ZTE Releases Sustainability Report 2024: Empowering a Sustainable Future through Digital Intelligence

ZTE Corporation (0763.HK / 000063.SZ), a global leading provider of integrated information and communication technology solutions, has recently released its Sustainability Report 2024, marking the 17th consecutive year the company has proactively disclosed its sustainable commitments and progress to the public.

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The ZTE Corporation Sustainability Report 2024 [https://www.zte.com.cn/content/dam/zte-site/investorrelations/en_announcement/ZTE_Sustainability_Report_2024_EN.pdf] highlights ZTE's strong ESG strategies and achievements, showcasing how the company is leveraging digital innovation to drive sustainable transformation across the globe.

Amid the accelerating wave of global digitalization, ZTE remains committed to its role as a "Driver of the Digital Economy", advancing its sustainability agenda on two fronts: by making significant strides in green operations guided by science-based carbon targets, and by enabling digital and low-carbon transformation across industries through cutting-edge technologies.

Xu Ziyang, Executive Director and CEO of ZTE, states in the report, "The new wave of AI-driven technological revolution, particularly the boom of large models and generative AI, has propelled the global digital and intelligent transformation. In this critical year filled with both challenges and opportunities, ZTE, as a 'Driver of Digital Economy', stayed true to its original aspiration and responded to the call of the times."

The report reveals that ZTE continues to strengthen the underlying capabilities and scaling up R&D investment to build stronger core competence, with the R&D expenses accounting for 19.81% of operating revenue. As of December 31, 2024, ZTE had filed 93,000 global patent applications, with over 48,000 patents granted. Specifically, in the field of chips, ZTE had filed about 5,500 patent applications, with over 2,000 granted. In the field of AI, the company had filed more than 5,000 patent applications, with nearly half of them already granted, demonstrating strong innovation and technological capabilities.

Advancing Green Strategies to Tackle Climate Challenges

ZTE centers its core drive on technological innovation, continuously deepening its green development strategy to address climate change challenges and promote the coordinated advancement of digital intelligence and sustainability across industries. In 2024, ZTE received official approval from the Science-Based Targets initiative (SBTi) for its near-term 1.5 degrees C target and long-term net-zero targets. In the same year, ZTE published the ZTE Net-Zero Strategy White Paper [https://www.zte.com.cn/content/dam/zte-site/res-www-zte-com-cn/green_lowcarbon/pdf/ZTE Net-Zero Strategy.pdf].

The company continues to advance its "Green Digital Path" initiative across four dimensions: green corporate operations, green supply chain, green digital infrastructure, and green empowerment. ZTE has been named to the prestigious CDP A list for leading climate action for two consecutive years, reinforcing its global climate leadership.

In terms of green corporate operations, ZTE has achieved the remarkable feat of increasing revenue while reducing energy consumption, thanks to years of continuous effort. In 2024, the company improved its energy efficiency by 20% compared with 2021, and recorded a 13.4% reduction in Scope 1&2 emissions compared to the previous year. Its telecom products saw an 8.39% reduction in physical emissions intensity during the use and maintenance phase, while its terminal products achieved a 5.02% year-on-year reduction in absolute emissions over the entire product lifecycle. ZTE reduced its Scope 1&2&3 carbon emissions by 14.317 million tons in 2024 compared to 2023 levels.

For green supply chain, in 2024, ZTE has integrated dual-carbon strategy requirements into supplier management IT systems, including agreement signing, on-site audits, and performance assessments. In this year, ZTE conducted onsite CSR audits for 261 production suppliers (representing 86.9% of the top 90% suppliers by procurement amount).

Regarding green digital infrastructure, ZTE boasts over 800 green innovation patents. As of 2024, the company has conducted carbon footprint assessments for 154 products, covering all its product categories. Through its end-to-end green solutions, ZTE continues to help global operators save over 10 billion kWh of electricity annually.

In green empowerment of industries, ZTE has actively integrated cloud and network infrastructure, IoT, big data, AI and other cutting-edge technologies with traditional industries to achieve a win-win outcome of development and emission reduction. The company has partnered with over 2,000 leading industry players to carry out 5G-powered innovative green practices across 18 sectors-including steel, metallurgy, electronics manufacturing, ports, rail transit, mining, and power-pioneering more than 100 innovative application scenarios.

Upholding a People-Centered Approach to Foster an Inclusive Society

ZTE has pursued sustainable development by advancing both technological leadership and CSR fulfillment. By leveraging its technological advantages, it provides tailored digital solutions to global customers, helping to bridge the digital divide and accelerate digital transformation worldwide. For example, ZTE and Orange have jointly launched the "Enhance Rural Area" project, delivering communications infrastructure to rural regions in Liberia and enabling digital access for more than 580,000 people in remote areas. In Anyang, Henan, the company supported the development of a drone-based blood delivery system, effectively addressing the "last mile" challenge in urban medical logistics. In Hainan, ZTE ensured uninterrupted emergency communications with satellite terminals during Typhoon Yagi.

ZTE upholds a people-oriented philosophy. In 2024, ZTE achieved 100% employee training coverage and its ISO 45001 Occupational Health and Safety Management Systems certification now covers offices in 30 countries.

In 2024, ZTE carried out 310 regular public welfare activities across various fields, including rural revitalization, education support, and medical and disaster relief. With the joint efforts of 15,000 employee volunteers, the company has provided assistance to over one million people in need, continuously delivering warmth and creating social value.

Strengthening Governance to Enhance Corporate Resilience

Xie Junshi, EVP and COO of ZTE, states in the report, "Committed to innovation-driven and sustainable development, ZTE has embedded ESG into every aspect of its operations. By harnessing digital and intelligent technologies, we are developing a development model that coexists harmoniously with nature and society, while exploring a path for business continuity in the new era."

Integrating sustainable development with its corporate strategies, ZTE aspires to strengthen its core competitiveness with a focus on its vision and three strategic cornerstones-internal control, compliance, and talent. In 2024, ZTE upgraded the corporate governance system and established the Strategy and Sustainability Committee to better incorporate the philosophy of sustainable development into its strategies and business activities.

In terms of corporate risk prevention and control, ZTE places particular emphasis on identifying and responding to emerging risks. As AI technology rapidly transforms the world, it brings immense business opportunities while also raising widespread concerns over ethical risks such as privacy infringement and algorithmic bias. To proactively address these challenges, ZTE established the Science and Technology Ethics Committee in 2024, demonstrating high-level organizational commitment to ethical governance. In addition, the company has put in place a technology ethics governance framework to review and assess AI-related R&D projects individually, ensuring the safe, reliable, and inclusive development of AI.

As a member of the UN Global Compact and the Global Enabling Sustainability Initiative and a key participant and a pioneer in the Partner2Connect (P2C) Digital Coalition initiated by the International Telecommunication Union, ZTE has received widespread recognition from numerous global authoritative organizations and rating agencies for its exemplary sustainability practices.

In 2024, ZTE was recognized with EcoVadis Gold Medal for sustainability excellence. In addition, the company was selected for the S&P Global's Sustainability Yearbook 2024 (China Edition) and honored with the title of "Industry Mover". It was also listed among the 2024 Forbes China ESG 50 list and received the World Internet Conference Distinguished Contribution Award. Furthermore, ZTE won two BDO ESG awards, as well as the LinkedIn MostIn Awards - Global Talent Magnet Employer, among others.

Moving forward, ZTE will continue to promote sustainable development globally, leveraging technological innovation and international collaboration to inject digital vitality into efforts toward the United Nations Sustainable Development Goals, working toward a greener, more inclusive, and resilient future.

For more details of ZTE Sustainability Report 2024, please download:

https://www.zte.com.cn/content/dam/zte-site/investorrelations/en_announcement/ZTE_Sustainability_Report_2024_EN.pdf

To discover more updates about our commitment to the sustainability, please visit ZTE Sustainability website:

https://www.zte.com.cn/global/about/sustainability.html

ABOUT ZTE

ZTE connects the world with continuous innovation for a better future. The company provides innovative technologies and integrated solutions, and its portfolio spans communication networks, computing infrastructure, industry digital solutions, and personal and home smart terminals. Serving over a quarter of the world's population, ZTE is dedicated to leading globally in connectivity and intelligent computing, enabling communication and trust everywhere. ZTE is listed on both the Hong Kong and Shenzhen Stock Exchanges. To learn more, please refer to ZTE Corporation's official website: http://www.zte.com.cn/global.

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