CONTENTS

01
Foreword
to the Report

P002-P014

02
Governance

Chairman’s Message

P015-P031
Standardizing Corporate Governance

About SF

Strengthening Risk Control Management

Sustainability Management

Abiding by Business Ethics
Ensuring Information Security

03
Environment

P032-P054
Creating Green Logistics

SocietyP055-P096
Empowering the Talent Team

Promoting Circular Economy

Building the Line of Safety

Protecting the Environment

Building Responsible Chain Together

Green Office

Shouldering Social Responsibility

05
Services

04

P97-P112
Creating Smart Logistics
Innovation-Driven Development
Securing Safety Delivery
Delivering Premium Services

06
Climate-related
Disclosures

P113-P122
Preface
Governance
Strategy
Risk Management
Metrics and Targets

07
AppendixP123-P148
About the Report
Assurance statement
Policy List
Key Performance
Indicator Index
Readers’ Feedback

Foreword to the Report
Chairman’s Message
About SF
Sustainability Management012023 S.F. HOLDING SUSTAINABILITY REPORT
Foreword to the Report

Chairman’s Message
In 2023, the recovery of social production and consumption activities has driven the express delivery and logistics industry to achieve good growth,with China’s annual express delivery volume exceeding 132 billion parcels for the first time. Against the backdrop of the global supply chain reshaping
and the upgrading and globalization of China’s manufacturing industry, SF, as the largest integrated logistics enterprise in Asia and the fourth largest
in the world, has always adhered to its original aspiration and practical actions, upheld the concept of sustainable and healthy development, andempowered global customers to achieve high-quality development by providing efficient, green, and low-carbon integrated logistics services. At thesame time, we realized social value and demonstrated corporate responsibility and commitment.

Adapting to Change, Embracing Sustainable Vision
In the face of a dynamic external environment, SF has quickly grasped opportunities, continuously innovated and transformed, consolidated its
service capabilities, and built a more comprehensive product system, a more complete coverage chain, and a more diversified service scenario in thecomprehensive logistics service landscape, covering end-to-end supply chains for customers from procurement and production to sales and services,and from domestic to international. In 2023, SF has completed and put into operation Asia’s largest cargo aviation hub in Ezhou, gradually building a“hub-and-spoke” network connecting China with the world, further improving the competitiveness of service efficiency. In the Fortune 500 in 2023,
SF has risen to 377th place, making the list for the second consecutive year, and is the only Chinese private express delivery company to enter theFortune 500.

Integrating Knowledge with Action, Implementing Lowcarbon Operations
SF is committed to achieving the integration and unity of commercial and social values, firmly fulfilling its commitment to environmental protection
while pursuing high-quality development, and steadily advancing the achievement of the Company’s carbon targets. In 2023, SF made considerable
progress by promoting low-carbon transportation, building green industrial parks, developing sustainable packaging, and other initiatives, achieving a
15% improvement in its carbon efficiency compared to the target base year. At the same time, the Company committed to the “Science Based Targets
initiative” (SBTi) and to achieving net-zero greenhouse gas emissions across its value chain by 2050. Based on its standardized carbon management
capabilities, SF independently developed the industry’s first shipment-level carbon calculation model in 2023, providing customized green and lowcarbon supply chain solutions and services to multiple global leading customers, deeply enabling upstream and downstream partners in the industry
chain, and jointly promoting the industry’s supply chain towards a zero-carbon future.

Embracing Our Commitment to Serving Society and Honoring
Our Corporate Roots
While continuously providing high-quality express logistics services, SF has always adhered to fulfilling its social responsibilities and contributing tosociety and serving the people’s livelihood through tangible actions. In 2023, SF helped expand the production and sales network of agricultural
products to cover more than 2,700 county-level cities across the country, transporting 4.58 million tons of specialty agricultural products. It alsoestablished over 100,000 cooperative points in rural villages, gradually forming a comprehensive rural express delivery network and continuously
injecting new logistics momentum into rural revitalization. In the face of various sudden natural disasters, the Company promptly mobilized emergency
resources such as aircraft and vehicles to actively assist in disaster relief operations such as the Baoshan earthquake in Yunnan, the flood situation in
Beijing, Tianjin, and Hebei, and the Jishi mountain earthquake in Gansu. Relying on its own resource advantages and efficient organizational allocation
capabilities, SF has continuously contributed its due efforts to stand together with the people in disaster-stricken areas and overcome difficulties.
Undeterred by challenges, unfazed by adversities, our journey is marked by resilience and fruition. Gazing toward the future, SF will continue toadhere to the principles of long-termism and sustainable and healthy development, steadily promote the construction of a green and low-carbon
supply chain ecosystem, continuously enhance employee welfare and care, fulfill social responsibilities, and strive to become a benchmark enterprisethat continuously creates excellent social value, delivering enduring momentum for global sustainable development.

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2023 S.F. HOLDING SUSTAINABILITY REPORT
Foreword to the Report

About SF
“S.F. Holding is the largest integrated logistics service provider in China and Asiaand the fourth largest in the world.1”
With the logistics ecosystem as a focal point, the Company has continually developed its portfolio of product and service capabilities, and has
expanded to cover time-definite express, economy express, freight, cold chain and pharmaceuticals logistics, intra-city on-demand delivery,
international express, international freight and freight forwarding, and supply chain, to provide customers with domestic and international end-to-end
one-stop supply chain services. Meanwhile, through leveraging leading technology and research and development capabilities, the Company strives tocreate a digital supply chain ecosystem, and become a front runner in global intelligent supply chain.
With the aim of sustainable and healthy development through visionary and forward-looking strategic planning, for the past 31 years, the Company
has accurately seized opportunities to expand its scale, maintain industry leadership, and has become the leading logistics company in China and Asia
ranking the 377th in the Fortune Global 500 list.
The Company’s flagship product, time-definite express, has dominant market leadership in China, and through leveraging the network resources andcapabilities for its time-definite express, the Company has rapidly and efficiently expanded into new logistics service sub-segments, covering fromsmall parcels to bulk and heavy cargoes, from standardized express delivery to customized supply chain services, and from China to Asia and further tothe world. The Company is the market leader in China1 across five logistics sub-segments including express, freight, cold chain, intra-city on-demanddelivery2 and supply chain3, and the market leader in Asia1 across four logistics sub-segments including express, freight, intra-city on-demand delivery2
and international business4 in Asia.
Looking ahead, the Company is committed to becoming the leading global logistics company connecting Asia and the world. The Company willsolidify its market leadership in China and continue to expand its presence in Asia and globally; rapidly replicate its proven domestic know-how to
overseas networks, and expand globally by leveraging its well-recognized brand, leading cost advantages and integrated logistics service capabilities
to drive the sustainable and healthy growth of the Company, so as to become the go-to logistics partner of global business customers and retailcustomers to foster shared-growth and co-create enduring value.

Extensive Scale

Undisputed LeadershipPremium Brand

Largest in Asia

No. 1 in Asia

No. 1

Express, LTL Freight, Intra-city
On-demand, International

Customer Satisfaction for
Express Services in China

4th Largest Globally
Integrated Logistics
Service Provider

1
2
3
4

No. 1 in China
Express, LTL Freight,
Cold chain logistics,
Intra-city On-demand, Supply chain

According to the Frost & Sullivan report, in terms of revenue in 2022
Among third-party intra-city on-demand delivery service providers
Among non-state-owned independent third-party supply chain solution providers
Among the integrated logistics service providers in Asia004

14 years in a row

2023 S.F. HOLDING SUSTAINABILITY REPORT
Foreword to the Report

SF culture
For thirty-one years, we have been striving for progress, and every season has been fruitful. Time and again, the thorns and breakthroughs engravedin the rapid development of SF, so that the company has built a corporate culture imprinted with the brand of SF. For SF, corporate culture is not
only a belief, but also a commitment and practice. It is reflected in the words and deeds of all SF employees, and in all SF’s business conduct, and has
become a strong spiritual force that is deeply cast in the cohesion, competitiveness and vitality of SF.

Corporate VisionCorporate vision is the goal and blueprint of SF, navigating the development direction of SFers.

To build a truly digitalized eco-system with our partners
To drive for global excellency with our customers
To strive for common prosperity and a better future for all
For the society, SF is a benchmark that continues to create excellent social value.
For our customers, SF is the preferred partner of all customers.
For the Company, SF is a leading player in global smart supply chains.
For our employees, SF is a promising platform for global talents to pursue excellence,achieve dreams and take pride in one’s career.

Core Values
Core values are the value standards and basic faith that SFers must believe in, guiding SFers the approaches to realize the corporate vision.

Integrity and responsibility
Dedication to employees’ success
Dedication to customers’ success
Innovation and inclusivenessPursuit of excellence

In SF, all people shall adhere to the principle of integrity and responsibility,
take dedication to employees’ success and dedication to customers’
success as their own tasks, always be innovative and inclusive, pursue
excellence and create a better future together.

005

2023 S.F. HOLDING SUSTAINABILITY REPORT
Foreword to the Report

Corporate Spirit
Corporate spirit is the team quality and spiritual outlook that SFers demonstrate in practice, and is the portrait of SFers and the popular image of SF.

Equality and respect
Integrity Pragmatism

Treat others and handle affairs in principle ofequality, respect, integrity and pragmatism. These
Corporate Spirits are the practices of SF values andalso the public’s most intuitive perception of SF.

Team Culture
SF’s team culture, derived from SF’s vision, core values and corporate culture with organizational characteristics, guides SF to victory.

Win the game; teamwork
Identify the weaknesses
and make improvement
Promote the capable ones;
coach; sunshine
The Company is like a team, all the members gather to win
for common goal. They learn and grow here, coordinate andcooperate with each other, train and fight together. The honorof the team means personal achievement of each member.

006

2023 S.F. HOLDING SUSTAINABILITY REPORT
Foreword to the ReportAwards for Sustainable Development
2023 Honours and awards related to SF Sustainable Development

Named to “Fortune China ESG
Influential Listing” (in 2 years
consecutively)

China Association for PublicCompanies “Best Practices in ESG for
Listed Companies,” “Best Practices
in Corporate Governance for Listed
Companies,” and “Best Practices
for the Board of Directors of Listed
Companies” in 2023

CCTV-2’s “Chinese ESG Listed
Companies Vanguard 100”

China Corporate GovernanceExperts 50 Forum “China Listed
Companies ESG TOP50 (NonFinancial) in 2023”

Caijing’s Caijing Award“Sustainable Development
Inclusive Award” in 2023

China Green Point’s “Green Point
Award for Sustainable Practices”
in 2023

The Time Weekly’s “Listed
Companies ESG ExemplaryEnterprise Award” in 2023

Stockstar’s “ESG New Benchmark
Enterprise Award” and “ESG
Investment Value List” in 2023

ChinaTimes’s “ESG PracticeExcellent Cases” in 2023

Wind’s “Top 100 Best ESG
Practices” for Chinese Listed
Companies in 2023

Corporate Donor Award in the
12th China Charity Awards

Charity Project Award in the 12th
China Charity Awards (SF Warmthand Care Program)007

2023 S.F. HOLDING SUSTAINABILITY REPORT
Foreword to the Report

Annual progress on UN Sustainable Development Goals (SDGs)
Governance•

Environment•

There are 2 female directors among the members of the Board of
Directors, accounting for 28.6% of the total female representationon the Board.

•

In 2023, SF carried out targeted updates to risk scenarios and•formulated 26 risk response and control plans.
•

In 2023, SF conducted specialized risk training courses for a totalof over 86,400 hours, achieving a 100% coverage rate for new
employees’ specialized training about risk.

••

Over the past three years, SF has achieved a 100% coverage rate
for conducting internal audits of business ethics at all operational•sites.
•In 2023, SF organized 20 offline anti-corruption training sessions,achieving a 100% coverage rate among employees. The total
duration of anti-corruption education for employees was 70,073•

hours, and the signing rate for the “Anti-Corruption Commitment
Letter” among employees reached 99.0%.
•

In 2023, SF Technology obtained ISO 27001, the authentication•of information security management system and ISO 27701, the•authentication of privacy information management system.
•

As of the end of 2023, SF had led or participated in thedevelopment of 5 national standards and industry standards related
to data security, of which 3 national standards had been formallyissued.
••5This is the carbon efficiency data of SF only, excluding Kerry logistics network
limited.

008

In 2023, SF achieved a carbon efficiency5 of 41.1 tCO2e/million
revenue, representing a 15.3% improvement compared to thecarbon target baseline year (2021). And the carbon footprint
per shipment was 730.9 gCO2e/parcel, a decrease of 15.1%
compared to the carbon target baseline year (2021).
In 2023, SF independently developed the industry’s first
shipment-level carbon calculation model, which
accurately calculates the carbon emissions generated by each
shipment in various transportation stages using different modes oftransportation based on the actual business data.
As of the end of 2023, SF had deployed over 31,000 new energy
vehicles, covering 243 cities.
As of the end of 2023, 14 ph otovoltaic projec t s i nindustrial parks had been successfully put into operation,with a total installed capacity of 64 MW. The photovoltaic power
generation in 2023 reached 18.39 million kWh, reducing GHG
emissions by 10,229 tCO2e.
In 2023, SF reduced paper usage by approximately 43,000 tons,
plastic usage by approximately 162,000 tons, and GHG emissions
by approximately 164,000 tCO2e through packaging reduction
measures.
In 2023, SF reduced GHG emissions by approximately 540,000
tCO2e through green packaging initiatives.
In 2023, SF completed the R&D of a recycled formula and products
for “Double Easy” (easy to recycle, easy to regenerate) plasticbags in Shanghai, adding up to 30% recycled resin (PCR) while
maintaining excellent performance. It met the national standard
requirements for express bags and was awarded an excellent rating
certificate for “Plastic Product Easy to Recycle and Easy toRegenerate Design Certification”.
In 2023, SF launched the industry’s first pilot project forthe closed-loop recycling and regeneration of plastic
packaging waste in Shanghai, with over 880,000 “Double
Easy” packaging bags distributed. The total amount of recycling
exceeded 1.1 tons.
As of the end of 2023, SF had jointly planted over 823.5 acresof carbon-neutral forests with enterprises, employees, andcustomers, planting over 600,000 trees in total. It is estimatedthat these trees will absorb over 110,000 tons of carbon dioxideduring their growth in the future.

2023 S.F. HOLDING SUSTAINABILITY REPORT
Foreword to the ReportSociety•

Services

By the end of 2023, SF has extended its service network for•

agricultural product production and marketing to cover overtwin with high algorithm verification efficiency, finding optimal

2,700 county-level cities nationwide, encompassing more thandecision-making solutions for numerous scenarios and improving

6,000 characteristic agricultural products. In 2023, we transported

the logistics operational efficiency in various aspects of the realapproximately 4.58 million tons of characteristic agricultural

world.

products.
•

In 2023, SF supported an exterior training program for employees•with an investment of over RMB4.6 million. A total of 21,445

280,000 parcels per hour.

Your University Education” program.
•

In 2023, SF assisted more than 20,000 employees and their
RMB11.61 million.

•

In 2023, SF did not experience any major fire accidents orcovering hundreds of cities nationwide, and involving moredecreased by 15.1% compared to 2022.

than 40 sub-indicators across six dimensions.

In 2023, SF conducted assessments of the safety production system
for the entire network. 55% of regions and 100% of distribution•

areas’ safety production system underwent assessments by thequarters of 2023. According to the China Net Promoter Score

In 2023, SF achieved a 100% signing rate for safety management(C-NPS) released by Chnbrand in 2023, SF ranked first in theagreements with contractors and conducted on-site safety

recommendation of express delivery.

inspections for 321 contractors.
•

In 2023, SF conducted a total of 96,000 safety training sessions•of different types, covering 100% of employees with safety

information, ensuring end-to-end information encryption,

reached 940.
In 2023, SF conducted a total of 13,000 firefighting safety

and providing users with a more convenient and privacy-safe way

emergency drills, with a cumulative participation of 440,000

of sending parcels.

people.
•In 2023, the signing rate for integrity agreements with suppliers
reached 100%.

•

In 2023, SF spent a total of RMB106 million on public welfare,organizing a total of 155 public welfare activities with 8,861
participants, and a total volunteer service duration of 34,948
hours.

•In 2023, SF launched the “SF ID” service, which supports
users in setting customized codes to replace traditional addresseducation. The number of employees holding safety qualifications•

In the 2023 public satisfaction survey on express delivery services
released by the State Post Bureau, SF ranked first in all threeheadquarters.
•

SF conducts quarterly customer satisfaction and Net Promoter Score(NPS) surveys. In 2023, the total sample size exceeded 100,000,

major casualties. The accident rate for every one million parcels•

In 2023, SF received 32,578 complaints, a decrease of 12.1%
compared to 2022. The handling rate reached 100%.

families in need, with a total relief amount of approximately•

The SF Ezhou Hub has an automated sorting equipment line witha total length of 52 kilometers, is capable of sorting a peak of

employees obtained academic certificates through the “SF Supports•

SF has created a highly realistic and efficient logistics digital

In 2023, the SF Lotus Education Assistance Program sponsored
13,718 students, with a total scholarship of RMB31.19 million.
By the end of 2023, the SF Warmth and Care Program had assisted
21,379 needy children suffering from serious illnesses or orphans,providing humanistic care services to 35,803 children and theirfamilies.

009

2023 S.F. HOLDING SUSTAINABILITY REPORT
Foreword to the Report

External ESG Ratings Highlights

SF has been rated BBB by MSCI for
two consecutive years (2022-2023)

For two consecutive years (2022-2023),

SF has obtained a CDP climate change questionnaire rating of B

SF has rated as “Low Risk ” by Sustainalytics fortwo consecutive years (2022-2023)

SF has been included in the FTSE Russell ESG Index series
for three consecutive years (2021-2023)

Note: the above rating results were collected on March 26, 2024.

010

2023 S.F. HOLDING SUSTAINABILITY REPORT
Foreword to the Report

Sustainability Management
SF is committed to integrating corporate value with social value, nurturing a vision to drive sustainable industry development, andactively exploring the path of corporate sustainability. SF continuously improves its sustainable development management system,
actively integrating ESG principles into every aspect of its value chain, enhancing its sustainable development capabilities andbusiness resilience, and achieving long-term value creation.

Declaration from the Board of Directors
The Board of Directors and all directors solemnly declare that the contents of this report are true, accurate, and complete, without any false records,
misleading statements, or significant omissions. The Board also makes the following statements regarding its ESG supervision and management work:

ESG Management Policies and Strategies
The Board of Directors closely monitors the main trends of global ESG and changes in the domestic and international macroeconomic situations.
Combining with the Company’s current development strategy, the Board actively communicates with stakeholders to accurately identify ESG-relatedrisks and opportunities. The Board also updates its ESG management policies and strategies when necessary to ensure that SF’s ESG principles keep
pace with the times.

ESG Risk Management
The Board of Directors attaches great importance to the management of ESG-related risks and actively participates in stakeholder communication.
It assesses, analyzes, and prioritizes the materiality of ESG issues, identifies related risks and opportunities, and updates management policies andstrategies as necessary. SF has incorporated ESG-related risks, including climate change, into its risk assessment system, regularly conducts risk
identification and assessment, and formulates corresponding risk response measures. For more information on risk management and internal controls,
please refer to the “Governance – Strengthening Risk Control Management” section of this report. As for information on climate change-related risk
management, please refer to the “Disclosure of Climate-Related Information” section of this report.

ESG Goal Setting and Progress Review
The Board is responsible for overseeing and managing the Company’s sustainable development matters, making decisions on strategic goals, strategic
directions, and key work areas in the core domains of sustainable development, and supervising and guiding the implementation of ESG work toensure that ESG governance is integrated into the Company’s strategic development. The members of the Sustainability Leadership Group under the
Board’s Strategic Committee have their compensation linked to ESG performance. SF has achieved all its ESG goals in 2023, and significant progresshas been made in advancing long-term ESG goals. The Board will continue to optimize the Company’s ESG governance, regularly review its progressof approaching the goals, actively respond to stakeholder concerns, and continuously improve its ESG governance levels.

011

2023 S.F. HOLDING SUSTAINABILITY REPORT
Foreword to the Report

ESG Governance System
SF integrates ESG principles into its corporate development strategy, establishing a scientific and professional ESG management system and a clear andtransparent ESG governance structure. Meanwhile, it comprehensively implements the ESG-related strategies to support the sustainable developmentof the Company’s business.

The Board of
Directors

Audit
committee

Salary and assessment
committee

Strategy Committee of
the Board of Directors
Decisionmaking
supervision

Supervision &guidance

Daily
management

Implementation

Risk management
committee

Determine the strategic objectives, strategies and focuses relevant to sustainability,
supervise and guide the implementation of ESG work, and ensure that ESG
governance is integrated into the Company’s strategic development.

Composed of the Chief Strategy Officer (CSO), Chief Financial Officer (CFO), Chief
Operating Officer (COO) and Chief Human Resources Officer (CHO), the Group is
responsible for setting sustainability goals in line with the Company’s sustainability
strategies and development situations, and reviewing the progress regularly.

Daily
reporting

Sustainable Development
Working Group

Coordination in
implementation &promotion

Nominating
committee

Periodic
reporting

Sustainability
Leadership Group
Overallplanning

Strategy committee
Perform the sustainability
oversight responsibility tooverseeComposed of representatives of the Office of the Board of Directors, various
functional departments, BGs (Business Group), and BUs (Business Unit) related tosustainable development, the Group is responsible for the overall implementationand promotion of ESG-related work, accelerating the implementation of theGroup’s goals in each business unit and functional system, and graduallypromoting the normalization of sustainable development governance.

Daily
reportingBusiness and Functional
Departments

Implement ESG-related specific work in accordance with the establishedmanagement indicators and mechanisms, and regularly report to the Sustainable
Development Working Group.

012

2023 S.F. HOLDING SUSTAINABILITY REPORT
Foreword to the Report

Communication with Stakeholders
SF attaches great importance to communication with stakeholders and has established diverse and efficient communication channels tailored to thecharacteristics of different stakeholders. Through regular and diversified communication with nine categories of stakeholders including regulatory
agencies, investors, employees, customers, value chain partners and so on, SF optimize the rights to know for all stakeholders. At the same time,
the Company actively considers stakeholders’ concerns, integrating their expectations and demands into strategic and operational management, andregularly reviews the materiality of various issues in the Company’s operations and development.

Main Stakeholder Groups••
Regulatory agencies•••

Employees

Customers

Shareholders andinvestors

Directors, supervisors andsenior management

Suppliers

•
•

•
•
•
•

Employees rights andbenefits
Employee development
and training
Employee care
Occupational health andsafetySafety Delivery
Consumers Protection
Customers privacy
Responsible marketing•••

Information disclosure
Policy implementation
Inspection of institutions

Operating in compliance with laws
Preventing major safety accidents
Increasing local employment rate
Promoting actively industrial
poverty alleviation•

Employeecommunication channels
Employee satisfaction
surveyEmployee meeting
Employee activities

Protecting employees’ rights
according to the law
Providing training
Improving the talent promotion
and salary system mechanism
Strengthening occupational healthand safety management
Promoting diverse employee
benefits•••

Customer research
Customer hotline
Customer satisfaction
surveyProviding efficient, reliable, andfast logistics services
Enhancing the customer claim
settlement process
Building a safe ecosystem••

General meeting ofshareholders
Announcements andcirculars
Investor roadshow

Establishing and improving thescientific decision-making andsupervision mechanism
Strengthening risk management
Disclosing information properly
Organizing and participating in
activities targeting different
types of shareholders•••

Investment returns
Corporate governance
ESG management•••

Corporate governanceCompliance risk
Sustainable Operations•

Regular board meetings

Periodic report
Operating in compliance with laws
and regulations
Strengthening risk management•

Sustainableprocurement
Honesty and integrity
Industry cooperation•••

Supplier conference
Supplier training
Industry communication

Promoting transparent
procurement
Eliminating commercial bribery

Public charity
Community
development
Rural revitalization

•
•
•
•

Provision of employment
Industrial assistance
Volunteer service
Public welfare activities

Interactions through websites andother official platforms
Paying regular visits•

Convening summit
activities
Organizing technologicalcommunication

Participating in industry activities
Participating in the developmentof industrial standard

Information disclosure
Building acommunication
mechanism

Active communication throughwebsites and other official
platforms
Providing external publicity
materials

•
•

•
•
•

Industry association••
Media/the public

Compliant operation
Paying taxes inaccordance with laws
Building Integrity

Response Measures

•
•
•

•
•
Community

Main Channels forCommunication

Main Concerns

Strengthening
communication andcooperation
Industrial standard
development
Informationtransparency
Interaction with the
media

•

•

•
•

013

2023 S.F. HOLDING SUSTAINABILITY REPORT
Foreword to the Report

Assessment of Materiality Issues
To review the commitments, policies, management strategies, actions and performance in the aspect of sustainable development, and to respond to
stakeholders’ concerns regarding the Company’s sustainable development-related matters, SF annually identifies and updates ESG materiality issues
through a combination of questionnaire surveys and on-site interviews. These issues are comprehensively integrated into the Company’s operational
management work, continuously strengthening the management and practice of sustainable development within the Company.

Process of Assessing Materiality Issues
Step
1-Identificationof issues

Based on disclosure requirements at home and abroad, benchmarking analysis against industry peers,
mainstream ESG rating concerns and SF’s business relevance, the Company updated its material topics
repository. The upgraded repository now includes 17 materiality issues across three categories, namely
environment, society, and governance.

Step
2-Stakeholder
SurveysMateriality issues were compiled into questionnaires distributed to internal and external stakeholders.
Stakeholders were asked to rate the materiality of each ESG topic on a scale of 1 to 5, providing
suggestions for each issue’s priority based on their expectations and demands. Additionally, interviews
were conducted with key stakeholders to assist in determining materiality issues and responding tostakeholder expectations.

Step
3-Assessmentof themateriality issues

Based on the results of effective questionnaire evaluations, an analysis of materiality issues was
conducted to identify those most relevant to SF’s sustainable development in 2023.

Step
4-Prioritizationof the issues

Materiality issues were prioritized based on two dimensions: “The importance to stakeholders” and “Theimportance to the Company’s development.” The matrix of SF’s materiality issues in 2023 was developed
and reviewed by the Board of Directors.

Analysis Result of Materiality Issues
High

The importance to stakeholders

2

Low

12

Respect and guarantee
10 of human rights
Energy management andcarbon emission reduction

13 Emission management

Data security andprivacy protection

4
8

Building agreen and smart
industry chain

14 Sustainable supply chains

16 climate change
Response torevitalization,
15 Ruralcharity and volunteering

63

Safety delivery andtransportation

Corporate governanceOccupational health andsafety management

5

Product andservice optimization

Employee training anddevelopment

7

Anti-corruption andbusiness ethics

11 resource recycling

Green packaging and

917 Diversity and inclusion

Employee welfare and care

The importance to the Company’s development
Governance1

Environment

014

SocietyHigh

GOVERNANCE
Theme: Forging Ahead with
Original Mission and Writinga New Chapter Under Concerted
Efforts Led by Party Building

02
Standardizing Corporate Governance

Strengthening Risk Control Management
Abiding by Business Ethics

Ensuring Information Security

2023 S.F. HOLDING SUSTAINABILITY REPORT
Governance

Ahead with Original Mission and
Theme Forging
Writing a New Chapter Under Concerted
Efforts Led by Party Building

The year 2023 is the starting year to fully implement the spirit of the 20th National Congress of the Communist Party of China(CPC). SF is determined to make another progress in the new journey. Blessed with the leadership of the Party, SF promotes theparty building and the growth of the Company, fulfills corporate social responsibility, and contributes to the development of thetimes.

Standing Firm in Our Beliefs and Convictions Under the Leadership of the Party
Focusing on the Importance of Policies in Development, and Integrating Party Building into Management
Under the leadership system of “two-way entry and cross-appointment” for the Party Committee team, SF has built the Party Committee comprising
all senior executives of the Company. Besides, the practice of Party building is included in our Articles of Association to ensure the implementation of
the principles and policies of the Party during our development.
Advocating the Learning of Party’s Ideology and Organizing Thematic Education
In 2023, SF carried out extensive thematic education on Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and studied andimplemented the spirit of the 20th CPC National Congress. The Company formulated and released an implementation plan for thematic education
throughout the year, encouraged Party members and comrades to read the original versions of books and articles and comprehend the theories,and subscribed a total of 4,400 books on thematic education for Party members. The Company also organized party workers to carry out thematic
education and learning in Jiaxing, striving to cast the soul, increase wisdom, correct the atmosphere and improve proactivity by learning.

Training class of thematic education on the study and implementationof Xi Jinping Thought on Socialism with Chinese Characteristics for a
New EraSF Party Committee won the Group Champion of Shenzhen Express
Industry Party Committee Knowledge Competition016

2023 S.F. HOLDING SUSTAINABILITY REPORT
GovernanceConducting High-standard Party
Building and Strengthening PrimaryLevel Party Building
Adhering to the Principle of “One Synchronization” and “TwoCoverage”
For a more comprehensive coverage of Party organization andleadership, the Company has made continuous efforts to optimize
the building of primary-level Party organizations, and has established
Party branches in new business units in a timely manner to expand
the coverage of Party organizations. In addition, SF adopts a Partybuilding management model of “centralized guidance and localized
management” for branches across the country. In 2023, the Company
managed 93 Party organizations with 2,323 Party members, andcoordinated the management of 76 local Party organizations
nationwide.
Party and Mass Service Center of SF Group

Reinforcing the Construction of Party Building Front to Provide Strong
Spiritual Support for Party Members
Based on the “1+N” pattern, the Party Committee of the Company
directs the construction of the Party building front in each region,
including the design of exhibition walls with focuses on theorganizational building and elegance of Party members to promote theParty building culture, trying to build important platforms to serve Party
members. Meanwhile, on the basis of the Group’s original Party andmass service centers, 15 new Party building stations have been set up
in Shenzhen, of which the Party and Mass Service Station of Nanshan
Branch is recommended as an investigate site for the education
management of Party members in Shenzhen.

In 2023, the coverage of the Company’s Party building was ashigh as85%.

Carrying out High-quality Party
Members Activities to Stimulate Their
Vitality as a Pioneer
To be fully prepared for the “Double Eleven” business peak, the Party
Committee of SF issued the Party Members Pioneer Action Initiative,
calling on all primary-level Party organizations and the majority ofParty members to take the initiative in the prompt establishment of the“Pioneer Team of Party Members” to support the front line and serve asa strong reserve force to win the “Double Eleven” peak battle.
In addition, SF arranged an array of activities to celebrate the 102nd
anniversary of the founding of the CPC, and encouraged couriers who
were Party members to play a part in urban governance, and serve as a“mobile probe” in civilized city construction, urban environment, andresident services.

Celebration of the 102nd Anniversary of the Founding of the CPC and
The “July 1” Commendation ConferenceIn the “seven goals for the youth in the new era” series of activities,
each primary-level party organization actively recommended its excellent
parts for the appraisal of role models:

Party member Qin Wenchong won the 27th “China Youth May
Fourth Medal”

SF Aviation Department was awarded “National Workers Pioneer”

017

2023 S.F. HOLDING SUSTAINABILITY REPORT
GovernanceStandardizing Corporate GovernanceCorporate GovernanceSF has formulated the Articles of Association, the Rules of Procedure for General Meeting of Shareholders, the Rules of Procedure for Board of
Directors, and the Rules of Procedure for Supervisory Committee and other internal control rules and regulations to improve the internal corporate
governance structure and the internal management system and regulate the conduct of the Company. The Company has clearly defined the
responsibilities and authorities of decision-making, execution and supervision, established a corporate governance structure composed of the general
meeting of shareholders, Board of Directors and Supervisory Committee, and formed an effective division of labor and restraint mechanism with clear
rights and responsibilities and standardized operation.

General meeting ofshareholders

Office of the Boardof Directors

Strategy
Committee

Board ofDirectors

Remuneration andAppraisal Committee

Supervisory
Committee

Risk Management
Committee

Nomination
Committee

Audit
Committee

SF’s Governance Structure

General Meeting of Shareholders
The Company convenes and holds general meetings of shareholders in strict compliance with relevant laws and regulations, engages lawyers to attend
the general meeting as observers and issue legal opinions on the holding and voting procedures of the general meeting, and gives full respect to andprotects the legitimate rights and interests of all shareholders and investors. The Company’s controlling shareholders strictly regulate their behaviors,
exercise their rights through the general meeting, and do not interfere with the Company’s management or decision-making directly or indirectly bypassing the general meeting and the Board. In 2023, SF held 3 general meetings.

018

2023 S.F. HOLDING SUSTAINABILITY REPORT
Governance

Board of Directors
SF’s Board of Directors is composed of 7 directors, of which 4 are executive directors and 3 are independent non-executive directors. In 2023, theCompany, giving full play to the decision-making functions, held a total of 9 board meetings to study and make decisions on major matters such as
related-party transactions, exercise of equity incentives, and external guarantees. In strict accordance with the requirements of the Company Law, theArticles of Association and the relevant laws and regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange, SF has
meticulously conformed to the relevant procedures of the board meeting, and made timely disclosure of information after the meetings.
The Board of Directors has established five special committees, namely the Strategy Committee, the Remuneration and Appraisal Committee, theRisk Management Committee, the Nomination Committee, and the Audit Committee. In 2023, these special committees held a total of 11 meetings.
All directors diligently fulfilled their duties with an industrious and responsible attitude. The independent directors perform their responsibilities
independently, protect the overall interests of the Company, and express independent opinions on important and major issues.

Performance of Duties by Special Committees of SF’s Board of Directors in 2023
Strategy
Committee

Consider the overall development strategy and sustainable development strategy of the Company, supervise
and guide the ESG implementation, and make recommendations to the Board of Directors.

Remuneration
and Appraisal
Committee

Ensure that the remuneration system serves the Company’s business strategy and is subject to constantadjustment to support the Company’s further development.

Risk Management
Committee

Guide the Company’s overall risk management, evaluate the completeness of the risk management system
and issue opinions, and provide support for the Board of Directors to perform risk management functions.

Nomination
Committee

Make decision and provide professional recommendations on the candidates, selection criteria and selection
procedures for directors, general managers, and other senior management appointment of the Company.

Audit Committee

Give full play to the role of audit supervision, review audit work reports every quarter and provide guidanceand suggestions, promote the establishment and improvement of internal controls, standardize theCompany’s business behaviors, optimize business management, and avoid business risks.

Diversity of the Board of Directors
The members of the Board of Directors were experienced in different industries, with different educational backgrounds and professional qualifications
in engineering, economics, law, accounting, and business administration, comprising a well-balanced group of directors in line with SF’s Board
Diversity Policy. There were two female directors in the Board, representing 28.6% of the Board.

Supervisory Committee
SF’s Supervisory Committee comprises 5 supervisors, of which 2 are employee representatives and 3 are non-employee representatives. In 2023, SF
held 6 meetings of Supervisory Committee in total, and each supervisor attended the meetings in earnest, performed their duties conscientiously, andsupervised and expressed their opinions on the Company’s major issues, related party transactions and financial situation.

Compliant Information Disclosure
SF honestly fulfills the information disclosure obligations, strictly follows the regulations and requirements of the China Securities Regulatory
Commission as well as the Shenzhen Stock Exchange on information disclosure and the relevant provisions of the Company’s Management System
for Information Disclosure in our information disclosure work. The company further intensifies the collection, feedback, collation, and review of major
information, so as to ensure the truthfulness, accuracy, completeness and timeliness of the information disclosed.

019

2023 S.F. HOLDING SUSTAINABILITY REPORT
Governance

Strengthening Risk Control Management
SF has established a sound internal control and risk management system to strengthen and standardize the internal managementof the Company, continuously improve the effects of risk prevention and control, and promote the sustainable and healthy
development of the Company. The Company also actively identifies and assesses environmental, social and governance (ESG) risks
in operation and development, and clarifies the response strategies for such risks to effectively reduce operational risks.

Risk Management System
SF has established a risk management structure led by the Risk Management Committee of the Board of Directors. The Risk Committee under the Risk
Management Committee of the Board of Directors, led by the Chief Financial Officer (CFO) of the Company, is a professional decision-making bodyfor the overall management and control of the Company’s risks. The Committee is mainly responsible for deliberating and making decisions on thebuilding of the Company’s risk management system, policies, prevention of major risks and response to major crises. The Risk Committee reports to
the Risk Management Committee of the Board of Directors on a quarterly and annual basis. The Risk Control and Compliance Office of the Company
coordinates the management of risk control and compliance; while the leader of each functional department, BG (Business Group), BU (BusinessUnit) and region has the primary responsibility for the relevant risk control, responsible for the formulation of specific risk control measures andimplementation rules, as well as the identification and assessment of daily risks and the implementation of control measures.

Risk Management Committeeof the Board of Directors
Risk Committee (CFO)

The Company’s Risk Control
and Compliance Office
Unifiedadministration
Unifiedoperation
Assessment

Strategy Formulation
Organization:
Strategy Formulation
and GuidanceOverall Management
Organization:
System Optimization,
and Control

ReportFeedback
Optimization

The Company’s Functions,
BGs/BUs and Subsidiaries, etc.

Implementation
Organization:
Routine Managementand Execution

SF Risk Management
Organizational Structure020

2023 S.F. HOLDING SUSTAINABILITY REPORT
GovernanceRisk Management Practices
SF continues to improve its risk management system on the basis of the Company’s comprehensive risk management system. In 2023, SF newly built
a compliance risk management system in various fields including environmental protection, safety production, anti-monopoly and unfair competition
by comprehensively sorting out compliance requirements and referring to domestic and international advanced experiences. SF also synchronously
updated policy documents such as the Risk Control and Compliance Management Policy, and the Risk Event Management Policy to consolidate theCompany’s risk management capabilities.

Enhancement of Digital Risk Management Capability
SF has continued to strengthen its digital risk management capability by continuously upgrading the Company’s risk management system, internal
control and compliance system and compliance management system. Through continuous iterative optimization of the systems, SF has achieved thedigitization of the entire chain from risk identification, assessment, monitoring, early warning, response, to loop closing, thereby effectively improving
the efficiency of risk identification and management.

Risk Management System
Responsible for monitoring risk management and control in priority areas of the Company andmanaging risk events.

Internal Control and Compliance Platform
Responsible for conducting regular internal control inspections of the Company’s businessprocesses and supervising rectification.

Compliance Management System
Responsible for intelligently capturing and analyzing external regulatory requirements and public
opinion information, and monitoring the quality of internalization of external regulations.

In 2023, SF completed the building of its compliance management system, applying intelligent algorithms to mark and aggregate complianceinformation in a systematic way, and enhancing its ability to aggregate, precipitate, analyze, share and proactively manage compliance informationin an intelligent manner, thus realizing the scheduled position-based push of compliance information and improving the efficiency of compliancemanagement. In addition, the Company has optimized the risk management function and launched the risk event database at the mobile end tofurther enhance the efficiency of risk management.

021

2023 S.F. HOLDING SUSTAINABILITY REPORT
Governance

Loop-closing Management of Risk Events
SF has established a sound risk event management system, which realizes graded risk event management through risk labels, and strengthens thewhole-process risk management of pre-event prevention, in-event response and post-event review, so as to enhance the efficiency of risk event
management and control.

Pre-event
Prevention

In-event
Response

Post-event
Review

Regularly carry out
risk assessment
to understand thecurrent situation ofrisk management andcontrol, continuously
optimize the risk
management andcontrol mechanism, andreduce the probability ofoccurrence of risk eventsfrom the source.

Respond with multiple

Summarize the incident
with the relevant
departments, dig out
root causes, promote thedepartments to formulate
optimized solutions, andcontinue to consolidate
the basic capabilities ofrisk event management.

departments to address
risk events according
to local conditions andminimize the negative
impacts caused thereby.

Based on risk event management, the Company carried out a targeted refresh of the risk scenario and deposited

26 risk responsemanagement and control plans in 2023.
Based on the summarized response experience of historical risk events, the Company considered medium- and high-risk points into businessscenarios to prepare corresponding risk plans, achieving

100% coverage of medium and high-risk points.

ESG Risk Management
SF regularly carries out the identification and sorting of risk information database, and fully integrates environmental, social and governance risks into
the original level 1, 2 and 3 risk level database. The ESG risk management structure is consistent with SF’s risk management organizational structure,with the Risk Management Committee of the Board of Directors as the highest risk management body responsible for the identification, prevention
and control of ESG risks.
At present, SF has identified 16 types of ESG risks including natural disaster risk, intellectual property risk, fraud risk, safety production risk, humanresource management risk and others. Environmental risks contain carbon neutrality risk, operation risks under extreme weather and high temperature,
covering a wide range of the ESG field. (Please refer to the “Climate-related Information Disclosures” for the governance, countermeasures andtargets of climate change risks.)

In 2023, the Company held

24 weekly meetings on risk control, generating a total of 52 resolutions, of which 4 meetings and 5

resolutions were related to ESG issues.

Risk Management Training
SF continues to organize diversified risk training and empowerment courses to strengthen employees’ risk awareness through offline training, online
learning, examination and other forms. In 2023, the Company conducted a total of 29 training courses on risk compliance, covering such risk areas
as product and service quality, anti-monopoly and unfair competition, export control and trade sanctions, and intellectual property rights. A total of
86,400 hours of risk-specific training courses were conducted throughout the year, and the coverage rate of new employees reached 100%.

022

2023 S.F. HOLDING SUSTAINABILITY REPORT
Governance

Abiding by Business Ethics
SF adheres to compliance operation and business ethics. The Company has established a management mechanism led by the
Audit Committee of the Board of Directors, while the Chief Audit Executive (CAE) is responsible for the overall management of
the Company’s business ethics affairs, including anti-corruption, anti-money laundering and anti-unfair competition, and regularly
reports to the Audit Committee. For primary-level managers, the Company formulated the “369 Code of Conduct”, which put an
end to three violations of business ethics, required six affairs to be made public, and established nine guidelines for managers to set
an example and adhere to business ethics in operation and management. In 2023, SF had no legal litigations related to impropercompetition and anti-monopoly.

Integrity Management System
SF analyzes the causes of corruption incidents investigated and punished every year, confirms whether there are deficiencies in processes andsystems, and updates the internal policies with necessary iterations to ensure the effectiveness of the Company’s integrity management as wellas anti-corruption policies and systems. In all relevant policies, SF explicitly prohibits bribery, illegal kickbacks, non-compliance business gifts andother violations, clearly defines the approval and control process involving sensitive transactions such as large gifts, and provides employees andmanagement with specific rules and operational guidelines on acceptable behaviors and approval procedures. In 2023, the Company evaluated andupdated its integrity management policies, such as Reward and Penalty Management Regulations, further improving the penalty rules for violation of
integrity-based incidents and providing guidance to employees and management when faced with business ethics dilemmas.
The Company has established a defensive line for integrity supervision from the Audit Committee of the Board of Directors, the regulatory department
at the headquarters to the business areas/branches. Three defensive lines have also been established simultaneously within business areas/branches
to achieve an integrity management system that runs through the whole network and all positions of management. In addition to the two-level threedefensive lines, the Company has also set up a Senior Executive Discipline Inspection Committee and an Employee Discipline Inspection Committee ledby the Chief Executive Officer (CEO), the Chief Human Resource Officer (CHO), and the Chief Audit Executive (CAE). These committees are respectively
responsible for managing the integrity and discipline of senior management and other employees.

Senior Management Disciplinary
Inspection Committee

Employee Discipline
Inspection Committee

Led by the CEO, CHO and CAE

The third line: Company audit
Bu
er
wn
so
ts
tle

ou

es
s/

The second line: Regulatory department at
the headquarters for each segment
Legal affairs/Compliance/Internal control/
Risk control, etc.

Gr Empou lo
p o yeefR
De Hum elati
pa an onrtm Re shen sou ip
t
rce
s

sin

Three Defensive
Lines for Integrity
Supervision

Business
Areas/
Branches

Risk Control Group of
Operation and Management
Department

The first line: Businessareas/branches

SF’s Defensive Lines for Integrity Supervision023

2023 S.F. HOLDING SUSTAINABILITY REPORT
GovernanceTo create a fair, just and open working atmosphere, SF has also established an anti-corruption system of “no courage, no ability and no intention” tostrictly prevent and sternly punish illegal and corrupt behaviors such as bribery, acceptance of bribery, embezzlement, and fraud.

Create a working

Create a “no ability to

Lay a solid foundation

atmosphere of “nobe corrupt” governanceof “no intention to becourage to be corrupt “environment ofcorrupt” ideology

Active anti-fraud

Organization governanceCommitment signing

Professional investigation

Systems and standards

Propaganda and educationand punishment

Democratic supervision

Strict accountability system

Special learning
Organization atmosphere

SF’s“No Courage, No Ability and No Intention” System for Anti-corruption

Anti-Corruption Management
SF integrates anti-corruption management into its daily operations, and continues to strengthen the Company’s ability to control anti-corruption,
anti-bribery, anti-money laundering and other ethical business behaviors through anti-corruption risk assessment, anti-corruption audits, and anticorruption education.

Risk Assessment on Anti-Corruption
SF has built an anti-corruption risk assessment mechanism to identify and assess the relevant risks in each business area, and formulated relevant
response initiatives in parallel to strengthen anti-corruption risk management. In 2023, SF continued to explore anti-fraud risks, identified andexported more than 500 anomalous clues, and launched the “Action of Purity” to rectify potential risk points.
In addition, SF conducts an annual review of the effectiveness and compliance of internal controls to prevent and detect bribery and corruption risks
in a timely manner. Once relevant risks are identified, SF will report the risks, violations and countermeasures directly to the Audit Committee of theBoard of Directors.

Anti-Corruption Audit
SF has included anti-corruption in its key audit areas to identify and assess potential risks, so as to ensure the effectiveness of its internal anticorruption management system, and safeguard the Company’s compliance operation. In the past three years, the percentage of all operational sites
for which an internal audit/risk assessment concerning business ethics issues has been conducted was 100%.
In addition, SF conducts third-party external audits every year to independently review the Company’s business ethics and sort out and identify
potential business ethics-related risks in the Company’s operations.

Anti-Corruption Education
SF has formulated the Employee Handbook and Integrity Handbook to clarify the Company’s definition of internal and external integrity behaviors, thedefinition of violation behaviors and the corresponding penalties, thus providing all employees with a clear and reliable code of conduct, to regulate
the behaviors of the employees, and to advocate honest practices.

0242023 S.F. HOLDING SUSTAINABILITY REPORT
Governance

The Company understands the internal integrity situation through regular research on integrity index. At the same time, the Company continuously
carries out publicity and education on integrity culture which covers all employees, promotes the anti-corruption system and initiatives to theemployees through various forms, including policy interpretation, integrity briefings and anti-corruption announcements. Furthermore, the Company
also adopts a combination of online cases and offline training to carry out positive propaganda on integrity culture and negative warnings on fraudcases to strengthen employees’ anti-corruption awareness.

Exposure bulletin

Propaganda and

Early warning forprompts

disclosure of

Positive guidance

violation of rules

Commendation ofor disciplines

examplesSysteminterpretation
Red line under
rules
Reportingchannels
Rewardmechanism
Situational
guidance

Cautionary form

Integrity briefing

Anti-corruption

Judicial fraudMonthly

announcementcase disclosure

disclosure

Illegal fraud

warning

Hot issues andAnnualconcerns

announcement

SF’s Anti-Corruption Propaganda and Education

In 2023, SF actively carried out special training on integrity topics through a variety of online and offline channels to organize all employees to learn,
to know and to abide by the rules together. Integrity related training covers 100% of the employees, with a total of 70,073 hours of anti-corruption
education. Among them, 20 offline special anti-corruption training sessions were held throughout the year.

“Honesty and Integrity – Double Full Pass”:
SF launched the “Honesty and Integrity – Double Full Pass” action for all employees, and a total of
115,000 employees participated in learning and examination.

“Preventing and Controlling Risks for Operation”:
The integrity-themed training, “Preventing and Controlling Risks for Operation”, was conducted for key
positions and specific functions, covering more than 3,500 employees.

Management Lectures:
10 sessions of “Management Lectures” were held for management, covering core values, culturalconcepts, integrity and anti-corruption, with more than 6,600 people participated in total.
2023 Integrity Training Program

In order to prevent and combat against all kinds of corrupt behaviors, SF actively encourages all employees to sign the Letter of Commitment to Anticorruption, to protect the legitimate interests of the Company, employees, customers and partners from infringement, and to promote the sustainable
and healthy development of the Company. In 2023, the rate of the workforce signing the Letter of Commitment to Anti-corruption reached 99.0%,
up 4.4% from that in 2022.
In addition, the Company requires cooperative suppliers to sign the Integrity Agreement to jointly build an integrity value chain. In 2023, the rate ofsuppliers signing the Integrity Agreement reached 100%.

025

2023 S.F. HOLDING SUSTAINABILITY REPORT
Governance

Excerpts from the Anti-Corruption Commitment:•

I will refuse to engage in any bribery, acceptance of bribes, embezzlement and other improper business practices during the tenure of
office.

•I will refuse to engage in any behavior that conflicts with the interests of the Company during the tenure of office, unless prior written
and explicit intention is obtained from the Company.

•

During employment, if any unit or individual related to the business of the Company offers or request any gift to me during the tenureof office, I will refuse and promptly report to the Company.

Reporting channels
SF provides multiple open 7*24 reporting channels for internal and external stakeholders, including e-mail, hotlines, and the Company’s official
website, to encourage employees, suppliers and other stakeholders to actively expose violations. At the same time, the Company has established amutual communication mechanism to understand the plight of employees on business ethics through employee symposiums, internal media and otherforms.

Reporting channels

Target group

Reporting e-mailsf5198@sf-express.com

SF official website

About us – I want to report

Mailing

SF Headquarters – Audit Department (Receipt)

Forespace APP

Service – I want to report

Labor union hotline

4006883783

All internal employees and external
stakeholders

All internal employees

Upon receipt of the report, SF will act as soon as possible, requiring the relevant department to follow up, and make immediate and positive responses
in accordance with the “Triple Ones” (“三个一”) timeliness requirements.

“Triple Ones” Requirements:•

Response within one working day: Respond to the whistleblower within one working day upon receipt of the report.

•

Case confirmation within one week: Confirm whether a case needs to be filed for investigation within one week upon receipt of thereport.

•Completion of the investigation within one month: Complete the investigation of the report and provide the results within one month of
confirming the case.

After the investigation and review of any violations, the Company will take disciplinary action against the responsible person involved, dependingon the severity of the violation. If the violation is suspected of being illegal, the responsible person will be referred to the judicial authorities forprosecution.

In 2023, SF achieved a

100% follow-up rate for effective reports and a 96% compliance rate for the “Triple ones” requirements

regarding time-efficient complaint handling.

026

2023 S.F. HOLDING SUSTAINABILITY REPORT
Governance

Whistleblower Protection
SF has clearly defined the requirements for confidentiality of whistleblower information in its Reporting Management Measures: Any employee who
has access to information reported shall keep the information confidential. The responsible person of each organizations the first person responsible
for the protection of witnesses (including whistleblower), and shall take reasonable measures to protect witnesses (including whistleblower), ensurethat the basic rights and interests of witnesses (including whistleblower) are not infringed, and stamp out any form of retaliation.
In 2023, there is no breaches of privacy for anonymous whistleblowers in SF.

SF ’s Measures for the Management of Whistleblowing sets out the confidentiality requirements for whistleblower information,
including but not limited to the following:•

All personnel who receive information reported shall submit the information to the department in charge of whistleblowing and shallnot, at their discretion, disclose the information to other personnel.

•

Personnel involved in the follow-up of the report shall not disclose the relevant information to other personnel.

•

Investigation results and handling opinions shall not be disclosed prior to the assessment and public announcement of the disciplinary
opinions.

•

Investigation reports and evidence shall not be disclosed to other personnel at their discretion.

Intellectual Property Protection
Having attached great importance to the protection of intellectual property, SF continuously improves its internal intellectual property management
system. In 2023, SF revised the Patent (Software Copyright) Achievement Management System, updated the rules for managing intellectual property as
intangible assets, and the rules for the inventory of intellectual property assets and capital utilization. In addition, the Company formulated a grading
and classification standard for intellectual property. Experts in various fields completed the grading and classification of existing intellectual property,
enabling fine management of the value of intellectual property.
The Company actively conducts intellectual property training by offering courses such as Intellectual Property Protection and Operation, Patent Mining
and Application Training and Patent Protection and Compliance for Overseas Business Operations. These courses encourage all types of talents todevelop expertise in their respective fields and help to raise employees’ awareness of intellectual property protection.

At the end of the reporting period, SF had
patents accounted for

4,093 patents in force or pending and 2,490 software copyrights. Of these, invention

59.3% of the total patent portfolio.

027

2023 S.F. HOLDING SUSTAINABILITY REPORT
Governance

Ensuring Information Security
Information and Cybersecurity Management System
SF remains highly vigilant with regard to information security and cybersecurity risks. The Company continuously improves its internal informationand cybersecurity management system. The Company also updates and iterates its internal policies and related measures in accordance with thelatest relevant domestic and international laws, regulations, as well as data protection standards. These efforts strengthen the foundation for dataprotection and network information security.

Decisionmaker

Information Security and Privacy Committee
Composed of the CTO, the CEO and the CFO of the Company

Be responsible for information security and privacy
protection decisions, appointments and instructions,as well as supervision and audit of personal
information protection related matters

Management

Information Security and Privacy Protection Working Group
Led by the Chief Information Security Officer, with an Information
Security Center, various business lines, and a Legal Affairs Center

Coordinate and organize the Company’s information
security and privacy protection governance

Execution

In 2023, SF updated its information and cybersecurity governance structure by establishing a 3-layer information security and privacy management
structure that includes decision-making, management and execution organizations.

Departments and Business Units
Composed of functional departments and business units

Implement specific information security and privacy
protection governance measures

Information and Cybersecurity Governance Structure
SF Technology Information and Cybersecurity Management System has obtained ISO 27001 Information Security Management System Certification
and ISO 27701 Privacy Information Management System Certification, covering the Company’s main business operation scenarios. In addition, the SF
Express app has passed the Level 3 Protection Assessment for Cybersecurity Classification Protection, and the CCRC Certification in Mobile Internet
Application (Andriod/IOS) Security.

701 C
ISO 27

ISO

2

0
70

e
1C

rtif

ti
ica

ertifica

CCRC

tion

(Andriod) CertificateCConLevel 3 Cybersecurity Certificate

028

RC

(A

nd

rio

d)

Ce

rtif

ica

te

2023 S.F. HOLDING SUSTAINABILITY REPORT
Governance

Information and Cybersecurity Management
SF attaches great importance to information and cybersecurity. Several systems have been established to guide the response mechanisms andhandling initiatives of information and cybersecurity incidents. The Company’s security defense capabilities are strengthened through cybersecurity
vulnerability detection, cyberattack drills and other measures. In addition, high-risk behaviors related to internal information and cybersecurity, and thecorresponding disciplinary principles for violations have been clarified to standardize the behavior of employees in this regard.
SF regulates the collection, use, sharing, and retention of user privacy data according to the latest domestic and international laws and regulations
to ensure that user data is obtained through legitimate and transparent means. Adhering to the principle of “Minimization” in data collection, theCompany ensures that the user data is collected and processed within the prescribed scope.
SF regularly conducts data security audit and assesses internal and external data security risks in accordance with the latest regulatory requirements.
Based on the assessment results, the Company improves the information and cybersecurity management system accordingly.

Assessment of Graded Protection:
The security compliance of information systems is monitored and assessed based on national and industry standards andspecifications. This assessment enables the Company to gain a timely understanding of the security protection status of
information systems and to assess their security protection capabilities. In addition, targeted corrective actions can beproposed for any identified security issues and potential risks.

Internal Audit of the Management System:
Internal audits of the information security management system are carried out in accordance with ISO 27001, ISO 27701
and other relevant standards in terms of compliance, applicability and sufficiency. Any issues identified are addressed
promptly to ensure the reliability of the Company’s information and cybersecurity system.

Security Response Center (SRC):The SF SRC is designed to enable potential internal risks to be identified externally and remediated in a timely manner,and to reward users who discover security vulnerabilities in the systems and operations.

SF Data Security Risk Assessment

In order to strengthen information and cybersecurity management, SF has taken various measures to improve the data security awareness and data
security and personal information protection skills of all employees, thereby enhancing the foundation of SF’s data security.

Red-blue confrontation drill
In March 2023, SF conducted a two-week Red-blue confrontation drills in collaboration with the attack team of an external security company. The drill
simulated classic scenarios of various external cyberattacks. Throughout the drill, the Company continuously identified weaknesses in the cybersecurity
defenses system and reviewed them for improvement. The aim of the drill was to improve the collaboration and emergency response capabilities ofour security team, thereby strengthening the Company’s data security capabilities.

029

2023 S.F. HOLDING SUSTAINABILITY REPORT
Governance

Employee Training
Information Sharing in Cybersecurity: In 2023, SF organized a total of 16 technical cybersecurity sharing activities and 28 security awarenesscampaigns for relevant professionals.
Data Lifecycle Training: Focusing on the data lifecycle, SF developed a series of training courses covering the collection, classification and grading,transmission, use, exchange, and destruction of data. These courses significantly enhanced employees’ professional understanding of data security andincreased their awareness of privacy compliance. In 2023, these training courses totalled over 1,200 hours.
Information Security Education for All Employees: SF continuously carries out information security education for all employees, emphasizing theimportance of privacy protection and raising awareness of information security through various means such as special training and publicity. In 2023,
SF essentially achieved full coverage of data security education, with more than 650,000 participants on a cumulative basis.
By the end of 2023, SF had led and participated in the development of 5 national and industry standards on data security, with 3 national standards
officially published, contributing to promote the standardization and normalization of data security in the industry.

Standard

Status1

National standard Information Security Technology – Data Security Requirements
for Express and Logistics Services (GB/T 42013-2022)

Officially published in October 20222

National standard Information Security Technology – Basic Requirements forCollecting Personal Information in Mobile Internet Applications (GB/T 41391-2022)

Officially published in April 20223

National standard Information Security Technology – Implementation Guidelines
for Notices and Consent in Personal Information Processing (GB/T 42574-2023)

Officially published in May 2023

4

National standard Information Security Technology – Security Requirements for
Processing of Sensitive Personal Information

Officially open for public consultationin August 2023

5

Cyber Security Standard Practice Guide – Data Classification and Grading
Guidelines

Officially published in December 2021

030

2023 S.F. HOLDING SUSTAINABILITY REPORT
Governance

Third-Party Data Management
SF also pays close attention to data security during its cooperation with third-party partners. Prior to any data interaction with third-party partners,
the Company conducts thorough data security due diligence to assess the risk in their information security qualifications, information security policies,
human resources security, physical security, and data security (including data collection, storage, provision, use, backup, and disaster recovery). By
doing so, the Company strives to mitigate the risks associated with data security in third-party collaborations.
In 2023, the Company updated its supply chain security agreement to include additional data security requirements for suppliers. These requirements
covered the destruction and return of data upon termination of the collaboration, the establishment of contingency plans for data security
incidents, the protection of data centers, the business continuity plans, etc., aiming to standardize the management of data security throughout thecollaboration.

Personal Information Protection
SF fully recognizes the significance of personal information security. In accordance with relevant laws, regulations and industry best practices, acomprehensive privacy management framework and the personal information security and compliance policies have been developed and continuallyenhanced, serving as guidelines for appropriate personal privacy protection practices. In order to effectively protect personal information, various
measures covering the digital lifecycle have been put in place to ensure the security of customer privacy in a responsible manner. In 2023, there wereno significant breaches of privacy and information security in SF.

Strengthening the Technical Foundation of Privacy Protection
SF keeps improving its data security technology capabilities, including unified privilege management platforms, automatedencryption/decryption platforms, log management and analysis tools, and personal data desensitization. The aim of these efforts
is to protect users’ personal information from unauthorized access, manipulation, disclosure, corruption or loss.

Personal Data Lifecycle Security Management
Under the data lifecycle theory, the personal information involved in the business activities is subject to classification andgrading management. SF takes protective measures such as encryption, de-identification, and access control during the datacollection, transmission, use, and storage processes, depending on the sensitivity of the data and the principle of minimum
necessary rule. These measures aim to effectively protect personal information security.

Security Incident Detection and Response
SF uses a security incident investigation and response platform to monitor both internal and external threat signals targeting
sensitive data in real time. This platform allows for immediate identification of abnormal operations and high-risk behaviors thatmay pose the risk of personal information leakage. Once an abnormality is identified, the Company immediately launches aninvestigation and takes measures to minimize the risk of personal information leakage at the source.

Mechanism for Receiving and Responding to Requests Regarding Personal Information Rights
SF has established a mechanism for receiving to requests regarding personal information rights. Prior to the collection andprocessing of user data for business purposes, users will be promptly informed of their personal information rights and related
information through means such as privacy agreement check boxes and device pop-ups. In addition, users’ requests to exercise
their personal information rights are responded to within the specified timeframe as required by the law.

Privacy Waybill Protection
SF desensitizes the fields on the express waybill that contain users’ personal information, namely the names, contact andaddress details of the sender and recipient. In addition, delivery personnel and customer service representatives communicate
with customers using virtual phone numbers. This effective management of the risks associated with data sharing enhances
users’ privacy experience.
Measures to Protect Personal Information

031

03

ENVIRONMENT
Theme: Exploring Value through Carbon,
Racing towards the Zero-Carbon Future
Creating Green Logistics
Promoting Circular Economy
Protecting the Environment
Green Office2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Value through Carbon, Racing
Theme Exploring
towards the Zero-Carbon FutureWith the implementation of the national “dual carbon” strategy, the green and low-carbon development concept has graduallypenetrated into various economic activities across industries. The logistics industry, as a fundamental, strategic, and leading industry
supporting national economic development, is trending towards the establishment of a green, low-carbon, and efficient logistics
transportation and distribution system.
As an enterprise with a strong sense of social responsibility, SF actively responds to the national “dual carbon” policy, adhering
to its original intention of sustainable development. SF is committed to driving green and low-carbon changes in the industry with
its own efforts and extending green value to the industrial chain, working together with upstream and downstream partners toachieve a zero-carbon future.

Developing the Industry-First Carbon Calculation Model, Consolidating theFoundation for Green Technology
Since officially publishing the white paper on carbon targets in 2021, SF has been committed to building an integrated green and low-carbon
supply chain service capability that is environmentally friendly, green, and low-carbon for sustainable development. Its aim is to reduce the impactof greenhouse gases on the global environment through the management of supply chain carbon emissions across all links of the industrial chain.
In recent years, SF has built a standardized carbon management system and independently developed a digital and intelligent carbon management
platform called the “Fenghe Sustainability Platform”, which integrates the Company’s carbon emission and carbon reduction data, covering multiple
links such as packaging, transportation, transfer, and delivery.
Based on SF’s standardized carbon management capabilities, in 2023, the Company independently developed the industry’s first shipment-level
carbon calculation model. This model not only simulates the scenarios of cargo transportation to calculate greenhouse gas emissions generated byvarious modes of transportation, but also supports the calculation of the actual greenhouse gas emissions and emission reductions generated by each
shipment in all stages of “collection, transit, transportation, and delivery”. It achieves fine-grained and automated calculation of carbon data formassive shipments, continuously consolidating the foundation of SF’s green technology capabilities.

The Industry’s First Shipment-level Carbon Calculation Model Independently Developed by SF

Providing Low-carbon Supply Chain Solutions, Empowering Industrial Chain
Partners
As a benchmark enterprise actively promoting and implementing the “dual carbon” strategy in the logistics supply chain, SF understands that thevalue of green development goes beyond itself to influence the entire industry chain. Based on its standardized carbon management system and finegrained carbon calculation capabilities, combined with the leading experience in the logistics industry, SF has reached deep into various industries
such as new energy, high-tech, clothing, footwear, and luxury goods, providing customized green and low-carbon supply chain solutions and services
to multiple brand customers. It strongly enables upstream and downstream partners in the industrial chain, collaborating with our customers toaccelerate low-carbon transformation and jointly drive the industry towards a zero-carbon future.

033

2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

SF joins hands with a world leading luxury brand to launch a carbon
neutrality acceleration plan at the level of supply chain
In 2023, SF signed a letter of intent for a low-carbon strategic service agreement with a leading global luxury brand on “carbon footprint system
and management for the entire logistics supply chain,” officially initiating the LNA+ (Logistics Neutral Acceleration Plus, or “supply chain-level
Scope 3 carbon neutrality acceleration”) plan led by SF in the context of logistics supply chain scenarios.
Through this plan, not only will the precise carbon footprint of each shipment be calculated, enhancing the transparency and accuracy of carbon
information in the supply chain service scenarios between brand owners and logistics providers, but it will also include customized comprehensive
improvement actions to enhance the climate resilience of sustainable supply chains, optimize the transportation modes of upstream anddownstream logistics providers, support greenhouse gas emission reduction and offset actions in their supply chains. Additionally, it could reducethe cost of environmental compliance and climate risks in operations, and comprehensively enhance the green and low-carbon operational
resilience of the entire logistics supply chain.

Carbon accounting••

Setting carbon targets and conducting
monthly follow-up
Whole-chain carbon footprint managementfrom suppliers to warehousing a n d
distribution

Carbon offset•

Carbon emission reduction•

The accuracy of carbon
emissions data can be
improved byapproximately•

Providing consultation services for net zero
emission strategy in logistics scenarios
Designing and delivering green and lowcarbon logistic services

70%

Carbon certification•

Assisting customers in acquiringhigh-quality carbon credits to offset
their emissions

Providing customers with services
including carbon accounting,carbon neutrality certification

SF’s Intelligent Packaging Algorithm Solution helps the Motorcycle Parts
Company Enhance its Green Value
To help the motorcycle parts company solve problems such as low warehouse loading efficiency, severe packaging material waste, and hightransportation costs, SF customized an intelligent packaging algorithm system for this company.
The system simulates the packaging process through computer modelling, and uses algorithms to accurately calculate the most suitable box sizefor each order. Compared to the traditional method of packaging based on employee experience, the digital packaging tool algorithm achieves
precise and efficient box selection, improves the loading rate of packaging boxes, and significantly reduces the usage of packaging materials.
Meanwhile, the adaptation of box sizes effectively reduces space waste during transportation, improves the efficiency of transportation resource
utilization, and also reduces transportation costs. It not only solves the problem of warehouse packaging for customers, but also brings dual
improvements in environmental protection and economic benefits.

Provide the most suitable
packaging solution

Increase the loading rate ofpackaging boxes

SF’s Intelligent Packaging Algorithm Solution

034

Significantly reducepackage waste

2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Building a Green and Low-carbon Logistics Ecosystem, Charting a Global Carbon
Neutral Blueprint together
Building a zero-carbon business environment is of paramount importance in turning the grand blueprint of global carbon neutrality into reality. SF
attaches great importance to cross-industry exchanges and cooperation, and actively engages in professional exchange and sharing activities, striving
to establish long-term and friendly partnerships.
Based on the core value of sustainable development, SF fully leverages its leading advantages and successful practices in the field of green and lowcarbon logistics to promote cross-industry collaboration. Through participation in and conduct of continuous green and low-carbon special discussions,mutual empowerment, and the establishment of industry standards, it achieves win-win cooperation while driving the development of the industrial
chain towards green and low-carbon directions. SF releases its green influence and joins hands with business partners to build a green and low-carbon
logistics ecosystem, contributing to global sustainable development.

SF Joins China ESG Alliance to Contribute to a Green Future
In 2023, SF officially joined the China ESG Alliance (hereinafter referred to as the“the Alliance”), which was jointly established by several well-known enterprises
and institutions in the industry. The Alliance integrates professional ESG insights
and ecological development resources, creates an innovation-driven communication
platform that is supported by digital technology, and hatches green and sustainable
solutions to help enterprises enhance their ESG values.
As a member of the Alliance, SF will leverage its leading advantages and successful
practices in ESG areas, such as green technology innovation and low-carbon logistics
solutions, strengthen cross-industry communication and cooperation, and exert
positive influence as a member enterprise. SF, together with other members, strives todrive ESG development on all fronts and leads the green transformation.

SF Conducts Training on Green and Low-Carbon Capability Building
In January 2024, SF conducted training session on green and lowcarbon capability building with the theme of “Exploring Value through
Carbon, Racing towards the Zero-Carbon future.” This training aimed toactively respond to customer demands for a green and low-carbon supply
chain, enhance customer loyalty, and consolidate the Company’s corecompetitiveness.
Cantered on the requirements for the development of SF’s green andlow-carbon capabilities, this training session focused on the customercentric approach, allowing employees to gain more diverse and authentic
external perspectives from both the macro-environment and thecustomer’s perspective. At the training, domestic and international brandcustomers from various industries such as new energy, high-tech, clothing
and footwear, consumer goods, and luxury goods were invited to share

Exploring Value through Carbon, Racing towards the Zero-Carbon Future——Training Venue for SF’s Green and Low-Carbon Capability Building

their green and low-carbon practices and needs. Internal brainstorming
sessions were also conducted, which not only deepened the understanding of the significance and value of green and low-carbon capability
building but also jointly identified the directions and paths for the company to achieve capability development in the green and low-carbon field.

035

2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Creating Green Logistics
Aiming to protect the environment, save energy and reduce
emissions, SF has continuously improved its environmental
management system, realized green management covering
the whole life cycle of logistics by promoting low-carbon
transportation, building a green industrial park, developing
sustainable packaging and applying green technology, etc.,
and actively created sustainable logistics.

In 2023, SF reduced greenhouse gas emissions by

1,945,917 tCO e
2

Carbon Reduction Initiatives and Achievements
Carbon Reduction Direction

GreenTransportation

Carbon Reduction Initiatives

Green Ground Transportation:

Green Aviation:• Optimize transportation capacity, increase the proportion of newenergy vehicles, and promote low-carbon transportation.
• Upgrade the loading capacity of vehicles, replace vehicles withhigher axle counts, and improve transportation efficiency.
• Phase out high-fuel-consumption vehicles, reduce energy
consumption and pollution, and achieve more environmentallyfriendly ground transportation.

• Increase the proportion of low-energy and high-efficiency
large freighters to promote green aviation transportation.
• Increase the proportion of new energy vehicles in air bases
to reduce carbon emissions.

• Continuously increase the construction of photovoltaic in industrial parks, and continuously improve the proportion of clean

Photovoltaic Power
Generationenergy in energy consumption.

• Fully implement packaging reduction, recycling, harmlessness and standardization, and contribute to green logistics.

Green
Packaging• Utilizing intelligent transport path planning technology to optimize transport routes and effectively reduce transport energy

Application of
GreenTechnology

consumption.
• Actively promote paperless processes, such as electronic proof of delivery (POD), photo uploading, and paperless reimbursement.

• Create the “SF Carbon-Neutral Forest” to achieve carbon offset.
• Implement the uniform points redemption mechanism to motivate the courier to reduce the frequency of uniform replacement

Othersand reduce material consumption.

036

2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

GHG emission intensity (tCO2e/million revenue)6

47.6
41.1

2022
2023

10

20

30

40

50

60

⬇14%

70

Carbon footprint per parcel (gCO2e/parcel)

824.5
730.9

2022
2023

150

300

450

600

750

900

1,050

⬇11%

Photovoltaic power generation (MWh)9,843
18,339

2022
2023

3,000

6,000

9,000

12,00015,00018,00021,000⬆86%,Equivalent to carbon emission reduction
by 10,229 tCO2e

GHG emissions reduced through green transportation (tCO2e)304,029
374,4692022
2023

60,000120,000

180,000

220,000

280,000

360,000

420,000 ⬆23%

GHG emissions reduced through green packaging (tCO2e)506,408
541,0902022
2023

100,000

200,000

300,000

400,000

500,000

600,000

700,000 ⬆7%

GHG emissions reduced through the application of green technologies (tCO2e)739,982
1,018,436

2022
2023

200,000

400,000

600,000

800,000 1,000,000 1,200,000 1,400,000 ⬆38%

Emission reduction contributed by other initiatives (tCO2e) ( “SF Forest” included)

605
1,692

2022
2023

250

6

500

750

1,000

1,250

This is the GHG emission intensity data of SF only, excluding Kerry Logistics Network Limited.

037

1,500

1,750

⬆180%

2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Optimizing Environmental Management System
SF has established a sound environmental management system and energy management system, and will continue to facilitate the completion of
official environmental and energy management system certifications of each business segment. As of the end of the reporting period, all of theCompany’s main business segments have passed ISO 14001 environmental management system certification, and SF Airlines has obtained ISO 50001
energy management system certification.

Shenzhen S.F. Taisen Holding (Group) Co., Ltd.
S.F. Express Co., Ltd.
S.F. Express Group (Shanghai) Express Co., Ltd.
Guizhou S.F. Express Co., Ltd.
Shenzhen SF Freight Co., Ltd.
GZ SF Pharmaceutical Supply Chain Co., Ltd.
Fengyi Technology (Shenzhen) Co., Ltd.
Jiangxi Fengyu Shuntu Technology Co., Ltd.
ISO 14001 Environmental
Management System

Shenzhen SF Comprehensive Logistics Service Co., Ltd.
SF Multimodal Transportation Co., Ltd.
Shenzhen SF International Supply Chain Management Co., Ltd.
Zhejiang Shuangjie Supply Chain Technology Co., Ltd.
Shanghai Shunxiaofeng Distribution Co. Ltd.
Wuhan Shunfeng Zhida Logistics Co., Ltd.
Shenzhen Xingshun Intelligent Supply Chain Co., Ltd.
Shenzhen Fenglang Supply Chain Co., Ltd.
Shenzhen Chengfeng Business and Enterprise Services Co., Ltd.

ISO 50001 Energy Management System
RB/T 104-2013 Energy Management
Systems for Transport Industry
Enterprises

SF Airlines Co., Ltd.

038

2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Promoting Low-carbon Transportation
With green and sustainable development as the core, SF has effectively applied the low-carbon concept to its operation practice, continuously
strengthened its environmental management system, and vigorously promoted diversified low-carbon transportation scenarios. SF is committed torealizing green management covering the whole life cycle of logistics, actively building sustainable logistics, laying a solid foundation for building asustainable logistics system, and realizing the harmonious development of corporate value growth and environmental protection.

Green Ground Transportation
Ground transportation is one of the key carbon emission segments in SF’s logistics operations. the Company focuses on promoting the comprehensive
development of green ground transportation. By increasing the investment in new energy logistics vehicles, optimizing the selection of fuel logistics
vehicles, establishing an intelligent monitoring platform to track the real-time energy consumption of vehicles, and applying advanced logistics
technology to optimize transportation routes, SF strives to reduce air pollution and greenhouse gas emissions in the process of ground transportation.
Optimizing Structure of Transportation Capacity
Optimizing the structure of transportation capacity is one of the crucial measures for achieving green, efficient, and sustainable development in thelogistics transportation industry. As the industry leader, SF expanded the green vehicle fleet through multiple approaches such as self-owned andleased, to phase out traditional fuel-powered transport vehicles. In 2023, more than 5,000 additional new-energy powered vehicles were put into
operation, covering scenarios such as short-haul feeder routes, feeder and end-of-line collection and delivery within cities, as well as primary andsecondary trunk routes across provinces and cities. By the end of the Reporting Period, over 31,000 new energy vehicles have been placed in service,with a service coverage of 243 cities.

A total of

31,750 new energy vehicles have

Service coverage extends to

243 cities

been placed in service

Additionally, SF continues to explore thewider deployment of renewable energy
vehicles. After taking into account thematurity of new energy vehicle technology

40,00031,75030,00026,18921,278and refueling conditions, as well as theapplicability and feasibility in practical

17,05320,000operations, the Company has initiated pilot
operations of LNG and hydrogen vehicles incertain regions and routes. In 2023, a total of
11 hydrogen-powered light duty trucks had
been put into operation in Shanghai and two
LNG tractors in Beijing.

11,35410,000

7,049

0
2018

2019

2020

2021

2022

Number of SF’s Self-owned andLeased New-energy Powered Vehicles from 2018 to 2023

039

2023

2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Monitoring Energy Consumption Data
In order to accurately assess and manage the energy consumption
Charging
records

efficiency of new energy vehicles, SF has introduced a new energy
vehicle system management platform to monitor their daily operation

Third-party
platforms

Charging
records

Interoperabilityof Charging
Platforms

Third-party
charging piles

data in real time. This platform performs visualized data analysis on
factors such as vehicle mileage, driving duration, charging duration,
as well as the distribution of usage and charging periods. This enables
targeted optimization of energy management strategies for newenergy vehicles to improve the efficiency of their operation and energy
consumption.

SF platform

In addition, to further meet the charging demand of new energy
vehicles, SF has been developing and optimizing the self-owned
charging platform. In 2023, SF integrated internal charging piles
resources and actively cooperated with third-party charging piles
Charging
operations
on Appproviders. With the resources from multiple channels, the features ofthe platform were continuously optimized and updated, expand theinterconnectivity of more third-party service providers, and effectively

New energy
vehicles of SF

On-sitecharging

obtain charging energy data for new energy vehicles while providing
more convenient and efficient charging services for SF’s new energy
vehicles.

Replacing Fuel Vehicles
Replacing fuel vehicles in ground transportation scenarios is a crucial part of promoting energy transformation and plays a vital role in reducing air
pollutants and greenhouse gas emissions. In 2023, SF continued to optimize and replace traditional fuel vehicles. Methods such as increasing loading
capacity, replacing high-axle count vehicles and phasing out vehicles with high energy consumption, were adopted to comprehensively improve thefuel efficiency and to significantly reduce the negative environmental impact of exhaust emissions from fuel vehicles. In 2023, more than 2,000 fuelvehicles were replaced or decommissioned by the Company.

Phase-out of models withinsufficient loading capacity

Replacement of high-axle
count vehicles

Precisely managing
fuel efficiency

Strict implementation ofvehicle emission standards

Adopting the strategy ofGradually replacing high-axle

For models with high fuelStrictly in accordance with

“replacing small vehicles withcount vehicle models with low-

consumption, management

national and local requirements,

larger ones”, where vehicle

axle count ones to reduce

approaches such as fuelimplement the "National Stagemodels with insufficientunnecessary fuel consumption,

consumption calibration

VI Motor Vehicle Pollutant

loading capacity are replaced

as the latter performs better inand speed ratio adjustment

Emission" vehicle emission

and eliminated, to reduce theterms of fuel savings.

are employed to lower fuelstandards, and take the initiative

frequency of deployments

consumption Models withto dispose of fuel vehicles withand improve the efficiency offailure in improvement aresubstandard emissions.

transport. capacity input by

eliminated to ensure an overall

increasing loading capacity.

improvement in fleet fuelefficiency.

040

2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Controlling Vehicle Fuel Consumption
To effectively control the fuel consumption of transport vehicles,
SF adopted a two-pronged approach of empowering management

Driving behavior modelling
Supported by the Company’s data technology, weestablished a driving behavior database, which
includes idling speed, over speed and many otherfactors, achieving a breakthrough in developing afuel consumption management tool from scratch.

and implementing measures to strengthen control over and further
reduce fuel consumption of the fuel vehicle fleet. From the perspectiveof management measures, SF has formulated the Lump-sum Oil
Consumption Plan for Commercial Vehicles. The plan determines thescientific fuel consumption standards in light of different businessscenarios, sets fuel consumption targets, and specifies fuel consumption

Analysis tools for energy consumption
We made in-depth analysis on factors including
routes, vehicle models, axle count and emission
standards, providing strong support for optimizing
fuel consumption control.

reward and punishment rules, in order to achieve efficient use of fueland effective control over transportation costs.
To ensure the effective implementation of fuel consumption
management measures, SF irregularly rectifies instances of abnormallyManagement and training empowerment
In the Company’s internal regular meetings,
exemplary management methods related to vehicle
replacement, job rotation, and parking are shared
to constantly improve fuel consumption control
measures. In some key regions, supportive measures
for fuel consumption management have been
implemented, successfully reducing fuel consumption
by 1% to 5%.

high fuel consumption in vehicles. By launching and optimizing theintelligent fuel consumption management platform, we also conduct
precise and comprehensive management from aspects including
monitoring energy consumption in real time and overseeing the driving
behaviors. In addition, SF regularly carries out training related to fuelconsumption control and energy saving and emission reduction fordrivers, launched a course on fuel consumption control for self-owned
vehicles, and carried out special training on fuel consumption control forthe actual situation in different regions in order to raise awareness offuel conservation amongst drivers.
Optimizing Transportation Routes

In the ground transportation, SF provides optimal paths through intelligent algorithms, in combination with factors such as express delivery timelinessand distance. During transportation, SF has pre-transit planning alerts, in-transit automated alerts and interventions, as well as post-transit tidal
analysis and time-out handling. These measures enable the early identification of congested road stretches and comprehensive optimization oftransportation routes, ensuring improvement of transportation timeliness. SF also deploys data analysis and deep learning technology to accurately
match freight routes and capacity resources to ensure the best combination of vehicles and goods, thus significantly improving overall transportation
efficiency.

Green Aviation
SF Airlines actively implements the concept of “double control” (i.e. controlling the total amount and intensity of energy consumption) and steadily
promotes the construction of green aviation. By establishing the energy management structure of SF Airlines, continuously optimizing the energy
management system, and promoting the energy saving and emission reduction efforts of the air transport module, SF Airlines has penetrated energy
conservation and carbon reduction into every aspect of flight operations.

Energy Conservation and Emission Reduction LeadingGroup and Management Committee

Energy Management Taskforce• Conduct statistical analysis on aviation kerosene, gasoline,
diesel, gas, water, electricity, and other energy data;• Formulate specific energy management work plans andmeasures;• Advance the implementation of energy management work
plans and measures;• Regularly report the project progress to the Leading Group.

•

Guide the work of the Energy Management Taskforce;•

Review and assess the work plans and measures proposedby the Energy Management Taskforce.

SF’s Airlines Energy Management Structure041

2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Furthermore, in order to ensure the authenticity and reliability of carbon emission data and meet the carbon emission monitoring requirementsof regulatory authorities, SF Airlines invites a third-party verification agency to verify GHS emission data annually and issue a verification reportaccordingly. In 2023, SF Airlines passed the annual carbon emission verification of the Ministry of Ecology and Environment and also completed
the annual ISO 50001 Energy Management System certification. Additionally, the Company has actively carried out environmental internal audits
and prepared the SF Airlines Energy Conservation Self-Inspection Report, fully showcasing SF’s efforts and achievements in energy conservation andemission reduction in aviation transportation.
In 2023, SF Airlines continued to prioritize low energy consumption and sustainable operations as its core objectives. By optimizing the mix of aircraftmodels, applying fuel-saving technologies, managing aviation fuel, optimizing ground fleets, and other means, the company actively explored andpracticed green aviation, improved energy and fuel utilization efficiency, reduced emissions of greenhouse gases and other pollutants, and minimized
the environmental impact of its business operations.
Optimizing the aircraft model mix
SF is committed to building a low-energy, high-efficiency “green fleet” and actively introducing large cargo aircraft such as the 747 and 767, while
gradually increasing the proportion of wide-body cargo aircraft. Compared to the traditional 737 models, the newly introduced large cargo aircraft
exhibit higher carbon emission efficiency and lower fuel consumption per ton of payload under full load conditions. As of the end of 2023, SF had atotal of 86 owned cargo aircraft.

The proportion of self-owned large aircrafts of SF
increased year by year from 2019 to 2023
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

2019

2020
737

2021
747

757

2022

2023

767

Applying fuel-saving technology
SF Airlines continues to explore and optimize fuel-saving technologies in the aviation transportation sector, actively applying a series of innovative
fuel-saving measures, including optimizing flight altitude levels, refining payload management, dynamic allocation of aircraft models based on payload
forecast, redispatch7, straight route selection and APU shutdown to reduce fuel consumption.
International Routes Redispatch

Straight Route Selection

Under the premise of ensuring flight safety, SF Airlines
can precisely reduce the amount of fuel for take-off byimplementing a redispatch strategy on international routes,
thereby increasing the business payload of the flight. In

Route optimization allows the reduction of unnecessary
detours and turns. This shortens the flight distance andreduces fuel consumption. In 2023, SF Airlines saved

1,183 tons of aviation fuel and reduced
carbon dioxide emissions by approximately 3,587
tCO2e through straight route selection.
about

3,292 tons of aviationfuel and reduced carbon dioxide emissions by 9,981
tCO2e through redispatch.
2023, SF Airlines saved about

7

Under the premise of ensuring the safe and normal operation of flights, SF Airlines rationally utilizes international route fuel policies and implements redispatch strategies
for flights to reduce aircraft refueling and lower fuel consumption.

042

2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Aviation fuel management monitoring system
SF Airlines continues to improve its online fuel management system. By setting scientific oil-saving procedures, SF Airlines monitors and manages
the fuel consumption of each flight in real time so as to improve fuel efficiency. After four years of development efforts and continuous updates, avariety of fuel-saving indicators including straight route selection, redispatch and others have been fully integrated into the fuel management system,
realizing the tracking and monitoring of fuel data throughout the whole process.
Upgrading fuel-saving incentives
To encourage pilots and dispatchers to actively adopt energy-saving and emission-reduction measures while ensuring safety, SF Airlines has
established a flight landing fuel residual assessment system. SF Airlines has developed an evaluation system for pilots and dispatchers’ landing fuelresidual indicators in the fuel management system. Quarterly statistics and analysis are conducted on the fuel savings and ranking data of pilots anddispatchers, and rewards are issued to those who excel in controlling landing fuel residuals. This approach aims to more accurately measure andincentivize energy-saving performance, achieving the desired effects of energy conservation and emission reduction.
Optimizing ground fleet
To fulfill the objective of “striving to achieve 100% electrification of vehicle equipment at aviation bases by 2030”, SF is progressively replacing
diesel and gasoline vehicles and equipment at airfield bases with new energy vehicles. This initiative includes the deployment of special-purpose newenergy vehicles such as conveyor-belt loaders, lifting platform vehicles, and tractors, thereby advancing the electrification of vehicles at aviation bases.
In 2023, SF continued its efforts to acquire new energy vehicles at various aviation bases to further increase the electrification rate of its vehicle
equipment.

The electrification rate of thevehicle equipment reached

Shenzhen
Headquarters

27.45%The electrification rate of thevehicle equipment reached

HangzhouBase

16%

Striving to achieve

Ezhou Base

The electrification rate of thevehicle equipment reached

55.8%

100%

electrification of vehicle
equipment at aviation
bases by 2030

Beijing
Base

The electrification rate of thevehicle equipment reached

15.2%

The progress of vehicle electrification at various aviation bases in 2023

Strict prevention and control of pollution
SF Airlines is committed to implementing strict pollutant emission control in air transportation business scenarios. For waste fuel generated during
aircraft maintenance, SF Airlines has formulated and implemented internal operational management standards, clarifying the disposal requirementsfor various fuels, such as waste fuel, hydraulic oil, and lubricating oil. In terms of noise control, SF Airlines has implemented various noise abatement
measures and has optimized departure procedures and cargo aircraft departure strategies. Additionally, SF Airlines actively engages in regular airfield
noise monitoring, which further enhances the efforts to mitigate the impact of aircraft noise on the surrounding environment.

043

2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Building Green Industrial Parks
SF is actively building green and low-carbon industrial parks, promoting green operations in various aspects such as planning and design, warehouse
construction, and operational management, based on green infrastructure construction and carbon reduction technological innovation. Throughvarious measures such as installing rooftop photovoltaics, introducing intelligent water and electricity management, and optimizing warehouse
space layout, SF comprehensively improves the efficiency and energy-saving benefits of the transfer process, reducing the environmental impact of
the transfer process. that are environment-friendly, energy-efficient, and operate with a green ethos. In 2023, SF’s industrial parks in Changsha andFoshan obtained the “Class I Green Warehouse” certification by the China Warehousing and Distribution Association (CWDA), while the Guizhou
industrial park received the “Green Logistics Park” certification issued by the Guizhou Federation of Logistics and Purchasing.

Green Warehouse Certification(Changsha)

Green Warehouse Certification(Foshan)Provincial Green Logistics Park
Certification (Guizhou)

By integrating institutional regulations and digital empowerment, the Company is continuously improving its environmental management capabilities,
focusing on aspects such as operational efficiency improvement, intelligent energy management, and installation of energy-saving equipment.

Operational efficiency improvement

Intelligent energy management

In order to improve the operation and management efficiency of thepark, SF has built a property management system that integrates
key property modules such as environmental greening, security
and fire management, and maintenance and inspection of facilities
and equipment, which has covered all the parks in operation andensures that the parks operate efficiently and safely as a whole.

SF has established the Energy Consumption Management System for
Industrial Parks and installed intelligent water and electricity systems
to standardize the management of public energy consumption
in various parks, effectively improving the efficiency of resource
utilization in the parks. As of the end of 2023, the intelligent waterand electricity systems for industrial parks have been installed andoperated in five parks. Compared to 2022, the water and electricity
consumption in the public areas of the operational parks has
decreased by 8.9% and 12%, respectively.

Installation of energy-saving equipment

In addition, SF actively promotes the construction of permeable
concrete technology and carries out rainwater collection workwithin the parks. The recovered rainwater is recycled and reused as
greening water, effectively improving the utilization rate of water
resources and saving water usage, and plays a good demonstrationrole in protecting the ecological environment.

SF continues to carry out the installation of new energy charging
piles to meet the green travel needs of customers in the parks. By
the end of the reporting period, 30 industrial parks had completed
the construction of new energy charging piles, with a total of morethan 280 charging devices installed and more than 500 charging
spaces provided.

SF continuously increases the proportion of clean energy usage, actively plans for renewable energy generation projects, and advances the construction
progress of photovoltaic projects in industrial parks. In 2023, SF established the Industrial Park PV Project Management Implementation System,
clarifying the full-process management standards for photovoltaic projects from site selection to operation, including supplier access standards,
photovoltaic project investment and construction standards, equipment and material quality standards, management standards during construction,and subsequent operational management requirements.

Progress and Future Plans for PV
Projects in Industrial Parks
As of the end of 2023, SF had successfully promoted theconstruction of 26 industrial park PV projects, of which 14
industrial park PV projects have been put into operation, witha cumulative installed capacity of 64 MW, and an annual clean
energy generation of 18.39 million kWh.
SF will continue to promote the investment and construction of PV
projects in its industrial parks, with the aim of fully completing theconstruction and putting them into operation by the end of 2025.
By then, the total installed capacity of photovoltaic equipment in
the parks will reach 140MW, and the annual power generation is
expected to exceed 100 million kWh.

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2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Sustainable Packaging R&D
SF actively responds to the trend of green packaging, firmly implements the guidance of the “9917” Program for green development in the postal
industry, and continuously increases investment in the research and development of sustainable packaging materials, striving to make breakthroughsin green packaging technology, models, and application innovation. Guided by sustainability and intelligence, SF comprehensively promotes the
reduction, recycling, harmlessness, and standardization of packaging, contributing to green logistics. At the same time, SF is committed to deepening
the fine management of sustainable packaging and closely collaborating with upstream and downstream partners in the industry chain to jointly
promote the development of green packaging.

Packaging Reduction
To tackle the issue of excessive packaging in express delivery at its root, SF proactively drives innovation in packaging technology and curtails
packaging usage from a front-end reduction perspective, aiming to realize green packaging governance. At the management level, SF enhances theimplementation of the Packaging Operation Code of SF, conducts special campaigns on excessive packaging, and offers detailed operational guidelines
for packaging various items to ensure the enforcement of green packaging standards. At the same time, the Company continues to enhance the SFIntelligent Packaging Service Platform, leveraging this platform to continually refine packaging solutions. The platform utilizes multimedia tools like
videos and images to offer couriers training in packaging techniques, instructing them on how to pack various items in a rational manner and prevent
excessive packaging.
In 2023, SF continued to center its efforts on the “Fengjing Plan”, innovating in R&D for the reduction, standardization, and contextualization of eight
major material categories, including plastic bags, tape, stickers, and seals. By employing lightweight and reduction-oriented designs, the Company
decreased the consumption of plastics. Through packaging reduction measures, SF has cumulatively reduced the use of base paper by approximately
43,000 tons and plastic by approximately 162,000 tons in 2023, resulting in a total reduction of carbon emissions of approximately 164,000 tons.

 ursuing Packaging Reduction Without Quality Degradation: LightweightP
Document Waterproof Bags Replace Traditional Plastic Bags
During the rainy season, to shield documents and tickets from rain
damage, couriers frequently place an extra standard plastic bag over the
document envelope, this extra usage accounting for about 4.5% of theoverall use of document envelopes. In order to reduce the consumptionof materials in this scenario, SF has introduced a specialized waterproof
bag for documents as an alternative, which reduces the thickness by
40%, simplifies the manufacturing process, optimizes from three-layer
co-extruded film to a single-layer co-extruded film, and avoids the needfor printing to be more environmentally friendly.
In 2023, SF’s entire network applied for the use of these lightweight
document-specific waterproof bags approximately 2.55 million. This
move led to a decrease in plastic consumption of around 19 tons and areduction in carbon emissions of approximately 67 tons.

SF Lightweight Document Waterproof Bag

Recyclable Packaging
Based on different business scenarios, SF continuously explores and develops recyclable packaging
containers that are suitable for various scenarios and possess comprehensive functionalities. This enables
the standardization of container and carrier applications, successfully reducing product damage rates,
shortening operation times, and effectively cutting operational costs. In 2023, SF actively pushed forward
the innovative research and development of recyclable packaging containers, developing a series of
packaging suitable for 19 different scenarios. This not only enhances the efficiency of the company’s
internal operational infrastructure but also provides customers with superior and convenient recycling
packaging solutions.
SF has widely used recycled woven bags to replace disposable woven bags in transit. By considering thedemand for bags in different regions and allocating the bags based on their existing usage, the Company
ensures the effective recycling of woven bags. As of the end of the reporting period, the average numberof times each recycled bag has been used has exceeded 24 times. In 2023, the Company invested an
additional 23 million recycled bags to further promote the recycling of recycled bags.
SF Recyclable Woven Bag

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2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Additionally, SF has developed and implemented recyclable packaging solutions including medical precision temperature-controlled boxes, cold chain
EPP recyclable insulated boxes, and standard recyclable pallet boxes for large items, all tailored to meet the diverse requirements of customers acrossvarious industries and scenarios for circular packaging. In 2023, SF’s recyclable packaging initiatives contributed to a total carbon emission reductionof approximately 377,000 tons.

Cold Chain Transportation Scenarios – Cold Chain EPP

Pharmaceutical Transportation Scenarios –Pharmaceutical Temperature-controlled Recyclable Box

Recyclable Insulated Box

This box uses a design for recyclable temperature-controlled

Compared to traditional white foam boxes, the EPP recyclable

packaging, effectively replacing disposable foam boxes.

insulated box is lightweight, pressure-resistant, non-toxic,

Through ongoing improvements and optimizations ofand environmentally friendly, providing a safer and morematerials, the number of times packaging boxes can be

eco-friendly solution for cold chain logistics. In 2023, SF

reused has been significantly increased. Compared topiloted about 4,000 recyclable insulated box in cold chain

traditional foam boxes, each use of a pharmaceuticaltransportation scenarios, accumulating more than 20,000 times

temperature-controlled recyclable box can reduce carbonof recycling and reducing carbon emissions by about 5 tons.

emissions by 207g.

“π-Box” Recyclable Box

Bulk Transportation Scenarios•

Recyclable Pallet Box: made of PP/PE materials

Theπ-Box carbon-neutral recyclable box is a reusable
outer packaging box independently developed by SF.

(100% recyclable), they exhibit strong compressive•

and impact resistance. The absence of nails reduces

It is made of environmentally friendly PP material that is

the risk of workplace injuries and effectively decreases

harmless to humans and the environment, with 97% of thethe dependence on traditional wooden frames, wooden

box being recyclable. It eliminates the need for consumableboxes, and wooden pallets for large and irregularmaterials such as adhesive tape and zippers. As of theindustrial items. As of the end of the reporting period,end of December 2023, over 1.29 million π-Box recyclable

over 30,000 recyclable pallet boxes have been deployed,

packaging boxes have been deployed, covering 119 cities,

with a cumulative reuse rate exceeding 170,000 times;

with a cumulative reuse rate exceeding 20.64 million times.

Recyclable Honeycomb Panels: primarily made of PP
material (about 97% recyclable), they exhibit strong
impact resistance and can be used as a substitute for
air cushions or honeycomb cardboard in television
protection. As of the end of the reporting period,
approximately 11,000 reusable honeycomb panels havebeen deployed, with a cumulative reuse rate exceeding
54,000 times.

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2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Bio-degradable Packaging
SF has actively carried out research and development work on biodegradable packaging materials, collaborating with external research institutions
and universities in a series of cooperative studies to continuously expand and deepen its knowledge reserve in the field of cutting-edge biodegradable
packaging technology. As of the end of 2023, SF has cumulatively deployed hundreds of millions of biodegradable packaging “Feng Bag” in regions
including Beijing, Hainan, Guangzhou, and northern Zhejiang.
Meanwhile, SF has also conducted pilot projects for various types of biodegradable packaging materials to further verify the feasibility ofbiodegradable packaging materials in practical applications. In 2023, SF completed the development and pilot testing of fully biodegradable woven
bags.

Green Packaging Standards
Empowering the green transformation of express packaging, setting industry standards for green packaging, and thoroughly refining the green
packaging system across the industry chain are of vital importance. As an industry leader, SF actively engages in the development of national andindustry standards concerning express packaging. In 2023, SF took the lead in drafting the national standard Requirements of Restricting Excessive
Package in the Express and played a pivotal role in the creation of several industry standards, including the Technical and Management Specifications
for Green Packaging in E-commerce.

S etting the Industry Standards: SF’s packaging laboratory was honoredwith the 2022 China Standards Innovation and Contribution Award
In 2023, SF’s packaging laboratory, in partnership with several
institutions, contributed to the formulation of the national standard GB/
T 37422 – 2019 Method and Criteria for Green Packaging Assessment
which was awarded the Second Prize of 2022 China Standards
Innovation Contribution Award. This standard adopts a “whole
lifecycle” approach to packaging, encompassing aspects such as design,
production, usage, and recycling. It establishes a comprehensive,
practical, and broadly applicable green packaging evaluation index
system, addressing a void in green evaluation standards within China’s
packaging industry.
China Standards Innovation and Contribution Award, as the highest
honor in the field of standardization in China, aiming to recognizeorganizations and individuals who have made outstanding contributions
to standardization activities. SF’s packaging laboratory received thisSF’s packaging laboratory obtained the China Standards

award signifies that its work in green packaging standardization has

Innovation and Contribution Award

reached a leading position in China.

SF not only actively supports the development of green packaging standards but also enhances theinspection of packaging materials for logistics, the safety validation and assessment of packaging
solutions, and the innovative research into packaging standards by establishing a packaging laboratory
testing center. SF’s packaging laboratory testing center boasts comprehensive testing capabilities,
encompassing 45 packaging categories, more than 140 testing standards, and the capacity to test 400
items. With these efforts, SF has successfully earned the designation of Green Packaging Technology
Research and Development Center in the postal industry, it is one of the first to do so within the industry.
Additionally, the Company has obtained ISTA certification (International Safe Transit Association) andCNAS (China National Accreditation Service for Conformity Assessment) certification, offering robust
support for the green transformation of the industry.
In 2023, SF’s packaging laboratory once again passed the review and expansion of CNAS accreditation,and its CNAS-accredited testing capabilities were increased from 22 to 66 items. Additionally, thelaboratory conducted a comparison of testing capabilities with nine external third-party testing institutions,with consistent results, fully validating the consistency and reliability of SF packaging laboratory’s testing
methods compared to external testing institutions.
CNAS Certificate

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2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Promoting Circular Economy
SF is committed to collaborating with the upstream and downstream sectors of the industry chain to establish a recycled packaging
system, and is committed to raising the public awareness of environmental protection, in order to promote the development of therecycling economy, to build and share a “zero waste city”, and to contribute to the realization of a green and sustainable future.

Recycling Express Packages
Promoting the recycling of express packages is one key measures of SF to realize sustainable logistics and the “zero-waste city”. The Group is actively
engaged in building a circular ecosystem for express packages, integrating internal and external resources to promote the verification and practiceof a closed-loop chain from developing industry standards, conducting technological research, to the realization of express packages recycling We
also optimizes the use of plastic recycling approaches, and works with upstream and downstream enterprises to explore a new model of reasonable
reuse of recycled plastics, in order to lay a solid foundation for building a complete system of “plastic packaging design – production – consumption –recycling -regeneration – High-value application”.

FormulaRaw material
supplyFilm blowing,
printing andbag manufacturing

Transportation

GRPG
Double E markTerminal express
outlets/stations

The regeneration
Film blowing andformulabag manufacturing
Providing technical support
for the formula design
Providing PE materialof recyclable packaging
with traceable quality
materials
and origin

The usage

The last miledelivery
Waste reallocation
Waste
collection

Consumers
Communitydrop

Recycling, cleaning and pelletizing
Discarded plastic films
Recycling andpelletizing
Providing resource utilizationof the recycled materials
Manufacturers ofplastic products

Express Easy Recycling, Easy Regenerating Recycling System

In 2023, SF continued to improve the closed-loop model of recycling and regeneration of express bags,
and completed the technological innovation and implementation of “Double Easy” (easy to recycle, easy toregenerate) bags through close linkage with internal business lines and in-depth cooperation with upstream
and downstream enterprises. In the field of front-end technology research, SF has completed the researchand development of the regeneration formula and products of “Double Easy” plastic bags, adding up to 30%
of regeneration resin (PCR) while maintaining excellent mechanical properties, in line with the requirementsof the national standard for courier bags, and realising the value of a single material that is easy to recycle. It
has won the certificate of excellent rating of “Plastic Products Easy Recycling Design Certification” issued bya third-party authoritative organisation, which fully demonstrates the company’s leading ability in building an
innovative circular economy model.

Plastic Products Easy Recycling
Design Certification

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2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

The first industry-wide closed-loop recycling pilot project for plastic packaging waste was officially launched in Shanghai in 2023. With efforts fromthe up and down stream industrial partners, the project aims to collect and pelletize discarded courier wastes and manufactures high-performance
products through technological innovation. We facilitated a closed-loop recycling system, breaking away from the traditional linear mode of“production – usage – disposal” to establish a circular business model from courier bags to courier bags, and minimize the environmental impact ofexpress wastes.

User end: over

880,000 Double E bags have beendispensed in Shanghai. In 2024, the Group anticipates expanding
the application in seven major regions, reducing carbon emissions
by approximately 1,000 tons per year compared to conventional
polyethylene (PE) bags. This will reduce carbon emissions byapproximately

1,000 tons per year compared to conventional

PE bags.

SF’s Double E Courier Bags
Recycling end: the terminal recycling points in Shanghai have increased to 35 this year, covering various places such as schools and service
stations. SF puts up posters at various recycling points to disseminate the concept of “zero waste”. As of the end of the reporting period, the

1.1 tons. SF plans to increase the terminal recycling points by 30%, and strives to amplify
the total amount of recycling by more than 40% .

total amount of recycling reached over

The Recycling Poster

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2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Promoting Public Environmental AwarenessSF is committed to improving the public consciousness and awareness of environmental protection by varied means. By doing so, we aim to inspire
the public to actively engage in environmental actions and jointly promote sustainable development and build a Zero Carbon Future.

“Go Green Together” – Exploring a Green and Sustainable Future
SF continues to carry out the “Go Green Together” program, aiming
to encourage public participation in the reuse of idle express cartons
through DIY transformations.
2023 is the fourth year of this program. SF used express cartons asvases for green plants and called on everyone to do so. We also connect
with “plant recycling in the community” organisations to create offline
flash activity called “planting garden”, attracting people to experience
cardboard box planting, and convey the environmental protection
concept of the plan.
SF also cooperated with an international maternal and baby brandto launch a themed parent-child activity called “Green ’Box’
The DIY Planting Carton
Companionship for Baby’s Growth”. The host prepared planting cartons
designed by SF and the maternal and baby brand, and encouraged
everyone to transform cartons into vases through DIY, which promotes the concept of recycling and transforming waste into treasures to children.

Building a green carbon energy
platform to promote a new modelof sustainable consumption

SF Launched the Public Welfare
Video – “Zero Carbon Future” toMotivate Individuals to Take Small
Steps towards Reducing Their
Carbon Footprint

SF keeps developing agreen energy platform topromote carbon reduction
among consumers. With
this platform, SF encourages
sustainable consumption by
establishing a holistic closed
loop of “promoting lowcarbon services – using lowcarbon services – rewarding
green energy – redeeming
points”. To motivate moreconsumers to choose lowcarbon services, SF explores
various scenarios of lowcarbon services, including
circular package, SF Rush,electronic proof of delivery,
photo uploading, EPP
temperature control boxes
and the special urgent
delivery services. Consumers
SF Green Carbon Energy Platform
will be rewarded with “green
for Carbon Reductionenergy” that can be further
redeemed for gifts andvouchers after selecting and adopting these low-carbon services. By
doing so, we improve the satisfaction of consumers toward services
of SF green logistics, and foster a collaborative effort with users tocreate a low-carbon lifestyle.

To better disseminate theconcept of zero carbon to
the public, employees andbusiness partners, SF filmed
its public welfare video –“Zero Carbon Future”. The
advertisement has beenreleased both internally andpublicly, with a current total
online view counts surpassing
10,000. O n D e c e m b e r 5,
2023, the International
Volunteer Day, SF held thepremiere of the SF publicwelfare advertisementwith a theme on forest
conservation - “Zero Carbon
Future” - in Nanshan district,
Shenzhen. Avid tree plantersshared their experienceswith approximately 100
participants in this event.
The Premiere of The Public
Consequently, we arose
Welfare Video – “Zero Carbon
awareness of employees
Future”
and volunteers about
environmental protection,
evoked profound reflection on environmental protection andinspired them to take small actions to reduce carbon emissions.

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2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Protecting the Environment
SF shoulders the responsibility of protecting environment, and exercises various environmental protection initiatives to minimize theinfluence of its operation on the environment and biodiversity. This commitment aims to conserve natural resources and make theworld a better place.

SF Forest
To realize carbon reduction goals and promote sustainable development, SF continues to implement its carbon-neutral program – the SF Forest –Carbon Neutral Project (the SF Forest in short). We fulfil our commitment to protect the environment by real actions. Based on the online app “SFForest” and the carbon-neutral woods, the program advocates the “zero carbon” concept to the volunteers, employees and clients to encourage
active participation through multiple channels including the public welfare advertisement.

The Carbon-Neutral Forest
With scientific planning and meticulous implementation, the SF Forest program effectively offsets the GHG emissions while protecting biodiversity andmaintaining the stability of the ecosystem. With these efforts, SF contributes to creating a healthy and resilient ecological environment. Since 2019,
the program has been engaged in multiple strategic cooperations with the China Green Carbon Foundation concerning climate change and ecologicalprotection and restoration. During the year, SF actively promoted ecological conservation by implementing the forest plantation programs in Laiyuan,
Hebei Province and Seda, Sichuan Province.

As of the end of 2023, SF together with its enterprises and employees, had planted carbon-neutral forest spanning overwith a cumulative total of more than823.5 acres

600,000 trees, which will absorb estimated over 110,000 tons of carbon dioxide in

the atmosphere during their future growth. thus making a positive contribution to the mitigation of global warming.
In 2023, the SF Forest was listed in the “China Public Welfare Brand Project List” by Southern Weekend.

SF Forest in Seda, Sichuan
In July 2023, SF launched “SF carbon-neutral forest in Seda, Sichuan”.
We ensured the health of plants and the ecological benefits at
maximum by selecting plants adaptive for local climate and following
scientific planting and maintaining methods. SF planted 514,530 spruce
trees in the Dema village of Ranchong town in Seda county, Sichuan
Province this year, covering 741 acres. Additionally, SF cares the local
community, and ensures residents’ basic living by provide regularprovisions of subsistence to the woods rangers, children and the elderly.

SF Carbon-Neutral Forest Planting

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2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Online App – The SF Forest
As of the end of 2023, the app had
As a champion for the green and80,000environmentally friendly concept, SF

attracted more than

encourages voluntary in low-carbon activities

individual users. Together, they adopted

interactive experience. The users can easily

70,000 trees and made overRMB 500,000 of donations.
In 2023, a total of 37,837 treeacquire information such as the planting

saplings were adopted, an increase ofand growth of forests and the fruit of the

85% compared to 2022. Saplingsand provides diversified approaches topublic welfare. SF integrates IT with green
philosophy by developing an online app called“the SF Forest”, bringing users a brand-new

environmental protection through “theonline tree planting”. The app also featuresa variety of interactive functions, such as

overwere planted in the field after maturing,
contributing to a greener Earth.

measuring carbon emissions, adopting andraising saplings, etc., and motivates users toparticipate through a task reward mechanism.

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2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Green Office
SF has established internal systems such as “Office Space Management Measures” and “Water and Electricity Management
Measures” to actively integrate green development into daily operation with an emphasis on the scientific and reasonable use ofresources and emissions and at the same time, encouraging its employees to practice low-carbon behaviours, and continuously
improving their awareness of environmental protection, so as to jointly create a green and environmentally friendly officeenvironment and build a resource and energy-saving enterprise.

Energy Management
Energy management is an essential issue of the sustainable development of a company. To build a green and low-carbon environment, SF actively
pushes forward a series of energy management measures.
••

EnergySaving
Renovation•

Electricity
Consumptionof OfficeEquipment

EnergyMonitoring•

For energy saving, SF has replaced some of streetlamps into solar-powered ones, and regularly turned off the light while
ensuring illumination.
SF has replaced some of the porch lights in its structure into discontinuous infrared body sensor activated lights designedwith two sets of switches. To manage energy consumption, one switch is remained permanently on and is connected tothe infrared body sensor activated light, while the other is under manual control, allowing for flexible selection of switchingtime. This energy-saving initiative has been proven successful in the first phase of the complex building in Ma’anshan
industrial park, where 0.672 kwh were saved for each floor per day.
As part of the energy-saving renovation at the headquarters, SF upgraded lights and displays, resulting in electricity savingof over 13,000 kwh per month.

SF reduces energy consumption by introducing energy-saving office equipment such as computers and printers, and reasonably
deploying devices to decrease machine standby and idle time.
To avoid electricity waste and prevent safety risks, SF requires turning off the power of devices when they are not in use for an
extended period, after being charged or during off-work hours.

••

SF has developed a comprehensive energy monitoring and management mechanism. By installing energy meters that enablereal-time monitoring and data analysis of electricity and water consumption in offices, SF works out improvement measures
after timely identifying waste and its cause.

Waste Management
SF strictly manages wastes in operations. The Group strives to reduce the negative impact on environment by measures such as waste sorting andresources recycling. SF has developed and implemented an internal waste sorting policy. We actively implement relevant measures in offices andmanufacturing sites. Distinct marks for waste sorting and specific treatment processes have been set up for various types of waste.

General waste

Recyclable waste

Hazardous waste

General waste such as domestic waste,

Recyclable waste such as waste paper,

Hazardous waste such as obsolete

obsolete office supplies, waste plastic

paper products and cardboard shouldlamps, batteries, printer ribbons andbags, waste folders, paper scraps,

be centrally collected and sent to thetoner cartridges should be collected byrags and waste gloves firstly should

designated locations. Then personnel

SF in a centralized manner and handed

be sorted out. Afterwards, they arein charge should contact qualified

over to a certified third party fortransported to designated places andcontractors for on-site recycling based

recycling.

handled by the sanitation department.

on the condition of the waste, thus

The disposal process should be duly

making the best use of it.

recorded for better management andcontrol.

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2023 S.F. HOLDING SUSTAINABILITY REPORT
Environment

Additionally, SF continuously conducts trainings on waste sorting for employees, aiming atcomprehensively improving their awareness and capability of garbage sorting. The training covers
every aspect in waste sorting, such as basic knowledge, practical operation skills, relevant laws andregulations as well as policy requirements.

Exhaust & Noise Management
To comply with the relevant regulations and to minimize the impact on the surrounding environment
in the course of operations, SF actively identifies, assesses and manages exhaust and noise.
Regarding noise control, SF employs the soundproof glass and upgrades some devices to further isolate
and reduce noise. In terms of exhaust emission management, SF strictly implements vehicle admission
standards in accordance with national requirements.
All purchased vehicles must meet environmental emission standards and undergo annual inspections
for compliance with exhaust emission standards. This proactive approach effectively minimizes
pollutant emissions into the air.
SF’s Publicity posters on waste separation

Water Resources Management

SF regulates water consumption by formulating water management systems such as “Water and Electricity Management Measures”, controlling theamount of water consumption and improving the efficiency of water resources use. The company strengthens the maintenance of water equipment
to reduce the waste of water, and also actively carries out water conservation publicity to enhance employees’ awareness of water conservation andachieve water conservation. The Company’s sources of water are all municipal water, and it does not involve the use of large quantities of water orthe discharge of wastewater in the course of its operations, nor does it engage in products and businesses that are prone to cause pollution to water
resources.
Effective water conservation measures implemented by SF include:

SF carries out regularSF

to

Outdoor rainwater

Elaborately designed

device inspections,

optimize the efficiency

continues

reuse ponds are set up

water-saving logos aretimely detections andof greening waterin industrial parks forposted at all water

repairs of the leakage

use by adjusting theirrigating green area,

points with content

issue to ensure all

irrigation pattern,cleaning garages andregularly updated

water equipment istransitioning fromroads, to reduce theaimingin sound operatingexcessiveuse of tap water.

employees’ awarenesscondition and avoid

irrigation to moreof water conservation

unnecessary water loss

sustainable methods

and guide them tosuch as water leakage

with the adoption ofdevelop good waterand overflow.

water-saving irrigation

usage habits.

water

technologies.

054

to

raise

04

SOCIETY
Theme: Building Specialized Agricultural
Product Value Chains to Support Rural
Revitalization and Development
Empowering the Talent Team
Building the Line of Safety
Building Responsible Chain Together
Shouldering Social Responsibility

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Specialized Agricultural Product
Theme Building
Value Chains to Support Rural Revitalization
and Development
SF actively responds to the national strategies of rural revitalization and common prosperity. As a leading integrated logistics
service provider in China, the Company has always adhered to the core concept of “racing against time” and deeply cultivated thefield of agricultural product delivery. Countless SF couriers are stationed in the first-mile of the place of origin, helping to realize
the business model of agricultural products from “field” to “taste buds”, winning the trust and praise of the vast number ofconsumers.

Facilitating the Flows of Agricultural Products to Help Revitalize Rural Areas
In response to the promotion of “agriculture, rural areas, and farmers” work process,the Company focuses on the difficulties in the circulation field of agricultural products.
To promote the upstream services of agricultural products and facilitate the leapfrog
development of rural economies, SF, with the construction of the front end of logistics as its
core, scientifically allocates logistics capacity and lays collection points to injects new vitality
into rural revitalization. Additionally, over the years, SF has actively explored the path ofbuilding regional agricultural brands by customizing brand packaging, establishing a complete
traceability system, and organizing brand promotion activities, helping regional agricultural
products enhance their brand premium capabilities. The Company’s strategy of helping
farmers is clear: not only to transport good agricultural products out, but also to “transport”
the good agricultural brand out.

In 2023, SF delivered about

4.58 million tonsof specialty agricultural products.

The Company insists on building agricultural product collection points in the fields, investing in mobile sorting vehicles suitable for small batch
sorting, and building fresh pre-processing centers close to the place of origin. For many fresh categories, the Company ensured product freshness andsafety through the design of exclusive packaging. During the harvest season of characteristic agricultural products, the Company integrates varioustransportation resources such as aviation, high-speed rail, and cold chain to ensure that agricultural products are efficiently and quickly delivered to allparts of the country. To ensure the quality of service throughout the process, a special project team is set up during the “fresh season”, with the helpof data technology and visualization system, to monitor and warn each link of collection, transfer, transportation, delivery, and after-sales in real time.
The Company’s strong logistics network, advanced packaging technology, and fast delivery capabilities have overcome one after another highdifficulty transportation of fresh categories, assisting in the express transportation of products such as hairy crabs, live fish, seafood, beef and mutton,
lychees, cherries, bayberries, strawberries, and matsutake, to achieve the direct delivery and direct arrival mode of agricultural products nationwide.

11,000 tons
2.20 million shipments

Shaanxi fresh dates

Chagan Lake fish

Shaanxi kiwifruit

Jilin ginseng

Dried fruits in Xinjiang
Donggang strawberry
Xinjiang fresh fruits

Gansu wolfberry

Xinjiang medicinal herbs

Inner Mongolia beef and mutton

Gansu apples

Beijing juicy peach
Dalian cherry

Gansu beef and mutton
Ningxia beef and mutton

Yantai cherry
Ningxia wolfberry
Qinghai Golmud wolfberry

Shanxi apple

Ningxia fresh dates

Rushan oyster

Hairy crab (nationwide)

Tibetan cordyceps sinensis
Sichuan orange

Anhui herbal medicine

Hubei orange

Sichuan pomegranate

Yangshan peach
Anhui tea

Hubei crayfish

Sichuan cordyceps sinensis
Xianju waxberry
Fuzhou tea
Quanzhou tea
Yunnan matsutake mushrooms
Xiamen seafood
Yunnan coffee

Guangxi dragon fruit
Guangxi orange

Dongguan durian
East Guangdong pomelo

Hainan mango

West Guangdong longan
South Jiangxi orange
West Guangdong lycheeWest Guangdong seafood

SF’s service network for delivering agricultural products

056

44,000 tons
12.77 million shipments

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Building a Sustainable Production-distribution Ecosystem to Promote Rural
Industry Development
The Company continues to promote the coordinated development of the upstream and downstream of the agricultural industry chain, focusing onfour aspects: refined services, support for production and sales, technology empowerment, and brand building. By building a nationwide service
network for the upward movement of agricultural products, SF aims to increase farmers’ income, promote high-quality development of ruralindustries, and contribute to achieving common prosperity.

Refined services

Support for production and sales
SF is actively developing live streaming marketing andspecific business scenarios. By leveraging its brand influenceand conducting live streaming with popular online
influencers at the places of origin, SF has connected the
production and distribution of agricultural products topromote their online sales. For pre-cooked dishes, lychees,
cherries, and waxberries and others, SF has worked
closely with local governments, associations, andleading brands to host industry conferences.
The Company also developed “SF + Coldchain + Technology” functionalities andprovided solutions for the industrial supply
chain, so as to promote the developmentof the industry.

SF has integrated internal resources including charter
flights, cold chain logistics, warehouses, and other external
collaborative resources to serve agricultural products withdifferent value hierarchies and time requirements. In doing
so, the Company have formulated differentiatedoperation models and refined pricing strategies
to improve business efficiency and servea wider market of agricultural productswith more cost-effective services.

Connecting
production anddistribution topromote upward
movement ofagricultural
products

Brands building
SF actively cooperated with local
governments, rural cooperatives and otherinstitutions to build regional agricultural
product brands, promote brand construction.
In 2023, SF also continued to invest RMB 3 million
to formulate a special fund subsidy mechanism for thecustomization of regional brand packaging materials andalso cooperated with local governments, obtained brandauthorization, designed brand packaging, and helped tojointly build 28 regional agricultural product brands.

Technology empowerment
Based on the characteristics ofagricultural products, SF applied technology
tools such as fruit wrap, harvest, onepiece delivery and Fengsu in different businessscenarios, covering production, supply, transportation,

operation and sales. These tools assisted farmers in waybill
printing, source tracing, marketing and financial settlement,
providing one-stop technological logistic solutions to the
supply chain.

Map presenting SF’s services to support the upward movement of agricultural products
As of the end of reporting period, SF’s service network for helping agricultural products production and sales covered more than 2,700 county-level
cities nationwide, encompassing 226 types of more than 6,000 specialty agricultural products nationwide. SF fully contributes to the upward
movement of agricultural products with practical actions, allowing more local brand specialty agricultural products to be known, tasted, andrecognized by the Chinese.

In 2023, SF's service network for helping agricultural products production and sales covered more thannationwide, and cumulatively serve more than

6,000 specialty agricultural products.

057

2,700 county-level cities2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Introducing transportation solutions for the crab industry, facilitating
the upgrade of the brand of ‘Anhui Crab’
In August 2023, the “2023 SF Crab Industry Solutions Release Conference and ‘Dangtu Crabs’ Brand Promotion Conference” was grandly heldin Ma’anshan City, Anhui Province. SF has been cooperating with crab merchants from various regions in Anhui for many years and has beenrecognized by local aquatic industry associations, being designated as the “designated logistics supplier for Dangtu crabs.”
SF continues to introduce accurate and effective transportation solutions for the crab industry. On the product side, products weighing over
20kg are upgraded with door-to-door delivery. On the packaging side, exclusive packaging for “Anhui crabs” is upgraded to help deliver fresh
crabs to homes. On the technology side, traceability systems are employed to ensure the authenticity and freshness of the crabs from the source.
Leveraging its own brand advantages, SF drives the development of regional public brands. In terms of sales, blending production and sales
together can help production areas expand their sales channels and promote the export of “AnHui crab” beyond Anhui province.

Site of “2023 SF Crab Industry Solutions Release Conference and ‘Dangtu Crabs’ Brand Promotion Conference”“Developing a Comprehensive Logistics System for Gastrodia Elata,
Facilitating the Rapid Delivery of Fresh Gastrodia Elata from Yunnan”
In recent years, Yiliang County has seized the opportunity of Yunnan
Province’s initiative to create world-class “three brands” policies,
making the Gastrodia Elata industry the leading industry in the
county’s “one county, one industry” project aimed at strengthening
the county and enriching its people. In 2023, SF actively responded
to the development and construction requirements of Yiliang
County, focusing on multiple dimensions such as cost, timeliness,safety, after-sales service, channels, and technology, to fully ensure
the fresh and rapid delivery of Gastrodia Elata from Yunnan. In
addition to establishing a three-dimensional transportation networkof “air + land + high-speed rail” to ensure efficient and smoothtransportation, a Gastrodia Elata project team was also established,setting up multiple collection points in the trading market to provide

SF’s courier picking up fresh Gastrodia Elatastrong support for the rapid delivery of Gastrodia Elata from Yunnan.

Accelerating “Express Delivery to Villages” to Promote Regional Economic
Development
Over the years, SF actively explored the “express delivery into the village” model, through the establishment of a five-level administrative division
address library, supported the decision-making of township and village resource investment, accurately identified rural parcels, ensured the timeliness
commitment of express delivery into the village, and created “precise entry into the village” high-quality service.
As of December 31, 2023, the Company had more than 100,000 village-level post cooperation points, gradually forming a relatively complete rural
express network. The service network’s township coverage rate exceeded 93%, and the daily processing volume of township parcels amounted to 2.26
million. Based on the high-quality logistics services, the extension to the front end of the industrial chain to the full-process service allowed farmers toenjoy more convenient and fast express services in the village.
Over the past 15 years, SF has continued to explore and steadily advance, always sticking to the path of rural revitalization, promoting express delivery
services to the countryside and villages, building an upward service network for agricultural products, practicing social responsibility with practicalactions, and continuously injecting new momentum into rural revitalization.

058

2023 S.F. HOLDING SUSTAINABILITY REPORT
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Empowering the Talent TeamSF remains committed to driving its business through talents. SF continuously builds a “self-sustaining” talent mechanism andan elite workforce, which forms a healthy, sustainable talent supply chain, bolstering the Company’s rapid growth and futurecompetitive advantage. SF consistently increases investment in developing its talent pool to aid both employees’ and company’s
growth, prioritizes the protection of employee rights, implements comprehensive employee care and welfare measures, aiming tocultivate a highly skilled, cohesive workforce.

Protection of Employees’ Rights and Interests
SF has formulated a sound labor management system, established diversified communication channels for employees and cultivated a talent poolfeaturing diversity, equity and inclusion. Through these efforts, the Company strive to build a harmonious labor relationship while demonstrating ourrespect and protection of the rights and interests of our employees.

Human Rights Protection
SF remains committed to protecting and respecting human rights of all groups of the communities involved throughout its global operations andthe communities in which it operates. SF strictly complies with the human rights related laws and regulations of the jurisdictions where it operates,
and commits to the core conventions of the International Labor Organization (ILO) and the United Nations Global Compact, including the Equal
Remuneration Convention, Minimum Age Convention, Convention on the Worst Forms of Child Labour, Discrimination (Employment and Occupation)
Convention, Forced Labour Convention, Abolition of Forced Labour Convention, and Occupational Safety and Health Convention.

SF’s commitment on human rights protection•

Ensure equal opportunities: Every employee is treated equally and respected, regardless of their duties or positions. Selections
and appointments must follow the principles of fairness, impartiality and openness.

•

Protect against discrimination and differential treatment: Prohibit discrimination on the ground of any legally protectedcharacteristics such as gender, nationality, belief and age.

•

No employment of child labor: Explicitly stipulate that persons under 16 years old are not allowed to be employed.

•

No human trafficking: Prohibition of slavery or human trafficking in any part of the Company’s business and supply chain.

•

Collective bargaining and freedom of association: SF respects employees to freely connect with third-party organizations inaccordance with local laws, as well as to join, form or not join labor unions. Employees may join the collective bargaining
agreements voluntarily. Employees have the right to participate in or form associations that comply with the laws and regulationsof the countries in which they operate.

•

Freedom of expression: SF respects employees’ freedom of speech within the legal boundaries and encourages employees toexpress their opinions freely and actively communicate with the management level.

•

No harassment: Being rude to colleagues, verbal provocation and other disrespectful behaviors and verbal harassment ofcolleagues, customers or external partners are not allowed.

•

No forced labor: SF does not force employees to work against their will, and resolutely prohibits threatening or restricting theiractions.

•

Rights to rest and leisure: Employees are provided with legal paid leaves such as annual leave, sick leave, marriage leave andmaternity leave according to their local laws and regulations.

•

Privacy protection: Disclosure of any employee’s personal information to others is prohibited without the authorization of theCompany and the employee himself/herself.

The above commitments apply to all directors, officers and all workforce of S.F. Holding Co., Ltd. and its subsidiaries.

SF has zero tolerance for any form of forced labor, child labor, discrimination, harassment, or other illegal behaviors. The Company has formulated
the Employee Handbook and the SF Recruitment Management System that clearly prohibit child labor and forced labor, discrimination and unequal
treatment. In this way, the Company can ensure equal remuneration for equal work between men and women, limit working hours, protect therights and interests of female employees, and promote the employment of people with disabilities. In addition, SF has clarified the rules of disciplinary
punishment for harassment in the Rewards and Penalty Management Regulations. The Company requires all employees to review and sign the
Rewards and Penalty Management Regulations online, and also fosters the publicity in various regional organizations offline, covering all workforce. In
2023, SF did not have any incidents of discrimination.

059

2023 S.F. HOLDING SUSTAINABILITY REPORT
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In terms of staff recruitment, SF requires all candidates to register their personal information online at the application stage, and automatically identify
their age through the system. For those under 18 years old, interviews for them are prohibited. Candidates also need to pass the system for facerecognition authentication in the onboarding stage to ensure that the information about the individual and their ID cards are identical. In the selectionof third-party partners, SF requires partners to submit documents to prove that their labor management meets SF’s labor standards and that there areno human rights violations such as child labor and forced labor.
SF has stipulated working hours in the Employee Handbook, Attendance Management Regulations and Labor Contract and formulated the Flexible
Working System to provide convenience for employees with needs for special working hours. During holidays and business peaks, SF increases thenumber of employees in some temporary and auxiliary positions. This reduces the work intensity of employees on duty and guarantees their rest time.
The Company treats all workforce equally and adopts the same management of employees and protection of employees’ rights and interests as for
self-employed workers. SF or third-party companies sign legal contracts or agreements with all temporary employees, pay appropriate remunerationaccording to the regulations, and purchase employer’s liability insurance (including accident insurance) or work-related injury insurance for all
temporary employees.
If SF undergoes major restructuring or changes, the Company will explain 30 days in advance to the labor union and all employees. SF will fully
consider suggestions from the labor union or employees before terminating the labor contract with the employees properly.

Diversity and Equity
SF adheres to the principles of equal employment in its recruitment of talents, and it will never restrict the recruitment and employment of
employees due to factors such as gender, region, ethnicity, religious belief, economic ability and other factors. With continuous expansion of its
overseas business, SF is deeply aware that building a diversified talent pool can help the Company better adapt to the complex and changing market
environment. Moreover, with the support of diverse talents, the Company can better understand the needs of customers from different countries andregions, and gain new perspectives and solutions to the business challenges.
Diversified recruitment: In 2023, female workforce in SF accounted

Female senior managers: 131 people
27.41%

for 15.8%, an increase of 1.1% compared with 2022. Ethnic minorities
accounted for 6.1% of employees, an increase of 3,200 from last year.
In addition, SF’s overseas branches (subsidiaries) also actively employ
local personnel in the places where they operate, and by the end of2023, there were 2,510 foreign employees, an increase of nearly 2

Senior managers: 478 people

times compared with 2022.

Recruitment

Under the principles of fairness and equality, the Company have formulated a transparent
recruitment process that is clearly and formally communicated to all candidates. The
Company will never restrict recruitment or employment based on gender, geographicalregion, ethnicity, religious belief, or financial situation.

Employee promotion

The Company select and promote talents through open and transparent internal
competitions or appraisals, providing equal promotion opportunities for all employees.

Remuneration management

The Company implement a fair, just, and transparent remuneration management system,
and adhere to the principles of gender equality and equal pay for equal work, to ensurethat all employees share in our development fruits.

The principles of equality in SF’s recruitment, promotion and remuneration management060

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Paying tribute to the power of “she” – the growth story of female
employees
SF always upholds the core values of equality and inclusion, and strives to promote the growth and development of female employees in the
Company. In the field of logistics, the Company believes that female employees also have excellent skills and great potential. With their keen
insight, meticulous work attitude and unwavering perseverance, they have made indispensable contributions to the sustainable development of
the Company.

Wang Huanzhen | 13 years of employment
Wang Huanzhen is working as a courier at SF Weifang in Shandong Province. After joining SF, she loads andunloads trucks, distributes expresses every day, rain or shine, and she doesn’t leave work until she sees that
her customers’ express delivery catch up with the fastest schedule. With her hard work, Wang Huanzhen has
become an expert in the industry and won multiple honorary titles such as the “2023 Women’s Advanced
Individuals” award.

Feng Limei | 10 years of employment
Feng Limei is the business manager in SF’s northern Xi’an district in Shaanxi Province and the manager of nearly
30,000 couriers in Xi’an. As the president of Xi’an Postal Express Industry Labor Union Federation, Feng Limei
visits an average of 200 outlets every year and collects more than 800 demands from employees. With her
sincere care for couriers, Feng Limei won the title of “May 1 Women’s model” in 2023.

Li Meiyu | 9 years of employment
As a Malaysian, Li Meiyu is currently working as a team leader for cases regarding customer services at SF
Singapore. As a “Premium customer server”, Li Meiyu adheres to the concept of “taking the initiative andresponding to everything”, carefully listens to and timely responds to every customer’s problem, and actively
solves problems for them. With her dedicated service to customers, Li Meiyu has won multiple honorary titles
such as the “Best Customer Service”, “Star Award” and “2023 Individual Excellence” awards.

Recruitment of vulnerable groups: SF actively provides employment opportunities for the disadvantaged groups in society, and provides positions
with lower physical intensity (such as customer service, management, warehouse management, professional, etc.) to promote the employment ofvulnerable groups. As of the end of the reporting period, SF had more than 600 employees with disabilities in service.
Rights and Interests Protection for Female Employees
SF respects women’s equal rights to development and determination in their own careers,and resolutely eliminates gender bias in the workplace. In the office, the Company sets
up 34 baby care rooms to cater for the needs of nurturance and breastfeeding for female
employees in any other special occasions. SF also provides the “warm care boxes” toprovide female employees with female products including ginger tea with red dates andbrown sugar, heating pads, and hand cream. In addition, SF provides female employees

15,556

There arefemale employees who undertook healthscreening checks for cervical cancer and breast
cancer in 2023.

with free female health screening checks for cervical cancer and breast cancer, anddistributes various caring gifts to all female employees on Women’s Day every year.
In 2023, SF labor union established the Female Employee Committee to promote the effective protection of female employees’ rights and interests.
The special rights and interests of female employees during pregnancy, childbirth, and breastfeeding were written into the Collective Agreement of SF
Employees’ Rights and Interests.

061

2023 S.F. HOLDING SUSTAINABILITY REPORT
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Carry out female-themed activities to show the “she-power” of SF
female employees
In order to affirm the outstanding contributions made by female employees to the Company’s management and development, and encourage
female employees to stand firm on their positions, strive to move forward, and compete for excellence, in March 2023, SF’s labor union
organizations held the activity with the theme of Goddess Festival, namely “Finding the beauty in ‘She-Power’ and looking for the goddess
in workplace”. Through the selection of the “most beautiful employee”, makeup teaching live broadcast and other activities, to help female
employees unwind while showcasing the “she-power”.

Communication and Exchange with Employees
SF greatly values the voice of employees. The Company has established a variety of open, transparent and responsive channels to encourage employees
to be efficient and speak out. SF offers greater incentives and opportunities to grow for employees who put forward voices and suggestions that are
beneficial to business. Meanwhile, SF recognizes and praises organizations that actively listen to voices and suggestions as well as those who promote
the improvement and solution of problems.
Apart from traditional telephone channel (labor union hotline 4006883783), network channel (“Echo platform” and “I want to report”), mailboxes,
etc., SF builds diverse channels that can quickly solve employees’ problems in accordance with different scenarios. For example, the problem can bequickly solved through platforms such as the “Echo Help” through the intelligent reply system, visits paid by representatives of labor union and “Cloud
Master” that can connect the whole network, which can swiftly address employees’ problems and appeals.

Communication Channel for SF Primary Employees

In 2023

One-stop
appealservice

Appeal service
for the frontline
workers

The one-stop appeal service collects effective
appeals from employees monthly to distributeto the relevant regional organizations forfurther solutions.

The Company’s policies will be delivered to thefrontline workers in the form of live broadcast
at the first time, including institutional
process, system tools, business development,
quality improvement and logistics support andemployee welfare.

Employeecare hotline

SF opens an employee care hotline to ensuresmooth procedure in channels to cater for
employees’ needs on weekdays and holidays
and provide timely psychological support andproblem-solving solutions for them.

Representativefrom the laborunion

SF listens to the voice of employees throughvisits paid by labor union’s representatives
and other similar forms, communicates with
employees face-to-face, learns about theirworking conditions, welfare benefits and careerdevelopment, and timely reports feedback
about their opinions and suggestions torelevant departments.

Smart tools

SF applies industry-leading Large Language
Model (LLM) technology to build a smart service
centre for couriers in combination with theinternalization of actual scenes of SF, which can
carry out real-time human-machine dialogue
with couriers, respond to their questions, andquickly address their problems. The wholenetwork will be promoted by 2023.

13,83498.4%

appeals collected

resolution rate

In 2023

13
broadcasts

Over

1.37 million
live broadcast views

In 2023

14,946phone calls received by the
Employee Care hotline Centre

96.1%
hotline connection rate

In 2023

3,863

collection of employee needs throughunion representative channels

95.8%
resolution rate

In 2023

40,563of solved problems on the “Echo Help”
through the intelligent reply system

062

98.9%

resolution rate on the
Echo platform

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Advice and Suggestions
SF continued to scale up the publicity and promotion of the system that collects advice and suggestions, encouraging employees to put forward
reasonable suggestions around the “five little matters” (little inventions, little creations, little innovations, little designs, little suggestions), promoting
the optimization of system and process, and reducing costs and increasing income.
In 2023, based on the Productivity and Reasonable Suggestion Management Mechanism, the Company has set up a supporting implementation
guidelines and reward mechanism, and established 61 review panels for the reasonable proposals to identify their rationality and feasibility from a
professional perspective, evaluating the value points and contributions of values, and giving different degrees of rewards to the recommendations
that are determined to be adopted. In addition, the Company has also launched a rationalization proposal platform to provide employees with a more
flexible, fast and democratic way to offer suggestions.

30,000 people participated in providing
suggestions, collectively submitting over 35,000 proposals.
Among these, 1,428 suggestions were adopted, resulting inrewards for 1,758 people.

10% 3%In 2023, more than

11%
44%

15%

SF employees’ rationalization suggestions focused on six major
scenarios, including improving operational efficiency, ensuring
compensation and benefits, safeguarding delivery operations,

17%enhancing safety in production, improving service quality, andenhancing service skills. Among them, scenarios related to

improving operational efficiency

enhancing safety in production

operational efficiency improvement accounted for the highest

ensuring compensation and benefits

improving service quality

safeguarding delivery operations

enhancing service skills

proportion, reaching

44%.

Democratic Management
SF respects employees’ freedom of association and collective bargaining.
Meanwhile, SF continues to improve its democratic management level,

As of the end of the reporting period, SF had establishedoptimizing and facilitating communication channels to make sure the130 labor unions in its whole network with 21,000

voice of frontline workers’ voices are heard. All these efforts are maderepresentatives.

to effectively improve the happiness index of SF frontline employees.
The Company actively promotes the establishment of labor unions
in regional SF companies to highlight the practical needs of primary
employees.
Every year, SF elects employee representatives through democraticelections, and it discusses and communicates with the representatives

161 elected staff representatives, andon employee rights and interests such as salary subsidies, insurance

In 2023, there were

benefits, and vocational training in SF staff representatives’ congresses.

5 staff representatives’ congresses were held.

In 2023, SF holds the collective bargaining conference of “Fostering SF’s high-quality development and accomplishing happy laborers” (namely staff
representatives’ congress), signing the Collective Agreement of SF Employees’ Rights and Interests.

063

2023 S.F. HOLDING SUSTAINABILITY REPORT
SocietySF’s Collective Agreement of SF Employees’ Rights and Interests Signing
Ceremony Successfully Held
In order to ensure the effective protection of the rights and interests of all workforce,in July 2023, SF held the “Fostering SF’s high-quality development and accomplishing
happy laborers “ collective negotiation meeting and the signing ceremony of Collective
Agreement of SF Employees’ Rights and Interests. With the remote witness of 761
staff representatives, 12 negotiation representatives from the Group side and theemployee side communicated, negotiated, and explained around the demands andconcerns of express industry workers. They proposed a draft collective contract, which
was unanimously passed through a democratic vote by 161 staff representatives, andsuccessfully completed the signing of the collective contract.

Signing of Collective Contract by Company and
Employee Representatives

100%
coverage rate of employees in the SF
Collective Agreement

On-site of SF Collective Negotiation Meeting

Remuneration

Working hours and Holidays

Insurance and Benefits

Special care forfemale employees

Safety and health at work
Main content coveredin the Collective
Agreement
Vocational training

Reward andPunishment System

Democratic right

Employee Satisfaction
SF quarterly conducts satisfaction surveys for all employees, and continuously tracks the changes in employee satisfaction and employee engagement.
It also analyzes and develops improvement plans according to the research results, and accepts the supervision of the all employees towards theimplementation of measures, and periodically reviews the improvement effect. In 2023, the employee satisfaction is 87.8%, an increase of 1.4%
compared with 2022. In 2023, due to the Company’s deepening changes in its business model, the employee engagement shows a slight decline.
The Company has focused and analyzed key issues, responded quickly and formulated improvement measures. In 2023, the rectification loop of 115
points for optimization has been completed.
Results of the 2021-2023 Employee Satisfaction Survey
2023

2022

2021

Employee satisfaction

87.8%

86.4%

86.9%

Employee engagement

84.7%

86.2%

87.5%

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2023 S.F. HOLDING SUSTAINABILITY REPORT
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Construction of Talent TeamSF takes human capital as its core competitiveness, pays attention to the introduction and incentive of talents, and creates an environment to attract
skilled workers. It builds a comprehensive talent training and development platform, and supports employees’ career development, aiming for building
a stable and efficient talents team.

Talent Attraction and Retention
Through diversified talent strategies and training plans, SF extensively attracts talents, establishes a scientific and effective performance management
system, standardizes the whole process of employee performance management, and fully guarantees the stability and vitality of talent team.
Talent Recruitment
SF facilitates online and offline recruitment channels such as campus recruitment, internal recommendation and online recruitment, and promotesintern programs and school-enterprise cooperation, absorbing outstanding workers and strengthening the Company’s talent pool.

Deepening School-Enterprise Cooperation and Building a Solid Applied
Talents Training Chain in Logistics
In December 2023, SF held a discussion and exchange conference with the
School of Logistics Management and Engineering of Zhuhai College of Scienceand Technology to further deepen school-enterprise cooperation and build
a more efficient and practical logistics applied talent training model. In theconference, reviews and summaries were made to the development of “SFClass”. Looking ahead, the plan to establish “2024 SF Class” and relevant
curriculum to be conducted were also discussed by both parties.

Site of School-enterprise Cooperation Conference

SF-X University Elite Challenge of Smarter Supply Chain
SF-X University Elite Challenge of Smarter Supply Chain is a large-scale logistics
competition for college students across China. It requires participating teams
to provide innovative solutions for smart supply chain and is committed tocultivating innovative talents with practical spirit. In 2023, the competition
covered 603 universities with 4,649 participants, rewarding 163 outstanding
students with PASS cards (chances of interview in campus recruitment).

Site of SF-X University Elite Challenge of Smarter Supply Chain065

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Performance Evaluation and Feedback
SF adheres to the performance management principle of “high quality, high yield and high return”, cultivates the employee performance management
culture of “Common purpose with practical actions”, and effectively leads employees to make progress together. In 2023, SF updated employee
performance management mechanism, built a diversified evaluation system, and deepened the operation system of first accountability system tofurther standardize the whole process.

Diversified Value Creation System

First Asking Responsibility System

In order to take the lead in value creation of SF employees, theIn order to lead functional employees to better implement theCompany established a diversified evaluation system in line withconcept of first question service, SF has incorporated the first

cultural values, taking “on-job delivery value” “cross-organizational

asking responsibility system into the employee diversified evaluation

collaboration value” and “service support value” as its core.

system to achieve a more objective and three-dimensional

Supported by the “difficulty-overcoming value” “talent retention

evaluation of personal value contribution. In 2023, the overallvalue” and “knowledge empowerment value”, the system firmly

positive rate of employees increased from 84.6% to 98.4%, anddefined the value creation direction for SF employees, measuring

the average demand resolution time decreased from 40 hours to 28

employee value creation objectively and effectively identifying andhours.

motivating outstanding talents.

Promotion of the “First Asking Responsibility system”

Establishment of “SF diversified evaluation system”

SF Regular Performance Evaluation and Communication Mechanism•

SF carries out an annual performance evaluation for all employees every year, as well as a monthly or quarterly performance
evaluation for employees in different positions based on the needs of operation and management. In 2023, 100% of theCompany’s employees have received regular performance reviews.

•

SF establishes an employee performance interview mechanism to provide employees with the results of their performancethrough the interview, and at the same time SF ensures the fairness and objectivity of the performance appraisal.
The Company pays attention to the quality of performance interviews. It carried out the “Excellent Case Sharing in
Performance Interview and Improvement Plan Signing” and compiled the Performance Interview Guidelines to strengthen
managers’ performance coaching awareness and performance interview ability.

Performance
Evaluation

Performance
Interview•

Talents Incentives
Under the principle of high performance and high salaries, SF establishes a compensation management system oriented to value creation and basedon performance appraisal. Specifically, for employees with high value contribution, the Company provides competitive compensation systems in orderto ensure its internal dynamics for sustainable development. Furthermore, the Company sets salaries based on the position and employee bonuses are
related to the Company’s performance. Meanwhile, the Company attracts and retains core talents through differentiated and diversified short-and
long-term incentive mechanisms. As such, the core personnel will be more closely aligned with the interests of shareholders and the Company,
ensuring the continuous growth of the Company’s long-term business performance.
SF has established a comprehensive salary communication channel, providing employees with a full understanding of the salary structure through a
combination of online salary query tools and offline face-to-face communications. Furthermore, SF regularly conducts reviews of its salary incentive
mechanisms, analyses salary competitiveness, monitors salary equality, and ensures that the salary level is fair, reasonable, and competitive.

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Equity Incentives
SF grants stock options to its directors, senior executives, core management personnel, and key staff members. In 2023, the first exercise conditions
for the stock option incentive plan for 2022 have been met, and a total of 1,252 incentive recipients have exercised their stock options.
Honours System
SF combines honours and awards with an honours system to set benchmarks and motivate outstanding employees.

Selectionorganization

SelectioncategoryAwardsettingAnnual excellence
selection of theCompany

Daily excellence
selection oforganizations

Top awardof the Company

Excellence selectionof the Company

Excellence
selection offunctional
departments

Excellence
selectionof districts

Annual excellence
selection oforganizations“Best SFer”

Monthly
selection+

instant
award

Social Responsibility Award Customer Service Award Innovation Award
Outstanding Management Award Long-term Contribution Award
Headquarters Category Special Awards (Key Figure/Business Pioneer)

SpecialawardsExcellence
selection of BUs
and independent
organizations=

Progressive upgrade

Best
SFer

Honor

Individual awards by posts

Collective awards by departments, functions, and outlets

Cheer foryou

Moral model Performance model Innovation modelManagement model Service model

Honor System of SF

SF’s talent retention measures
For the outstanding employees in the performance evaluation, SF gives incentives from the aspects of care and reward, career management,
retention and return visit to strengthen the retention of outstanding talents.

Care and reward

Career management

Retention and return visit– Stock option incentive– Rely on the “Career– Conduct resignation– Offer extra two-day paid
leave
– Display the list ofDevelopment Assistant” toencourage employees’ self-interviews to retain
employees

driven development, and– Visit resigned employees

outstanding achievements

pay bonuses to outstanding

regularly and send themand award exclusive gifts

employees

gifts on special holidays

and activity funds– Provide well-performing
employee cultivation fund067

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Employee Training and Development
SF highly values the growth and development of its employees by establishing a scientific and comprehensive talent training system and continuously
enhancing employees’ professional quality and comprehensive ability. In this case, we aim to provide a smooth career development path for SF
employees and help them achieve long-term career development.
Talent Training System
SF has established a talent training system covering all workforce, including leadership training, professional ability training and other training.
In 2023, the Company promoted the optimization of its overall training system by iterating the course and lecturer management mechanism,encouraging the creation of high-quality content, and boosting lecturers’ teaching enthusiasm; by establishing a demand map around the actual
business needs of key talent teams and matching course resources, the Company created a full-process training mechanism; at the same time, throughdigital platform transformation, the Company supported a closed-loop management of talent training work. Thus, the Company achieved “accuracy”
of training needs, “supply” of training content, “discovery” of training resources, and “foundation” of talent team training. In addition, with thedirection of “contextualized”, “stratified”, and “specialized”, the Company continued to iterate the training of the talent team.
SF Training Plan

Training of Basic-Level
Employees

Echelon Building-Up of
Middle and Basic-Level
Employees

For employee groups such as couriers, warehouse managers, customer service and sales staff, theCompany will focus on the cultivation of their service awareness, safety awareness, and communication
skills. While paying attention to personnel performance improvement, the Company will emphasize thesustainable development of personnel, help basic-level employees to improve their education, and pays
attention to personal long-term development.
In terms of college graduates training, the Company will consider college graduates as an importantsource of the group’s talent echelon, thus it will independently operate special talent projects forcollege graduates and refine the operation of the “New Eagle Internship Plan, Excellent Talent Plan,
Management Trainee Project”. By adhering to the three principles of “bold use of freshly joined,
talent mobility, self-growth”, the Company will spot high-potential college graduates through rotation
practice, systematic course learning, dual mentor coaching and other training measures and matchthem with rapid development mechanisms, promoting college graduates to grow into core professional
positions/key management positions.
For junior managers (such as network heads), the Company will accurately identify actual business needs
in various scenarios, carry out “network heads onsite special training camp” and “demands in scenarios
live room” activities in multiple sessions and multiple regions, and provide junior managers with more
effective training resources through both online and offline.
For middle-level managers (such as regional functional department heads), the Company will carry out
layered training from reserve to incumbent workers, iterate the “Fengyun Plan – Reserve Functional
Department Head Training Plan” with scenario leadership training, actual job training, scenario task
simulation as the core focus to train reserve personnel, improve reserve quality and achieve sustainable,
high-quality talent supply.

Professional Team
Building

The Company will focus on professional fields, sort out the ability situation of each functionalorganization, and improve ability through targeted training measures. The Company continues to carryout customized professional ability training projects, such as reserve expert training, expert lectures,expert forums, and provides learning resources on workplace general force and professional ability
boutique, continuously improving employees in the professional field and benefiting employees’ longterm development.
Adhering to the guidance and principles of differentiated empowerment, refined management, andnormalized operation, covering three major groups of business managers, functional department
executives, and reserve executives, the Company will carry out high-level cadre training projects such as
beacon training camps, Fengxing plans, and reserve executive training camps:

Senior Management
Training

For senior operational managers, focusing on “setting direction, making decisions, leading teams”,
through communication with moguls in the industry, visits to benchmarks, cross-industry exchanges,
overseas study tours and other learning methods, the Company will help managers improve the ability ofhigh-quality decision-making and leadership skills when confronting uncertainties, thus promoting andimplementing the Company’s operation mode reform, and achieving sustainable and robust developmentof business;
For senior functional managers, based on the Company’s strategic orientation and business needs,
the Company will help each unit of functional executives with “chain operation, horizon expansion,
capabilities improvement, and overcome insufficiencies, improving the effectiveness of supporting
business services and providing potential executives with differentiated learning resources and practicein various scenarios;
For high-level back-up echelon personnel, through the combination of training and practice, theCompany will focus on core dimensions such as role transformation in a target position, leadership
improvement, strategic business integration to customize the development of courses and learning
content for the reserve echelon, provide multiple scenarios of actual practice positions and tasks, andeffectively improve reserve cadres’ matching degree for target positions.

068

2023 S.F. HOLDING SUSTAINABILITY REPORT
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Lecturer Team Building
SF has introduced internal market-based incentives for lecturers to increase their training willingness and quality:

2
Intensive creativeclass activities

More thanMore thanParticipants in course
development activities

Certified courses

2,000

700

813 hours, a 31.9% increase from last year.
575 new lecturers have been added during the year, with an instructor activity rate of 55.7%, up 10% from last year.
Average monthly effective hours of instruction increased by

Developing high-quality courses to create key teams via “Jizhi Fengke” activity
In 2023, in order to provide key teams with more training resources which meet the actual needs, SF has organized the “Jizhi Fengke” activity.
It brings together the excellent experience of all parties, collects the strengths, and creates high-quality demand scenario classes that arepractical and easy to replicate. These can effectively expand excellent course learning resources for the key teams and develop the quality ofskilled personnel. A total of 9,376 people participated in the development and evaluation of the courses, and more than 500 high-quality course
resources were generated.

Implementing the concept of “standardization+” and rebuilding thesystem of outlet reserve management talents training
SF has focused on the outlet reserve management talents, and has optimized the end-to-end
program from the process of selection to training. The Company has implemented the conceptof “standardization +” to create an efficient and powerful outlet talent group.
In 2023, SF has specified the standardized selection process to accurately identify talents.
While performing “the first step” of the talent selection, SF has carried out a number of offline
training activities, including 6 training camps to improve the capabilities of station managers,
and 10 “Ruifeng Plan” training sessions for reserve managers. In addition, each region has
established a secondary academy with personalized training needs, continuously enriched theonline learning resources for regional talents, and carried out a number of intensive training andempowerment activities in the region for reserve and on-the-job personnel.

Special Training Camp for Station Heads

Focusing on “benchmarking model enterprise and broadening horizons”
to deepen digital transformation learning
The training system of SF transit team focuses on “benchmarking model enterprise andbroadening horizons”, and the SF transit team actively learns from enterprises with successful
digital transformation and are the industry benchmarks.
In 2023, SF transit team has organized and implemented three “external benchmarking enterprisevisits”, with “on-site visits + thematic exchanges” as the core, to learn from their secrets ofefficient operation. The Team combined the accurate diagnosis of internal situations with thehighlights of the external benchmarking enterprise visits to match the value points, effectively
triggering the thinking of the transit talents, deepening the learning of digital transformation,and providing a talent guarantee for the continuous excellence of the SF transit site.

069

External Benchmarking Enterprise Visits

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Career Development Channels
SF pays great attention to the career development of employees. To provide employees with diversified and open career development opportunities,
SF continues to build a smooth promotion channel, and provides all-round career development support.
Promotion Management
SF continued to improve the mechanism of development programs in two channels, i.e., management competence and technical competencedevelopment, offering employees a sound development platform. Through the management competence development channel, employees withcertain management ability can participate in corporate operation and management. While through the technical capacity development channel,
technical staff can become experts in various fields through continuous improvement in technical skills and accumulation of technical experience.
Educational Promotion
SF supports all workforce for degree programs and certifications, providing reimbursement of learning expenses to help them realize self-development.
At the same time, SF actively carries out the program “SF Sends You to University” to build a platform for employees to improve their academic
qualifications, skills and overall quality.

In 2023:
SF supports exterior training“SF Sends You to Universities”

for employees

Total number of employees

Total inputs exceed

obtained academic credentials

RMB4.6 million

Educational background
Standard for the financial aid

Total amount of subsidies granted exceeds

RMB1.8 million

or certificates

21,445
Junior college

Undergraduate

RMB5,000

RMB10,000“SF Sends You to Universities” ProjectThe 2nd “SF Cup” National Job Skills Competition Was Held
In 2023, The Company held the 2nd “SF Cup” National Job Skills
Competition to stimulate the enthusiasm of front-line employees tostudy professional skills, further “strengthening skills, improving quality
and providing excellent services” for colleagues in different positions toshow their personal value. The competition mainly focuses on the four
major positions of pickup and delivery, warehouse management, drivers,
and transit. After fierce competition in the regional qualifiers and semifinals, a total of 225 players were selected for the finals and went toShenzhen to compete in the summit.

“SF Cup” National Job Skills Competition

070

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Employee Care and Welfare
SF has established a comprehensive and multifaceted employee care and welfare system that positively influences the life of employees and theirfamily members from various aspects. The Company takes employees’ job security, medicals, food, housing and transportation, important festivals,
important moments and other scenes as the entry point to establish a multi-dimensional, sinking security and care mechanism, understands the realneeds of employees, helps employees solve practical problems, enhances the sense of belonging and happiness of employees towards the Company,
fostering the cohesion and sense of identity of employees.

Employee welfare andcare system
SF provides employees with a variety of welfare care measures from the three aspects of“ensuring basic welfare, improving caring temperature, and helping long-term development”.

Guaranteeing
basic welfare

Raising ofcare

Supporting
long-term
development

Statutory benefit
Providing insurance
and housing fund, paid
maternity leave, paternity
leave, parental leave andother statutory benefits

Festival care
Providingvarious holiday
benefits/
activities for
employees andtheir families

Subsidies
Providing food subsidies,
communication subsidies,transportation subsidies,
winter and summer
subsidies

Deploying care
Offering freeshipping/familyvisit holiday/
family-visit
transportation
allowance, etc.

Education and skill
upgrading
Providing subsidies foreducation and skills
upgrading

Performance care
Providing incentive
leaves, activity
funds and study
subsidies

Diversified
development within
the Company
Smooth development
pathways for transfer
and transformation

Living welfare
Providing staff dormitory,
staff canteen, remote work,and other living welfare
security

Pension fordifficulties
Providing special
greetings andassistance forabnormal weather/natural disasters/
major diseases, etc

Honor andcommendation
Carrying out daily
and annual merit
recognition

Employee welfare care system

071

Physical and mental health
Providing healthcare
services such as freephysical examination,
online consultation, video
consultation, convenient
medicine purchase,
psychological consultation, etc.

Care for family
Providingscholarships,
grants, andother benefits
to employees’
childrenRecreational andsports activities
Organizing
team building,encouraging
participation in
cultural and sports
activities andholding art activities

Training
Providing multiple learning
resources and channels

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Guarantee basic welfare
In addition to statutory benefits, SF also provides employees withcomprehensive and diverse welfare security, including providing
living welfare facilities such as canteens and dormitories, allowing
employees to choose remote working and flexible working hours tomeet the personalized office needs of employees. In addition, thecompany will honor a number of care measures such as food subsidies,
communication subsidies, transportation subsidies, winter and summer
subsidies according to the positions of employees, so as to implement
the action of caring for employees to improve the quality of life andhappiness of employees.

Staff dormitories cover

12,677 beds provided

4 3 business areas, with

Care for the Physical and Mental Health of Employees
SF always puts the health and safety of employees in the first place, adheres to the “people-oriented” development principle, provides employees witha full range of physical and mental health support, and strives to protect the physical and mental health of employees.
Safeguarding physical healthSF cares about the health of its employees, provides annual physical examination for all employees, and provides different physical examination
packages according to the age and job classification of employees, to help employees identify health risks and get timely medical reminders.

Health check-ups for employees were organized, benefiting

192,000 people, including cancer screening, treatment

and recuperation for female employees, and free medical treatment for traditional Chinese medicine, dentistry, andHealthcheck-up

ophthalmology.

Forespace (Fengsheng) platform has introduced the Medical Housekeeper service and provided online consultation and drug
MedicalHousekeeper
医管家服务Servicepurchase preferential services, with a total of

2,657 online consultations and 5,468 drug purchase services.

Safeguarding couriers’ health

SF always puts the protection of couriers’ rights and interests in the first place, and takes multiple measures to protect their health and safety

SF operates online medical consultation platform with couriers providing convenient service, and the annual
cumulative consultation reaches about
Couriers’safety19,000 people

Equipped with first aid medicine box, the network configuration of SF is more than

Summer cooling activities were held in hot summer areas, covering more thanmore than
Extremeweather

10,000 outlets and benefiting

630,000 people

In extremely cold weather, the whole network is equipped with scarves, gloves, knee pads and other cold materials,
and employees in high-cold areas are provided with heating neckerchief
Purchase of commercial insurance formillionPurchase of
insurance

25,000

all couriers at an investment cost of about RMB55

Outstanding couriers reward serious illness insurance, the cumulative benefit ofinvestment cost of about

RMB8.6 million
072

57,000 people, the2023 S.F. HOLDING SUSTAINABILITY REPORT
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Care for Mental Health
SF attaches great importance to the mental health of employees, and helps employees grasp positive mental health concepts, master mental healthknowledge, and relieve emotions and pressure by setting up a mental care service hotline, building a psychological counseling platform, providing
psychological counseling services, holding mental health lectures and other activities.

Care about Mental Health

Mental health articles were pushed via
Forespace (Fengsheng) platform, service

One-to-one psychological counseling service

account and other channels, with more thanfrom the online and offline has served for more

530,000 views
Platform
publicity

The “Shun Xin Ru Yi” self-psychologicalPsychologicalcare

relaxation experience platform has beenviewed more than

1,000 people

Setting up a 24-hour hotline

180,000 times

800 Shunxin service centers have been set

134 psychological carelectures with more than 220,000
SF has organizedat outlets across the network

6 3 1 psychological activities wereconducted, covering more than 35,000

participants
Psychologicallecturesthan

SF has arranged Shun Xin Ru Yi Lecture

Psychologicalactivity

5 6 times, covering more than
22,000 peopleforpeopleDistrict happiness tour of psychology has been
set for

51 events with over 2,000

participants

Mental Health Activities073

2023 S.F. HOLDING SUSTAINABILITY REPORT
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Promotion of the warmth of care

Offering Student Subsidies/ ScholarshipGolden Autumn Subsidies: the Company offered student subsidies of

SF deeply understands the needs of employees, cares about the life
and work status of employees and their families, helps solve practical

RMB1.624 million to the families of 446

difficult problems, and carries out a variety of employee activities to

employees with serious diseases and major difficulties

promote work-life balance and enhancement of employee care.

Scholarships for college entrance exams:

Care about Employees’ Families

scholarships were given to

RMB362,000

158 children of employees who wereadmitted to universities

SF actively carries out activities for the care of employees’ families, andprovides corporate welfare for employees’ families to enhance theirCarrying out greetings and assistance activities

happiness and sense of belonging.

The Company visited more than

20,000 employees and theirfamilies with difficulties, and the amount of assistance was about

RMB11.61 million

Patrol vehicle for the Company Annual Celebration

Numerous of family members Stepping into SF074

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Cultural and sports activities,
SF carries out healthy and diversified employee activities to enrich their leisure life, stimulate their vitality and cohesion, increase their happiness andsense of belonging, and balance their work and life. In 2023, SF held 14,164 various activities such as birthday parties, symposiums and fun games,
covering 484,000 people.

Carried out “Fengba” Cultural and Sports Activities

11 interest clubs were established with about 8,700 members, and over 20 major sports events were organized“Fengba” Cultural and Sports Activities

 olding the first “Happy Employee Festival” and “Fourth Culture andH
Arts Festival”
In 2023, SF has held the first “Happy Employee Festival” and “Fourth Culture and Arts Festival”. The Festival brought together more than 60
organizations and attracted more than 300 employees to participate in the festival’s entries. During the Festival, more than 800 employees in
Guangdong Province gathered together, and the traffic of the online live broadcasting room reached more than 560,000, which conveyed thisatmosphere of joy and art to others. The Festival not only provides a platform for employees to display their talents and exchange art, but also
further enhances the cohesion and centripetal force of the enterprise.

First “Happy Employee Festival” and “Fourth Culture and Arts Festival”

075

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Building the Line of Safety
To adapt to the changes in the external policy environment and to support the stable expansion of the Company’s diversified
business, SF has paid great attention to and continuously strengthens the construction of the safety risk management system. We
are committed to creating a safe and healthy working environment for all workforce.

Safety Management
System
SF has built a comprehensive work safety

Occupational

Posting andTransportation

Basic

HealthDelivery Safety

SafetyManagement

framework and established a group-wide worksafety compliance database according to pertinent

PeopleStakeholders

Risk Assessment

national laws, regulations and standards in theManagement

Management

and Control

field of production safety, such as the standardof occupational health and safety management

Site

system (ISO 45001), the Guideline of China

Management

Facilities andEquipment

Emergency andContinuous

Accident

Improvement

Management

Occupational Safety and Health Management
System (GB/T33000) and NOSA five-star systemstandard (health, safety and environment). The

Comprehensive Work Safety Frameworkcomprehensive work safety framework consists of
66 elements of production safety in 11 modules.

Principles and Commitments
Safety Management Principles
Safety first, focus on prevention, legal compliance, full performance of duties, continuous improvement and sound development.

Safety Management Commitments
1.

Abide by national laws and regulations, standards and management requirements;

2.

Company’s top executive is the first responsible person for safety of SF, and the chief leaders of each organization are the first
responsible person for safety of their own organizations In daily work, they implement the code of conduct and play the leadingrole in safety;

3.

Adhere to the principle of people first and focus on prevention and achieve the target of “zero accidents”;

4.

Provide necessary support, including manpower, resources and funds;

5.

Establish communication channels on safety management for all employees and stakeholders;

6.

Control production safety risks effectively and take actions to minimize the risks;

7.

Optimize the allocation of safety management resources and continuously improve the safety management;

All of our stakeholders, including employees and contractors, are obligated to keep the Company’s commitment to production safety
management.

076

2023 S.F. HOLDING SUSTAINABILITY REPORT
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Safety Management Structure and Responsibilities

Headquarters

Safety Production
Committee

Composed of the CEO and senior management from each business. It is responsible forformulating and supervising the company’s overall policies, targets and plans of safety
management, and determines the accountabilities for high-risk safety incidents.

Regional
Department

Regional Safety
Production Committee

Composed of the leaders of each regional and district departments, and responsible for the
implementation of the safety management of the company’s safety production committee.

Primary-level
Department

SF has established the three-tier management organizations consisting of the headquarters, regional Department and Primary-level Department andimproved safety systems to effectively supervise and manage the safety management of all regions and guarantee the safe production and operationof the whole Company. The Risk Management Committee of the Board of Directors is accountable for overseeing the comprehensive risk managementof the company (including safety risks), assessing the completeness and effectiveness of the safety risk management system and providing suggestions.
The Chairman and Chief Executive Officer (CEO) has the primary responsibility for our production safety, and our Safety Committee is directed by
the CEO and consists of senior management from each business. The Safety Committee supervises and manages the implementation of our overall
strategies, targets and performance in production safety, and regularly reports the progress in safety risk management to the Risk Management
Committee of the Board of Directors.

Safety Management
Leadership Team

Composed of the Command and Safety Center of the headquarter, functional departments
and the safety management leaders of subsidiaries. They are responsible for all coordinationof safety tasks and implementation of safety matters in a rapid pace.
SF Safety Management Structure

Safety Production Management System
SF regularly reviews and updates our documents of the safety management system every year to give rational, appropriate and effective instructions
on safety production management to all functional departments. The Company optimized the safety management system in 2023 in accordancewith the requirements of the Guidance on the Safety Management System (SMS) Construction for Enterprises and Express Enterprises (Trial) issued
by the State Post Bureau of the People’s Republic of China as well as the safety management working plan of SF. The company improved the safety
production management system in accordance with the key elements of ISO 45001 for occupational health and safety management system, andsupplemented and updated 42 management system documents.
SF requires all employees to sign the Letter of responsibility for safety production to further strengthen the targets and responsibilities of personnel
in charge of safety management at all levels. Which can further implement the primary responsibility for production safety, prevent and reduce
production safety accidents, and protect the safety of people and property. The chairman of the Board of Directors and CEO is fully responsible forsafety management objectives, assuming the highest level of responsibility for work safety and undertaking the commitment to ensure the safety andhealthy working conditions of all company personnel. At the same time, each level’s primary leader is fully responsible for production safety within
their jurisdiction.

Safety Management Targets
SF regularly reviews the safety management and its effectiveness overthe past years. The Company quantifies health and safety requirements
and sets annual safety management targets every year, and link
the target to the performance of safety management personnel. SF
continuously tracks quantitative indicators related to the health andsafety of our employees and contractors. In 2023, there was no major
fire accident or major casualty accident occurred in the Company, andthe accident rate of casualties in millions of express deliveries decreased
by 15.1% compared with 2022, which successfully achieved the annual
health and safety target. In 2024, we will strive to achieve a 5% yearon-year decrease in the casualty accident rate per million expressdeliveries.

8

Achievements of 2023 Safety Management Targets
0 major fire accidents

Achieved

0 major casualty accidents

Achieved

Accident rate of casualties of one million expressdeliveries8 decreased by 10% year-on-year

The casualty accident rate covers all workforce in SF.

077

Achieved

2023 S.F. HOLDING SUSTAINABILITY REPORT
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Safety Management System Certification
SF has obtained the ISO 45001 (the occupational health and safety management

100% Percentage of business operations

system) certification for all business operations.

covered by ISO 45001.

Shenzhen S.F. Taisen Holding (Group) Co., Ltd.

Jiangxi Fengyu Shuntu Technology Co., Ltd.

SF Co., Ltd.

Shenzhen SF Comprehensive Logistics Service Co., Ltd.

SF Group (Shanghai) Co., Ltd

SF Multimodal Transportation Co., Ltd.

Guizhou SF Co., Ltd.

Shenzhen SF International Supply Chain Management
Co., Ltd.

Shenzhen SF Freight Co., Ltd.

Zhejiang Shuangjie Supply Chain Technology Co., Ltd.

Shenzhen Fenglang Supply Chain Co., Ltd.

Shanghai Shunxiaofeng Distribution Co. Ltd.

GZ SF Pharmaceutical Supply Chain Co., Ltd.

Wuhan Shunfeng Zhida Logistics Co., Ltd.

Phoenix-Wings (Shenzhen) Co.,Ltd.

Shenzhen Xingshun Intelligent Supply Chain Co., Ltd.

ISO 45001 Certification

SF Airlines Passed the Third-Party Audit on Safety Management System (SMS)In November 2023, SF Airlines successfully passed the third party
audit on the safety management system (SMS) conducted by the
Civil Aviation Management Institute of China. This further testifies
the Company’s integrity, conformity and effectiveness in safety
management system.

The Third-Party Audit of SF Airlines Safety Management System (SMS)078

2023 S.F. HOLDING SUSTAINABILITY REPORT
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Safety Management Measures
SF is improving the “dual prevention mechanism” of risk classification and control as well as potential hazard inspection and elimination. The
Company have established a scientific and systematic management process in safety risk prevention, control and hazard elimination, which has formed
a double firewall to prevent production and safety accidents. This enables SF to continuously improve its safety management capability and guarantee
the safety of its production and operation in all aspects.

SF Safety Risk Identification, Evaluation and Control Framework

1

Build anorganizational
structure

Set up a safety management working group

2

Defineevaluation
units

Define evaluation units based on field scenarios associated with departments, positions, operational
activities and operational procedures

3

Identify sourcesof safety risks

Identify hazardous sources from the four elements of “people, materials, management andenvironment”

4

Assess the risk
level of safety

Evaluate the risk level of safety using the Level of Risk Evaluation of Operational Conditions (LEC
method)5

Safety risk
classification andcontrol

Identify the management layer based on the level of safety risk

6

Develop risk
control measures

Control measures include but are not limited to engineering and technical measures, management
measures, education and training measures, personnel protection measures, and emergency measures

Safety Risk Classification and Control
SF has changed the safety risk assessment method from MES to LEC. It determines the magnitude of the risk value by multiplying the frequencyof exposure to the hazardous factor, the severity of the consequences and the likelihood of occurrence of the event. All regions are required to
identify and assess safety risks at least once a year according to the requirements of the Hazard Source Identification, Risk Assessment and Control
Management Regulations, and then categorize the risks into four levels in accordance with SF’s risk classification control principles and determine therisk control levels.

Risk Level

Risk Value Assessed by LEC Method

Risk Control Level
Company level (functional departments of theheadquarters)

Level I: Material risk

D≥320

Level II: Major risk

160≤D<320

Department level (business/allocation area)

Level III: General risk

70≤D<160

Workshop level (transit center, service outlets/supply
station)Level IV: Low risk

D<70Team/position level079

2023 S.F. HOLDING SUSTAINABILITY REPORT
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In 2023, the Company organized a comprehensive safety risk

According to the 2023 inventory of production safety risk, the Company

identification and evaluation regarding to the workflow of all

conducted a special training on Key Risks and Control Measures of

positions in 55 regions across the network. A total of 835 safety risk

Production Safety for safety management personnel and functionalsources were identified and appropriate risk control measures weredepartment members across the network. With cases and pictures, this

implemented. These measures include but are not limited to promotion

training deepened their understanding of the safety risk list of 2023

of tools used for identifying safety risk sources, optimization of security

and allowed them to learn and discuss the key safety risks and control

risk management process, and training and communication of safetymeasures.

risks.

59
510

Major risk

835
safety risk
sources
in total

General risk

266

Low risk
SF safety risk training scene

SF Completed Third-Party Safety Risk Assessment
In 2023, SF engaged independent third-party professional evaluation
organizations to conduct comprehensive and independent safetyassessment and risk source identification in multiple business operations
located in South China and Northeast China, including distribution
centers, transit depots, collect and dispatch points and service points. In
accordance with the result of the third-party safety risk evaluation, SF
has optimized and upgraded the current safety risk source identification
tool, thus to further enhance the applicability and comprehensiveness of
this assessment tool. As the tool has been widely applied and promoted
across the network, the Company has significantly improved the work
efficiency in the safety risk assessment.
SF safety risk assessment on site

The Company attaches much importance to feedback, suggestions, andinquiries from our employees on safety management. We encourage ourFengsheng App ——“Safety Whistleblower”

employees to provide suggestions and feedback on safety management“Provide Feedback”

campaign

improvement through various channels to the Safety Production
Committee. This proactive approach helps prevent potential safety risks
Channels forreporting safetyincidents

in a timely manner and contributes to the continuous improvement of
our safety management.

Labor Union Hotline

080

Labor Union
WeChat Service

2023 S.F. HOLDING SUSTAINABILITY REPORT
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Safety Hazards Investigation and Management
SF has implemented a work safety assessment mechanism that involves “oversight from theheadquarters, cross-inspection between regional organizations, and self-inspection at local
levels”. With the mechanism, SF aims to strengthen independent safety management capabilities
at regional levels and strives to mitigate or eliminate safety hazard. The headquarters also
regularly evaluates safety production systems of transit depots and service points in all regionsof the network. In 2023, the headquarters evaluated the safety production systems of 41 transit
depots and 61 service points in 31 regions within the whole network. At the same time, we also
promoted self-evaluation and self-improvement of safety production systems in all regions acrossthe network.
In addition, SF revised and updated the Safety Hazards Investigation and Management Measuresduring the Reporting Period to add requirements for the investigation, identification, reporting andelimination of major safety hazards. We also formulated accountability and incentive provisions
for investigation, to further standardize and strengthen the investigation and managementof potential hazards of safety accidents, and unify the Company’s safety hazard management
standards.

55%
Percentage of the business operations thathas been evaluated by the headquarters
in terms of safety production systems

100%
Percentage of distribution centers9 thathas been evaluated by the headquarters
in terms of safety production systems

Remediation of potential hazards
In 2023, the Company carried out more than 36 special risk elimination activities, including:

•
•
•
•

9

Comprehensive safety hazard elimination program

Special safety hazard elimination program

Investigation and elimination of major safety production
hazards program
Investigation and elimination of safety hazard program
Identification and evaluation of hazard source program
Safety system evaluation program

Transit depots:	special safety hazard elimination
program in belt conveyor, equipment
padlocking, forklift, cage trolley andbuilding structure on rainy and snowy
days
Fleet management:	vehicle inspection, tailgate trucks, andfixing of vans and caged trucks
Property management:	summer/winter electricity for
firefighting, charging area renovation
Terminal management:	standardization of safety andappearance management of two- andthree-wheeled vehicles

The distribution center is a specific area used for receiving, storing, loading and dispatching goods in the logistics transportation process.

081

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Operational Safety of Personnel at Transit Depots

Operational and electrical safety ase: Fire Safety Risk Elimination
C
Program in Charging Areas ase: Elimination of Operational
C
Violations at the Platform

SF conducts fire safety hazard investigation in the charging areas of
its operating sites across the network, and draws up corresponding
fire prevention and safety management measures including:SF utilizes the Sharp-eyed Pupil (慧眼神瞳) snapping function andintelligent video recognition technology to capture personnel’sunsafe behaviors on the platform in real time, and issue timely
warnings to on-site personnel and video supervisors, to prevent
safety accidents.

Install hanging powder
extinguishing devices

Arrange 24-hour video
monitoring patrol

Charging cabinets in the charging areas of operating sites

Monitor screen of “Sharp-eyed Pupil (慧眼神瞳)” in transit depots

Contractor Safety Management
The safety management policy of SF is also applicable to the safety management of the contractors
and their employees. The Company clearly stipulates in the Work Safety Management Manual that
all contractors shall comply with SF safety management policies and take relevant responsibilities.

100%

In order to strengthen contractor safety supervision and management, in 2023, the Companyof contractors have signed the safety

optimized and updated the Management Measures for Contractor Safety to further refine themanagement of the contractor operation process. At the same time, the Company strengthened

management agreement

the contractor safety management through performance evaluation, regular review, accident
management, communication mechanism and qualification termination, continuously improving thesafety management requirements for contractors.
In addition, SF integrates relevant safety management requirements into the contract terms signed with contractors on the basis of business scenarios,and signs the safety management agreement with contractors to ensure that they strictly comply with SF’s safety management standards and eliminate
safety hazards. In 2023, the Command and Safety Center of the Company headquarters, jointly with other line-of-business departments, conducted
on-site safety inspections of 321 contractors.

Primary Safety Management Qualification Requirements for SF Contractors
Essential qualification requirements for the contractors include:

1 Having a business license

2 No major or above levelapplicable

4 Purchasing necessarythat matches the businesswork safety accident

3 Having

personnel qualification

insurance for employees,

services it provides;

within one year;

certificate, special

such as transportation,equipment use registration

warehousing or personalcertificate and transport

injury (accident) insurances.

vehicle license;0822023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Occupational Health and Safety Training
SF has established a comprehensive safety training system that offers targeted safety training

100%

content based on different levels and positions. The Company regularly carries out offline training
activities such as safety production month, safety knowledge competition, and finding potential
safety hazards. We also post online safety training materials related to holiday safety, peak season
safety, seasonal safety and emergency safety to all employees to continuously strengthen theirsafety awareness.

Coverage rate of Health and Safety
Training (including employees andcontractors) in 2023

Senior Management
Hold “professional lectures” to facilitate the exchange of excellent management experience, thus
empowering senior management by equipping them with safety management skills.

Safety management professionals
Prrovide various forms of training for safety management professionals within the network, including internal
sharing sessions, external tutoring sessions and special safety training.

All workforce
Develop their own safety training agenda by each region across the network, and provide standard
safety training for all employees (including contractors) in the region.
SF Safety Training System

SF Safety Training Performance Data in 2023
Total safety training sessions launched

Cumulative number of participants

96,000676,000 people

A total of

27 safety training sessions were provided for safety management professionals, including:

16

6

5

Safety management sharing
sessions

External tutoring sessions

Special safety training

SF provides sufficient internal training resources for safety management personnel to obtain professional qualifications. By the end of theReporting Period, the number of employees with safety qualification certificates across the network reached

083

940.

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Safety Emergency Drill
In accordance with the requirements of national laws and regulations such as the Emergency Response Law of the People’s Republic of China and theWork Safety Law of the People’s Republic of China, SF has formulated a series of emergency response procedures and standards, and established andimproved the planning system to provide emergency response guidance. In this way, the Company has effectively improved its emergency response
capabilities. In 2023, SF maintained the Comprehensive Plan for Work Safety by updating a total of 35 emergency response plans. Apart from fire
drills in accordance with national regulations, the Company also regularly organizes diversified emergency drills every year centered on explosion
prevention, anti-terrorism, traffic accidents and public health. These initiatives are designed to improve SF’s emergency response capabilities.

To improve employees’ safety awareness and emergency response capabilities, and to ensure the safety of the Company’s property,
packages and employees, the Company organized safety knowledge training and emergency drills in 2023, involving 55 regions across the
network, and rewarded those regions that actively organized drills and performed well.
2023 SF Fire Drills

A total of

13,000 drills were conducted, with an accumulated participation of 440,000 people

SF Fire Emergency Drill Scene

S F Airlines Conducted the First Large-Scale Nighttime Emergency Rescue
Civil Aviation Exercise
In December 2023, SF Airlines in Shenzhen and Ezhou cooperated with the Ezhou Huahu Airport to carry out a large-scale comprehensive
emergency rescue exercise named “Mission Accomplished 2023”. This exercise was the first large-scale emergency rescue comprehensive exercise
carried out by domestic airport hub at night with all-cargo aircraft as the simulated model, and it was also the first time for the Company to carryout practical exercise in the way of “one exercise for two places” (i.e., setting up an emergency command center at the headquarters, combining
with Shenzhen and Ezhou for coordinated disposal).
This drill successfully completed the fire fighting, medical rescue, aircraft removal and other practical exercise subjects, which achieved the
purpose of strengthening the cooperation between the two places in emergency response and enhancing the synthetic emergency response
capability. The valuable practical experience gained from this exercise also played a pivotal role in constantly enhancing capabilities of SF Airlines
to handle emergencies.

SF Airlines Nighttime Emergency Rescue Scene084

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Building Responsible Chain Together
Upholding the core value of integrity and commitment, SF attaches great importance to supplier management, and advocates asound cooperation environment of equality, mutual respect, transparency, development and mutual benefit. Over the years, SF has
been striving to reach long-term, stable and win-win cooperation with suppliers and partners, and to build a responsible supply
chain together with them.

Supplier Management System
SF continued to improve its supplier management system, implemented a strict supplier management system, and strengthened ESG risk identificationand management in the supply chain. In 2023, the company has updated Criteria for Supplier Management, further supplemented, and improved the
supplier access process standards, access conditions, performance evaluation standards, on-site evaluation standards, etc., to continuously strengthen
the supplier refined management ability and reduce the risk of supplier cooperation.

Risk Supervision of Procurement
Management Structure
In the process of decision-making and execution of procurement
activities, SF has a risk supervision organization to carry out independentrisk monitoring of the whole process.

Decision-making, management,
and Execution of procurement

Risk supervision of the
procurement process

At the same time, the company makes purchasing strategies andStrategic Procurement Committee

Risk Supervision Organization

decisions through the collective decision-making mode of the Strategic

Purchasing Supply Chain Center

Procurement Committee. Under the Committee, a Purchasing Supply
Chain Center is set up, responsible for the execution of purchasing
Organizational Structure of Procurement Supervision Committee

decisions, purchasing demand analysis, and supplier management.

Life cycle Management for SF Suppliers

Access accreditation

Classification and grading

The requirements for supplier admission
certification are clarified in terms of admission
channels, admission conditions, and certification
audit process.

According to the supplier’s cooperation
performance, the Company adopts differentiatedand dynamic grading and classification
management for suppliers.

Performance management

Routine management

The Company establishes a scientific and rational
performance management and evaluation
mechanism, develops quantifiable performance
evaluation criteria and conducts multidepartmental performance evaluations.

Three mechanisms have been established tostrengthen the routine management of suppliers:a training and coaching mechanism, a routine
audit and inspection mechanism, and an
information change approval mechanism.

Penalty management

Exit management

For suppliers with breach of contract anddiscipline in the course of business cooperation,
penalties are imposed with reference to the SF
Group Supplier Penalty Management Measures.

There are two forms of supplier exit management:
penalty exit and non-penalty exit to standardize
the supplier exit process.

085

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Digital Management of Suppliers
SF has continued to promote the upgrading of suppliers’ digital and intelligent management. The Company has enhanced the efficiency of suppliers’
management and strengthened the risk control capability of supplier cooperation through various initiatives such as the construction of supplierManagement Dashboard, supplier Digital Archives and supplier Labeling System, and the establishment of supplier risk models.

Supplier Management Dashboard

Supplier Digital Archives

Establish supplier management dashboard withdifferent levels and categories dimensions,achieving dynamic real-time monitoring of
supplier resources, to provide decision-making
assistance for management.

Gradually optimize supplier portrait andstrengthen supplier resume management toprovide decision makers with better supplierinformation and reduce procurement risks.

Suppliers Labeling System

Supplier Risk Models

Build supplier labeling system and implant thelabels into the business system for employees toquickly identify and prevent supplier cooperation
risks, thereby improving the efficiency of
procurement decisions.

Build a supplier risk model including tradecompliance risk screening, affiliation identificationand supplier credit evaluation to realize supplierrisk control in the whole process.

Supplier Management and
Evaluation

In 2023, SF conducts a comprehensive evaluation and managementof suppliers:

The Company regularly conducts supply chain assessments
and identification about environment, health and•safety, labor rights and ethical risk. Through regularsupplier on-site audits, written audits and other way,
SF assess the performance of supplier cooperation and•based on the performance to put forward rectification•

improvement in a timely manner. Besides, SF will recognize•

60 outstanding suppliers.

The percentage of new suppliers screened through CSR standardisoutstanding performers and set an excellent example ofcooperation.

SF carries out excellent supplier evaluation and recognizes morethanrecommendations, urge suppliers with management
deficiencies to make rectifications and follow up on their

1,600 suppliers on site, with an audit passrate of 93.6% .
SF audited over

99.29%The percentage of targeted suppliers that have gone through a
CSR assessment (e.g. questionnaire) is•

The Percentage of targeted suppliers that have gone through a
CSR on-site audit is

•

100%

96.46%The percentage or number of audited/assessed suppliers engaged
in corrective actions or capacity building is086

79.03%

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Supplier Environmental and Social Impact Assessment
SF pays attention to suppliers’ environmental and social performance and strictly regulates the behavior of suppliers in the areas of environment,
society and labor rights and interests. By doing these, SF promotes suppliers to strengthen their own performance in social responsibilities such as inenvironmental and safe area.
SF focuses on the following areas in supplier environmental and social risk assessment:

Environmental protection

Health and safety

Labor requirements and protection

Environmental permitting and reporting

Occupational safety

Labor requirements

Pollution prevention

Emergency preparedness

Fairness and equality

Exhaust emission

Employee protection

In 2023, the company continues to build a value chain that has a positive impact on society and the environment through the following initiatives:

SF incorporates CSR clauses, including environmental protection, health and safety, and labor rights,
into supplier contracts.

When conducting supplier admission and evaluation, SF pays attention to the certification of related
systems involving ISO environment, occupational health and safety, and information security.

SF regularly evaluates suppliers’ environmental and social practices, and includes such performanceas one of the indicators in their periodic supplier reviews.

SF conducts on-site audits of suppliers on key environmental and social issues, and provides
rectification recommendations and support to suppliers with deficiencies.

In 2023, the percentage of targeted suppliers with contracts that include clauses on environmental, labor, and human rights requirements is

99.29%.

087

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Build the Sustainable Supply Chain
Following the principles of fairness, impartiality and openness, SF has established standards of transparent admission in the front stage ofprocurement, a fair process at the middle stage and fair supervision at the backend to ensure a responsible and sustainable procurement environment.

Green Procurement
SF has formulated the Regulations on Green Procurement Management to add corresponding environmental protection requirements to the life cycle
management of suppliers. At the same time, SF promotes sustainable concepts among procurement staff through initiatives such as online and offline
training and daily advocacy. In some extent, SF gives priority to the procurement and use of raw materials, products and services that are conductive
to environmental protection, such as energy saving, water saving and material saving, in order to guarantee the implementation of the green
procurement concept.

Green procurement related courses

Procurement Integrity Management
In order to strengthen the procurement integrity management capability, SF has
continued to focus on building a comprehensive and profound anti-corruption compliancemanagement system. SF has formulated the Letter of Notification of Transparent
Procurement to further determine the responsibilities of joint construction of integrity
and the rights owned for both parties, building high-standard business ethical practices.
Also, the Company signed the Integrity Agreement with suppliers, prohibiting any form ofsoliciting, offering or accepting bribes between the two sides in their transactions.

In 2023, the signing rate of the Integrity
Agreement has reached

100%.

1

Registration

2

Bidding

Supplier affiliation is monitored to prevent their collusion with other SF suppliers.

3

Contact conclusion

framework master agreement, sub-agreement, and bidding documents. If suppliers discover acts such

All suppliers are required to proactively declare the conflict of interest relationship, with 100% of
declarations in 2023.

The Integrity Agreement shall be signed. Reporting channels should be clearly stated in theas solicitation of bribes, they can report the complaint.
Supplier Anti-corruption Initiative088

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

The Group continued to optimize its online procurement management platform. In 2023, The Company has deepened the construction of the collusive
bidding identification system to realize efficient early warning of compliance and potential integrity risks. For collusive bidding behaviors identified andwarned by the system, SF also carries out integrity actions at the first time to investigate and maintain the fairness and impartiality of procurement
behaviors. In addition, SF has enhanced its ability to control the risk of corruption in procurement by various initiatives, such as regulating ethicalbehaviors of procurement staff, providing regular anti-corruption training to procurement staff and requiring procurement staff to undergo regular job
rotation.

Procurement integrity-related training"Integrity Responsibility, Risk Prevention”:“Transparent Cooperation, Healthy Win-Win”:

In September 2023, SF carried out integrity training on the

In 2023, SF will conduct “Transparent Cooperation, Healthy

theme of “Integrity Responsibility, Risk Prevention” for all

Win-Win” integrity-themed training for external suppliers,

procurement staff, covering more than

300 people.

covering more than

150 suppliers.

Supplier Training
SF regularly organizes supplier training. The Company provides trainings on six modules including quality management, integrity cooperation, andgreen and environmental protection, to convey the cooperation concepts of green and environmental protection, and honesty and integrity tosuppliers.

Key partner
suppliers

Conducts online training in the form of video and live courses.

Uploads training materials in the form of training announcement on
Full-volume
suppliers

SRM system (Supplier Relationship Management System), notifies
suppliers to download the training course materials and requires
them to complete the training by themselves.

Supplier Online Training Exchange

S F Packaging Materials Suppliers’ Conference – advocate sustainable
development cooperation
In September 2023, the Group carried out the SF Packaging Materials Suppliers’ Conference,
inviting more than 60 supplier partners to be present. SF carried out in-depth communication on
topics such as changes in the procurement business, macro environment change of the market
and the management mechanism of packaging materials. Also, SF encouraged suppliers tocommunicate with each other, share their own experience. The conference passed on the conceptof synergy with each other under transparent cooperation and advocated sustainable development
cooperation, so as to jointly build up an industry ecosystem for sustainable development.

089

SF Packaging Materials Suppliers’ Conference2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Shouldering Social Responsibility
As deeply understands that business and society are intertwined, SF has always been committed to public welfare and social
responsibility without forgetting why it started. In 2012, SF has established SF Foundation and carried out a rich variety of publicwelfare projects and volunteer activities in medical care, education, environmental protection, etc., so as to give back to the society
in every small practice.

RMB106 million on public charity.
21 volunteer associations organized a total of 155 public service activities, with 8,861 participants and a total of 34,948
In 2023, SF Foundation spent a total ofvolunteer hours.

In 2023, the SF Holdings was listed in the“2023 Top 10 Chinese Corporate Volunteer
Service Brands”

In 2023, 26 business region/organizations of SF has launched 59 “SF Blood Donation Day” blood
donation events in 37 cities with 2,904 people participated, over 777,430 ml of blood and 25
treatments of platelets successfully donated by 2,236 people.

Education Charity
SF Lotus Education Assistance Programs
Launched in 2012, the SF Lotus Education Assistance Program, through centralized application, family visits, continuous financial support andaccompaniment, aims to help students in need to successfully complete their education and grow into wonderful young people with excellent
character who can adapt to the development of the society and stand ready to give back to society.

In 2023, the SF Lotus Education Assistance Program sponsored

13,718 students in need, with a total of RMB31.19

million scholarships awarded.
By the end of December 2023, the Program sponsored a total of

38,067 students in need with RMB228.3

million scholarship awarded.

090

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Financial Support
A total of 11,762 high school students and 1,956 college students were supported throughout the year, with grants totalling RMB25.09 million and
RMB6.10 million respectively.

 olunteers made door-to-door home visits one by one and provided
Vfinancial support to 3,973 new students in need
In 2023, SF Foundation has organized 40 public welfare activities in rural areas, with more than 1,200 participants as SF employees, university
students of SF Lotus Program, and social volunteers. Our volunteers visited rural children in Guizhou, Gansu, and Guangxi, and 4,094 student
households were visited during the Program, with 3,973 new students identified as eligible for the financial support. The Program sponsored
13,718 students in need, with a total of RMB31.19 million scholarships awarded throughout the year.

Public welfare activity in rural areas

Psychology and Health
SF Lotus Education Assistance Program attaches great importance to the physical and mental health of students. A total of 367 thematic classmeetings were held throughout the year. 16,800 high school students and college students took the psychological test.

091

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Dream sharing sessions to dream of a better future
In 2023, the SF Lotus Education Assistance Program provided students 40 dream sharing sessions with various forms. Students engaging in“Giving-Back-to-Society” platform project, SF’s managers and volunteers were invited to share their dreams, struggles, transformations, andgratitude in their life. During the sessions, through participating in on-site interactions, singing inspirational song, dancing, and many otherinteresting activities, students were encouraged to dream of their future and fight for their dreams. In 2023, the SF Lotus Education Assistance
Program has convened dream sharing sessions in 35 counties under, involving 3,807 students.

Dream sharing sessions

Empowerment for Growth
32 empowerment courses were provided in 2023, with a total of 3,908 participants. A total of 117 empowerment public activities took place,including the rural summer camp, lesson creation contest, alma mater exchange communication, volunteer consulting about application for Collegeand University Admission , involving a total of 1,142 students engaging in “Giving Back to Society” platform project.

 iversified empowerment to help feed the comprehensive growth ofD
Giving-back-to-Society students
In 2023, SF Foundation has helped college students of the SF Lotus Education Program through feeding the community mutual aid platform suchas the Giving-back-to-Society Nesting Association, encouraging participation in public welfare activities (such as teaching in rural summer camps,
visits to schools, etc.), organizing empowerment courses (Learning and Career planning, Personal development, Career preparation, etc.), andcarrying out the SF on-campus cultivation Internship and part-time jobs to help college students of the SF Lotus Education Program learn together
and grow with their peers and continue to enhance their comprehensive abilities, so as to get ready for the workplace life in the future.

Offline empowerment training of Giving-back-to-Society Program092

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society he Giving-back-to-Society rural summer camp, A summer feast forT
country children
In the summer of 2023, university students engaging in “Giving-Back-to-Society” platform project of the SF Lotus Education Assistance Programorganized 15-day rural summer camps in 10 rural elementary schools in 6 provinces: Hunan, Shanxi, Shaanxi, Yunnan, Henan and Gansu, with a
total of 141 volunteer students participated. The camp provided “music, sports, and art” lessons, psychological counseling, fun games, and manyother activities to give rural children an exclusive summer feast. In addition to enriching the summer activities of rural children, the camp also
supports their all-round development in arts, physical health, and mental health to improve themselves.

Rural summer camp

We also apply the digital technology to empower the SF Lotus Education Assistance Program and improve the digital platform to enhance the student
experience while increasing the efficiency of public welfare activities.

SF Liangshan Charity Class Program
SF Liangshan Charity Class Program is a welfare public program
cooperated by SF foundation and Liangshan Yi Autonomous Prefecture
Mawei Development Center (the former Liangshan Yi Women andChildren Development Center) to help Liangshan dependent children(children who have lost their fathers or mothers and have nothing torely on in their lives) and female high school students in poverty. The
project is committed to improving the living conditions of dependent
children in Liangshan, supporting female high school students in difficult
circumstances to complete their education, and providing them withequal access to educational opportunities and resources. The program
is committed to improving their living conditions, supporting female
high school students in need to complete their education, providingthem with equal access to education and enjoying equal educational
resources.
In 2023, the program sponsored a total of 451 students in 8 classes(with 2 new classes of 120 students) throughout the year, while 4classes with 209 students graduated. By the end of December 2023,
the program had set up a total of 25 love classes and sponsored 1,407
orphaned children and poor girls.

SF Liangshan Charity Class093

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Medical Care•

SF Warmth and Care – Children Medical Assistance Program(hereinafter “SF Warmth and Care Program”) is committed topromoting early detection, early treatment, and early recovery
of children patients aged from 0 to 18 who suffer from relevant
diseases. It boosts the physical and mental health of children patientsin terms of medical assistance and humanistic care, and contributes
to the development of “intra-provincial treatment of serious diseases”
and the children’s medical industry.

In 2023, we newly helped an additional number of

3,424 orphans and children with serious diseases.
•

15 self-run designated hospitals of the SF Warmth andCare Program received additional

2,134 children withcongenital heart disease, blood diseases and malignant
tumours in 2023, up

By the end of 2023, SF Warmth and Care Program had invested a
total of RMB432 million to assist 21,379 orphans and children withserious diseases, and had provided humanistic care services to 35,803
people including children patients and their family members, as wellas medical staff.

•

13% year on year.

In 2023, the SF Warmth and Care - Children Medical

12th China
Charity Awards.

Assistance Program won the ongenital heart diseases screening in children to care for the health ofC
children patients
In 2023, the SF Warmth and Care Program cooperated with the Children Cardiology Department of the University of Hong Kong Shenzhen
Hospital to carry out screening and assistance activities in Longchuan of Guangdong, Chasum of Tibet and Lundu of Guangdong. The professional
medical examination is conducted to diagnose congenital heart diseases in time, contributing to early detection, early treatment, and earlyrecovery of the children patients.
•

In 2023, the SF Warmth and Care Program carried out the
fourth diseases screening activity in Tsawang County, Linzhi
City, Tibet. Following the comprehensive school screening
in two elementary school last year, this year, it also went
deep into the most remote Tsawanglung Township and Gula
Township to carry out school screening, with a cumulative
total of 1,233 children being screened, and 7 newly diagnosed
with positive congenital heart disease and in need of surgery.

•

The SF Warmth and Care Program congenital heart diseases inchildren screening activities in Chasum, Tibet

2023, the SF Warmth and Care Program carried out
universal screening continuously in 11 kindergartens throughinnovative “heart ultrasound into the garden universal
screening” way in Lundu, Shantou, Guangdong Province,with timely discovery of 55 children with positive congenital
heart disease. The Program also provided guidance tokindergartens and parents for a better follow-up review andfollow-up work, guarding young children’s “heart” healthwith all their heart.

The SF Warmth and Care Program congenital heart diseases inchildren screening activities in Shantou, Guangdong0942023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Humanistic care
In 2023, provided humanistic care services such as growth accompany to

10,765 people including children patients, parents, as wellas medical staff.
Organized

20 volunteer activities with a total of 1,010 volunteer hours, involving 1,232 people including children patientsand their parents, as well as medical staff.

1,151 warmth and care energy packs were given out.

 ublic service activity on humanistic care to accompany the growthPof children patients
In August 2023, the SF Warmth and Care Program staff organized public service activity on
humanistic care with the theme of “Accompanying Children’s Growth”in Zhengzhou, Henan
Province. During the activity, the staff made online and offline return visits to 108 children patientsdiagnosed with blood diseases and malignant tumors, to learn about their current conditions anddreams for the future. The activity laid a solid foundation for future activities and accompanied thehealthy growth of the children patients.

Public service activity on humanistic care of the
SF Warmth and Care Program in Zhengzhou

Meanwhile, SF Foundation pays special attention to medical capacity building in rural areas and contributes to the development of township hospitals,
so as to improve the medical experience of rural residents.

 oncentrating on the capacity building of rural medical and healthcareCsystem to facilitate the development of Qinghe Town Health Clinic
In 2023, SF Foundation supported the medical
service capability establishment of the Qinghe
Town Health Clinic in Pingquan City, Hebei
Province. New pre-screening and triage
clinics, fever clinics and enteral clinics havebeen built in the health clinic to optimize
the process of patient care and improve thehealth-care environment for rural residents.
The Qinghe Town Health Clinic in Pingquan City, Hebei Province

SF donation has continued to promote the digital upgrading of the SF Warmth and Care Program, upgrading the medical assistance management
system and completing the R&D of humanistic care management system, and thereby providing children patients and their families with a better allprocess experience from the early treatment to the later humanistic care service.

095

2023 S.F. HOLDING SUSTAINABILITY REPORT
Society

Disaster Relief
Disaster is merciless, while SF stand with love. In the face of all kinds of natural disasters, SF has always regarded serving the society and safeguarding
people’s livelihood as its own responsibility, paid close attention to the situation in the disaster area, and mobilized the emergency resources of its
whole network to support the disaster relief in the first time. Relying on its own resource advantages and efficient deployment capabilities, it hascontinued to contribute its effort to help the people in the disaster areas and tide over the difficulties together.
In 2023, SF actively participated in the earthquake relief in Baoshan, Yunnan Province, flood prevention and relief in the Beijing-Tianjin-Hebei region,and earthquake relief in Jishishan County, Gansu Province by leveraging our capacity to transport relief materials to the disaster areas in time anddonating materials and funds for the reconstruction of the disaster areas. SF continues to pay attention to the disaster situation and dynamicallyschedules relief forces to provide assistance and support for post-disaster reconstruction.

In December 2023, when an earthquake hit
the Jishishan County, Gansu Province, SF
put the B757 cargo aircraft into service andopened up the “Wuxi-Lanzhou” air route toquickly transport 20 tonnes of relief materials
to the disaster area, providing logistics
support for the relief efforts.
SF Airlines guarantees the transportation of earthquake relief materials

In August 2023, when a flood struck the
Beijing-Tianjin-Hebei region, SF immediately
dispatched 20 relief vehicles loaded with foodand other urgently needed materials to thedisaster area, and distributed them to thepeople affected by the flood. In addition, SF
Foundation announced a donation of RMB10
million to prioritize the emergency needs ofthe disaster areas and provide assistance to

SF participates in the flood relief in the Beijing-Tianjin-Hebei region

the post-disaster reconstruction.

In May 2023, an earthquake occurred inLongyang District, Baoshan City, Yunnan
Province. SF urgently procured relief materials
through various channels and deployedpersonnel and vehicles to load, unload andtransport them to the disaster area to ensure
the supply of relief materials.
SF participates in the earthquake relief in Longyang District, Baoshan City, Yunnan Province096

SERVICES
Theme: Application of smart
supply chain technologies
to boost the transformation
and upgrade of clients’supply chain
Creating Smart Logistics
Innovation-Driven Development
Securing Safety Delivery
Delivering Premium Services

2023 S.F. HOLDING SUSTAINABILITY REPORT
Servicesof smart supply chain
Theme Application
technologies to boost the transformation
and upgrade of clients’ supply chain

In the era of digital intelligence, SF has always been committed to empowering logistics and supply chain services with scientificand technological innovation, and realizing “data support decision-making”, “data-driven business” and “data-enabled customers”
through the transformation of business digital intelligence. Through technologies including operations planning, blockchain,
integrating the leading technology capabilities and industry experience, the Company embedded digital capabilities into thecustomer value chain, providing customers with production and sales full-scenario, fully visible, one-stop, traceable smart supply
chain services. Through the integration of production and logistics, and the integration of marketing and logistics, the Company
helps various industries create a responsive, flexible and smart, sustainable supply chain system that responds efficiently to facilitate
industrial upgrading, cost reduction and efficiency enhancement.

Establish smart supply chain integration products benchmark
The Company integrates the whole set of technological capabilities to form intelligent supply chain products – Feng Zhi Cloud Chain *(丰智云链),Feng Zhi Cloud Strategy *(丰智云策), Feng Zhi Cloud Tower *(丰智云塔), Feng Zhi Cloud Data *(丰智云数) and Feng Zhi Cloud Marketing *(丰智云商) –for different levels of customer demands.

Forecasting

Planning

StrategydIn-warehouse
Optimization
Solution

One Bucket
Solution

Optimization of
in-warehouse picking-up,
spot optimization,
replenishment

Generalwarehouse

Businessflow

Forwardwarehouse

Information
flow

Network
Optimization
Solution

Middle-end
Business Solution

Warehouse site
selection, routing
optimization,transportation schedulingDistributors

Omnichannel Order
Integration
Management

Regional
warehouses

E-commercelog

Multi-level
Replenishment/
Allocation Scheme

Customized O2O, B2C,
B2B and othermulti-mode online stores

Solve inventory turnoverand out-of-stock problems
in multi-level warehouses

Omnichannel
Business Platform

Smart
Warehousing

Feng Zhi
Cloud Chain

Smart
Transportation

Smart Park

ics

ics

Feng Zhi
Cloud Marketing

Smart Shop

Feng Zhi Cloud Data
Cross-Cloud
ComputingMulti-Cloud
Management

Real-time
Data Warehouse

Separation Between
Storage and Computation

SF Smart Supply Chain Products and Services

098

ist

ist

Online Store Solution

for production
tions
and
solu
log

Park-operation screen,vehicle schedulingand 3D map

OfflinestoresSolve inventoryfragmentation problem
in different channels

atedShorten order-to-delivery
time and enhanceuser experience

Factory

Fundflow

Logistics

gr

teEnd-user

ForwardWarehouse
Solution

te

gr
a

Smart
Park Solution

Store recommendation
based on historical
data and forecastsandns formarketingIntegration ofpromotional strategies
and logistics activities

CyclicPickup Scheme
Inbound logistics line-up
and loading optimization
at sourcing stage

Supplierutio

Integration of pricing
strategies andlogistics activities

Feng Zhi
Cloud Tower

End-user portrait
profiling andbehavior analysis

Store Selection
ProposalssolIntegration of
product strategies
and logistics activities

Collaboration

In

In
te

Feng Zhi
Cloud Strategy

Consumer
Insights

Warning

Auto Scaling

Integration of
procurement planningand logistics activities

Integration ofscheduling plans
and logistics activities

Integration of delivery
planning andlogistics activities2023 S.F. HOLDING SUSTAINABILITY REPORT
Services

A supply chain operation execution system. Through modules such as ordering, warehousing,transportation and settlement, it assists enterprises to achieve the interrogation of warehousing
Feng Zhi Cloud Chainand distribution and provide a full-spectrum supply chain solution, including intelligent storage andintelligent transportation.
An intelligent planning/decision-making system for supply chain. It meets the intelligent decisionmaking needs of enterprise supply chain in different stages of preparing, planning and execution
through the capabilities of warehouse network planning, intelligent site selection, commodity layout,
demand forecast, sales planning, plan coordination, inventory strategy optimization/simulation,

Feng Zhi Cloud Strategy

intelligent replenishment, route optimization, capacity optimization, execution monitoring, indicatorsystem, root cause analysis, etc.
A supply chain intelligent control system. It achieves visualized the entire process from orderplacement, warehousing, transportation, settlement and other data indicators; it achieves risk
early warning, efficiency optimization based on the core node data exploring and analysis; it helps

Feng Zhi Cloud Tower

business decision-making, and generates work order tasks, drives business collaboration through themacro perspective insight into the whole business.
A cloud native-hybrid data management platform. On cloud-native real-time scenarios, it realizes
a centralized storage repository with a single storage of all data. The product is divided into fourparts, including the elastic storage layer, the integrated computing layer, the data insight layer,

Feng Zhi Cloud Dataand the data application layer. In addition, it is equipped with member data platforms, member
management, and marketing capabilities.
A cloud native-hybrid data management platform. On cloud-native real-time scenarios, it realizes
a centralized storage repository with a single storage of all data. The product is divided into fourparts, including the elastic storage layer, the integrated computing layer, the data insight layer,

Feng Zhi Cloud Marketingand the data application layer. In addition, it is equipped with member data platforms, member
management, and marketing capabilities.

099

2023 S.F. HOLDING SUSTAINABILITY REPORT
Services

Providing Solutions for Smart Supply Chain
The Company leverages its comprehensive smart supply chain products and customer demand on business sub-segments, deeply reached dozens ofindustries including cosmetics, 3C and fast-fashion consumer goods with in-depth empowerment on over 4,000 enterprises.

Smart Supply Chain Project for a Coffee & Beverage GiantTo solve problems in store replenishment, operation and supply chain management, SF and the customer jointly developed a smart store
management system and an intelligent replenishment forecast system, which use algorithms that mimic real business scenarios to empower thecustomer’s supply chain.

Automatic Inventory•
Introduction of RFID, gravity and visual IoT
devices and platforms for automatic inventory

Intelligent Replenishment•
Automated store replenishment based on
demand forecasts, supported by operation
research optimization algorithms and arules engine

Supply Chain Control Tower•
Visualization of order fulfillment andinventory management•
Multi-source heterogeneous data integration•
Automatic statement generation, businessanalysis, and BI for decision support

Supply Network Optimization•
Network planning and implementation of
forward warehouse•
Order fulfillment and inventory sharing in
multiple scenarios

Help thecustomer to:

Reduce store inventorybyReduce warehousedelivery costs by

Decrease scrap rate perstore byIncrease the forecasting
accuracy by

30%

15%

1.4%

5-20%

Full-Link Supply Chain of Lighting Brand
By applying analysis and algorithm strategy, SF provided smart supply chain services to a lighting brand, including intelligent replenishment
strategy, and optimization of warehouse network coverage, order strategy and packing and shipping, to improve the brand’s express fulfillment
efficiency, reduce cross-bin rates and slow-moving inventory, thereby enhancing supply chain operational efficiency.

Integrating algorithm strategies according to business conditions, output scientific and reasonable daily replenishment
and allocation plans.

Developed visual and automated replenishment monitoring dashboards to allocate daily output and inspection
results, improving the brand’s express fulfillment timeliness with reduced warehouse cross rate.
Provided promotion strategies and packaging transportation optimization services, at the same time controlled
the allocation execution rate and followed up on abnormal problems, helping the brand reduce unsalable inventorywith improved packaging utilization rate.

100

2023 S.F. HOLDING SUSTAINABILITY REPORT
Services

Creating Smart Logistics
The Company is committed to establishing a smart supply chain ecosystem in the digital era and becoming a leader in the smart
supply chain market. The Company combines the massive data and industry solution experience gained in its comprehensive service
offerings with leading digitalized, visualized, and intelligent logistics technologies to promote full-link supply chain technology
innovation and help clients in various industries create a modern supply chain system with efficient and prompt response.

Logistics Digital Twin Technology: Replace Experience with
Data and Let Algorithms Verify the Future
Digital twin technology refers to building a twin body in the virtual digital world that is highly similar to the real world from appearance, internalmechanism, and behavior. Through this simulation technology, it is possible to verify and optimize various strategies in the real world in the virtualworld at a low error cost. SF deeply integrates digital intelligence with its business to create a logistics digital twin system with high realism and fastalgorithm verification efficiency, to promote an innovative revolution for the logistic industry.

Simulation

Fidelity verification
Digital twin

Data collection

Parameter
optimization
Machine learning

Mechanism model
Data model

Data mining

3D reconstruction andrendering
VehiclesTransit center

Logistics
Personnel
Procedure

Digital Twin Construction

Over the years, SF has been striving to create a logistics digital twin system with high fidelity and efficient algorithm validation. The system is used tosimulate and calculate actual business scenarios based on data from warehouse sorting and logistics route planning scenarios, so as to find the bestsolutions for various scenarios and explore ways to improve the efficiency of logistics operations at each process in the real world. Through digitaltwin technology, SF can efficiently simulate, validate and optimize the strategies in the real world with extremely low simulation costs and trial anderror costs virtually, helping the logistics industry to achieve efficient intelligent transformation in warehouse design and operation, logistics network
design and other aspects.

1012023 S.F. HOLDING SUSTAINABILITY REPORT
Services

Warehouse Sorting
SF quickly verifies the feasibility and

For the same number of parcels, the new

effectiveness of the sorting plan bydigital twin sorting plan reduces sorting

digital twin sorting plan can improveadjusting simulation parameters using

time by more thanactual average capacity by more thanthe digital twin system. This enables

10%

8%

warehouse sorting plans to be switched

Within a fixed sorting period, the newat almost no cost and with high quality
in the real world, significantly improving
warehouse sorting efficiency.

Logistics RoutePlanning
By connecting its own business systemwith the digital twin system, SF simulates
physical entities, such as outlets andvehicles, in the virtual world, and imitates
all kinds of parameters involved in logistics

On average, more than 500 transport routes percity per month can be avoided via the digital twinbased operation research optimization technology.

over

500

routesroutes to find out the best plan for parcels
after evaluating all strategies. In thisway, it can effectively improve logistics
efficiency and optimize resource allocationin the real world.
While the digital twin technology continues to iterate, SF has primarily achieved:

Adoption rate of strategies recommended by the

Digital twin optimization improves logistics route verification efficiency by 600

digital twin reaches

times, greatly reducing manpower and resource consumption

Above 95%

600 times

In September 2023, SF held the “SF Digital Twin Press Conference” during the 15th International Exhibition on Transport Technology & Equipment,
and released the Logistics Digital Twin White Paper in December 2023, which introduced its breakthroughs and achievements in digital twin
technologies to the public.

102

2023 S.F. HOLDING SUSTAINABILITY REPORT
Services

Upgrading the digital intelligence of the logistics network
SF has continued to improve its overall digitalization and intelligent level of the logistics network. Through the whole-chain digitalization throughout
its end-to-end operations from first-mile pickup to last-mile delivery, together with visualized monitoring and early warning, the Company has
achieved the universal intelligent planning and dispatching, dynamic resources matching and mapping, and flat and efficient management. Leveraging
the IoT technologies, automation and investments in unmanned technologies, the Company has improved network operation efficiency, with securedelivery guaranteed at the same time, thus enabling the Company to reduce costs with increased efficiency.

Digital intelligence of forecast & scheduling
Utilizing data, operation and intelligence, the Company created a universal intelligent decision-making system covering “forecast → early warning →scheduling → feedback”.
Forecast in advance: In order to ensure optimal and accurate resource scheduling and dispatching, the Company’s cargo volume flow forecast
has achieved multi-dimensional extension, from the overall cargo volume to province-to-province, city-to-city and other flow dimensions, enabling
various forecasts, regardless of long-term, short-term, or dynamic as the case may be. Synchronized with these forecast results, the Company’ssystem can then adjust the pre-planning and on-going planning of various resources, thus ensure service quality and enhance resource utilization
and allocation efficiency.
Network planning: The Company has been continuously improving the aviation and ground transportation network planning capabilities by
establishing and consolidating its intelligent network planning system tools. By utilizing the digitalization capabilities, the Company has visualized
the data of customer demand and market dynamics to guide the utilization and adjustment of various types of sites under multi-network
integration. With various product standards bearing in mind, the Company also accurately match aviation transportation resources according
to the dynamic changes in volume demand of seasonal fresh food and other types of goods. Leveraging algorithm-backed dynamically adjusted
strategies and programs, the Company built an integrated multi-network ground transportation system to support various service scenarios,
such as new modes of ground transportation, ground-air resource coordination, and flexible routing and loading of oversized goods for airtransportation, to maximize the efficiency of resources allocation and enhance the timeliness and competitiveness of the air and groundtransportation products.
Real-time scheduling: Utilizing the universal operation monitoring system, the Company has achieved real-time monitoring, automated data
capture and intelligence warnings of abnormal scenarios, such as weather anomalies, flight delays and traffic control, as well as the monitoring of
our real-time operation status. Therefore, the Company would further recommend optimal adjustment plans intelligently and notify the frontier
staff to intervene for safeguarding the service performance in a timely manner, ensuring consistent delivery of product and proactive customer
services.

Digitalized and intelligent sorting
Committed to establishing automated, visualized and intelligent sorting centers, creating an efficient and intelligent.

Automation: In 2023, automation construction or upgrade projects in over 100 sites have been completed, thus further improved the transit andsorting capacity and efficiency of the whole network.
Intelligence: Build up digitalized production management
capability for major processes on-site. Site managers canuse the system to capture the potential risks of eachprocess in advance and take measures to avoid them, makemore refined deployment of equipment, personnel, vehicles
and other resources, improve the timeliness of expressdelivery, and ensure the smooth and orderly operation of
the site during peak hours.

The system can provide cargo forecast information and site capacity

every 10-minute, and provide early

estimation about
warning of overcapacity on-site.

Visualization: Leveraging image recognition and video
recognition technology, the combination of technical defense and human defense guarantees the transportation safety of express in the
production process as well as the personal safety of personnel in the business process, provides a safe production and working environment forparcels and personnel, thus solving problems of quality management and safety risk control in sorting centers.

1032023 S.F. HOLDING SUSTAINABILITY REPORT
Services ase: Building a Digital International Air Cargo Hub – The Ezhou CargoC
Hub
The Ezhou cargo hub comprehensively uses technologies such as building information modelling to consolidate the hub database, and adopts
operations optimization, computer vision, and other algorithms to refine hub operation management and effectively ensure the time-definite
parcels.
Dispatch collaboration•

To ensure the time-definite transit of parcels at the hub, from takeoff to landing, the full-link has been perceived and deducted andthe operation process and resource efficiency will be collaborative
optimized.

•

The self-developed parking position allocation algorithm takes
timeliness, transit efficiency, aircraft taxiing efficiency, and dozens ofbusiness operations into consideration to automatically form a preallocation plan, and adjusts in real-time according to flight dynamics,
effectively reducing the complexity of the work of air traffic control
personnel and improving operational efficiency.

•

Automatically collect aircraft stand guarantee nodes, monitor in realtime through cameras, efficiently identify with intelligent algorithms,
and accurately collect real-time node data information such as aircraft
positioning and aircraft push-out.

Field Operations in the Ezhou aviation hub

Sorting management
Automated equipment and intelligent algorithms help the transit center increase capacity. The Ezhou cargo hub has an automated sorting
equipment line with a total length of 52 kilometers, with a peak sorting volume of 280,000 pieces per hour. The parcel follows the optimalparcel walking path obtained by the algorithm, and smoothly and accurately falls into the boarding or loading mouth. Monitor the status of all
automated equipment in the field, warn of sub-health equipment, maintain during idle time, effectively reduce equipment failure rate and failure
recovery time.
Computer room network
Multiple computer rooms back up each other, 5G WIFI signal covers the whole area, and the signal is strengthened in key operation areas such asloading and unloading vehicle areas, and dismantling and boarding areas, improving the reliability of the transit center, and ensuring the stable
operation of basic IT infrastructure and intelligent mobile terminals.

1042023 S.F. HOLDING SUSTAINABILITY REPORT
Services

Digitalized and intelligent transportation
Continuously improved the full-stack end-to-end digitalized and intelligent management across various transportation modes such as air, ground andrail transportation.

Air transportation: In terms of all-cargo aircraft, based on the Ezhou cargo hub, the Company built up the capability related to abnormalscheduling and timeliness guarantee in hub scenarios; in terms of bulk flights, the Company improved the efficiency of procurement and thematching of resources and demand through the refinement of numerical and intellectual management tools to segregate procurement of demand
and use, so as to guarantee the consistent availability of resources and meet the demand for timeliness.
Ground transportation: Through intelligent route combination and resource structure design, the Company schedules resource reserves for a more
optimal cost structure.
In terms of transportation resource matching
Based machine learning and other technologies, the Company predicts data in terms of dimension including cost, task, and volume of each route
flow, and outputs the expected structure of different transport resources (controllability and elasticity); at the same time, through intelligent
algorithms, routes are packaged in combination according to various strategies and matched with the most suitable transport resources toeffectively control costs.
During transportation
Through the digital system, the Company swifts from manual dispatch to automatic dispatch. If there is a temporary increase in transportation
demand, the system will prioritize the assignment of idle controllable transport resources to undertake, maximizing the reduction of temporary
resource dependence.
In terms of transport resource outsourcing and pricing
SF has built basic price for routes to calculate the corresponding route’s price according to the market average price, mileage, and other factors
in the industry through intelligent algorithms; on this basis, it further builds a digital transportation resource outsourcing system, and a series ofprocesses such as bidding, contract signing, and settlement are completed in one-stop through the online platform. At the same time, this system
can output procurement strategies based on the intelligent route price base and pre-planning data of transport resources, and intelligently judge
the rationality of contracts or transactions, ensuring the rationality, transparency, and health of transportation resource outsourcing.
Rail transportation: Through digital upgrading, the standardization of end-to-end railway operations has been improved, supporting theapplication of diversified resources based on high-speed rail freight, high-speed rail scheduled trains, express trains, and ordinary trains, providing
customers with differentiated transportation services, improving transportation performance timeliness and customer satisfaction.

Digitalized and intelligent service outlet management
The company further refined comprehensive digital operation and online management of collection and delivery at service outlets.

Collection and dispatching service capacity•

Provide intelligent resource planning and dynamic scheduling suggestions at service outlets by combining factors such as forecasted parcel
volume, operational difficulty, courier professional ability, and couriers’ willingness to rest, so as to reasonably allocate collection anddispatch tasks and improve courier service ability, thus guaranteeing customer experience.

•

Provide differentiated subsidies based on the difficulty of collection and delivery tasks, mode of operation, and scenario specificity, sothat the couriers can get more reasonable compensation. The Company optimized the online delivery SOP, so that the system will quickly
formulate personalized operational requirements and operational guidelines based on customer preferences, consignment characteristics,
etc., and dynamically push them to the cell phones or handheld terminal devices of the couriers to enhance their operational standardization.

•

Meanwhile, the “Courier Service Center” has been launched to support couriers’ questions at any time, providing couriers with intelligent,accurate, and easy-to-understand comprehensive information Q&A services quickly, with the accuracy rate reaching 90%. The Company has
built packaging recommendation tools to accurately recommend corresponding eco-friendly packaging solutions and materials according todifferent consignments, to improve packaging quality, to protect the safety of customers’ shipments, and to avoid over-packaging and waste.

Last-mile network construction•

Integrated and upgraded the last-mile capacity scheduling system and operational tools to achieve the integration of large and small parcel
collectors and dispatchers, effectively strengthening the flexibility of the last-mile collection and delivery capacity.

•

At the same time, The Company upgraded its system capacity to further enhance the synergistic capability of various end channels, suchas service outlets, HIVE Boxes and post stations, to meet the differentiated needs of customers for receiving and delivering parcels and to
improve the customer experience while optimizing the resource utilization of the entire last-mile network.

End transportation application•

The end collection and delivery operation has been combined with automated transportation to enhance delivery efficiency. In officescenarios such as industrial parks, transportation through automated collection and delivery vehicle and door-to-door transportation anddelivery through robots improved transportation efficiency and reduced the pressure for couriers. Terminal transportation applications havebeen promoted in various places including Beijing, Shanghai, Shenzhen, Suzhou, Wuxi, and Hefei, etc.

1052023 S.F. HOLDING SUSTAINABILITY REPORT
Services

Innovation-Driven Development
Management of Technological Innovation
Innovation is the soul of enterprise progress and development. Highly concerned with innovation R&D, SF is committed to driving business productivity
through innovation, and encourages employees to create value in new and disruptive ways. SF has also established a sound innovation management
mechanism to inject impetus for sustainable technology-enabled innovation.
SF implements mechanism-driven innovation to promote innovation from idea to practical application. Since 2016, SF has set up the Innovation
Workshop and continued to upgrade it. Up to now, it has realized a closed loop covering innovation cultivation, generation, implementation and value
creation.

Innovation
Cultivation

Innovation
Generation

Innovation
Implementation

Innovation
Value
Creation

In 2023, SF continued to optimize its innovation mechanism and carried out diversified innovation activities to improve its innovation efficiency. As
shown below:

Conducted: 4live courses by the Innovation Workshop  

12 selective micro innovation reviews

4 Innovation Pioneer Award reviews
Output: Over 2,500 innovation achievements

80% of employee participation rate106

2023 S.F. HOLDING SUSTAINABILITY REPORT
Services

Promoting Industry-University-Research Collaboration
With an open and win-win attitude, SF continues to team up with research institutes, universities, and other partners to promote the technologicalinnovations development, such as digital twins, blockchain and operations, jointly creating a new era of intelligent logistics.

Partnering with Universities to Facilitate Industrial Innovation
Innovation Competition: In 2023, SF cooperated with Zhejiang
University National Science Park to hold the “Creation π-The Third
Innovation Competition on Intelligent Logistics Application”. The
competition attracted top universities and research institutes fromaround the world and gathered various innovative projects, which,combined with regional development and the requirements oflogistics business scenarios, promoted innovation and development
in intelligent logistics and contributed to the construction of theindustrial ecosystem.
Creation π-The Third Innovation Competition onIntelligent Logistics Application
Collaborative R&D: SF collaborates with Xidian University and Zhuhai Fudan Innovation Research Institute to co-develop a “Supply Chain
Collaborative Management and Financial Service Platform based on National Cryptography and Blockchain”. The platform has completed systemestablishment and the design of the blockchain solution, and will greatly enhance the data credibility of internal supply chain system, and theindustry trust penetration level.
Industrial Base: SF collaborates with The Chinese University of Hong Kong, Shenzhen to establish an “Industrialization Base for the Digital Twin
Results of Logistics Transit Centers”. The collaboration aims to promote the construction of digital twins and intelligent operation and maintenancefor logistics transit centers, providing an industry-typical demonstration for enhancing deployment efficiency and optimizing operation plans.
Scientific Research Station: In 2023, SF Technology’s Postdoctoral
Research Station began recruiting and cultivating high-caliber andcutting-edge talents worldwide. Besides cultivating talents for logistic
industry, the station established joint training and cooperation
relationships with top universities at home and abroad to promote theintegrated development of industry, university, and research in fields
such as digital twins, operation research optimization, and supply chain
optimization.

SF Technology Postdoctoral Research Station1072023 S.F. HOLDING SUSTAINABILITY REPORT
Services

Securing Safety Delivery
SF strictly complies with laws and regulations such as the Postal Law of the People’s Republic of China, Measures for Supervision
and Management of Posting and Delivery Safety in the Postal Industry, Management Measures for Real-Name Receiving and
Sending of Mail and Express and the Regulations on the Management of Prohibited Items for Posting and Delivery. By doing so, SF
can improve its safety management of delivery service.
In 2023, the Company formulated and launched the Regulations on the Management of “Three Systems” for Safety Delivery, inwhich the principles for the internal management and control of the “Three Systems” are clearly defined and implemented, namely
the systems of real-name pickup and delivery, the inspection of parcels in delivery and the security inspection of the express mail.
Through optimizing the internal management regulations, performing real-name authentication and strengthen the management
and control of illegal and prohibited articles, the Compamy can ensure the safety of mail delivery.

Real-Name Authentication Management
SF strictly enforces real-name authentication management to ensure the safety and complianceof the delivery process. This is achieved via the dimensions of process implantation, system
enforcement, and assessment and monitoring.

••
Process
implantation•••
Systemcompulsion••
Assessment
andmonitoring

In 2023, the real-name online
registration rate of SF was

99.84%, with an increase of
0.31% from 2022.

SF collaborates with the Ministry of Public Security. and utilizes its authoritative “National Network Identity Authentication
Platform,” to verify user information.
The prompt of “Online Real-name Registration” and the link for real-name registration are displayed on the orderplacement pages of WeChat Mini Programs and Apps to guide customers to complete the real-name authentication before
placing orders.
SF regularly verifies the real-name information of credit account customers (enterprise customers), provides system prompts
for modifying incorrect data, and enhances the accuracy of real-name information.

Customer ID cards are automatically identified through the OCR/NFC methods. The combination of original ID card andtwo-factor verification is adopted to ensure the validity of real-name authentication.
SF has introduced the “Scan Me” function for real-name authentication, which allows users to automatically jump to themini program for real-name authentication after scanning with WeChat.
Real-name authentication prompts are optimized by adding reminders before, during, and after the ordering process. Users
are informed in advance to prepare valid identification documents.

Cause analysis is carried out on the data of abnormal real-name notifications of enterprises monitored by the State Post
Bureau. The problems are simultaneously exported to the relevant region in the form of daily reports for improvement andrelated departments are urged to rectify the problems found.

Management of Illegal and Prohibited Articles
SF, in strict accordance with the Regulations on the Management of Prohibited Items for Posting and Delivery, formulates the Standards for Receiving
and Sending Common Articles and updates and releases them monthly. SF regularly carries out special rectification work on delivery safety. SF takes
measures such as strengthening investigation and management, conducting employee training, and establishing incentive mechanisms to prevent
prohibited items from entering the delivery channels. The Company properly disposes the prohibited articles that entered the delivery channels,
maintains the safety and smooth of delivery channels and creates a safe and stable delivery service environment for the public.

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2023 S.F. HOLDING SUSTAINABILITY REPORT
Services

Inspection and Management of Prohibited Articles
SF has strengthened its cooperation with relevant national sectors to jointly crack down on the transportation of prohibited articles and perform
comprehensive and strict security inspections on each parcels to ensure the safety. This year, SF took a series of actions to comprehensively reduce
the transportation of prohibited articles, which further enhanced the risk prevention for delivery safety. SF investigated and disposed 38,500 illegal
prohibited articles in total.

The Standards for Receiving and Sending Common Articles is implemented into the system. Warnings and interceptions aredelivered when it comes to items that do not meet the standards in the process of customer ordering and collection.
Pickup anddeliveryinspection

On the basis of inspection of goods in receiving and sending, mandatory photo inspection of high-risk express items is taken
and uploaded to the system.

SF increases the investment in high-speed security machine to improve the quality of security inspection. By the end of thereporting period, more than 1,100 high-speed security machines had been put into operation.
Security check
implementation

Governmententerprisecollaboration

Positive
incentives

SF develops its own intelligent security check platform, which checks parcels for security while they are being automaticallysorted, replacing with 99% parcels that undergo manual inspection. Additionally, security inspectors can remotely assess
suspected prohibited articles at multiple locations simultaneously through the smart security check system.

SF enhances the government-enterprise collaboration by partnering with the Ministry of Public Security and the Ministry of
National Security. Specifically, SF precisely tracks the parcels of suspicious individuals, intercepts them during the pickup andtransit sections, actively communicates with relevant departments regarding the suspicious articles, and cooperates them in thesubsequent processes.

SF formulates the Reward Management Measures for Self-Inspection of Illegal and Prohibited Articles. SF sets positive incentives
for security inspectors to encourage them to actively discover and report suspected prohibited articles. More than 800 safety
inspectors have been rewarded in 2023.

In 2023, SF launched special rectification actions such as the “Management of control of battery express parcels” and the “Control on the deliveryof inflammable and explosive articles such as fireworks and firecrackers” to effectively prevent inflammable and explosive goods, drug-related goods,
dangerous chemicals, illegal publications and other illegal articles from entering the delivery channel.

S F Supported the Safety Delivery in the 31st FISU World University Gamesin Chengdu
In August 2023, the 31st FISU World University Games held in Chengdu,
Sichuan Province was successfully concluded. During the event, SF
provided perfect service to guarantee the safe delivery of sports-related
items and documents.
During the preparation stage of the competition, SF participated inseveral meetings with local government departments to coordinate anddeploy real-time operations. SF proactively coordinated with relevant
departments in the pre-event stage to develop a full-process plan,
identified and resolved issues on-site in a timely manner, ensuring
the smooth operation of centralized security checks. During thecompetitions, SF achieved zero occurrences of express delivery safetyincidents and its delivery service was highly appreciated by society. As
a result, SF was also honoured with the “Sichuan Province Outstanding
Enterprise in Express Delivery Security Work of the 31st World University“Sichuan Province Outstanding Enterprise in Express Delivery

Games” award.

Security Work of the 31st World University Games” award for SF

1092023 S.F. HOLDING SUSTAINABILITY REPORT
Services

Training on Identification of Prohibited Articles
To improve employees’ ability to identify illegal and prohibited articles, SF regularly carries out illegal and prohibited articles identification training
activities for grassroots employees. In 2023, SF carried out professional ability improvement training for safety inspection personnel. This training was
conducted through various forms, including sending safety-related training materials through internal online platforms and conducting offline training,self-training, morning meetings and other forms of training for new employees in different regions.

500 offline trainings.
In 2023, the coverage rate of safety delivery training for the couriers is 100% , and the qualification rate of the trainings is 99.9% .
As of the end of the reporting period, SF has conducted more than

Additionally, by putting up posters to crack down on drug, prostitution and pornography, knives and other illegal and prohibited articles, SF reminds
employees to remain vigilant at all times and jointly maintain the safety of delivery services.

Dangerous Goods Transportation
SF strictly abides by the relevant laws and regulations on the transport of dangerous goods. The company has established a comprehensive
management system for the transport of dangerous goods, such as the Dangerous Goods Transportation Manual and the Emergency Response
Guidance for Aircraft Incidents Involving Dangerous Goods. Meanwhile, SF formulated detailed safety standards, standardized the classification,
identification, packaging, collection and transportation, inspection and delivery of dangerous goods, strengthening the monitoring and managementof the transport of dangerous goods. In terms of the qualification of the transport of dangerous goods, SF Airlines has obtained the Category 1~9dangerous goods qualification for self-use aviation materials and commercial transport, and it has become the first airline in China to obtain theapproval under the A99 International Air Transport Certification.

S F Airlines Assisted in the Completion of A99 International Air Transport
Certification and the First Air Transportation of Large-Power Lithium Batteries
On November 23, 2023, SF Airlines successfully transported largepower lithium batteries of a leading new energy vehicle manufacturer
from Ezhou to Germany. This was the first time that it’s large-power
lithium battery products were exported via the domestic airline,
demonstrating the enhancement of SF’s ability to provide cross-border
air transportation services for dangerous goods.
SF formulated a transportation support plan, prepared A99 materials
with special approval, strictly adhered to transportation operational
requirements, and successfully completed the safety testing of lithium
batteries and their packagings in accordance with international
standards. Besides, SF Airlines and Ezhou Airport evaluated the
airport’s emergency response plan and SF Airlines’ emergency response

SF Airlines Supported First Transportation of
Large-Power Lithium Batteriescapabilities based on the pre-set scenarios such as “emergency response
to fires involving dangerous goods within the cargo warehouse” toensure transportation safety.

SF actively invested in the research and development of dangerous goods transportation technology. In November 2023, SF participated in thedemonstration of application of the national key project “Safety Protection Technology and Equipment for Power Lithium Battery Transportation”
for the first time as a benchmark logistics enterprise in the lithium battery industry. SF developed the key technology of power lithium batterytransportation safety protection equipment, and improved China’s transportation safety risk warning and accident prevention and control system. In
this case, SF supports the high-quality development of China’s new-energy automobile industry.

1102023 S.F. HOLDING SUSTAINABILITY REPORT
Services

Delivering Premium Services
SF continuously improves service quality, differentiates service competitiveness and continuously provides customers with highefficiency and high-quality services. SF’s services have penetrated into industrial manufacturing, commercial circulation, salesof agricultural products, food and medicine cold chain, international trade, local life and other fields, covering all aspects ofproduction and people’s livelihood. This establishes a “fast” “punctual” “safe” brand image, which has been widely recognized bycustomers, industries and society.

Enhancing Customer Experience
SF continues to improve the industry service standards in various segments. It is committed to providing customers with high quality service. SF drives
the coordinated delivery of all operational processes based on customer feedback, promotes the optimization of internal service standard processes,
provides customers with speedy and warm services, and continuously improves customer satisfaction.

Completed customer complaint service target in 2023 and target of customer complaint service
in 2024

Customer
service

Target of 2023

Target achievement in 2023

Target in 2024

The dissatisfaction rate 10 towards
customer complaint service is lower
than 5%The dissatisfaction rate customer
complaint service in 2023 was 3.7%

The dissatisfaction rate towards
customer complaint service is lower
than 5%

In 2023, SF received 32,578 complaints about products and services, a decrease ofcomplaint handling rate reached12.1% compared with 2022, and the consumer

100%.

In 2023, SF continued to promote customer satisfaction by building online customer service centers, improving professional customer service teams,
and expanding diversified customer service channels.

Create an online customer service center: SF provides customers with a more convenient and unified digital tool for after-sales service,
comprehensively enhancing the customer experience in the after-sales service process. For different claims circumstances, SF constructs the modeof differentiated direct compensation. While helping employees improve their operational efficiency, SF provides rapid services for high-quality
customers in the claim scenarios. At the same time, through in-depth analysis of the feedback of customer experience, SF fully explores customer
feedback, accurately identifies customer needs, and enhances customer experience.
Improve the professional team for customer service: Through the “Ability diagnosis – Thematic empowerment – Online resource – Effect audit”,
SF improves the professional ability of customer service in the whole process, strengthens the evaluation by means such as dialing test by
mysterious person, business testing, and applies the evaluation results to the optimization of processes and tools.
Expand customer service channels in a diversified manner: SF provides one-to-one exclusive service channels via WeCom for some enterprisecustomers, and gradually builds up the self-processing capabilities of WeCom to achieve self-service processing in simple scenarios. This year, SF
has achieved the self-service processing in 12 scenarios to provide customers with prompt responses and 24/7 uninterrupted service.

Customer Satisfaction Survey
SF conducts quarterly surveys on customer satisfaction and the NPS (Net Promoter Score), adopts online questionnaire survey and random stratified
sampling, continuously monitors NPS and customer satisfaction scores of enterprises and individual customers and collects customer opinions. In 2023,
the total number of survey samples exceeded 100,000, covering hundreds of cities across China, and the research content incorporated more than 40
subdivision indicators in six dimensions, namely the express timeliness, express security, pickup and delivery service, sales service, after-sales service,and system service.
10

The dissatisfaction rate with customer compliant service is derived from satisfaction ratings with respect to the handling of customers’ complaint issues, which equals
to, the number of customers dissatisfied with the handling of their complaint issues / total number of customer complaints.

111

2023 S.F. HOLDING SUSTAINABILITY REPORT
Services

According to the survey results, SF customer satisfaction and NPS continue to be promoted. According to the public satisfaction score of expressdelivery services in 2023 released by the State Post Bureau, SF ranked first in the first three quarters of 202311. According to the China Net Promoter
Score (C-NPS) released by Chnbrand in 2023, SF is the most recommended company that provides express delivery services.

F urther upgrade of claims service enables more convenient self-service
operation
In 2023, SF has launched its online self-service claims product that is based on risk models and intelligent compensation algorithms to effectively
solve the needs such as the long-processing cycle, opaque processing progress. Customers can apply for claims online through the SF app or its
WeChat mini program, and then upload the relevant claim proof. They can receive quick compensation within 5 minutes, which greatly enhances
customers’ experience in their settlement of claims.

Customer Privacy Protection
SF pays attention to the privacy protection of its users and implements a comprehensive customer data security protection strategy covering all aspectsof the service process, including “ordering, pickup and delivery, transit, after-sales service, and operations”. It comprehensively safeguards the securityof customer data and privacy.

SF’s measures to protect customer privacy in each businessBusiness Process
Protection
measures

Order Placement

Pickup and Delivery

Transit/After-sales

Operation

Customers areencouraged to complete
online real-nameauthentication using
State Post Bureau’s
An YiDi Real-Name QR
Code and the SF RealName QR Code before
placing an order.
Information is alsocollected by means ofa virtual QR code upon
picking up parcels.

For sealed documents
such as bidding
documents andpersonnel files, it isforbidden to unseal andinspect the envelope. Bytaking and uploading
photographs of the outer
packaging, it is ensured
that the parcel is sealed
and intact before it issent.

Data desensitization andintelligent outboundcalling are implemented
to protect customer
privacy. When contacting
customers, customer
phone numbers areprotected with masked
phone numbers
displayed on the callinterface. Alternatively,
customers are directly
called from the backend.

Encrypted storage andtransmission are used
to encrypt customer
information stored in
the business systems anddata platforms to realize
cipher text transmission
during data transfer.

Since 2017, SF has taken the lead in launching SF privacy waybill - “Fengmi Waybill”, by hiding the middle 6 digits ofthe phone numbers of both senders and receivers. The personal information is encrypted on the waybill, and the virtual
number is used to contact customers by the delivery personnel and customer service personnel through the information
system security technology. In addition, it also supports the differentiated privacy protection needs of customers,
protecting the name and address information of customers, and comprehensively guaranteeing the security of customer
data and privacy.
In November 2023, SF took the lead in launching the innovative “SF ID” service in the industry to provide users with amore convenient and private and secure way to send parcel. The “SF ID” service allows users to set a customized code(a combination of digits and letters) in place of traditional address information. After the setup, users no longer needto provide details such as phone number and address to the sender, but only need to provide “SF ID” for the pickup
and delivering. The rest of the information will be encrypted and hidden, to realize the information encryption in thewhole process, greatly safeguarding personal privacy and security.

SF ID Interface
11

As of the disclosure date of this report, the annual public satisfaction score of express delivery services in 2023 has not been released.

112

06
CLIMATE-RELATEDDISCLOSURES

2023 S.F. HOLDING SUSTAINABILITY REPORTClimate-related Disclosures

Preface
Climate change concerns the well-being and future of all humankind, and a global
consensus has been formed to actively cope with climate change. As the United
Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement
set the course for global climate governance, stakeholders from all walks of life should
work together to explore and establish a new mechanism for a comprehensive andefficient climate governance, so as to address the challenges brought by extreme
weathers, to move towards a green and low-carbon future, and to safeguard ourplanet Earth.
In 2023, the 28th Conference of the Parties (COP28) to the United Nations Framework
Convention on Climate Change conducted the first global stocktaking since the entry
into force of Paris Agreement. The Conference summarized the achievements and gaps
in countries’ progress towards achieving the target to limit the temperature rise, andreaffirmed the key concerns of independent contributions and energy system transition
made by each country, as well as the target to limit the temperature rise to 1.5℃.
China, as a major participant, contributor and leader in the global climate governanceprocess, has further refines the national goal of “Carbon Peaking and Carbon
Neutrality” and actively participated in global climate governance by adhering to theconcept of green and low-carbon development, thereby contributing to the building ofa community of human destiny.
Under the context of China’s “Carbon Peaking and Carbon Neutrality” goals, thelogistics industry, as one of the important pillar industries of national economic
development, shoulders the critical mission of energy saving and carbon reduction.
As a key player of green and low-carbon transformation in the logistics industry, SF
always upholds the original intention of sustainable development, and is committed
to leveraging science and technology to take the lead in changing the green supply
chain. SF has deeply integrated the sustainability concept with its development strategy
by extending the green value to the industrial chain, thus providing upstream anddownstream partners and customers with green and low-carbon solutions supported
by digital intelligence technology. SF firmly believes that it can provide upstream anddownstream partners and customers with more efficient and low-carbon solutions in
all aspects of supply chain logistics, such as packaging, transportation and transit bymeans of digital intelligence technology. In this way, SF has also built a green supply
chain ecosystem jointly with its partners, contributing to achieving global climate goals.
To actively respond to the concerns of stakeholders on sustainability issues, SF has
published sustainability reports since 2019. In 2021, SF released a white paper oncarbon targets, setting out the climate commitment to “achieve a 55% improvementin carbon efficiency by 2030 compared to 2021, and a 70% reduction in the carbon
footprint of each parcel compared to 2021”. This year, by joining the Science Based
Carbon Targets Initiative (SBTi), SF took a crucial step in committing to achieve “netzero” greenhouse gas (GHG) emissions across its value chain by 2050.
To better understand the risks and opportunities posted by climate change, SF has fully
adopted the management suggestions and disclosure framework of the Task Force on
Climate-related Financial Disclosure (TCFD) and has increased its climate information
disclosure efforts. In addition, through policy research, industry benchmarking
and other means, SF comprehensively assesses and analyses climate-related risks
and opportunities for an accurate identification of the key ones, and formulates
corresponding response strategies. Meanwhile, SF keeps on optimizing and refining
relevant metrics and target management to ensure effective strategic response to thechallenges brought by climate change.
The task of addressing climate change must be conducted with ambitions andpragmatism. Based on the present circumstances and looking towards the future, SF
will continue to improve its understanding of climate change risks and opportunities,
actively explore paths of green innovation, continuously promote the low-carbon
transformation of operations, and work with various stakeholders to jointly push ourindustry towards technology, efficiency, cleanliness and greenness.

1142023 S.F. HOLDING SUSTAINABILITY REPORTClimate-related Disclosures

Governance
SF is keenly aware of the significant impact of climate change on its own strategic planning and business operations. Thus, SF
has integrated climate change governance as an important part into its Environmental, Social and Governance (ESG) system.
To effectively respond to climate risks and continuously improve its governance level in ESG, SF has established a sustainable
development governance structure since 2019 and continuously improves its ESG governance system. In 2022, SF also elevated
ESG professional management work to the corporate governance level, and added responsibilities regarding the supervision ofsustainable development to the Strategy Committee of the Board of Directors that is responsible for monitoring and managing
sustainable development issues, including the task of addressing climate change. In this case, SF integrates climate risks andopportunities into its strategic planning.

Decision-making Supervision

The Board of Directors

Audit
committee

Salary andassessment
committee

Supervision & guidance

Strategy
Committee

Nominating
committee

Riskmanagement
committee

The Board of Directors, acting as the highest decisionmaking body for SF’s sustainable development andresponse to climate change, is responsible for the strategy
development, supervision and policy-making on ESG
and climate change issues to ensure the implementation
departments take effective measures to address ESG risks
and impacts of climate disasters. The Strategy Committeedelivers ESG and climate goals and regularly discusses
trends, risks and opportunities to keep information updated.
Meanwhile, SF has incorporated carbon reduction targets
into its corporate strategy, tracked them as a key issue tofollow up, and linked them with management performanceto ensure effective implementation of ESG and climate
governance.

Periodic reporting
The Sustainability Leadership Team composed of Chief
Strategy Officer (CSO), Chief Financial Officer (CFO), Chief
Operating Officer (COO)and Chief Human Resources Officer(CHO), reporting to the Strategy Committee of the Board of

Sustainability Leadership Group

Directors, is responsible for setting and regularly reviewing
ESG and climate change related targets to ensure that ESG
and climate related risks are fully considered and addressedwith SF’s decisions, investments and operations.

Daily Management

Overall planning

As a professional working body, the Sustainable
Development Working Group is composed of representatives
from the Office of the Board of Directors, various functional
departments involved in sustainable development word, BGs(Business Group), and BUs (Business Unit). It is specifically
responsible for coordinating the implementation of ESG
and climate change-related work, ensuring the effective
uploading and issuing of tasks, and reviewing the risks andopportunities related to climate change.

Sustainable Development
Working Group

Coordination in implementation& promotion

Implementation

Daily reporting

Daily reporting
In order to effectively implement and perform ESG andclimate-related management work, all business andfunctional departments of SF do a good job of ESG andclimate risk identification and carbon emission accounting
in accordance with established management indicators andmechanisms, implement climate change risk management
measures in business activities, and implement energy
conservation and emission reduction work plans to ensurethat ESG and climate governance work is comprehensively
improved.

Business and Functional Departments

115

2023 S.F. HOLDING SUSTAINABILITY REPORTClimate-related Disclosures

Strategy
To identify and assess the impacts of climate-related risks and opportunities in a more effective way, based on therecommendations of the TCFD framework and extensive industry research, SF adopts the two Shared Socioeconomic Pathways (SSPs)of the United Nations Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report, i.e., SSP1-2.6 (Low-Emission
Scenario) and SSP5-8.5 (High-Emission Scenario), to analyze the risks and opportunities of SF under different climate scenarios. In
terms of physical risks, SF focuses on the impacts of acute and chronic physical risks under high-emission scenarios. For transition
risks, the main consideration is the impacts of changes in various external policies, markets, technologies and other factors on SF
under low-emission scenarios.
The climate scenarios adopted for the current year are shown below:

Type

Highemission
scenario

Lowemission
scenario

Scenario

SSP5-8.5

SSP1-2.6

SourceApplication Notes●

Under this scenario assumption, GHG emissions
are projected to be at a high level by 2100 due
to the continuous exploitation of fossil fuels as
the primary energy to drive global economic
growth, which may exacerbate the occurrenceof extreme weather events;●

Under such a scenario, the lack of robust
climate response interventions leads to asignificant increase in GHG emissions and a risein physical risks faced by enterprises.

●

Under this scenario assumption, the economy
shifts rapidly from fossil fuel-dependent to
the renewable energy-driven one, and many
countries begin to implement strong climate
mitigation measures to control the magnitudeof global warming in this century to not
exceed 2.0℃ higher than the temperature
before the Industrial Revolution (1850).

●

Under such a scenario, enterprises face ahigher transition risk as policy regulation
becomes more stringent in an effort to reach alower-carbon economic environment.

AR6 of IPCC

AR6 of IPCC

In the meantime, SF identifies and assesses short-, medium- and long-term climate risks and opportunities, and maps risk management to SF’s short-,
medium- and long-term strategic targets and action plans. During the year, SF defined the time frame of the its climate-related risks and opportunities
as short-term (0 to 2 years), medium-term (2 to 5 years) and long-term (5 to 10 years), so as to assess the impacts and trends of the risks andopportunities under various climate scenarios in different time frames, thus formulating a more forward-looking and flexible risk management
strategy.

1162023 S.F. HOLDING SUSTAINABILITY REPORTClimate-related Disclosures

Physical Risk
Physical risk refers to the impact of changes in climatic conditions on SF’s operations and development, including acute physical risks (e.g., typhoons,floods) and chronic physical risks (e.g., rise in average temperature). This year, SF conducted a comprehensive risk screening of acute and chronic
physical risks, identifying and analyzing the financial impact of key physical risks on SF. The physical risks identified by SF are shown in the tablebelow:

Risk Type

Risk Factor

Time frame of Influence

Level of Impact

Acute risk

Typhoons

Short-, medium- and long-term

Low to medium

Risk Analysis●

At the stage of transit, SF has a large number of domestic and overseas self-operated and agency outlets, transit centers,
logistics industrial parks and warehouses. Strong winds and heavy rains brought by frequent typhoons may cause damage
to the facilities in transit centers, such as damage to the roofs of warehouses and breakage of the transit equipment, etc.,
which may result in the malfunction of the transit centers, as well as a possible increase in maintenance expenses andoperating cost.

●

During the transportation, SF provides domestic and cross-border multi-modal transport services to customers using various
modes of transportation such as air, land and railway. Severe typhoon events may have impacts on the overall logistics
transportation, resulting in goods being stranded in transit centers or warehouses and the inability to deliver goods to theirdestinations in a timely manner, thereby affecting logistics performance risk and causing loss of revenue.

Countermeasures●

In the design and construction of transit centers (e.g., industrial parks), due consideration shall be given to the effects ofstrong winds and heavy rainfalls brought by typhoons. And in compliance with local building requirements, the design ofmulti-sloped pavement shall be avoided to prevent the formation of inward gullies produced by heavy rainfalls.

●

In terms of air transportation, SF Airlines has set up a meteorological seat in the Aviation Operation Command Center togive warnings and forecasts about the weather situation in a timely manner, assess the specific intensity, scope and period
of influence of inclement weather in a refined way, and be ready to convey such information to the operational guarantee
units such as the units responsible for dispatching and releasing goods, so as to provide meteorological support for thedecision-making adjustments on flights.

Risk Type

Risk Factor

Time frame of Influence

Level of Impact

Acute risk

FloodsShort-, medium- and long-term

Low to medium

Risk Analysis●

In transit, especially in regions prone to flooding, SF’s transit centers, warehouses and industrial parks may suffer fromwarehouse flooding or waterlogging, which may result in damage to goods in stock. At the same time, the logistics
infrastructure, such as transportation equipment, piping systems and warehouse facilities may be destroyed, causing loss ofasset and an increase in repair cost.

●

Flooding may lead to serious damage to roads, bridges and other transport infrastructure, resulting in obstruction of routes
and delays in logistics transportation, thereby affecting SF’s transportation efficiency and causing a revenue decline.

Countermeasures●

For industrial parks located in low-lying terrain, drainage facilities are checked in advance, and flood prevention anddrainage modifications are carried out in accordance with local requirements to cope with flood risks.

●

On the basis of the news released by the China Meteorological Administration and the Ministry of Water Resources, SF’s
command and security center issued emergency plans such as the Emergency Response Plan for Flood Control and Abnormal
Weather Response Plan to the whole network through emails and other forms of communication, so as to prevent the safety
risks brought by the flood season by making work arrangements in advance, including organizing activities for safeguards,
daily precautions (personnel safety, parcel safety, driving safety, site safety and materials reserve) and responses during
different processes.

1172023 S.F. HOLDING SUSTAINABILITY REPORTClimate-related Disclosures

Risk Type

Risk Factor

Time frame of
Influence

Level of Impact

Chronic risk

Rise in average temperature

Long-term

Low to medium

Risk Analysis●

As the temperature continues to rise, the work efficiency of outdoor workers (such as couriers, sorters) is significantly
affected. High temperature may make them fatigued, suffer from heat stroke or physical discomfort, which in turn reduces
their work efficiency. Meanwhile, the expenses incurred for high temperature subsidy and environmental improvement may
increase the operating costs.

●

High temperatures may increase the refrigerant requirements for SF’s cold chain logistics (such as cold warehouses, coldtransport vehicles), which may lead to the rise in refrigeration costs.

●

High summer temperatures and temperature differences within the business area due to geographical location may adversely
affect the storage and transportation of consignments or result in loss of revenue.

Countermeasures●

Based on external weather forecasts, we established and improved the weather monitoring system, which can give early
warnings of high temperature. By doing so, our staff can respond to the risk of extreme high temperatures in advance.

●

Implementing safety and health measures for high-temperature work, including the provision of cooling materials such as
portable fans, special renovation projects for ventilation and cooling, and the reasonable allocation of working hours andtime for rest, to avoid injuries to personnel caused by extreme heat.

●

Based on the national urban temperature data and routing data collection, we developed an environmental temperaturemodel and divided the country into different temperature zones. Through the use of different temperature control materials
and composite temperature control technology, temperature control packaging solutions and refrigerant configuration
requirements based on temperature zone and flow direction are formed to deal with the potential adverse effects broughtby extreme temperatures on consignments.

Transition Risk
Transition risk refers to the risks brought to enterprises by a series of changes in policies, laws, technologies, and markets in the process of responding
to climate change and shifting to a sustainable economy. By analyzing the macro environment, industry characteristics and internal research, as wellas the characteristics of its own business mode, SF has conducted in-depth analysis of four types of transition risks, namely the policy and regulatory
risks, technical risks, market risks and reputation risks.
The key transition risks identified during the year are shown in the table below:

Risk Type

Risk Factor

Time frame of
Influence

Level of Impact

Policy and regulatory risks

Pressure from the GHG
reduction policy

Short-term, medium-term andlong-term

Medium to highRisk Analysis•

Since the announcement of the “Carbon Peaking and Carbon Neutrality” goal, China has successively issued a series of
relevant policies for the fields of energy, transportation and logistics, such as the Plan for Modern Logistics Development
during the “14th Five-Year Plan” Period and the Outline for the Development of Green Aviation Manufacturing Industry(2023-2035), to promote the green and low-carbon transformation of the economy. These pressures from the relevant macro
policy adjustments will influence SF’s core business activities such as express transportation and warehousing services, which
may have an impact on SF’s business model, and may also lead to an increase in SF’s expenses on environmental protection,energy conservation and emission reduction and other related activities.

•

In terms of offshore compliance, the EU-ETS has included the air transport sector, aiming to reduce the carbon emissions ofaviation through market mechanisms. With the rapid expansion of SF Airlines freighter fleet and the increased demand forintercontinental routes, SF Airlines may be included within the scope of carbon emission trading control in the future, which
may lead to an increase in additional operating costs.

118

2023 S.F. HOLDING SUSTAINABILITY REPORTClimate-related Disclosures

Countermeasures●

Continuously tracking the progress of laws and regulations at home and abroad and incorporating them into the risk
assessment process, SF has set up a national and local policy research team to deeply analyze the relevant policies that havebeen issued and make strategic layouts in advance in light of the changes in the internal and external environments.

●

For international routes, SF continuously monitors the volume of flights and closely follows the policy changes of the EU
ETS. Accordingly, SF has set up the working group on EU route carbon emissions and formulated the Guidelines of EU RouteCarbon Emission. By strengthening carbon business management capabilities in an all-round way, opening up relevant
channels, and cultivating professional talents, SF can cope with risks in advance.

●

SF invites the professional third-party institution to carry out carbon emission verification every year to gain a deeper
understanding of its own carbon emission status, and implements refined management of energy saving and carbon
reduction in order to promote scientific and standardized emission reduction work.

Risk Type

Risk Factor

Time frame of
Influence

Level of Impact

Technical risk

R&D and investment in lowcarbon transition technology

Short-term, medium-term andlong-term

Medium to highRisk Analysis●

Under the joint promotion of policy and external market environment, the investment of R&D in new energy and carbon
reduction technology in various application scenarios of logistics and transportation field has gradually received wide
attention, such as the application of hydrogen fuel cell electric vehicles, sustainable aviation fuel (SAF) and other innovativetechnologies in various transportation links. SF is increasing its investment in electric vehicles in vehicle transportation,
while continuing to expand its own freighter fleet in air transportation. The R&D and application of new energy innovativetechnologies in transportation scenarios require substantial capital investment, which may increase short-term costs.

Countermeasures●

SF has actively participated in seminars on the development of SAF to gain an in-depth understanding of the relevant
cutting-edge technologies and market dynamics. Based on this, SF explores the feasibility of deploying SAF projects topromote the green and low-carbon transformation of air transport.

●

Considering the maturity of new energy vehicle technology and the conditions of replenishment facility, the pilot operationof new fuel vehicles such as LNG, CNG, methanol and hydrogen is planned to be carried out in some specific areas or routes
in the future.

Climate-related Opportunity
On the road to a low-carbon economy, with the transformation of energy structure, changes in market demand, and the emergence of technologicalinnovation, SF actively takes forward-looking climate adaptation measures and actions, which also brings new development opportunities for SF itself.
The measures and actions include the development of new products and services, and the optimization of supply chain resilience.

Type of Opportunity

Opportunity Factor

Time frame of
Influence

Level of Impact

Products and services

Development and/or
expansion of low-emission
products and services

Short-term, medium-term andlong-term

Medium to high1192023 S.F. HOLDING SUSTAINABILITY REPORTClimate-related Disclosures

Opportunity Analysis•

From the policy perspective, China has successively issued a number of policies in recent years, such as the 14th Five-Year Plan
for Circular Economy Development and the Instruction on Accelerating the Construction of a Waste Recycling System, whichclearly points out the comprehensive implementation of the recycling mode of production, and provides strong guidance andsupport for various industries to vigorously promote the development mode of circular economy.

•

From the market perspective, as climate change becomes more and more a focus of attention, downstream customers andconsumers shift their preference to greener and low-carbon services and seek sustainable supply chain solutions. Meanwhile,by actively responding to customer demand for green and low-carbon services, SF can win the favor of customer and its
competitive advantage, and it can also promote the green and low-carbon transformation of the upstream and downstream
supply chain.

Countermeasures•

In line with the development trend of circular economy, SF has deeply created a circular ecosystem of express packaging,cooperated with the industrial chain to the downstream, and actively participated in the development of a new model ofgreen, low-carbon plastic recycling and the formulation of green packaging standards such as “double easy” (easy to recycle,
easy to regenerate). At the same time, we continue to implement the “Fengjing Plan”, and actively practice packaging
reduction, reuse, recycling, and degradation, promoting the enthusiasm of customers to participate in recycling as well as thedevelopment of circular economy.

•

SF has cooperated with a number of brand customers. Through the carbon emission calculation model of SF’s self-developed“Fenghe Sustainability Platform” with digital intelligence, it helps customers to learn about the volume of GHG emissions
during transportation, which enhances the transparency of carbon emission data and provides customers with greener andlow-carbon logistics solutions.

Type of Opportunity

Opportunity Factor

Period of Influence

Level of Impact

Resource efficiency

Usage of more efficienttransport modes

Short-term, medium-term andlong-term

Medium to highOpportunity Analysis●

As green logistics continues to be popularized and promoted, multimodal transport has received widespread attention as oneof the key strategies for advancing green logistics. In order to ensure the accelerated implementation of policies supporting
multimodal transportation, China continues to promote the Work Plan for Optimizing the Development of Multimodal
Transport and Adjusting the Transport Structure (2021-2025). In this way, it helps establish a unified, open, orderly
competitive transport service market where various modes of transport are deeply integrated and comprehensive transport
efficiency is improved, reducing the logistics costs and promoting energy saving and carbon reduction in transport links.

Countermeasures●

SF makes full use of its own resources such as air transportation, land transportation and delivery hubs to develop
multimodal transport combining highway, railway, waterway and air transportation. In terms of bulk transport business,
SF has participated in the national multimodal transport demonstration project, continuously optimized the transportorganization model, and provided rail transport services from pick-up and delivery to settlement, further enhancing its
competitive edge of business in the industry. At the same time, SF is actively exploring a new logistics model of air-rail
combined transport, which has carried out demonstration projects in Wuxi and Shenzhen. Working with partners to promote
the integrated development of rail transportation and modern logistics industry, we make full use of capacity resources ofurban rail transportation, reduce traffic congestion, and foster the green and low-carbon development of logistics.

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2023 S.F. HOLDING SUSTAINABILITY REPORTClimate-related Disclosures

Risk Management
SF has established a risk management framework at the company level based on the risk management framework of enterprise andfully integrated climate change risks into the its risk management system. SF also conducts regular identification and assessment inaccordance with the its overall process of risk management to identify, manage and disclose significant climate-related risks.
The Risk Management Committee of the Board of Directors, as the highest decision-making body of SF risk management, is
responsible for the effectiveness of the SF’s risk management system, such as identifying, preventing and monitoring climate
risks and ESG-related risks, and the Committee is also in charge of formulating strategies to cope with the related risks. The Risk
Committee, as a body under the Risk Management Committee of the Board of Directors, is responsible for considering and making
decisions on the risk management system, systems, major risk prevention and crisis response that incorporate climate change risks.
In addition, the risk control and compliance department regularly conducts discussions and analyses on climate change-related
issues, and prepares SF’s overall risk report taking climate change risks into consideration, and submits it to the Risk Management
Committee of the Board of Directors for further consideration. SF ensures timely transmission and effective handling of risk
information including climate risk through regular reporting and communication mechanisms, thus forming a risk management
mechanism of efficient collaboration and close communication.
In order to effectively manage climate risks, SF effectively combines climate risk assessment and risk management, establishes
a sound management mechanism and process for climate risk identification, assessment, control and supervision, and forms arisk management process of “risk environment analysis – goal setting and risk identification of risk control – risk assessment – risk
response – supervision and improvement”.

Risk environment
analysis

Goal setting and risk
identification of risk
control

Risk assessment

Risk responses

Supervision andimprovement

SF continues to pay attention to and analyse changes in the internal and external environment brought
about by climate-related risks, including pressures exerted by external policies, market trends, SF’s risk
tolerance, and business operation models. If environmental changes have a significant impact on risk
management strategies or measures, SF’s risk management and control department will make timely
adjustments to the risk control strategy planning.

Based on SF’s goals of risk control, it conducts in-depth research and analysis on the internal and external
conditions and key matters affecting the realization of the objectives, covering multiple aspects such as
internal management, external economic environment, natural environment and laws, regulations andpolicies. In this case, we can identify and sort out the list of risks related to climate change.

SF adopts a combination of quantitative and qualitative methods to conduct climate risk analysis andassessment. Based on the probability of risk occurrence and the degree of impact on SF’s objectives, theidentified risks are prioritized and the risks that are confirmed to be given the extensive focus and thepriority to control. As a result, the risks can provide information for the reference of formulation andadjustment of SF’s development strategy.

Taking into account the causes and tolerance of risks, SF weighs risks and benefits, brand reputation,social responsibility and other factors, and based on the results of risk analysis, the Board of Directors
will review and determine appropriate and effective risk response plans to ensure SF’s stabledevelopment.

SF continues to follow up, monitor and manage the handling of climate-related risks. In daily work, SF
improves its ability to cope with climate risks by continuously optimizing its risk control mechanism andmanagement capabilities.

1212023 S.F. HOLDING SUSTAINABILITY REPORTClimate-related Disclosures

Metrics and Targets
As the largest integrated logistics service provider in China and Asia and the fourth largest in the world, SF always adhere to theconcept of sustainable and healthy development. We understand the importance of participating in global climate action, and we
actively respond to the global carbon reduction initiative in an attempt to practice the national dual carbon strategy, and achieve
the long-term goal of the Paris Agreement to limit the rise in global temperatures to 1.5°C that is lower than that of the preindustrial level. Based on carbon reduction achievements in the past, SF released the industry’s first Carbon Target White Paper,committing to improve carbon efficiency by 55%, and reduce the carbon footprint of each parcel by 70% in 2030 compared to2021. On 23 November 2023, SF has formally signed and submitted to the Science Based Targets initiative (SBTi) the Business
Ambition for 1.5°C Commitment Letter to demonstrate our commitment to achieving the scientific target of GHG emissions
reduction and striving to achieve a net-zero emission of the value chain by 2050.

Scope 1 and scope 2

Indicators

Clean energy

Scope 3

Carbon footprint of eachparcel will be reduced by 70%
in 2030 compared to 2021

55%

70%

Progress on Climate Action

Future Plans for Short- andMedium-Term/Goal Setting●

By the end of 2023, SF has 26
photovoltaic projects in operation andconstruction in its industrial parks,
with a total installed capacity of 116
megawatts.

SF plans to continue to invest in theconstruction of photovoltaic projects in its
industrial park in 2024. By the end of 2025,
all photovoltaic projects are expected to becompleted and put into operation.

●

14 photovoltaic projects that havebeen put into operation havegenerated a total of 18.39 million kWhof photovoltaic power generation.

By then, it is expected that the total installedcapacity of photovoltaic equipment in theindustrial park will reach 140 megawatts andthe annual power generation will exceed 100
million kWh, realizing a stable supply of green
electricity.

●

In 2023, SF actively adjusted thestructure of transport vehicles,
continued to optimize the selection
and replacement of traditional fuelvehicles, and further expanded the
proportion of the fleet of energy
vehicles. By the end of 2023, SF has
cumulatively deployed over 31,000
new energy vehicles, serving a total of
243 cities.

In 2024, based on the maturity of new energy
vehicle battery technology and replenishment
conditions, SF plans to select several areas orroutes for the pilot and application of LNG,
CNG, methanol, hydrogen and other fuelvehicles.

In 2023, we have reduced carbon
e m i s s i o n s b y a b o u t 540,000 t o n sthrough green packaging initiatives
such as packaging reduction,
recyclability and degradability, which
reduced the use of packaging basepaper by 43,000 tons, and reduced theuse of plastic by about 162,000 tons.

In 2024, SF will continue to carry out thesophisticated R&D of the reduction technology
for various types of packaging materials,
and complete the formulation of mandatory
national standards in the Requirements for
Restrict Excessive Packaging. Meanwhile, SF
will complete the switch in the scale of using
double easy recycled plastic bags in 7 major
cities, while applying recycling technology
to other packaging materials to improve theamount of recycled plastics.

Greentransportation

●

Green
packaging

Carbon efficiency will be
improved by 55% in
2030 compared to 2021

By 2030, the Company will strive to achieve
100% electrification of vehicle equipment in
the aviation base.

By 2030, we will strive to reach 100% of theswitching of standard plastic bags to recycledplastic bags.

1222023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Appendix
About the Report
This is the fifth annual sustainability report issued by S.F. Holding Co., Ltd.. Adhering to the principles of balance, comparability,
accuracy, timeliness, clarity and reliability, this report discloses the management measures and effectiveness of S.F. Holding Co.,
Ltd. in terms of sustainable development.

Report Title
For the convenience of expression and reading, “SF”, “the Company”, “we” and “the Group” in this Report all refer to “S.F. Holding Co., Ltd.”.

Time Range
This report covers the period from 1 January 2023 to 31 December, 2023.

Reporting Scope
The reporting scope of this Report on general disclosure and management of material issues, and social key performance indicators is consistent
with 2023 SF Annual Report, including S.F. Holding Co., Ltd. and its major subsidiaries in the People’s Republic of China and other regions including
the United States, South Korea, Singapore, and Malaysia. To ensure data reliability and properly and thoroughly reflect the Company’s overall
environmental performance, the Company will continue to improve data coverage and calculation processes for environmental performance indicators.
If this report includes further explanations on the coverage of specific information, those explanations will take precedence.

Reference and Principles
SF created this Report using systematic procedures including research and interviews, the identification of important stakeholders and material issues
related to ESG, and its understanding of stakeholder opinions. The procedures also include the determination of material issues, the scope of ESG
disclosure, and the collection and review of relevant information. SF prepared the Report based on collected relevant information and review andapproval by the Board of Directors.

The preparation basis referred to in the Report includes:•

Environmental, Social and Governance Reporting Guide in Appendix C2 to the Rules Governing the Listing of Securities on the Stock Exchange
of Hong Kong Limited•

Shenzhen Stock Exchange Social Responsibility Instructions to Listed Companies《深圳证券交易所上市公司社会责任指引》•

Guidelines for Sustainability Reporting Standards (GRI Standards) of the Global Sustainability Standards Board (GSSB)•

Task Force on Climate-Related Financial Disclosure (TCFD)•

Sustainability Accounting Standards Board (SASB) of Sustainability Accounting Standards Board Committee•

United Nations Sustainable Development Goals (SDGs)•

Key indicators of corporate environmental, social, and governance performance by capital market rating agencies.

1232023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Reporting principles
This Report responds to and follows the reporting principles of the Environmental, Social and Governance Reporting Guide, including materiality,
quantitative, consistency and balance. The following table describes the Company’s application of the reporting principles:

Principles

Responses of the Company

Materiality

In 2023, SF analyzed and evaluated important issues related to the company’s operation through thesubstantive issues survey questionnaire and submit them to the senior management of SF Express forreview and approval. We used the results of the ranking of issues of importance in 2023 as the basis forthis report.

Quantitative

The report discloses SF’s key quantitative performance indicators and sets quantitative performancetargets where applicable. The calculation criteria, methods, assumptions and/or calculation tools for all
quantitative indicators have been described in their respective locations.

Consistency

Unless otherwise indicated, the information selection, preparation and presentation of this reportremain consistent with previous years. If there are material changes that could affect comparisons withprevious years’ reports, we have indicated them in the appropriate location.

BalanceThis report is based on objective information and facts, and fairly discloses positive and negative
information about the company to prevent descriptions or reporting formats that may affect readers’decisions or judgments.

Meanwhile, the Report responds to and follows the reporting principles of the GRI standard. The following table is the Company’s explanation of theapplication of the reporting principles:

Principles

Responses of the Company

Accuracy

The Report has been carefully reviewed to report accurate and detailed information to ensure theaccuracy of the disclosed data.

Clarity

The Report is written in a way that is easy for readers to understand, presenting information in anaccessible manner.

Completeness

The Report fully discloses all the materiality issues identified by the Company in 2023.

Sustainability Context

The Report discloses information about the Company in the context of broad sustainability.

Timeliness

The Company discloses the ESG Report every year and releases it at the same time as the annual Reportto provide readers with timely reference for decision-making.

Verifiability

The data collected, recorded, compiled and analyzed in the Report may be reviewed to ensure quality.

124

2023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Information Explanation
In 2023, SF conducted ESG management for Kerry Logistics Network Limited. During the Reporting Period, SF completed the integration ofenvironmental indicator data of Kerry Logistics Network Limited (see Appendix “Key Performance – Environment” for details).
In March 2024, SF successfully passed the audit by SGS-CSTC Standards Technical Services CO., LTD., an international independent third-party audit
organization. The Company completed the third-party verification of greenhouse gas emissions of 2023 and obtained the certificate of greenhousegas accounting.

For the monetary amounts stated in the Report, unless otherwise stated, the currency in the Report is denominated in RMB.

This Report is published in both Chinese and English. If there is any discrepancy between the Chinese version and the English version, the Chineseversion shall prevail.

Release of this Report
This Report was approved and released by the Board on 27 March 2023 after confirmation by the management. The sustainability report of SF isreleased annually at the same time as the annual financial report.

Accessibility of this Report
You can obtain the electronic version of this Report from the following website: SF’s official website https://www.sf-express.com

For further consultation, or to offer any opinion or suggestion about this Report, please contact the Company via sfir@sf-express.com.

1252023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Assurance statement1262023 S.F. HOLDING SUSTAINABILITY REPORTAppendix1272023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Policy List
Chapter

GovernanceCompliance with the main laws andregulations

Main internal system of SF

Standardizing
Corporate
Governance“Code of Corporate Governance for Listed
Companies”“Rules Governing the Listing of Stocks on theShenzhen Stock Exchange”“Company Law of the People’s Republic ofChina”“Criminal Law of the People’s Republic ofChina”“Securities Law of the People’s Republic ofChina”“Rules of Procedure for Risk Management Committee of
the Board of Directors”“Rules of Procedure for Audit Committee of the Board of
Directors”“Rules of Procedure for Nomination Committee of theBoard of Directors”“Rules of Procedure for Remuneration and Appraisal
Committee of the Board of Directors”“Rules of Procedure for Board of Directors”“Rules of Procedure for Strategy committee of the Boardof Directors”“Work System for Independent Directors”“Rules of Procedure for General Meeting”“Rules of Procedure for Supervisory Committee”“Articles of Association of SF Holdings Co., Ltd.”“Investor Relations Management System”“Information Disclosure Management System”

Strengthening
Risk Control
Management“Law of PRC on Countering Unfair
Competition”“Anti-monopoly Law of the People’s Republicof China”“Basic Standards for Enterprise Internal
Control”“Management System of Company Risk Control”“Operation Rules of the Risk Committee”“Risk Control Compliance Management System of theGroup”“Risk Event Management System of the Group”“Crisis Management System of the Group”

Abiding by
Business Ethics“Anti-Money-Laundering Law”
“Trademark Law of the People’s Republic ofChina”“Audit Law of the People’s Republic of China”“Patent Law of the People’s Republic of China”“Interim Provisions on Banning Commercial
Bribery”“Accounting Standards for Business Enterprises– Application Guide”“Provisions of the Audit Commission oninternal audit work”“Integrity Handbook”“Anti-corruption Management System”“Rewards and Penalty Management Regulations”“Reporting Management Measures”“Operation Guidelines for Handling Infringement
Incidents”“Administrative Measures for Relatives and Bidding
Avoidance”“Trademark (Trade Name) Management System”“Employee Communication Management Regulations”“Patent (Software Copyright) Management System”

Ensuring
Information
Security“Personal Information Protection Law of thePeople’s Republic of China”“Data Security Law of the People’s Republic ofChina”“Cyber Security Law of the People’s Republicof China”“Information Security Incident Management Provisions”“Privacy Data Security Compliance Management
Standards”“Employee Information Security Manual”

Chapter name128

2023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

ChapterCompliance with the main laws andregulations

Main internal system of SF

Creating Green
Logistics“Method and Criteria for Green Packaging
Assessment”“Limitation of Excessive Packaging for Express
Delivery”“SF Aviation Energy Management System (Provisional)”“Administrative Measures for Updating and Disposing ofOperational Vehicles”“Regulations on the Administration of Operational Vehicles
Put into Use”
“Lump-sum Oil Consumption Plan for Commercial Vehicles”“Regulations on the Administration of Water andElectricity in the Parks”“Management Guide for Maintenance of Industrial Park
Facilities and Equipment”“Industrial Park Property Service Standards”“SF Packaging Code of Practice”

PromotingCircular
Economy“Circular Economy Promotion Law of thePeople’s Republic of China”

No relevant internal management system

Protecting theEnvironment“Forestry Law of the People’s Republic ofChina”“Regulations for the Implementation ofForestry Law of the People’s Republic ofChina”“Regulations of the People’s Republic of China
on Wild Plants Protection”

No relevant internal management system

Green Office“Air Pollution Prevention and Control Law of
the People’s Republic of China”“Law of the People’s Republic of China on
the Prevention and Control of Environmental
Pollution by Solid Waste”“Law of the People’s Republic of China on
the Prevention and Control of Ambient Noise
Pollution”“Energy Conservation Law of the People’s
Republic of China”“Water Law of the People’s Republic of China”“Water Pollution Control Act of People’s
Republic of China”“Soil Pollution Prevention and Control Law of
the People’s Republic of China”“Integrated Emission Standard of Air
Pollutants”“Emission Standards for Odor Pollutants”“Emission Standard for Industrial Enterprises
Noise at Boundary”“Standard for Noise Limits at the Boundary ofConstruction Plants”“Self-monitoring technology guidelines forpollution sources – General rule”“Regulation on the Administration of
Permitting of Pollutant Discharges”“Comprehensive Wastewater DischargeStandard”“Standard for pollution control on the nonhazardous industrial solid waste storage andlandfill”(GB 18599-2001)“Guidelines for the Investigation of Soil
Pollution Hazards in Key Regulatory Units(Trial)”“Measures for Office Space Management”“Energy Metering Management System”“Dangerous Goods Management Procedure”“Measures for the Administration of Water and Electricityof Property Sites”

Chapter name

Environment129

2023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Chapter

Chapter nameCompliance with the main laws andregulations“Labor Law of the People’s Republic of China”“Labor Contract Law of the People’s Republicof China”“Regulations for the Implementation of the
Individual Income Tax Law of the People’s
Republic of China”“Law of the People’s Republic of China on
Trade Unions”“Employment Promotion Law of the People’s
Empowering theRepublic of China”

Talent Team

“Law of the People’s Republic of China on theProtection of Women’s Rights and Interests”“Social Insurance Law of the People’s Republicof China”“Regulation on Work-Related Injury Insurance”“Provisions on the Prohibition of Using Child
Labor”“Special Rules on the Labor Protection of
Female Employees”“Regulations on Paid Leave for Employees”

Society

Building theLine of Safety“Work Safety Law of the People’s Republic ofChina”“Special Equipment Safety Law of the People’s
Republic of China”“Fire Protection Law of the People’s Republicof China”“the Law of People’s Republic of China on
Prevention and Control of Occupational
Diseases”“Requirement and Guidelines for Occupational
Health and Safety Management Systems”“Regulations on emergency response to
production safety accidents”“Regulations on the administration of safe
production of construction projects”

130

Main internal system of SF“Contractor regulations”“Work Guideline on Handling of Employees’ Demands
through Labor Union”“Labor Union Hotline Service Quality Improvement
Mechanism”“Reasonable Suggestion Management Mechanism”“Rewards and Penalty Management Regulations”“Administrative Measures for Relatives and Bidding
Avoidance”“Talent Management System”“Talent Promotion Management System”“Sf send you to University Project Management Methods”“Complete-Process Management Mechanism for Demands”“Plan for Whole-Process Quality Improvement of Demand”“Retirement and reemployment management methods”“Management measures for the transfer of first- andsecond-line employees”“First- and second-line employees diversified developmentof key positions within the employment issued standard
requirements”
Employee “Welfare Management System”“Operation Instruction Manual for Employee Care”“Work Guidelines for Conversing Employee Voice into
Productivity”“Employee Handbook”“Information disclosure guidelines for employees”“Recruitment Management System”“Safety education and training management provisions”“Safety assessment and incentive management provisions”“Safety production target responsibility statement”“Comprehensive emergency plan for work safety”“Regulations on safety management of vehicle operationin yard”“Safety Management Protocol for road Cargo Transport
services”“Regional risk control list”“Standard for safe operation of post”“Notice on Regularly Carrying out Hazard Source
Identification and Evaluation and Improving theConstruction of Dual Prevention System”“Express fire emergency handling operation guide”“the Competence Evaluation and Training Management
Procedure”“Production safety risk assessment standards”“Production Safety Risk Assessment Standards andQuantitative Suggestions”“Safety Production Management Manual”“Production Safety System Evaluation Standards andFramework”“Production Safety System Evaluation Guide”“Production Safety Hazard Identification Control List”“SF Safety Production Management Manual”“Procedures on Hazard Source Identification, Risk
Assessment, and Control Management”“Logistics supplier safety management provisions”“Logistics handling and sorting services security
management protocol”“Related Party Safety Management Procedures’“Emergency Plan Management Regulations”“Emergency Preparation and Response Management
Procedure”“Workplace safety management standardization
improvement action plan”“Workplace safety management standardization
improvement action plan”

2023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Chapter

Chapter nameCompliance with the main laws andregulations

Building
Responsible
Chain Together“E-Commerce Law of the People’s Republic ofChina”“Contract Law of the People’s Republic ofChina”“The Bidding Law of the People’s Republic ofChina”“Regulation on the Implementation of the
Bidding Law of the People’s Republic of China”“Management Regulations on Procurement Risk”“Regulations on the Management of Purchasing Staff”“Regulations on Green Procurement Management ofProcurement Supply Chain Center”“Management Regulations on Procurement Suppliers”“Supplier Penalty Management Measures”“Letter of Notification of Transparent Procurement”

ShoulderingSocialResponsibility“Charity Law of the People’s Republic ofChina”“Articles of Association of SF Charity Foundation”“Management System of SF Charity Foundation Volunteer
Association”

Creating Smart
Logistics

No relevant laws and regulations

No relevant internal management system

InnovationDriven
Development

No relevant laws and regulations

No relevant internal management system“Postal Law of the People’s Republic of China”“Measures for the Administration of theReal-Name Receipt and Delivery of Mails andExpress Mails”“Supervision and Administration of Security of
the Postal Industry”“Measures for the Supervision and
Administration of the Delivery Safety of the
Postal Industry”“Provisions on Articles Prohibited from
Delivery”“Operation Specification in Safety Productionof Express Service”“Common Standards for Receiving Consignments”“Regulations on Operation and Management of BatteryContained Parcels”“Guidelines for Emergency Handling of Dangerous Goods
on Board”“Provisions on the Management of “Three Systems” for
Delivery Safety”“Provisions on the Administration of Prohibited
Consignments”“Operation Procedures for Real-Name Pickup and Delivery”“Pickup and Delivery Inspection System”“Dangerous Goods Transportation Manual”“Special Plan for the Control of Illegal and Prohibited
Articles”“Regulations on the Management of “Three Systems” forMails and Shipments”“Reward Management Measures for Self-Inspection of
Illegal and Prohibited Articles”“Reward Mechanism for Self-Inspection of Illegal andProhibited Articles”

No relevant laws and regulations“Reasonable Suggestion Management Mechanism”“Reward and Punishment Rules for Customer Service”“Differentiated Customer Services”“Customer Voice Classification Standard”“Customer Experience Customer Service Operation Process”“Measures on the Acceptance of Customer Complaints”“Administrative Measures for Claims Settlement”“Abnormality Handling Mechanism for Time-Effective
Category”“Complaint Handling Procedure”“Complaint Handling Upgrade Mechanism”“Guidelines for the Control of Internet Public Opinions andComplaints”“Abnormal Event Customer Service Process”“Emergency Response Capacity System”

Securing Safety
DeliveryService

Delivering
Premium
Services

131

Main internal system of SF

2023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Key Performance
Table of Environmental Key Performance
2022
Indicator – Environment

2023

Unit
SF

KLN

Total

SF

KLN

Total

GHG emissions

GHG emissions

12

Total GHG emissions

tCO2e

9,185,355.1

2,472,955.0

11,658,310.1

8,748,710.7

2,451,355.0

11,200,065.7

Scope 1tCO2e

3,143,752.0

322,253.0

3,466,005.0

2,652,365.1

221,739.0

2,874,104.1

Scope 2tCO2e1,804,248.5

80,543.0

1,884,791.5

1,465,521.8

79,916.0

1,545,437.8

Scope 312

tCO2e

4,237,354.6

2,070,159.0

6,307,513.6

4,630,823.8

2,149,700.0

6,780,523.8

Category 1: Purchased goods
and services

tCO2e2,522,391.5

N/A

2,522,391.5

775,202.1

N/A

775,202.1

Category 3: Fuel and energyrelated activities

tCO2e

1,689,195.7

N/A

1,689,195.7

1,754,182.2

N/A

1,754,182.2

Category 4: Upstream
transportation anddistribution

tCO2e

N/A

2,070,159.0

2,070,159.0

2,073,065.9

2,149,700.0

4,222,765.9

Category 5: Waste generated
in operations

tCO2e

1,492.1

N/A

1,492.1

3,303.1

N/A

3,303.1

Category 7: Employee
commutingtCO2e24,275.3

N/A

24,275.3

25,070.6

N/A

25,070.6

The Company continues to improve the statistics of the emission data of the categories of GHG emissions Scope 3. In 2023, the emissions of Scope 3 Categories 2,6, 12 and 15 are not applicable to the main business operation scenarios of SF, and therefore are not presented in the table of environmental key performance.

1322023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

2022
Indicator – Environment

2023

Unit
SF

KLN

Total

SF

KLN

Total

GHG emission intensity

tCO2e/million
revenue
(RMB)

47.6

33.1

43.5

41.1

53.5

43.3

GHG emissions per parcel13

g CO2e/parcel

824.5

N/A

824.5

730.9

N/A

730.9

GHG removal from newly planted trees

tCO2e

N/A

6.0

6.0

4.6

9.0

13.6

Emission
Nitrogen oxide emissions

ton

25,555.5

2,416.0

27,971.5

27,246.4

1,907.0

29,153.4

Sulfur oxide emission

ton

20.6

6.0

26.6

18.2

3.0

21.2

Particle emissions

ton

2,087.3

156.0

2,243.3

2,021.2

118.0

2,139.2

Total gasoline consumption

MWh18,546,599.7

1,673,098.0

20,219,697.7

17,506,785.1

1,005,665.0

18,512,450.1

Gasoline consumption

MWh1,100,111.1

15,339.0

1,115,450.1

1,394,864.5

13,424.0

1,408,288.5

Diesel consumption

MWh12,590,526.5

1,035,410.0

13,625,936.5

10,681,630.0

780,440.0

11,462,070.0

Aviation kerosene
consumption

MWh4,855,962.1

N/A

4,855,962.1

5,430,290.5

N/A

5,430,290.5

Natural gas consumption

MWh

N/A

1,410.0

1,410.0

N/A

909.0

909.0

Consumption of liquefied
petroleum gas

MWh

N/A

2,808.0

2,808.0

N/A

2,112.0

2,112.0

Compressed natural gas

MWh

N/A

614,100.0

614,100.0

N/A

204,405.0

204,405.0

Gas and oil consumption

MWh

N/A

4,031.0

4,031.0

N/A

4,375.0

4,375.0

Total energy consumption

MWh7,271.2

901.0

8,172.2

15,712.0

1,402.0

17,114.0

Solar energy

MWh7,271.2

768.0

8,039.2

15,712.0

1,378.0

17,090.0

Hydropower15

MWh

N/A

133.0

133.0

N/A

24.0

24.0

Electricity consumption

MWh1,840,522.7

164,389.0

2,004,911.7

2,100,998.5

167,799.0

2,268,797.5

Energy consumption

Non-renewableenergyconsumption14

RenewableenergyIndirect energy
consumption

13

14

15

The GHG emissions per parcel are calculated from the total GHG emissions and the total parcel volume during the reporting period, which does not include the parcel
volume of Kerry Logistics Network Limited express delivery business in overseas countries. In addition, this indicator is not applicable to Kerry Logistics due to differencesin business forms.
Due to the differences in the business forms of SF and Kerry Logistics Network Limited, some of the indicators in Non-renewable Energy Consumption are not applicableand are therefore presented as N/A in this environmental key performance table.
This indicator is not applicable to SF due to differences in business forms.

1332023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

2022
Indicator – Environment

2023

Unit
SF

KLN

Total

SF

KLN

Total

Total sold energy

MWh

74.8

657.0

731.8

57.2

479.0

536.2

Total energy consumption

MWh20,394,318.8

1,837,731.0

22,232,049.8

19,623,438.4

1,174,387.0

20,797,825.4

Energy consumption intensity

MWh/million
revenue
(RMB)

105.8

24.6

83.1

92.3

25.6

80.5

ton

1,423,452.0

1,169,181.0

2,592,633.0

1,601,051.4

1,042,625.0

2,643,676.4

Non-hazardous waste productionkg

46,096,330.9

28,442,000.0

74,538,330.9

155,214,609.7

20,113,000.0

175,327,609.7

Hazardous waste production

kg

N/A

142,000.0

142,000.0

N/A1754,000.0

54,000.0

Total use of packaging items

kg

445,093,236.0

477,113,830.4

5,672,000.0

482,785,830.4

Express envelopekg

75,219,380.0

73,959,992.9

N/A

73,959,992.9

Waybillkg

17,620,130.4

14,257,402.5

N/A

14,257,402.5

Cartonkg

241,291,360.0

266,797,554.7

4,539,000.0

271,336,554.7

Use of water resources
Water withdrawal16
Waste

Packaging materials

Use ofpackagingitems18

9,203,000.0

454,296,236.0

Plastic bags

kg

41,596,926.6

51,729,610.9

1,100,000.0

52,829,610.9

Scotch tapes

kg

28,412,018.0

26,013,021.8

N/A

26,013,021.8

Foaming type of fillers

kg

12,814,718.2

12,884,490.8

33,000.0

12,917,490.8

Inflatable type of fillers

kg

28,138,702.8

31,471,756.8

N/A

31,471,756.8

Table of Social Key Performance
Indicator-Society

Unit2022192023

Employment
Number of workforces
Total workforce

Person743,377

746,577

Male

Person623,980

627,408

FemalePerson119,397

119,169

By gender

16

17
18

19

The Company’s water sources are all municipal water, and the statistical data is based on the total amount of water withdrawn. Therefore, adjustments have been madeto the indicators disclosed in previous years’ report.
SF’s own operations do not involve the generation of large quantities of hazardous waste, and hazardous waste in the office has not yet been accounted for.
Due to the differences in the business forms of SF and Kerry Logistics Network Limited, some of the indicators in the usage of packaging items are not applicable and are
therefore presented as N/A in this environmental key performance table.
As the statistical scope of SF’s social performance data in 2023 is the same as the scope of disclosure in the Annual Report, the Company has retrospectively adjusted thesocial performance data disclosed in 2022 to include Kerry Logistics in the scope of SF’s statistics and disclosure to provide continuity and comparability between the 2022
and 2023 data.

134

2023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Indicator-Society

Unit2022192023

Aged below 30

Person244,875

226,221

Aged 30-50

Person485,308508,251

Aged over 50

Person13,194

12,105

Doctorate

Person65

57

Master degree

Person

4,143

4,068

Bachelor’s degree

Person55,36457,302

Associate’ degree

Person131,760

137,996

High school and below

Person552,045547,154

Management personnel

Person25,37426,025

Professional personnel

Person47,80443,725

Operations personnel

Person670,167

676,827

Full-time

Person630,072

647,728

Part-time

Person113,305

98,849Person323,493

305,817

Total number of workforces departed

Persons

142,540

122,037

Workforce turnover rate 20

%

19.2

16.3

Male

%

18.6

15.9

Female

%

22.2

18.7

Aged below 30

%

30.9

26.4

Aged 30-50

%

13.6

12.1

Aged over 50

%

7.2

7.4

By ageBy educational backgroundBy job functions

By employment type

Number of newly recruited workforces
Workforce turnoverBy gender21

By age2120
21

Workforces turnover rate = Total departures ÷ Total workforces
Turnover rate of workforces by category = Number of departures by category ÷ Number of workforces by category

1352023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Indicator-Society

Unit2022192023

Diversified employment
Number of newly recruited female workforces

Person61,60653,894

Health and Safety
Major express fire accidents

Accident

00Major site first and second level fire accidents

Accident

00

Signing rate of contractor safety management agreement

%

100

100

Safety training coverage

%

100

100

Lost time injury rate22

Per million hours
worked1.76

2.35

Number of aviation accidents

Piece

0

0

728,201

724,277

Training and development
Number of trained workforces
Total number of trained workforces

PersonPercentage of trained workforces

%

98.0

97.0

Male

%

84.2

84.5

Female

%

15.8

15.5

Hour

6.0

7.8

Male

Hour

5.9

7.8

Female

Hour

6.1

7.9

By gender23

Total training hours
Average training hours per trained workforces

By gender24

22
23
24

Lost-time injury rate = Number of lost man-hours accidents ÷ Number of actually hours worked × 1,000,000
Percentage of trained workforces by category = Number of trained workforces by category ÷ Total number of trained workforces
Average training hours per trained workforces by category = Total training hours by category ÷ Number of trained workforces by category1362023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Indicator-Society

Unit2022192023

Supply chain management
Total number of suppliersCompany

12,414

10,932Mainland China

Company

11,728

10,271

Hong Kong, Macao andTaiwanCompany

169

51

Overseas

Company517

519

Company

3,830

2,766

Number of patents granted

Patent

1,851

2,002

Number of new patents granted annually

Patent221

247

Number of software copyrights acquired

Copyright

2,449

2,490

Number of new software copyrights acquired annually

Copyright

480

285

By region

Number of new suppliers
Product Responsibility
Intellectual Property

Anti-corruption
Anti-corruption training
Number of employees involved in anti-corruption training

Person67,893

121,701

Total hours of anti-corruption training

Hour

32,33670,073

Donations to community activities

RMB

118,845,372

105,900,635

Community activity expenses (excluding donations)

RMB

935,169

1,008,576

Community investment137

2023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Indicator Index
GRI Standard Content Index
Instructions

SF referred to the GRI standards for preparation of the Report covering the period from January 1, 2023,
to December 31, 2023.

Use of GRI 1

GRI 1: Foundation 2021

GRI Standard
Indicator No.

GRI Standard Indicator

Location/Note

GRI 2: General Disclosure 2021
2-1

Organizational details

About SF

2-2

Entities included in the organization’s sustainability reporting

Reporting Scope

2-3

Reporting period, frequency and contact point

Time Range

2-4

Restatements of information

Information Explanation

2-5

External assurance

External Audit Statement

2-6

Activities, value chain and other business relationships

About SF

2-7

Employees

Table of Social Key Performance Index

2-8

Workers who are not employees

Table of Social Key Performance Index

2-9

Governance structure and composition

Standardizing Corporate Governance

2-10

Nomination and selection of the highest governance bodyStandardizing Corporate Governance

2-11

Chair of the highest governance bodyStandardizing Corporate Governance

2-12

Role of the highest governance body in overseeing the managementof impacts

Standardizing Corporate Governance

2-13

Delegation of responsibility for managing impacts

Standardizing Corporate Governance

2-14

Role of the highest governance body in sustainability reporting

ESG Governance System

2-15

Conflicts of interest

Anti-Corruption management

2-16

Communication of critical concerns

Communication with Stakeholders

2-17Collective knowledge of the highest governance body

ESG Management Policies andStrategies

2-18

Evaluation of the performance of the highest governance body

ESG Goal Setting and Progress Review

2-19

Remuneration policies

ESG Goal Setting and Progress Review

2-20

Process to determine remuneration

ESG Goal Setting and Progress Review

1382023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

GRI Standard
Indicator No.

GRI Standard Indicator

Location/Note

2-21

Annual total compensation ratio

Due to the confidentiality of
information, it is not publicly disclosed

2-22Statement on sustainable development strategy

ESG Management Policies andStrategies

2-23

Policy commitments

Protection of Employees’ Rights andInterests

2-24

Embedding policy commitments

Protection of Employees’ Rights andInterests

2-25

Processes to remediate negative impacts

Protection of Employees’ Rights andInterests

2-26

Mechanisms for seeking advice and raising concerns

Protection of Employees’ Rights andInterests

2-27

Compliance with laws and regulations

Integrity Management System

2-28

Membership associations

Management of TechnologicalInnovation

2-29

Approach to stakeholder engagement

Communication with Stakeholders

2-30Collective bargaining agreements

Protection of Employees’ Rights andInterests

GRI 3: Materiality topics 2021
3-3Management of material topics

Process of Assessing Materiality Issues
Analysis Result of Materiality Issues

3-1

The process of identifying material topics

Analysis Result of Materiality Issues

3-2

List of material topics

Analysis Result of Materiality Issues

3-3Management of material topics

Analysis Result of Materiality Issues

GRI 201: Economic Performance 2016
3-3

Management of material topics

Please refer to the Company’s Annual
Report201-1

Direct economic value generated and distributed

Please refer to the Company’s Annual
Report201-2

Financial implications and other risks and opportunities due toclimate change

Physical risk
Transition risk
Climatic opportunity

201-3

Defined benefit plan obligations and other retirement plans

Employee Welfare and Care

201-4

Financial assistance received from government

Please refer to the Company’s Annual
ReportGRI 202: Market Presence 2016
3-3

Management of material topics

Please refer to the Company’s Annual
Report202-1

Ratios of standard entry level wage by gender compared to local
minimum wage

Due to the confidentiality of
information, it is not publicly disclosed

202-2

The percentage of executives hired from the local community

Due to the confidentiality of
information, it is not publicly disclosed

139

2023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

GRI Standard
Indicator No.

GRI Standard Indicator

Location/Note

GRI 203: Indirect Economic Impacts 2016

3-3

Management of material topics

Please refer to the Company’s Annual
Report203-1

Infrastructure investments and services supported

Accelerating “Express Delivery toVillages” to Promote Regional Economic
Development

Significant indirect economic impacts

Unblocking channels for the circulationof agricultural products and boosting
rural revitalization
Building a Sustainable Productiondistribution Ecosystem to Promote Rural
Industry Development
Facilitating the Flows of Agricultural
Products to Help Revitalize Rural Areas

203-2

GRI 204: Procurement Practices 2016

3-3

Management of material topics

Supplier Management System
Building the Sustainable Supply Chain

204-1

Proportion of spending on local suppliers

Due to the confidentiality of
information, it is not publicly disclosed

GRI 205: Anti-corruption 2016

3-3

Management of material topics

Integrity Management system
Anti-Corruption management

205-1

Operations assessed for risks related to corruption

Anti-Corruption management

205-2

Communication and training about anti-corruption policies andprocedures

Anti-Corruption management

205-3

Confirmed incidents of corruption and actions taken

Anti-Corruption management

GRI 206: Anti-competitive Behavior 2016
3-3

Management of material topics

Risk Management Practice206-1

Legal actions for anti-competitive behavior, anti-trust, andmonopoly practices

Abiding by Business Ethics

3-3Management of material topics

Please refer to the Company’s Annual
Report207-1

Approach to tax

Please refer to the Company’s Annual
Report207-2

Tax governance, control, and Risk Management

Please refer to the Company’s Annual
Report207-3

Stakeholder engagement and management of concerns related totax

Please refer to the Company’s Annual
ReportGRI 207: Tax 2016140

2023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

GRI Standard
Indicator No.

207-4

GRI Standard Indicator

Location/Note

Please refer to the Company’s Annual
ReportCountry-by-country reporting

GRI 301: Materials 2016
3-3

Management of material topics

Sustainable Packaging R&D

301-1

Materials used by weight or volume

Sustainable Packaging R&D
Table of Environmental
Performance Index

301-2

Recycled input materials used

Sustainable Packaging R&D

301-3

Reclaimed products and their packaging materials

Sustainable Packaging R&D

Key

GRI 302: Energy 2016

3-3

Management of material topics

Optimizing Environmental Management
SystemPromote Low-carbon Transportation
Energy management

302-1

Energy consumption within the organization

Table of Environmental
Performance Index

Key

302-2

Energy consumption outside of the organization

Table of Environmental
Performance Index

Key

302-3

Energy intensity

Table of Environmental
Performance Index

Key

302-4

Reduction of energy consumption

Promote Low-carbon Transportation
Building Green Industrial Parks
Energy management

302-5

Reductions in energy requirements of products and services

Promote Low-carbon Transportation
Promoting Circular Economy

GRI 303: Water and Effluents 2018

3-3

Management of material topics

Building Green Industrial Parks
Water Resources Management

303-1

Interactions with water as a shared resource

Building Green Industrial Parks
Water Resources Management

303-2

Management of water discharge related impacts

Building Green Industrial Parks
Water Resources Management

303-3

Water withdrawal

Water Resources Management
Table of Environmental
Performance Index

303-4

Water discharge

Management of Water Resources

303-5

Water consumption

It is not applicable to the Company’sbusiness operation scenarios

141

Key

2023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

GRI Standard
Indicator No.

GRI Standard Indicator

Location/Note

GRI 304: Biodiversity 2016
3-3

Management of material topics

Protecting the Environment

304-1

Operational sites owned, leased, managed in, or adjacent to,protected areas and areas of high biodiversity value outside
protected areas

SF Forest

304-2

Significant impacts of activities, products and services on biodiversity

SF Forest

304-3

Habitats protected or restored

SF Forest

304-4

IUCN Red List species and national conservation list species with
habitats in areas affected by operations

Not applicable, the habitat in the area
affected by the Company’s operations
does not contain species that have been
listed on the IUCN Red List and the
National Conservation Register

GRI 305: Emissions 2016

3-3

Management of material topics

Promoting Low-carbon Transportation
Building Green Industrial Parks
Sustainable Packaging R&D
Exhaust & Noise management

305-1

Direct (Scope 1) GHG emissions

Table of Environmental
Performance Index

Key

305-2

Energy indirect (Scope 2) GHG emissions

Table of Environmental
Performance Index

Key

305-3

Other indirect (Scope 3) GHG emissions

Table of Environmental
Performance Index

Key

305-4

GHG emissions intensity

Carbon Reduction Initiatives andEffectiveness
Table of Environmental Key
Performance Index

305-5

Reduction of GHG emissions

Carbon Reduction Initiatives andEffectivenessSustainable Packaging R&D

305-6

Emissions of ozone-depleting substances (ODS)

It is not applicable to the Company’sbusiness operation scenarios

305-7

Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air
emissions

Table of Environmental
Performance Index

Key

GRI 306: Waste 2020

3-3

Management of material topics

Recycle and recycle express packaging
Waste management

306-1

Waste generation and significant waste-related impacts

Waste management

306-2

Management of significant waste-related impacts

Waste management1422023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

GRI Standard
Indicator No.

GRI Standard Indicator

Location/Note

306-3

Waste generated

Table of Environmental
Performance Index

306-4

Waste diverted from disposal

Waste management

306-5

Waste directed to disposal

Waste management

Key

GRI 308: Supplier Environmental Assessment 2016

3-3

Management of material topics

Supplier Management System
Building the Sustainable Supply Chain

308-1

New suppliers that were screened using environmental criteria

Supplier Management System
Building the Sustainable Supply Chain

308-2

Negative environmental impacts in the supply chain and actions
taken

Supplier Management System
Building the Sustainable Supply Chain

GRI 401: Employment 2016

3-3

Management of material topics

Protection of Employees’ Rights andInterests
Employee Care and Welfare

401-1

New employee hires and employee turnover

Table of Social Key Performance

401-2

Benefits provided to full-time employees that are not provided totemporary or part-time employees

Employee Care and Welfare

401-3

Parental leave

Employee Care and Welfare

GRI 402: Labor/Management Relations 2016

3-3

Management of material topics

Protection of Employees’ Rights andInterests

402-1

Minimum notice periods regarding operational changes

Protection of Employees’ Rights andInterests

GRI 403: Occupational Health and Safety 2018

3-3

Management of material topics

Safety Management System
Safety Management Measure
Employee Care and Welfare

403-1

Occupational health and safety management system

Safety Management System403-2

Hazard source identification, risk assessment, and incident
investigation

Safety Management Measure403-3

Occupational health services

Safety Management Measure
Employee Care and Welfare

403-4

Worker participation, consultation, and communication on
occupational health and safety

Safety Management System
Safety Management Measure1432023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

GRI Standard
Indicator No.

GRI Standard Indicator

Location/Note403-5

Worker training on occupational health and safety

Safety Management Measure

403-6

Promotion of worker health

Employee Care and Welfare

403-7

Prevention and mitigation of occupational health and safety impacts
directly linked by business relationships

Safety Management Measure

403-8

Workers covered by an occupational health and safety management
systemSafety Management System

403-9Work-related injuries

Table of Social Key Performance403-10Work-related ill health

Table of Social Key Performance

GRI 404: Training and Education 2016
3-3

Management of material topics

Construction of Talent Team

404-1

Average hours of training per year per employee

Construction of Talent Team
Table of Social Key Performance

404-2

Programs for upgrading employee skills and transition assistanceprograms

Construction of Talent Team

404-3

Percentage of employees receiving regular performance and careerdevelopment reviews

Construction of Talent TeamGRI 405: Diversity and Equal Opportunity 2016

3-3

Management of material topics

Protection of Employees’ Rights andInterests

405-1

Diversity of governance bodies and employees

Corporate Governance Protection of
Employees’ Rights and Interests
Table of Social Key Performance405-2

Ratio of basic salary and remuneration of women to men

Due to the confidentiality of
information, it is not publicly disclosed

GRI 406: Non-discrimination 2016

3-3

Management of material topics

Protection of Employees’ Rights andInterests

406-1

Incidents of discrimination and corrective actions taken

Protection of Employees’ Rights andInterests

GRI 407: Freedom of Association and Collective Bargaining 2016

3-3

Management of material topics

Protection of Employees’ Rights andInterests

407-1

Operations and suppliers in which the right to freedom of
association and collective bargaining may be at risk

Protection of Employees’ Rights andInterests

1442023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

GRI Standard
Indicator No.

GRI Standard Indicator

Location/Note

GRI 408: Child Labor 2016

3-3

Management of material topics

Protection of Employees’ Rights andInterests

408-1

Operations and suppliers at significant risk for incidents of childlaborProtection of Employees’ Rights andInterests
Supplier Management System

GRI 409: Forced or Compulsory Labor 2016
3-3

Management of material topics

Protection of Employees’ Rights andInterests

409-1

Operations and suppliers at significant risk for incidents of forced orcompulsory labor

Protection of Employees’ Rights andInterests
Supplier Management System

GRI 413: Local Communities 2016

3-3

Management of material topics

Educational Charity
Medical Care

413-1

Operations with local community engagement, impact assessments,
and development programs

It is not applicable to the Company’sbusiness operation scenarios

413-2

Operations with significant actual and potential negative impacts
on local communities

It is not applicable to the Company’sbusiness operation scenarios

GRI 414: Supplier Social Assessment 2016

3-3

Management of material topics

Supplier Management System
Build the Sustainable Supply Chains

414-1

New suppliers that were screened using social criteria

Supplier Management System
Building Sustainable Supply Chains

414-2

Negative social impacts in the supply chain and actions taken

Supplier Management System
Build the Sustainable Supply Chains

GRI 416: Customer Health and Safety2016

3-3Management of material topics

Real-name Authentication Management
Management of Illegal and Prohibited
ArticlesDangerous Goods Transportation

416-1

Assessment of the health and safety impacts of product and service
categories

Real-name Authentication Management
Management of Illegal and Prohibited
ArticlesDangerous Goods Transportation

1452023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

GRI Standard
Indicator No.

416-2

GRI Standard Indicator

Location/Note

Incidents of non-compliance concerning the health and safety
impacts of products and services

Real-name Authentication Management
Management of Illegal and Prohibited
ArticlesDangerous Goods Transportation

GRI 417: Marketing and Labeling 2016
3-3

Management of material topics

Enhancing Customer Experience

417-1

Requirements for product and service information and labeling

Enhancing Customer Experience

417-2

Incidents of non-compliance concerning product and service
information and labeling

There were no violations involving
product and service information andlogos in SF in 2023.

417-3

Incidents of non-compliance concerning marketing communications

There were no violations involving
marketing communications in SF in2023.

GRI 418: Customer Privacy 2016

3-3

Management of material topics

Ensuring Information Security
Customer Privacy Protection

418-1

Substantiated complaints concerning breaches of customer privacy
and losses of customer data

Ensuring Information Security
Enhancing Customer Experience

Sustainability Accounting Standards Board Index (SASB Content Index)
Sustainability Disclosure Topics & Accounting Metrics

Topic

Greenhouse Gas
Emissions

Accounting Metric

Category

CodeLocation

Gross global Scope 1 emissions

Quantitative

TR-AF-110a.1

Table of Environmental Key
Performance

Discussion of long-term andshort-term strategy or plan
to manage Scope 1 emissions,emissions reduction targets,and an analysis of performanceagainst those targets

Discussion andAnalysis

TR-AF-110a.2

C l i m a t e - r e l a t e dInformation Disclosures

TR-AF-110a.3

Promote Low-carbon
Transportation
Table of Environmental Key
PerformanceF u e l c o n s u m e d b y (1) r o a dtransport, percentage (a)natural gas and (b) renewable,and (2) air transport,
percentage (a) alternative and(b) sustainable

Quantitative146

2023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Topic

Air Quality

Labor Practices

Employee Health &SafetySupply Chain
Management

Accident & Safety
Management

Accounting Metric

Category

CodeLocation

Air emissions of the following
pollutants: (1) NOx (excluding
N2O), (2) SOx, and (3)particulate matter (PM10)

Quantitative

TR-AF-120a.1

Table of Environmental Key
Performance

Percentage of drivers classified
as independent contractors

Quantitative

TR-AF-310a.1

Not Applicable

Total amount of monetarylosses as a result of legal
proceedings associated withlabor law violations

Quantitative

TR-AF-310a.2

Not Applicable(1) Total recordable incident
rate (TRIR) and (2) fatality ratefor (a) direct employees and (b)contract employees

Quantitative

TR-AF-320a.1

Table of Environmental Key
Performance

Percentage of carrier withBASIC percentiles above the
FMCSA intervention threshold

Quantitative

TR-AF-430a.1

Not Applicable

Total greenhouse gas (GHG)
footprint across transportmodes

Quantitative

TR-AF-430a.2

Table of Environmental Key
Performance

Description of implementationand outcomes of a Safety
Management System

Discussion andAnalysis

TR-AF-540a.1

Safety Management System

Number of aviation accidents

Quantitative

TR-AF-540a.2

Table of Social Key
Performance

Number of road accidents andincidents

Quantitative

TR-AF-540a.3

Not Applicable

Safety Measurement System
BASIC Percentiles for: (1)Unsafe Driving, (2) Hoursof-Service Compliance, (3)Driver Fitness, (4) Controlled
Substances/Alcohol, (5)Vehicle Maintenance, and(6) Hazardous Materials
Compliance

Quantitative

TR-AF-540a.4

Not Applicable1472023 S.F. HOLDING SUSTAINABILITY REPORTAppendix

Readers’ Feedback
Dear reader:Thank you for taking time to read the 2023 SF Sustainability Report. To improve SF sustainable development program and this Report, SF would liketo hear your comments and suggestions.

If you have any opinions and suggestions on the sustainable development of the Company, please send an email to sfir@sf-express.com.

Readers’ Feedback Form for 2023 SF Sustainability Report

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