

also an important base for promoting ice and snow sports

and conducting research on ice and snow culture. APP China
made a donation to the construction of the museum, which

is another important endeavor to support sports and culturaldevelopment in China.

Night view of the Overseas Chinese Ice-Snow Museum

a fresh outbreak of COVID-19 in August 2021, Gold Hongye

Paper donated RMB1.4 million worth of tissues and hygiene
products.

met. We were the first overseas Chinese company to make adonation to help victims of this flooding in Henan Province.

Number of students

currently enrolled in theDream Plan:

236

Since its inception in 2018, the Dream Plan program has set up joint classes with Guangxi

Vocational and Technical Institute of Industry and the Mechatronics major of Nantong Vocational

University and offered pulp-making and papermaking courses collaboratively with the College ofLight Chemical Engineering and Food of Guangxi University and Zhejiang University of Scienceand Technology. The program enrolls aspiring students from remote areas, offering a fulltuition and accommodation fee waiver and a partial remission of the living and transportation

expenses. APP China also provides employment opportunities for the students upon graduation.
At our new site in Zibo, Shandong Province, which was added for the 4th Dream Plan in 2021,

we engaged Qilu University of Technology to be part of our professional training program. This
year's focus was on middle schools in remote rural areas, with a total of 86 students newly

enrolled. As of the end of 2021, 236 students were enrolled in the Dream Plan; by September

2021, 42 students had secured formal employment and another 42 were taking an internship.

We donated supplies to disaster areas in Henan Province

APP China's
Charity Journey:
Culture, Sports,
and Education80

Since entering China in 1992, APP China has been actively involved in promoting the cultural andsports development in China. In 2008, we donated RMB100 million to support the constructionof the Water Cube, an Olympic venue in Beijing, making us the first overseas Chinese company
to make such donations; donated RMB15 million in 2010 in support of the construction of the

China Pavilion at the Expo Shanghai 2010; donated RMB20 million in 2018 to Rangtang County,
Aba Prefecture, Sichuan Province to fund the construction of the Juenang Cultural Center; anddonated RMB20 million in 2021 to support the construction of the Overseas Chinese Ice-Snow
Museum, the first Beijing Winter Olympics themed museum.

Opening Ceremony of the 2021 APP Class at Dream Plan Zibo Site81

APP China Sustainability/ESG Report 2021

APP China's
Charity Journey:
Community
Development

During day-to-day operations, our BUs maintain an active dialogue with the communities we
operate in. We seek to understand the specific needs of local residents and do our utmost to
support the elderly and the vulnerable and help strengthen community development.
»

Ningbo Asia has been hosting the Harmonious Community program every year since 2011.
The company held 17 events throughout 2021, supporting communities in multiple ways
such as caring for elderly people who lived alone and visiting the firefighting brigades;holding chess and Go competitions for primary schools in the neighborhood; donatingbooks to nearby kindergartens; hosting activities to celebrate traditional festivals such as
the Lantern Festival, Dragon Boat Festival, and Mid-Autumn Festival in the surrounding
communities, etc., fostering a meaningful and harmonious connection with local
communities.
»

Since establishing a presence in Yangpu Economic Development Zone, Hainan Jinhai

Pulp & Paper has financially assisted elderly people and poor households in surrounding

Launching Ceremony of the "Common Prosperity and Happy Homeland" Charity Fundcommunities on holidays while allocating funding to improve local cultural and sports

facilities and donating needed supplies for hosting all kinds of activities like basketball,volleyball, and chess games and competitions. In 2021, the company made a total donationof RMB123,600 to aid elderly people and poor households in the neighborhood.

»

In 2021, Hainan Jinhai Pulp & Paper and APP China Tissue BU donated RMB500,000 and

RMB30,000 worth of tissue products respectively to five remote villages in Hainan Province
in support of local rural revitalization, poverty alleviation, and relief efforts. Over the years,
Hainan Jinhai Pulp & Paper has assisted Hainan Province in improving local educationand environmental protection through the Hainan APP Student Aid and Environmental
Protection Foundation, cumulatively donating over RMB46 million.

Ningbo Asia celebrated the Lantern Festival with local community residents

APP China's
Charity Journey:
Rural Revitalization

Rural revitalization and common prosperity are two developmental imperatives during the

14th FYP period. By investing to expand our network of services and promote innovation-driven

growth, we strive to boost local economy and employment and help create an environment thatrewards hard work, promotes equal opportunity, and affords everyone a chance to realize their
dreams. We also actively assist in poverty alleviation and offer help to those in need, doing ourpart to promote social stability and common prosperity.
»

In September 2021, Ningbo Beilun Charity Federation launched the Beilun District"Common Prosperity and Happy Homeland" Charity Fund, which received its first donations
from 21 companies, including RMB600,000 from Ningbo Asia.

82

Hainan Jinhai Pulp & Paper made monetary and in-kind donations

83

APP China Sustainability/ESG Report 2021

Governance:

Committed
to Doing
Business with
Integrity
We continue to improve the governancesystem and the effectiveness of

our governance while advancing

comprehensive risk management,
operational compliance, businessethics, supply chain management, andinformation security management toprovide a solid foundation for sound androbust business growth.

Risk Management86

Supply Chain Management

90

Business Integrity and Ethics
Information Security Management

84

87
91

85

APP China Sustainability/ESG Report 2021

Risk Management

Business Integrity and Ethics

APP China has established the "Three

operational risks by ensuring that all theissues such as abnormal transactions,

APP China is committed to the set of

regulations. We have instituted a set ofaugment efforts in internal controls andmanagement system to continuously

addressed. In 2021, our BUs completed

systems in sales, procurement,of "Integrity and Commitment" andCode of Integrity and Ethics , and aculture of integrity and compliance.

with all applicable national laws andframework while continuing toLines of Defense for Internal Control"
strengthen risk identification andmanagement and lay the groundworkfor maintaining stable and sustained

operations. As part of our digitalization
agenda, we launched an online audit

dashboard in 2021. It keeps our audit
management personnel updated

risks identified during audits are fullya total of 24 internal audits, undertaking
over 700 productivity enhancement andrectification initiatives and instituting
and/or amending seven procedural

documents in light of the identified
problems.

on the progress of ongoing audits

In the future, we will use the big datameasures. This helps minimize ourbetter risk identification and analysis on

and the implementation of remedial

fraud, and lack of workflows andproduction, logistics, and other businessprocesses and strengthen audits of ourdigitalization projects and automation

rules and policies, such as the Businessmoral values built on the cornerstones
conducts business in compliance

Company-wide integrity management

compliance to constantly evolve our

projects. This will help us navigate

potential risks as we press ahead with
our strategic transformation.

generated during Digital 2.0 to empower

APP China Integrity Management Framework

APP China's Three Lines of Defense for Internal Control

Resolutions and commitments by top management
Committee for Moral Disciplines and functional compliance department

First lineof defense

Frontline employees implement risk control in accordance with theBribery and Embezzlement and Integrity Risk Evaluation and Monitoring

internal audit manual and SOPs, which is inspected and approved by thesupervisors.

of defense

Third lineof defense

The business or project leaders formulate relevant control policies andprocedures and conduct self-examinations and evaluations on theimplementation of the first line of defense.

The Internal Audit Department and the Corporate Risk and Integrity (CRI)

Procedures

Data

Department at the headquarters make up the third line of defense. The
Internal Audit Department conducts independent audits according torisk-based audit plans and special requirements. The CRI Department

is exclusively dedicated to independently investigating matters related
to integrity and compliance, assuming responsibilities for the integrity
reporting hotline, compliance investigations, integrity training, andbusiness partner due diligence, among other matters.

Systems

Employee Code ofwhistleblowing; keeping

Ethicswhistleblowers confidential
and protected

Relevant policies,
standards, andcontrol procedures
Personnel selection andappointment, supervision,and motivation
Education andtraining,

Active, good-willand culture building

Due diligence; sunshine
declaration

Self-examination,

Response

Event management

Investigation and casemanagement

compliance review

Stop-loss measures

Data analysis

Corrective actions

and audit

integrity culture practices

Second line

Discovery

Becoming a world-class benchmark for corporate

Personnel

Prevention

Internal and external communication; reporting and feedback
Keeping everyone involved. Shouldering responsibilities

86

87

APP China Sustainability/ESG Report 2021

Integrity andComplianceManagement

We embed integrity and compliance at all levels of the Company and have an independent

In 2021, we continued to engage in the advocacy of ethical standards among all employees

collaborates with other departments to plan, supervise, and implement specific measures,

Provisions for Prohibition of Gifts and Hospitality . Such advocacy efforts have been establishedand effective governance, which helps us continuously advance management and practices

within the Company.

as set out in such documents as the APP China Employee Code of Ethics and Integrity and theCRI Department tasked with integrity and compliance responsibilities. The CRI Department

as long-standing and important commitments as we continue to advance a culture of integrity

thus constituting a compliance management mechanism with clear roles and responsibilities
in integrity and compliance. We have developed the Employee Code of Ethics setting out
requirements for employee conduct in their daily work.

APP China implements and constantly communicates the Encouraging Reports of Fraud Within

the Group and the Reward Plan to the employees, suppliers, and business partners. We do so todemonstrate our zero-tolerance stance on fraudulent behavior and support for the reporting of

violations in the workplace. We encourage all stakeholders, including our employees, to report,
in good faith, any improper conduct occurring within the organization and provide a numberof whistleblowing channels including an email address (GRW@app.com.cn), a 24/7 reporting

hotline (021-22839763), etc. Such improper conduct may include, but is not limited to, corruption,
fraud, commercial bribery, sexual harassment, abuse of power, conflict of interest, and theft.
We also have an interdepartmental whistleblowing mechanism, where staff of the CRI

Department register the filed reports in a timely manner, assess their validity, and refer them tothe appropriate departments for subsequent investigation based on the nature of the reported

matters. Reports involving fraudulent behavior are subject to a formal and focused investigation

carried out by the CRI Department. Necessary sanctions on relevant employees and departments

are then implemented pursuant to company policy, followed by improvements made in our work
process after an investigation is concluded. Incidents involving illegal conduct are escalated toexternal authorities, subjecting the offenders to legal proceedings.

2021 Sunshine Integrity Month events

The CRI Department has a due diligence function. It assists the Group and the businessdepartments in setting up a supplier and customer risk assessment system; pushes and works

with business departments to carry out background checks and risk assessments on suppliersand customers; monitors business partners' performance in operational sustainability andintegrity, social responsibility, and compliance management, among other areas, and takes

active measures to prevent risks. We also make a point of publicizing our compliance principles
and approach and drive continuous progress in our network of suppliers and customers

through engagement with our business partners on multiple fronts to foster effective and robust
partnerships.

Building a Cultureof Integrity andComplianceSome

25,000employees signed thepledge of integrity

2,000+

copies of the APP China

integrity policy brochure were
distributed to suppliers

88

Employees took the Integrity Pledge

Employees at an Integrity Month event

APP China actively engages employees in integrity and compliance training and activities tocultivate an increased understanding and awareness and weave the culture of compliancedeeply into every aspect of our business. We require all new employees to complete a

module on integrity, compliance, and business ethics during induction and provide special
compliance training for particular lines of business, including procurement, real estate,

and project implementation, and key departments. We also hold the Group-wide Sunshine

Sticking to the Red Line of Integrity

Integrity Month every year, which lasts four weeks and uses an array of learning activities toDuring the Sunshine Integrity Month event, Bohui Paper

values and code of integrity.

business ethics, emphasized the harm of corruption, fraud,

ensure our employees uphold ethical conduct in their day-to-day activities in line with our
In 2021, our Sunshine Integrity Month lasted from October to November. It was themed"Upholding Highest Standards of Business Ethics and Incorporating Compliance Management
and Risk Management". The event included a rich variety of cultural and educational

activities such as integrity pledge, seminars, case studies, online declaration of conflicts ofinterest, prize quizzes, and integrity awareness tests, along with short videos and examples

to help employees better understand the causes of fraud and further reinforce their risk andintegrity awareness. During this year's event, some 25,000 employees signed the pledgeof integrity online and over 2,000 copies of the APP China integrity policy brochure weretook the oath of integrity, reiterated its firm stance on

and other violations, and called on all employees to attach

great importance to integrity and compliance. Bohui Paper
also encouraged employees to make self-disclosure andtake the initiative to report their own violations, enhancing
the employees' recognition of the company's integrity andcompliance values.

Employees participating in integrity education

distributed to suppliers.

89

APP China Sustainability/ESG Report 2021

Supply Chain Management
APP China places a high premium

information inquiry platforms for basic

sustainability into procurement

management and continues toa preliminary construction of the

our suppliers adhere to responsible

on supply chain responsibility

improve the supplier management

mechanism to reduce supply chain

risks while ensuring that our suppliers
fulfill their responsibilities. During

Digital 1.0, we have set up an initialsupplier management system

which is connected with external

information collection. We completed
supplier performance evaluation

model in 2021 and are set to further

digitalize our procurement system andundertake the Digital and Intelligent

Procurement 2.0 Project at stage Digital
2.0. With a commitment to responsible

business practices by evaluating theirperformance against a set of criteria

including business ethics, labor rights,
occupational safety, environmental
protection, etc.

sourcing, we take steps to incorporate

Suppliers are categorized as low-, medium-, and highrisk based on a risk assessment that looks into theirfinancial status, credit profile, legal risk, reputationalrisk, and supply capacity, among other areas. They arealso assessed on third-party certifications in health,safety, environment, etc.
Supplier approval

Timber suppliers undergo a mandatory due

diligence process, which, through procedures suchas information collection, risk assessment, andrisk mitigation, ensures that the sources of our raw
materials are legal, compliant, and traceable.

Suppliers are required to sign the Sinar Mas Supplier/Partner Pledge on Business Compliance and Integrity

and the Corporate Social Responsibility Statement andPledge .

Suppliers are subject to ongoing risk monitoring, andSupplier communication and evaluationdue diligence assessments are reviewed at random
intervals.

An effective supplier communication mechanism is

set up to quickly resolve quality issues related to raw

materials and guarantee consistent supplies of quality
raw materials.

Suppliers are classified based on their respective

category and evaluation results, and those who fail tomeet our requirements for a long time will be removed
from our supplier list.

management and work to ensure

APP China's Requirements for Pulp and Wood Fiber
Suppliers• Suppliers are required to maintain valid records todemonstrate the origin of the source of raw materials (e.g.,plantation), and to be able to demonstrate in general how
the suppliers of wood fiber obtained their raw materials.

• Suppliers and their upstream suppliers must comply with thelaws and regulations of the countries in which they operate,

including laws and regulations on environmental protection.

• Suppliers shall guarantee that all wood chips come fromplantation forests.

• Suppliers shall take proactive actions to improve theirown sustainability management mechanisms, including
strengthening the procurement of raw materials fromplantation forests.

• Suppliers shall comply with the Responsible Fiber

Procurement & Processing Policy (RFPPP) of APP China's
pulp and paper businesses, guaranteeing to provide:◎ only timber that has been properly inspected and certified
as legally sourced and traced through the chain of custody;◎ no timber harvested in violation of tradition and civil rights;◎ protection of HCV through appropriate forest management
activities in source forests of timber where HCV forests are
identified;◎ only waste and wood residues that comply with national
regulations and are not on the list of regulated species of

the International Union for Conservation of Nature (IUCN)

and the Convention on International Trade in Endangered
species of Wild Fauna and Flora (CITES) Appendix I;◎ no genetically modified trees for reforestation unless it isassessed as in compliance with best-practice standards ;and◎ timber harvested in compliance with the Fundamental

Conventions of the International Labour Organization (ILO).

In 2021, APP China procured approximately 2.387 million tons of certified woodchips and approximately 1.243 million tons of PEFC-certified
wood pulp, accounting for 21.13% and 17.96% of total woodchips and wood pulp procurements respectively.
Proportion of Woodchips Sourced from Certified Forests（%）

2017

16.90

2019

19.41

2018
2020
2021

17.45
26.95
21.13

Proportion of Wood Pulp Sourced from Certified Forests（%）

2017

17.22

2019

19.80

2018
2020
2021

14.23
24.20
17.96

Information Security Management
Information security is a major pillar

In addition, we implement programs

conduct Company-wide awarenessmove to digital is underpinned byas class-based data protection andlike articles and videos, exams, posters,of digital transformation. APP China's
a heightened focus on information

security risk prevention and control

and the construction of an information

security management system. We havean Information Security Committee
and hold semiannual or provisional
meetings to review information

security issues that the management ismost concerned about to provide our

executive leadership team with needed
recommendations for formulatingin batches that target key areas suchnetwork security to progressively

strengthen the information protection

system and our response to information
security risks. Since Gold Hongye Paperis also engaged in B2C e-commercebusiness, it will undergo the grade

3 certification process of the gradednational data security protection for

e-commerce systems every year startingfrom 2022.

or improving relevant policies. We

We provide new employees withinformation security management

training during orientation andhave also instituted a Company-widesystem consistent with the ISO27001

information security awarenesscampaigns every year, using avenues
and extortion email tests to embed

an awareness of information security
across the entire organization. We

held the Information Security Week

themed "Raising Security Awarenessand Promoting Digital Development"in November 2021. Through online

learning on WeChat for Business andonline games, we enhanced employees'
knowledge about data protection,
prevention against ransomware

virus, etc. and cultivated an increased
awareness of information security.

since 2021 to facilitate efforts to identify
information security and network

risks, swiftly respond to the variety of
information security early warnings,
and enhance information security

management. The system encompasses
information asset management,

network security management, access
control security, and many other areasand is updated every year as planned.

90

91

APP China Sustainability/ESG Report 2021

Performance in Numbers

Anti-corruption
Indicator

Economic performance
Indicator

2021

2020

2019

Total assets

RMB100 million

2,465

2,480

1,914

Sales revenue

RMB100 million

973

738

651

RMB100 million

64

62

39

Total taxes paid
Total profit
Net profit

RMB100 million

47

RMB100 million

84

APP China sources of pulp procurement*
Region

2021

China

73

2020

39.89%

Other Asian regions

35

48

2019

43.25%

33.49%

30

43.8%

28.69%

26.6%

North America

12.88%

18.49%

25.7%

Europe

7.96%

5.01%

2.8%

South America

5.64%

Oceania

4.23%

0.14%

1.1%

0.32%

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

Materials
Indicator

Total amount of woodchips purchased
Amount of certified woodchips*

Proportion of certified woodchips

Total amount of wood pulp purchased
Amount of certified wood pulp*

Proportion of certified wood pulp

Total amount of waste paper purchased* CFCC/PEFC certified and FSC certified.

92

-

2021

2020

Number of line-level employees receiving anti-corruption training

person

16,676

15,36315,804

Number of incidents of termination or non-renewal of contracts with suppliers due to corruption

person12--

EnergyIndicator

Unit

Gasoline

ton

Coal

Kerosene

26.95

19.41

Power purchased

%

17.96

24.20

19.80

10,000 tons

52.82

10.39

19.81

100

100

%

100

15

160

100

100

100

13

13

188

100

1,548

79.02

94.28

Environmental

186.95111.88183

15* APP China requests all the suppliers to sign an anti-corruption statement. We also promote our integrity and compliance culture and policies tosuppliers. The percentage of suppliers that APP China's anti-corruption policies have been communicated to is 100%.

21.13

151.6014%

Percentage of line-level employees receiving anti-corruption training%

124.30100

14%Percentage of middle-level managers receiving anti-corruption training

LPG

10,000 tons

100

1,917

963.15564.94100

1,627

Natural gas

626.41%

person2019

692.10100

Number of middle-level managers receiving anti-corruption training

Percentage of senior-level managers receiving anti-corruption training

Diesel

10,000 tons

100

person874.50235.67100

Number of senior-level managers receiving anti-corruption training

1,129.64

238.69%person10,000 tons

10,000 tons

2019

Number of governance agency members receiving anti-corruption training

Fuel oil

Unit

2020

personPercentage of governance agency members receiving anti-corruption training

Unit

2021

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

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

Governance and Economic

Unit

Steam purchased

2019

3,622,348.26

4,692,593.29

4,999,054.08

ton

3,522.56

4,721.00

10,306.70

22,797.08

186,805.47

21,396.76

ton

7,179.45

3,072.64

10,985.74

10,000 kWh

376,627.71

111,190.99

133,309.85

ton

10,000 cubic
meterston

408.27

1,146.27

0.65

382.150.00

0.44

464.35846.51

0.96

GJ

12,106,028.74

1,502,787.00

1,490,357.25

ton

387,104.53

331,960.35

295,426.22

ton

Solar power generation

10,000 kWh* Not including the data of Rudong Base.

2020

ton

Black liquor from pulp
Biomass fuels

2021*

2,796,688.29

2,440.66

2,760,861.37

2,514.60

2,735,798.96

2,604.05

93

APP China Sustainability/ESG Report 2021

Water resources and wastewater*
Indicator

Unit

Total wastewater discharge***ton

Total water withdrawal**

Wastewater discharge per ton of paper produced
Wastewater discharge per ton of pulp produced
COD emissions per ton of paper produced
COD emissions per ton of pulp produced

2021

2020

2019

ton

125,567,722.20

120,215,643

125,397,098

ton

5.88

6.20

6.37

101,907,671.22

89,726,593

12.46

12.50

11.62

kg

0.86

0.85

0.63

0.24

0.22

0.29

COD

NH3-N

65.5

Gold East Paper

44.20

Ningbo Asia

32.66

Hainan Jinhai Pulp & Paper
Guangxi Jingui Pulp & Paper

57.28

Jiangsu Base of Bohui Paper

34.61

Shandong Base of Bohui Paper

24.5

Total Nitrogen(TN)Suspended Solids

0.61

0.013

4.10

17.43

0.72

0.043

2.91

5.50

5.37

/

0.18

0.39

2.50

0.12

0.874

2.20

0.027

1.75

6.37

0.11

11

12
/

*Wastewater discharged by Hainan Gold Hongye and Hainan Gold Shengpu was treated by Hainan Jinhai Pulp & Paper. The annual pollutant
discharge concentration of each mill is lower than the limit set in the Discharge Standard of Water Pollutants for Pulp and Paper Industry (GB3544-2008).

2021

Gold East Paper

658,752,000

Ningbo Asia

230,884,979

Hainan Jinhai Pulp & Paper

Guangxi Jingui Pulp & Paper
Hainan Gold Hongye

Hainan Gold Shengpu

94

ton

3,995.42

4,145.61

5,362.75

Total VOCs emissions

ton

0.14

/

/

Mill

Amount of reused water (tons)
2020

594,104,400

573,048,504

985,949,728

1,022,668,368

981,208,947

340,441,483

311,807,317

596,060,424

68,373,110
60,042,237

234,576,459
69,750,625
59,399,375

269,558,416
67,569,742
61,526,999

550.15ton

404.50292.95305.06

NOx

SO2

Soot

308.7522.67

Ningbo Asia

147.7

577.8

15.8

Bohui Paper

0.50

Guangxi Jingui Pulp & Paper

88

2,403

185.8

0

0

74.59

93.39

Unit

General waste disposed ofton

Recycling and reuse

Incineration

with energy recovery

without energy recovery

Selling to external parties for reuse

Centralized treatment by local sanitation
departments

Hazardous waste generated

Hazardous waste disposed of

429.060167

612.48

Indicator

General waste generated

697.80Volatile Organic Compounds（VOCs）

0

12.89

0.14

* The data of Hainan Jinhai Pulp & Paper include those of Hainan Gold Hongye and Hainan Gold Shengpu.

Waste*

2019

Exhaust gas emissions (tons)

128.15

Offsite

2019

ton

2020

Gold East Paper

OnsiteWater reuse
Mill

Total NOx emissions

Hainan Jinhai Pulp & Paper*

Total Phosphorous (TS)

0.94

2021

* Not including the data of APP China Forestry and Rudong Base.

** 98.53% came from surface water, 1.45% from third-party facilities, and 0.03% from underground water.
*** In 2021, there were zero incidents of major water body pollution at APP China.

Mill*

Unit

Total soot emissions* Not including data from APP China Headquarters and Rudong Base. Not including data from APP China Forestry except for the indicator of total
water withdrawal.

Annual average discharge concentration*（mg/L）

Indicator

Total SO2 emissions

88,160,320

ton
kg

Air pollutant emissions*

2021

2020

2019

ton

1,933,954.95

1,772,130.11

1,592,579.39

ton

378,796.61

717,315.56

513,583.54

ton

2,017,693.61

109,014ton

269,782.61

ton

772,455.80

ton
ton

1,914,695.06-

1,592,473.46-

779,631.70

485,644.50

446,418.20

7,175.90

-

-

-

-

ton

851,379.42

705,781.84

564,674.86

ton

6,570

5,293

5,653

ton

2,096.41

759.77883.84ton* Not including the data of APP China Forestry and Rudong Base.

2,098.16

844.36

1,003.65

95

APP China Sustainability/ESG Report 2021

Environmental investment
Indicator

Environmental investment

Environmental complianceIndicator

Environmental fines

Unit

RMB10,000

Unit
RMB

2021

2020

2019

103,069.13

73,084.31

87,457.18

2021

2020

2019

0

0

90,000Indicator

Employees directly and indirectly employed
Employees directly employed

Male employees directly employed

Female employees directly employed

Employees with ethnic minority background
Employees from Mainland China

Employees from Hong Kong, Macao and Taiwan
Employees from abroad

Employees with disabilities

Employees indirectly employed

Male employees indirectly employed

Female employees indirectly employed

New employees

New male employees

New female employees

Employee turnover

Male employees who voluntarily resigned

Female employees who voluntarily resigned
Male employees who involuntarily resigned

Female employees who involuntarily resigned
Male employees who retired

96

Unit

2021

2020

2019

Indicator

Unit

2021

2020

2019

Male employee turnover rate%

Female employees who retired* The employment data are within the reporting scope.

personEmployee turnover rate
Employee turnover rate

Female employee turnover rate

SocialEmployment*

Indicator

Turnover rate of employees aged 30 and below

2021

2020

2019

person19,42819,027

20,460person14,184

12,926

14,003

personpersonperson18,4864,302

927

person18,352

person40

personperson94

69

17,455

4,529

-

-

-

-

-

18,909

4,906

-

-

-

-

-

person

942

1,572

1,551

person

172

470

444

person

770

1,102

1,107

personpersonpersonperson

320

366

645

433

92

30

911

479

151

10

1,274

544

265

9

-

-

-

-

Unit

2021

2020

2019

person

114

212

340

124

6

239

20

373

31

person

338

437

447

person

5

5

20

323

418

425

Indicator

Unit

2021

2020

2019

Percentage of middle-level managers

%

%

8.80

90.21

11

10

Indicator

Unit

2021

2020

2019

Number of female employees in management

personPercentage of line-level employees

1,545

11.54

-

16.56

personMale employees who resigned after paternity leave

517

person%Male employees who returned to work after paternity leave

342

2,796

-

Male employees who took paternity leave

1,106

1,962

8.34

9.77

21.07

personperson

2,514

16.48

Female employees who resigned after maternity leave

Percentage of senior-level managers

person11.04

Female employees who returned to work after maternity leave

1,773

1,256

10.52

person

1,507

1,165

%

12.40

Female employees who took maternity leave

4,848

3,742

12.88

Indicator

personperson10.10

Employee retention after maternity/paternity leave

Employee composition by level

59

11.97

%

Turnover rate of employees aged 51 and above

45

%

%

Turnover rate of employees aged between 31 and 50

Unit

94

Employee composition by gender
Percentage of female employees

Percentage of female employees in management

%

0.99

1

88

1

89

%

23.27

25.95

25.97

%

18.62

27.29

26.69

337

571

573

97

APP China Sustainability/ESG Report 2021

Employee composition by age
Indicator

Unit

Percentage of employees aged between 31 and 50%

Percentage of employees aged 30 and below
Percentage of employees aged 51 and above

14.13

16.33

%

8.94

4.82

4.40

Unit

RMB10,000

Total employee training hours

Number of employees who participated in company-paid diploma programs
Total investment in company-paid diploma programs for employees
Average training hours for senior-level managers

Average training hours for middle-level managers

Number of work-related fatalities of employees
Work-related injuries of contractors* Not including the data of Rudong Base.

Indirect economic impact
Indicator

Employee volunteer hours*
DonationspersonRMB10,000
hour

81.05

2021

79.27

2020

562.16391.81

753,012619,287

35

11

2.55

3.30

37.99

11.23

31.62

hour

Occupational health and safety*

Work-related injuries of employees

hour

hour

Average training hours for line-level employees

Lost hours per million working hours

70.93

Assurance Statement
Independent Verification Statement
To the management and stakeholders of APP China,

Total training investment

Total investment in protective gears

2019

20.12

Indicator

Employee safety training hours

2020

%

Employee training

Indicator

2021

17.54

41.65

35.34

2019

475.42762,701
35

11.20

29.53

46.03

39.79

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. and the group of companies under its direct investment in China (herein referred to as “APP China” or “the Company”) to perform an
independent third-party verification on APP China Sustainability Report 2021 (hereinafter referred to as “the Report"). During this verification, TÜV SÜD'sverification team 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.
This Independent Verification Statement is based on the data and information collected by APP China and provided to TÜV SÜD. The scope of verification
is limited to the given information. APP China shall be held accountable for authenticity and completeness of the provided data and information.

Scope of Verification
Time frame of this verification:▪

The Report contains the data disclosed by APP China during the reporting period from January 1st, 2021 to December 31st, 2021, including
economic, environmental and social information and data, methods for management of substantial issues, actions/measures and theCompany's sustainability performance during the reporting period.

Physical boundary of this verification:
Unit

hour

RMB10,000
hour

person-time
personperson-time

Unit

hour

RMB10,000

2021

450,918.00

922.51

2,234.87

44

0

5

2021

16,532

4,676

2020

300,011.50

634.58924.79

45

0

3

2020

15,544

14,8792019▪

The verification took sampling way to carry out the on-site work, the physical scope of the selected location is detailed as follows:
Name of each plant

333,033.00

APP China Headquarters

578.74

Gold East Paper (Jiangsu) Co., Ltd.

854.70

Ningbo Asia Pulp & Paper Co., Ltd.

51

Guangxi Jingui Pulp & Paper Co., Ltd.

0

Verification
Location

3

Hainan Gold Hongye Paper Co., Ltd.
Hainan Jinhai Pulp & Paper Co., Ltd.
Hainan Gold Shengpu Paper Co., Ltd.
APP China Forestry Business - Wenshan
Sub-BUAPP China Forestry Business - Lancang
Sub-BUAPP China Forestry Business - other Sub-BU

2019

18,618

3,197* The 2020 data of donations has been corrected. The data disclosed before did not include a donation to an education foundation of a domestic
university.

Gold Hongye Paper Group Co., Ltd.
Shandong Bohui Paper Co., Ltd.
Gold Hongye Paper (Nantong) Co., Ltd.

D12 District, Yangpu free trade port Zone, Haikou City, Hainan
Province, China
Wenshan Forestry, Yunnan Province
Lancang Forestry, Yunnan Province
Not in the scope of this verification sample

Scope of data and information for the verification:▪

The scope of verification is limited to the data and information of APP China and Plants/Production sites under its operational control coveredby the Report.

The following information and data are beyond the scope of this verification:
TUV SUD Certification and Testing(China) Co., Ltd. Shanghai Branch
No.151 Heng Tong Road,
Shanghai 200070

98

Physical boundary
65F, Sinar Mas Plaza, No.501 East Daming Road, Hongkou
District, Shanghai, China
No.8 Xingang East Road, Dagang, Zhenjiang City, Jiangsu
Province, China
No.88 Hongyuan Road, Qingzhi Industrial Zone, Xiaogang,
Beilun, Ningbo, Zhejiang, China
Qinzhou Technology Development Zone, Qinzhou City, Guangxi
Autonomous Region, China
Not in the scope of this verification sample
Not in the scope of this verification sample
No.1 Lingang Dadao, Changsha Town, Rudong County,
Nantong City, Jiangsu Province, China

Page 1 of 4
Tel: +86 21-61410737
Fax: +86 21-61408600
Web: http://www.tuvsud.cn

99APP China Sustainability/ESG Report 2021▪

Any information and contents beyond the reporting period of this Report; andgovernance and business ethics, climate strategy, and air pollutant emissions, and has established various stakeholder▪

The Data and information of APP China’s suppliers, partners and other third parties; andcommunication mechanisms to fully respond to stakeholders' demands and expectations.

▪

The financial data and information disclosed in this Report that have been audited by an independent third party are not verified again herein.

APP China has built a 2030 sustainable development strategy framework and defined a three-year roadmap for ESG

Limitations▪

Impactunder this framework; in addition, it has built a "three lines of internal control" management system and continuously
strengthened risk identification and management to build a solid foundation for sound and sustainable operation.

The verification process is conducted in the above scope and place. Sampling and verification are adopted for the data and information in theReport by TÜV SÜD, and only the stakeholders within the organization are interviewed; and▪

The Company's standpoint, opinions, forward-looking statements and predictive information as well as the historical data and information on
and before January 1st, 2021 are beyond the scope of this verification.

After verification on a sample basis, we believe that the following data disclosed in the report for the year 2021 are true and reliable for use by interested
parties:
Environmental

Basis for the Verification

SocialEconomic

This verification process was conducted by TÜV SÜD's expert team with extensive experience in the economic, social, environmental and other relevant◼

Energy consumption data◼

Employees:◼

Economic Performance:areas and drew the conclusions thereof. The verification referred to the following standards:◼

Resource consumption data:••

Total water withdrawal
Total amount of recycled water

•
•
•

◼

Pollutant and waste emission
data:

Employment Status
Employee turnover rate
Employee retention aftermaternity/paternity leave
Percentage of employees at
each level
Employee gender ratio
Proportion of employees by age
group

•
•
•
•
•

Total assets
Total taxes and fees paid
Operating income
Total profit
Net profit◼

Pulp procurement source
distribution◼

Material indicators:•

Total amount of wood chips
purchased and their certification
Total amount of wood pulp
purchased and its certification
Raw waste paper purchases▪

AA1000AS v3, Type 2 Engagement and High Level of Assurance▪

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, the verification teamconducted the following activities:▪

Preliminary investigation of the relevant information before the verification;▪

Confirmation of the presence of the topics with high level of materiality and performance in the Report;▪

On-site review of all supporting documents, data and other information provided by APP China; tracing and verification of key performance••

information;▪

Special interview with the representative of APP China’s management; interviews with the employees related to collection, compilation andreporting of the disclosed information; and▪

•Other procedures deemed necessary by the verification team.

Verification Conclusions•

According to the verification, we believe the Report prepared by APP China adheres to the requirement of AA1000AS v3. The verification team has drawn◼

the following conclusions on this Report:
APP China has fully identified the internal and external stakeholders of the organization, such as employees, customers
Inclusivity

and consumers, suppliers/contractors, banks, government agencies, community representatives, industry associations,◼

Atmospheric pollutant
emissions(SO2、NOx、soot、
VOCs)
Waste generation and disposal(general waste and hazardous
waste)
Wastewater discharge (total
wastewater discharge,
wastewater discharge per unit
product, COD discharge per unit
product)
Energy-saving transformation
effectiveness data
Environmental protection
investment
Environmental protection
compliance (penalty situation)

•
•
•
◼

Occupational Health and Safety:••

Employee safety training timeAmount of investment inprotective equipment
Number of hours lost per million
working hours
Number of work-related injuries
to employees
Number of work-related
employee fatalities
Number of work-related injuries
to contractors
Incidence of occupational
diseases
Number of emergency drills
conducted
Average safety hazard correction
rate

•
•
•
•
•
•
•

professional bodies, NGOs, media, etc., and has established a stakeholder communication mechanism to regularlycollect the real demands of stakeholders.

◼

Training and careerdevelopment:•••

Total cost of employee training
Total employee training time
Training time per employee at alllevelsSocial contribution (amount ofpublic welfare investment)

APP China has established a prioritization process for material topics, identified sustainability topics that are highly
Materiality

relevant to our industry and prioritized the topics, disclosed strategies, management actions and performance data in thecompany's sustainability management and operations process, and the report content is substantive overall, with room
for improvement in the material topics of individual topics.

Responsivenessenvironmental compliance, occupational health and safety, product quality and safety, water management, corporate

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

100•

APP China has clearly disclosed the management methods and performance of major issues in the areas ofPage 2 of 4
Tel: +86 21-61410737
Fax: +86 21-61408600
Web: http://www.tuvsud.cn

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

Anti-corruption status(communication of policies andprocedures, training, terminationof cooperation due to corruption)◼

R&D investment◼

Number of patents applied forPage 3 of 4
Tel: +86 21-61410737
Fax: +86 21-61408600
Web: http://www.tuvsud.cn

101

APP China Sustainability/ESG Report 2021

GRI Content Index
GRI Standards

Recommendations on Continuous Improvement▪

It is recommended that the company systematically conducts energy management and greenhouse gas (GHG) inventory, and that the GHG
reporting cycle is aligned with this Report, and that GHG emission data is tracked and managed to disclose trends in GHG emission

General Disclosuresvalues/intensity to stakeholders.

Disclosure
Organizational ProfileTÜV SÜD is a trusted partner of choice for safety, security and sustainability solutions. It specialises in testing, certification, auditing and advisory services.

4；108

√

102-3 Location of the headquarter

6-7；back cover√

102-4 Location of operations

Since 1866, TÜV SÜD has remained committed to its purpose of enabling progress by protecting people, the environment and assets from technology-102-5 Ownership and legal form

related risks. Today, TÜV SÜD is present in over 1,000 locations worldwide with its headquarters in Munich, Germany. TÜV SÜD has been committed to102-6 Markets served

sustainable development and actively promotes environmental protection related projects. Over the years, TÜV SÜD has been actively expanding its

102-7 Scale of the organization

performance in energy management, renewable resources, and electric automobiles, etc., helping its customers meet sustainable development needs.

102-8 Information on employees and other workers

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

102-9 Supply chain

have professional background and rich industrial experiences.

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

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 and102-11 Precautionary principle or approach

information 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

102-12 External initiatives

itself and issuance of the verification statement.

102-13 Membership of associations
Strategy

Signature:102-14 Statement from senior decision-makerOn Behalf of TÜV SÜD Certification and Testing (China) Co., Ltd. Shanghai BranchTÜV SÜD Sustainability Authorized Signatory Office
Oct 18, 2022
Shanghai, China
Note: In case of any inconsistency or discrepancy, the simplified Chinese version of this verification statement shall prevail, while the English translation is used for reference
only.

4；6-7；92；96-97
96-97
90-92

4-7；inside back cover

√
√
√
√
√

46；54-55；72-75；86-91

√

8-11

√

14-18

√

88-89

√

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

16-17

√

102-42 Identifying and selecting stakeholders

16-17

√

102-17 Mechanisms for advice and concerns about
ethicsGovernance

Stakeholder Engagement102-44 Key topics and concerns raised
Reporting Practice2-3；12-13；19-21

46；49
16-21
16-21

102-45 Entities included in the consolidated financial
statements

Inside back cover

102-47 List of material topics

19-21

102-46 Defining report content and topic boundaries
102-48 Restatements of information
102-49 Changes in reporting

102

4

√

√

102-43 Approach to stakeholder engagement

Page 4 of 4
Tel: +86 21-61410737
Fax: +86 21-61408600
Web: http://www.tuvsud.cn

4√4；42-45；86-90

102-16 Values, principles, standards, and norms of
behavior

102-41 Collective bargaining agreements

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

4；6-7

√

√

Ethics and Integrity
GRI 102: General disclosures
2016

4

2-3

102-15 Key impacts, risks, and opportunities

Zhu Wenjun

External
Assurance

102-1 Name of the organization

102-2 Activities, brands, products, and services

Statement on Independence and Verification Capability

Page numbers/
Reasons for omission

102-50 Reporting period

102-51 Date of most recent report102-52 Reporting cycle

102-53 Contact point for questions regarding thereport

√

√
√
√

√

19-21；inside back cover

√

98

√

Inside back cover
Inside back cover
Inside back cover
Inside back cover
Inside back cover

√
√
√
√
√
√

103

APP China Sustainability/ESG Report 2021

GRI Standards

General Disclosures

Disclosure

Page numbers/
Reasons for omission

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

Inside back cover

102-56 External assurance

99-102

GRI 102: Generaldisclosures 2016
Material Topics

102-55 GRI content index

Economic Performance
GRI 103: Management
approach 2016
GRI 201: Economic
performance 2016

Indirect Economic Impacts
GRI 103: Management
approach 2016

GRI 203: Indirect
economic impacts 2016
Procurement Practices
GRI 103: Management
approach 2016
GRI 204: Procurement
practices 2016
Anti-corruption

GRI 103: Management
approach 2016

GRI 205: Anti-corruption
2016
Materials

GRI 103: Management
approach 2016

GRI 301: Materials 2016
EnergyGRI 103: Management
approach 2016
GRI 302: Energy 2016
Water and Effluents

GRI 103: Management
approach 2016
GRI 303: Water andeffluents 2018
Biodiversity

GRI 103: Management
approach 2016
GRI 304: Biodiversity
2016

104

201-1 Direct economic value generated and distributed

203-2 Significant indirect economic impacts

204-1 Proportion of spending on local suppliers

205-2 Communication and training about anti-corruption
policies and procedures

301-1 Materials used by weight or volume301-2 Recycled input materials used

302-1 Energy consumption within the organization

302-4 Reduction of energy consumption

303-1 Interactions with water as a shared resource

103-106

4；12-13；24-27；30-35；78√

23；28-29；36-41；78-83

√

90

√

90-91；92√

86-88；90√

86-89；93

√

90

92

92

12-13；24-27；58-64
93

63-64
12-13；58；64-65

√
√
√

√
√
√

√

64-65

√

94

√

94

GRI Standards

Material Topics
GRI 103: Management
approach 2016

Waste

GRI 103: Management
approach 2016
GRI 306: Waste 2020

GRI 307: Environmental
compliance 2016

GRI 308: Supplierenvironmental
assessment 2016
Employment

GRI 103: Management
approach 2016
GRI 401: Employment
2016

√

56-57

√

56-57

√

26

√

305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and othersignificant air emissions

√

95

√

12-13；58；65-67

√

65-67

√

306-3 Waste generated

95√

306-2 Management of significant waste-related impacts
306-4 Waste diverted from disposal

307-1 Non-compliance with environmental laws andregulations

308-1 New suppliers that were screened using environmental
criteria

308-2 Negative environmental impacts in the supply chain
and actions taken

401-1 New employee hires and employee turnover401-2 Benefits provided to full-time employees that are notprovided to temporary or part-time employees
401-3 Parental leave

403-1 Occupational health and safety management system403-3 Occupational health services
GRI 403: Occupational
health and safety 201827

306-1 Water generation and significant waste-related impacts

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

12-13；52

305-5 Reduction of GHG emissions

Occupational Health and Safety
GRI 103: Management
approach 2016√√

Supplier Environmental Assessment
GRI 103: Management
approach 201612-13；24-27；58；62-67

External
Assurance

27306-5 Waste directed to disposal

GRI 103: Management
approach 2016

Page numbers/
Reasons for omission

305-1 Direct (Scope 1) GHG emissions

305-2 Energy indirect (Scope 2) GHG emissions

Environmental Compliance√√

Disclosure

Emissions

GRI 305: Emissions 2016√94

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

√

4；92

303-4 Water discharge

304-1 Operational sites owned, leased, managed in, or
adjacent to, protected areas and areas of high biodiversity
value outside protected areas

√

√

64-66

303-5 Water consumption

√

4；12

303-2 Management of water discharge-related impacts
303-3 Water withdrawal

External
Assurance

403-4 Worker participation, consultation, and communication
on occupational health and safety403-5 Worker training on occupational health and safety403-6 Promotion of worker health403-7 Prevention and mitigation of occupational health andsafety impacts directly linked by business relationships

403-8 Workers covered by an occupational health and safety
management system403-9 Work-related injuries

65-67
95
95

√
√
√

12-13；58-61

√

96

√

90

√

90

√

90

√

46-47

√

96-97
49

√
√

49；97

√

70-74

√

70-71；74-75
72-73
74-75
70-75

√
√
√
√

72-75；98

√

70-75

√

70-75

√

74-75

98

√

√

105

APP China Sustainability/ESG Report 2021

GRI Standards

Material Topics

Disclosure

Training and Education
GRI 103: Management
approach 2016

GRI 404: Training andeducation 2016404-1 Average hours of training per year per employee

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

Diversity and Equal Opportunity
GRI 103: Management
approach 2016

GRI 405: Diversity andequal opportunity 2016
Non-discrimination

GRI 103: Management
approach 2016
GRI 406: Nondiscrimination 2016Child LaborGRI 103: Management
approach 2016
GRI 408: Child labor2016405-1 Diversity of governance bodies and employees

406-1 Incidents of discrimination and corrective actions taken

408-1 Operations and suppliers at significant risk for incidents
of child labor

Forced or Compulsory LaborGRI 103: Management
approach 2016

GRI 409: Forced orcompulsory labor 2016
Local Communities

GRI 103: Management
approach 2016
GRI 413: Local
communities 2016409-1 Operations and suppliers at significant risk for incidents
of forced or compulsory labor413-1 Operations with local community engagement, impact
assessments, and development programs

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

Supplier Social Assessment
GRI 103: Management
approach 2016

GRI 414: Supplier social
assessment 2016414-1 New suppliers that were screened using social criteria414-2 Negative social impacts in the supply chain and actions
taken

Customer Health and Safety
GRI 103: Management
approach 2016

GRI 416: Customer
health and safety 2016
Marketing and Labeling
GRI 103: Management
approach 2016

GRI 417: Marketing andlabeling 2016

106416-1 Assessment of the health and safety impacts of productand service categories

416-2 Incidents of non-compliance concerning the health andsafety impacts of products and services

417-1 Requirements for product and service information andlabeling

Page numbers/
Reasons for omission

46-48
98

External
Assurance

UN Global Compact Ten Principles Index

√

No.

√

Human Rights

43-44；47-48；98

√

46

√

Principle 2

97-98

√

Labor

Principle 1

Principle 3

46；90

√

No such incidents occurred

√

46；90

√

90

Principle 6√

Environment

46；90

√

90

√

77-78

√

Principle 954-56；77-83√

Anti-corruption

54-56；77√

Principle 10

90

√

90

Principle

Page Numbers

Businesses should support and respect the protection ofinternationally proclaimed human rights

42；46-49；72-74；76-83；88；90

Make sure that they are not complicit in human rights abuses

42；46-49；72-74；77；88；90

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

46-49

Principle 4

The elimination of all forms of forced and compulsory labor

46；90

Principle 5

The effective abolition of child labor

46；90

Principle 7
Principle 8

The elimination of discrimination in respect of employment andoccupation

46

Businesses should support a precautionary approach toenvironmental challenges

24-27；30-41；52-67

Undertake initiatives to promote greater environmental
responsibility

23；36-41；52-67

Encourage the development and diffusion of environmentallyfriendly technologies

28-41；58-67

Businesses should work against corruption in all its forms,
including extortion and bribery

86-90

√

88；90

√

23；36-39；75-76√

23；36-37；39-41；75-76√

No such incidents occurred

√

27

√

14-15；27√

107

APP China Sustainability/ESG Report 2021

TCFD Index
TCFD Recommended Disclosures

Page Numbers

a. Describe the board's oversight of climate-related risks and opportunities.

b. Describe the impact of climate-related risks and opportunities on theorganization's businesses, strategy, and financial planning.

c. Describe the resilience of the organization's strategy, taking into considerationdifferent climate-related scenarios, including a 2° C or lower scenario.

b. Describe the organization's processes for managing climate-related risks.

c. Describe how processes for identifying, assessing, and managing climate-relatedrisks are integrated into the organization's overall risk management.

The report has been prepared in accordance with the core24

published in November 2021. Data in "Company Profile",

Sustainability Standards Board (GSSB). Additionally, the25-41
12-13；24-41
12-13

APP China activated the green transformation strategy in
2021 and plans to complete a baseline data accounting.
We will go on to develop targets, measures, and pathwaysfor emission reduction. We will be using tools such as
climate scenario analysis to inform strategy formation.

24
24
24-27

13

b. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG)
emissions, and the related risks

c. Describe the targets used by the organization to manage climate-related risks andopportunities and performance against targets.

108

the Chinese version shall prevail.

The time span of this report is from January 1, 2021 toMetrics and Targets: Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities wheresuch information is material.

a. Disclose the metrics used by the organization to assess climate-related risks andopportunities in line with its strategy and risk management process.

translated from the Chinese report. If there is any discrepancy between the two reports,

24-27

Risk Management: Disclose how the organization identifies, assesses, and manages climate-related risks.
a. Describe the organization's processes for identifying and assessing climaterelated risks.

as APP China). The report is released in both Chinese and English. The English report isReporting Framework

Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the organization's businesses, strategy,
and financial planning where such information is material.
a. Describe the climate-related risks and opportunities the organization has
identified over the short, medium, and long term.

Ltd. and the group of companies under its direct investment in China (herein referred toReporting Boundary and Scope

Governance: Disclose the organization's governance around climate-related risks and opportunities.
b. Describe management's role in assessing and managing climate-related risks
and opportunities.

About thisReportThis is the 15th Sustainability Report issued by Sinar Mas Paper (China) Investment Co.,

December 31, 2021. Our last Sustainability Report was"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•

Hainan Jinhai Pulp & Paper Co., Ltd. (Hainan Jinhai Pulp &

•

•
•
•
•
•
•
•
•

Paper)

Guangxi Jingui Pulp & Paper Co., Ltd. (Guangxi Jingui Pulp &recommendations issued by Task Force on Climate-Related
Financial Disclosures (TCFD), the Pulp & Paper Products

standard and the Forest Management standard issued by

the Sustainability Accounting Standards Board (SASB), theS&P Global Corporate Sustainability Assessment (CSA), andpapermaking industry clean production and emissions
standards.

Content and Indicator Selection

Paper)

This report was prepared in accordance with the GRI principles

Shandong Bohui Paper Co., Ltd.（Bohui Paper）

and completeness, etc. At the preliminary stage, our work

Ningbo Asia Pulp & Paper Co., Ltd. (Ningbo Asia)

Gold Hongye Paper Group Co., Ltd.（Gold Hongye Paper）
Gold Hongye Paper (Nantong) Co., Ltd.（Rudong Base）

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,

of materiality, stakeholder inclusiveness, sustainability context,group conducted policy analysis, industry issues analysis, thecore issues and indicators benchmark of ESG mainstream
information disclosure frameworks and rating systems,

stakeholder surveys, and field visits to our headquarters andpulp & paper mills to collect the management approaches,

specific practices and performance indicators on sustainability/
ESG issues most relevant to APP China.

and Guangdong BUs, and Lancang, Wenshan, Ganzhou andHenan Sub-BUs)

Gold Huasheng (Suzhou Industrial Park) Co., Ltd. was shut

25-27

making all data except for R&D data unavailable. For more

The APP Global Sustainability Strategy pledges to reducecarbon footprint by 30% by 2030. APP China undertakes toformulate a localized green transformation strategy, alongwith related targets, that aligns with the global commitment
while also responding to the national 30-60 Goals in China.
The strategy is currently being developed.

report refers to the Global Compact Ten Principles, the TCFD

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

APP China regularly studies national policies and regulations
and industry trends to identify risks and opportunities that
could impact the Company's future development. Goingforward, we will tie climate-related evaluation indicators
more closely to the risk management indicators used by ourbusiness and operations departments.

13；25-27

option of the GRI Standards (2020) issued by the Global

Report Assurance

down in April 2022, so relevant information is no longer

APP China commissioned Technischer Überwachungs-Vereinmost operations in its Suzhou production base in April 2022,

this report. Please refer to the Assurance Statement for further

available. Gold Hongye Paper Group Co., Ltd. shut down

specific information on the scope of data, please refer to the(TÜV) to assess the reliability, objectivity, and transparency ofdetails.

"Performance in Numbers" section.

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

Address: 65/F, No. 501 Dongdaming Road, Hongkou District, Shanghai
Phone: +86-21-2283-8888
Fax: +86-21-2283-9063
Zip Code: 200080

Website: www.app.com.cn
Printing paper for cover pages: CFCC/PEFC-certified Ningbo Asia Caidie 250g/m2 double coated copper plate

Printing paper for body pages: CFCC/PEFC-certified Gold East Paper Space Shuttle 128g/m2 double coated matte paper

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