Table of Contents
About This Report ........................................................ 3
Letter from the Management ............................................... 5
Letter from Chief Compliance Officer ........................................ 7
Chapter 1 Our Company at A Glance......................................... 9
1.1 Company Profile ................................................ 9
1.2 Operational Performance ......................................... 15
1.3 Corporate Governance ........................................... 15
1.4 ESG Management .............................................. 20
Chapter 2 Innovative Development for Excellence ............................. 26
2.1 Committed to Innovation and R&D ................................ 26
2.2 Quality Assurance .............................................. 29
2.3 Cybersecurity.................................................. 34
Chapter 3 Empowering Customers’ Success for Win-Win Results................. 39
3.1 Provide Quality Services ......................................... 39
3.2 Protect User Privacy ............................................ 42
3.3 Listen to Customer Feedback ..................................... 43
3.4 Contribute to Industrial Ecosystem ................................. 45
3.5 Supply Chain Development ....................................... 46
Chapter 4 Serve the Society to Create a Better Future .......................... 49
4.1 Dedicated to Public Welfare ...................................... 49
4.2 Help to Build Harmonious Ecology ................................ 51
4.3 Build a Smart City Together ...................................... 56
4.4 Embrace Intelligent Manufacturing ................................. 61
Chapter 5 Talent-Focused, Growing Together ................................. 63
5.1 Protect the Rights and Interests of Employees ........................ 63
5.2 Talent Training................................................. 65
5.3 Safeguard Health and Safety ...................................... 68
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5.4 Empathize Employees’ Well-being ................................. 71
Chapter 6 Pursue Green Operation, Empower Sustainable Ecosystem ............. 76
6.1 Build Management System ....................................... 76
6.2 Practice Green Operation ........................................ 78
6.3 Reasonably Reduce Emissions .................................... 81
6.4 Create Environmental-friendly Culture .............................. 85
Appendix Report index: GRI Standards ..................................... 88
2
About This Report
This report is the first Environmental, Social and Governance (hereinafter referred to as "ESG")
Report of Hangzhou Hikvision Digital Technology Co., Ltd. (hereinafter referred to as "Hikvision",
"we" or "the Company"). This report covers Hikvision's performance and guidelines on ESG issues
with a focus on the concerns of stakeholders and how the Company could achieve sustainable
development in the environmental, social and economic aspects.
Scope
This report covers the data and information of the Company from January 1 to December 31, 2018
(hereinafter referred to as the “reporting period”). Some information covers in or prior to 2017. This
report covers Hikvision and its subsidiaries.
Basis of Preparation
This report is made reference to GRI Standards issued by the Global Reporting Initiative (GRI)
(hereinafter referred to as “GRI Standards”) in 2016, and Shenzhen Stock Exchange Social
Responsibility Instructions to Listed Companies. This report is in line with a set of established
procedures, including identifying and ranking relevant stakeholders, identifying and ranking material
ESG issues, determining the scope of reporting, collecting relevant data, preparing the report based on
the data, and viewing the data.
Data Source and Reliability Assurance
Information and cases included in this report are mainly from the Company's statistical reports and
relevant documents. The Company promises that this report does not contain any false or misleading
statement and is responsible for the authenticity, accuracy, and completeness of its contents.
Access and Feedback
This report is available in Simplified Chinese and English. For download, please visit
www.cninfo.com.cn
Confirmation and Approval
After confirmation by management, this report was approved by the Board of Directors on April 18 th
2019.
3
We highly value the opinions from stakeholders and appreciate your feedback us through the following
contact methods. Your comments will help us further improve this report and our ESG performance.
Contact: 0571-88075998
Website: www.hikvision.com
Board Office: hikvision@hikvision.com
Investor Relations: ir@hikvision.com
Address: No. 518 WuLianWang Street, Binjiang District, Hangzhou
4
Letter from the Management
Throughout history, no matter how science and technology progressed, business models
updated, society, economy and culture evolved, pursuing security, innovation and sustainable
development has always been the eternal theme of the world, and as well, the social
responsibility and mission that the Company should undertake. In 2018, the explosive
development and integration of new technologies such as artificial intelligence, Internet of
Things, cloud computing, and big data has improved our production and life, prompting the
whole society to enter a new cycle of revolution. The Company continues to increase
investment in technology R&D, and develops intelligent Internet of Things technology with
video as its core, keeps promoting social security and intelligence development to enhance
the ability to understand the world and make rational decisions for the public. At the same
time, while striving for business success, the Company is also pursuing the harmony between
the Company and society, between people and nature. Committed to the philosophy of
sustainable development, we have been taking into account the macro-planning and
implementation of corporate environmental, social and governance management, and
combine corporate values with social progress and improvement of people's livelihood to
deepen the integration of corporate business and social responsibility.
For a long time, the Company has been practicing the core values of “dedication to clients’
success, value oriented, integrity and down-to-earth, pursuit of excellence”.
The first is centered on customer needs. We adhere to the engineering culture and the spirit of
artisans, continue to promote the R&D of technology and products, and improve product
quality. Meanwhile, we regard open integration as a new business pattern in the era of
intelligence, and establish a complete open system covering products, services and
technologies, and work together with partners including suppliers to promote industrial
development.
The second is highly focused on the social responsibility value for products and solutions. As
an important technology, product and solution provider for “smart city” establishment, the
Company continues to explore innovative intelligent solutions in the areas of public security,
transportation, finance, education, manufacturing and other related aspects of social economy
and people's lives. We will create a safe, efficient, convenient and happy life for the public
with intelligent methods, and strive to make more people feel the support of science and
technology for society and environment.
The third is to build a harmonious team. The Company attaches great importance to
employee rights and care, and has established a series of employee training and development
management systems to help employees improve their knowledge and skills to meet current
5
and future job requirements, thereby enhancing the overall operational efficiency and
competitiveness of the Company. We advocate rewarding employees based on their
contributions, providing employees with competitive pay package and perfect welfare
guarantees, establish long-term incentive policies for sustainable development, and achieve a
win-win situation for both employees and the Company.
The fourth is to practice the concept of green development and help build a sustainable
ecosystem. The Company not only conserves energy and reduces emissions in daily operation,
but also seeks clean technology opportunities in its own products to improve the
comprehensive utilization efficiency of resources, protect the natural ecological environment,
and cope with climate change.
The fifth is caring and giving back to the society. In the process of development, we never
forget our social responsibilities, treat people with sincerity, and develop businesses with
integrity. We always combine corporate social responsibility with our own business
development. We are always grateful and strive to give back to the society. The Company
continues to practice social welfare and promotes ecological protection and harmonious
development of the society through the strengths of science and technology.
In the future, the Company will continue to promote diversified development by virtue of
video technology and artificial intelligence, enable individuals and families to control
real-time security and empower innovators to discover deep insights, provide
multi-dimensional information for decision makers, and lay the foundation for building and
developing smart society. We will conduct business operations in a more responsible way,
motivate talents and management teams more effectively, strengthen communication with
stakeholders more sincerely and transparently, and continue to enhance the Company's core
capabilities in sustainable development.
Hikvision empowers visionaries to see the future. See far, go further!
April 2019
6
Letter from Chief Compliance Officer
Hikvision is committed to being a respected, global company that contributes to the secure
and sustainable development of society.
Complying with local, national and international laws is the hallmark of our global business
strategy. We constantly work to deepen our understanding of statutes and regulations –
particularly, but without limitation, rules applying to data protection, export controls, fair
competition and anti-commercial bribery. In December 2018, the Company created a new
Compliance Department to promote the establishment of standardized approach to
compliance.
Over the past year, there have been numerous reports about ways that video surveillance
products have been involved in human rights violations. We read every report seriously and
are listening to voices from outside the Company. We are taking a hard look at our products
and business. As part of this process, we have recently commissioned an internal review of
our operations by the U.S. law firm, Arent Fox LLP, mandating it to look into relevant
transactions so the Company can enhance its screening standards to better protect human
rights. Arent Fox will also help us improve the policies that will help ensure human rights
compliance going forward. As part of this effort, a high-level team from Arent Fox has
already traveled to China twice.
Technological innovation is the driving force of our Company. We provide high quality
products and services to create value for customers. Video technology plays an increasingly
important role in nearly all aspects of life today, from national security, law enforcement,
business, education, art, culture, personal and property protection, and social networking.
Our company has made an important contribution to the safety and development of
humankind. At the same time, the Company is also keenly aware of the sensitivity of video
technology. Through the joint efforts with external consultants, we hope to stick to original
aspiration for the benefits of humankind and to deliver the goodwill that technology can
provide to our valued partners.
See far, go further!
Huang Fanghong
April 2019
7
8
Chapter 1 Our Company at A Glance
As an Internet of Thing (IoT) solution and big data service provider with video as its core
competence, Hikvision advances the core technologies of video and audio encoding, video
image processing, and related data storage, as well as cutting-edge technologies such as cloud
computing, big data, and deep learning. We provide professional solutions and big data
services for various sectors, including public security, transportation, judiciary, financial
services as well as intelligent buildings. Hikvision extended its business to various industries
such as smart home, industrial automation, and automotive electronics based on
accumulation of video technologies to explore channels for sustainable long-term
development. Thanks to effective corporate governance, Hikvision not only made
breakthrough in business performance, but also won extensive recognitions from all sectors
of society. Looking forward to the future, we are committed to become a well-respected
world-class company.
1.1 Company Profile
First established as an audio-video compression board provider in November 2001, Hikvision
has gradually developed into a provider of a board range of products and solutions covering
the demands of security and visualized management of the entire video surveillance industry.
Hikvision is a witness, practitioner and important promoter of video surveillance in
digitalization, HD networking, and intelligence. We provide global clients with integrated
high-quality security, data intelligent management and AI (artificial intelligence) empowered
solutions based on a client satisfaction-oriented management system.
According to an IHS report, Hikvision has been ranked as global No. 1 in the video
surveillance industry for seven consecutive years, with 22.6 percent1of the global video
surveillance market share. Furthermore, in the "A&S Security 50" list published by A&S
Security Automation, Hikvision has been ranked No.1 in the world for three consecutive
years.
1
Based on the global video surveillance market report published by IHS Markit in June 2018, with the
2017 data as the statistical basis.
9
Business Layout
Video, the most informative type of perception, has become an important bridge connecting
the physical world to the digital world supported by AI technologies. It promotes the Internet
of Everything and helps industry clients to achieve intelligent industrial upgrading with AIOT
（AI+IoT） as the core. Hikvision combines AI, video technology and the multi-scenario
business demands together to expand the use of video technology from security to many
other vertical markets, so as to help more clients to improve business efficiency and
management capbility, and facilitate the transformation and upgrading of traditional
industries.
As of the end of the reporting period, the Company has established 32 provincial business
centers/level one branches in Mainland China and 44 branches overseas. Hikvision's products
and solutions have been applied in more than 150 countries and regions, significantly
facilitating major projects such as G20 Hangzhou Summit, Beijing Olympics, Expo 2010,
APEC Summit, Nuremberg High-speed Rail Station in Germany, and Seoul Safe City in
South Korea.
32 provincial operation centers
/First-level branches in Mainland China 44 overseas branches
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Corporate Philosophy
Faced with opportunities and challenges arising from technological revolution, industrial
integration and globalization, we have always been committed to "empower vision for the
security and growth of the world." In order to achieve our sustainable development goals, we
are ready to work with our clients, partners and professional organizations to improve the
ability of mankind in understanding the world and making scientific decisions. We will
provide new vision, new insights and new wisdom to stakeholders to collaboratively
safeguard public security, promote sustainable development, and create a safer and better
future.
Looking ahead, we will continue to unleash the potential of computer vision to empower
smart security, smart transportation, smart manufacturing, smart education, smart business,
smart tourism, smart home, etc. We will provide brand new solutions to lay the foundation for
a smart society.
Corporate Honors
As we create economic value, we also strive to undertake social responsibilities, act as a good
corporate citizen and earn public respect. During the reporting period, we continued to
optimize management in terms of product quality, collaborative business relationship, social
welfare, employee development and environmental protection with our own businesses
competence and development. We actively communicate with various stakeholders, further
improve corporate governance, and strive for sustainable development of economy, society
and environment.
Quality Awards
11
The Awards From
National Quality Benchmark China Association for Quality
National Quality Inspection Stable Qualified China Association for Quality Inspection
Products
National Typical Quality Integrity China Association for Quality Inspection
Benchmark Enterprise
National Leading Brand in Quality China Association for Quality Inspection
Awards for Security Products
The Awards From
a&s Top 10 Security Brands in China a&s magzine
2018-Ranked Top 10 in Access Control
a&s Top 10 Security Brands in China a&s magzine
2018-Ranked Top 10 in Alarm
a&s Top 10 Security Brands in China a&s magzine
2018-Ranked Top 10 in AI Application
a&s Top 10 Security Brands in China a&s magzine
2018-Ranked Top 10 in Intercom/ Smart
Home
Awards in Recognition of Industrial Position
The Awards From
2018 Top 10 Contribution to Innovation in China Information Technology Industry
Chinese Electronic Information Industry Federation
2018 Top 50 Social Contribution in Chinese China Information Technology Industry
Electronic Information Industry Federation
2018 Top 100 Chinese Electronic China Information Technology Industry
Information Company Federation
2018 Top 100 Chinese Enterprises in
China Information Technology Industry
Software and Electronic Information
Federation
Services
Awards for Science and Technology Innovation
12
The Awards From
Second Prize of State Technological State Council of the People’s Republic of
Invention Award China
Second Prize of Zhejiang Science and The People’s Government of Zhejiang
Technology Awards Province
Science Technology Department of Zhejiang
Zhejiang Patent Gold Award
Province
Top 100 High-tech Enterprise of Innovation
Zhejiang High-tech Enterprise Association
Capacities
Awards for Manufacturing Capacities and Services
The Awards From
Ministry of Industry and Information
National Individual Champion Technology of the People’s Republic of
Manufacturing Enterprise China
China Federation of Industrial Information
a&s Top 100 Integrators Award a&s magzine
National Commodity After-service
Evaluation Compliance Certification
Five-Star Certificate for After-Sales Services
Committee
Beijing Sky Certification
Awards for Environmental Protection
The Awards From
CEC 024-2018 Five-Star Rating on Green Alliance of Green Consumption and Green
Supply Chain Assessment for Security Supply Chain
Camera
CEC 022-2018 Five-Star Rating on Green Alliance of Green Consumption and Green
Supply Chain Assessment for Disk Storage Supply Chain
Awards for Social Responsibility
The Awards From
National “Value the Contract, Define the State Administration for Industry and
13
Credit” Enterprise Commerce of the People’s Republic of China
Zhejiang Province “Value the Contract, Zhejiang Administration for Industry and
Define the Credit” Enterprise Commerce
Enterprise of Responsibility and Valuable
Chinese Electronics Standardization
Innovation in Electronic Information
Association
Industry
Quality and Technology Supervision of
Zhejiang Quality Education Social Practice Zhejiang Province
Base for Primary and Middle School Student Department of Education of Zhejiang
Province
Capital Market Awards
The Awards From
A-level Evaluation on Information
Disclosure Assessment of Listed Companies Shenzhen Stock Exchange
in Small and Medium Enterprise Board
Golden Horse Award for Listed Innovation
Security Daily
Tech Company
Top 50 Chinese Company Listed on the
SME Board by Value / Top 10 Management Security Times
Team of Chinese Company Listed on the New Fortune
SME Board
Fortune (China )
Top 10 Board of Directors in China
Aon Hewitt Investment Consulting
Other Awards
The Awards From
First Prize in the 2018 Video Behaviour CVPR (International Conference on
Recognition Challenge "Full Track" category Computer Vision and Pattern Recognition)
National Top 100 Quality Integrity General Administration of Quality
Benchmarking Demonstration Enterprises Supervision, Inspection and Quarantine
China Electronics Information Industry
2018 China Top 50 Big Data Enterprises Development Research Institute
China Big Data Industry Ecology Alliance
Silver Award for Innovation in China
China International Industry Fair
International Industry Fair
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1.2 Operational Performance
During the reporting period, we continued to penetrate the market, focus on client value, and
seek innovation-powered development. According to our medium and long-term strategic
plan, we increased our inputs in R&D to promote video-centered businesses. Moreover, we
continuously improved our management capabilities and adhered to sustainable development
strategies to further increase our business volume as well as profitability. With solid
development of operational businesses and improving economic performance, the Company
continues to create sustainable returns to investors and society as it develops itself.
* Payment to government includes Hikvision's total tax payment in each country/region excluding deferred taxes.
1.3 Corporate Governance
Sound corporate governance and strict risk management are important pillars for the healthy
development of a company. We are committed to creating a transparent, honest and compliant
operating atmosphere. We aim to establish an effective accountability mechanism and
conform to regulations against corruption, monopoly, and unfair competition to protect the
fair interests of the Company as well as our clients and shareholders.
In strict accordance with Company Law of the People's Republic of China, Securities Law of
the People's Republic of China, Code of Corporate Governance of Listed Companies, Stock
Listing Rules of the Shenzhen Stock Exchange, Guidelines of the Shenzhen Stock Exchange
for the Standard Operation of Listed Companies on the Small and Medium-sized Enterprise
Board, and other relevant laws and regulations as well as regulatory requirements of
supervision departments, we aim to create an efficient corporate governance structure in
order to protect the interests of shareholders and other stakeholders with our management
system, and continuously enhance the Company's value and management transparency.
15
During the reporting period, independent directors of the Company followed our operation
and performed their duties independently in accordance with relevant laws and regulations,
offering professional opinions on our systems and routine operational decision-making, in
order to improve our supervision mechanism and to protect the interests of the Company, its
shareholders, and public shareholders in particular.
The Company held three general meetings of shareholders during the reporting period. All
general meetings adopted a combination of on-site voting and online voting to ensure that
shareholders are able to exercise their rights. In 2018, the general meetings considered and
approved the appointment and removal of members of the fourth Board of Directors and
Board of Supervisors as well as 20 proposals, including Proposal on the Amendment to the
Authorization Management System, 2018 Incentive Restricted Stocks Plan (Revised Draft)
and Summary, and Measures for the Implementation of Restricted Stocks in 2018, etc. In
2018, the Company held 10 board meetings and considered and approved 56 proposals in
total.
For more information on corporate governance, please refer to the Corporate Governance
section of the Company’s 2018 Annual Report.
Integrity and Compliance Operation
To operate with integrity and compliance is the foundation for the survival of a company and
the cornerstone of its sound and sustainable development. Hikvision unswervingly pursues
the concept of integrity and compliance management, abides by business ethics, strictly
complies with the applicable laws and regulations as well as related provisions in different
countries and regions, and learns from international rules and industry leading practice to
ensure solid global operation. We have a professional legal team to investigate, identify and
track laws and regulations applicable to our operation, and to organize and assist various
departments of the Company to perform compliance risk assessments, implement compliance
initiatives and optimize compliance mechanisms. Furthermore, we work actively to establish
16
long-term cooperation with well-known, experienced domestic and foreign law firms.
In order to further regulate employee business behavior, and strengthen professional ethics
education, we have established Integrity and Ethical Compliance Committee. The committee
is directed by the head of the internal control department, the head of the human resources
department, the employee supervisor, and the manager of the internal audit department as
members. They are mainly responsible for dealing with employees violating laws and
regulations, internal rules and regulations of the Company, and the Company's moral
standards and committing corruption.
In order to enhance the level of compliance in a more systematical way and cater for our
global expansion, during the reporting period, we improved our organizational structure,
established a dedicated compliance department, and appointed the Company's Chief
Compliance Officer.
Code of Business Conduct
Integrity and trustworthiness is the core value of Hikvision. We require employees to comply
with relevant laws and regulations and high ethical standards in business activities. In 2012,
we issued the Hikvision Code of Business Conduct, requiring employees to comply with the
laws in business activities and act in an ethical way conforming to principles of integrity, fair
competition, and incorruptibility. In 2014, in light of the changes to our business environment
and refined management, we thoroughly revised the 2014 Hikvision Code of Business
Conduct to form Hikvision Code of Business Conduct for Employees (hereinafter referred to
as the “Code of Business Conduct”) and further revised it respectively on March 2017 and
November 2017. The Code of Business Conduct stipulates the general rules Hikvision
employees need to follow in business activities and requires employees to always comply
with laws and regulations, work honestly, devote themselves to their duties, and be honest in
performing their duties. The Code of Business Conduct covers more than 10 aspects,
including working environment, corporate assets, intellectual property rights, fair competition,
impartiality and integrity, gift and hospitality, conflict of interest, and insider trading. At the
same time, we ask employees to sign, learn, master and comply with the requirements of our
Code of Business Conduct. We made the Code of Business Conduct one of the documents that
new employees need to learn and sign, and asked employees to check and review how they
are following it as they perform their duties.
Banning Corruption and Commercial Bribery
Hikvision takes active steps to create a business environment and working atmosphere of
honesty and integrity, and performs “transparent sales” and “transparent procurement”. The
Code of Business Conduct requires employees to be honest and self-disciplined in business
17
activities and personal lives. It specifies that employees should comply with laws and
regulations as well as ethical standards and common business practices when dealing with
clients, partners, or suppliers and as well as gifts or hospitality. Employees shall not give or
accept any gift or hospitality that exceeds reasonable extents or violate the Company’s
policies. Employees shall not engage in bribery or anything reasonably suspected to be
bribery. Moreover, the Company performs financial procedures in accordance with applicable
accounting laws and regulations and accounting standards. The Company supervises business
conducts through financial systems and control processes on a regular basis. As for violation
of the Code of Business Conduct, the Company has established mechanisms for
complaint/reporting, investigation and so on, and formulated Management Measures for
Complaint and Reporting, which identifies procedures for handling complaints and measures
to protect whistleblowers. We encourage employees and relevant parties to report violations
of laws, regulations or rules, frauds and conducts that damage the interests and image of the
Company to promote transparency and steady development. Once a violation is confirmed,
we will hold relevant parties accountable according to internal rules, or report the case to
judicial authorities in accordance with relevant legal procedures. Furthermore, we will
demand the responsible person to be responsible for rectification of the exposed internal
control issues to promote management improvement.
Hikvision demands that all suppliers and distributors sign an Honesty and Integrity
Agreement, and incorporate anti-corruption and anti-commercial bribery clauses into
contracts with other clients and partners. We have set up complaint/reporting channels on our
website and placed a Letter to Suppliers in the reception halls of our office buildings to show
our attitude and determination to eliminate corruption and commercial bribery to all our
suppliers.
Hikvision continues to foster a culture of integrity in order to enhance the ethical awareness
of employees and internalize Company values and business ethics into employee personal
code of conduct. We stress the importance of honesty and trustworthiness to new employees
since their very first day. Moreover, we offer new employees a dedicated anti-corruption
course as part of their orientation training. In 2018, we provided corporate culture training on
anti-corruption for 9,326 new employees. In 2018, we held a dedicated meeting on
incorruptibility for middle-level managerial personnel and above, employees assuming key
posts, and their family members. Representatives of employees' family members issued an
"Integrity Family Proposal" at the meeting. All employee family members attending the
meeting signed a Letter of Commitment on Integrity. We aim to build a more incorruptible
atmosphere through corporate-family interaction. In 2018, a special story titled "Integrity:
Anti-corruption Efforts" was published on View, our internal magazine. Besides, we
conducted various forms of integrity education and publicity including making
anti-corruption posters, asking employees to do self-examination on a wide scale, and
18
organizing key employees to attend court trials on economic crimes as a lecture, to enhance
the awareness of integrity.
Fair Competition
Hikvision advocates fair and equal competition and abides by applicable laws and regulations
on fair competition and anti-monopoly. As required by the Code of Business Conduct, all
employees should participate in market competition in a legal and ethical manner. We
actively carry out research on anti-monopoly legislation, law enforcement and judicial
practice at home and abroad, and conduct anti-monopoly compliance training for key
personnel to achieve more effective management of employee business behavior. In the
reporting period, we established a selective distribution system in the UK and implemented a
Minimum Advertised Price (MAP) policy in the US to comply with local laws and
regulations and to optimize the distribution channel management mechanism in a more open
and transparent way, in order to sustain normal, productive market competition orders.
Export Control
Hikvision attaches great importance to export control requirements related to our global
operation. We follow laws and regulations on export control at home and abroad, and conduct
compliance construction in various aspects including policy, organization, process, and
execution. We have developed an internal management system for export control and
19
established export examination procedures covering classification and identification of raw
materials and finished products, customer review, end-use examination, and risk elimination,
etc. We ensure the effectiveness of our internal control mechanism by developing and
continuously optimizing the information management method. We also conduct promotion
and training on departments and personnel related to export controls. In addition, we
corporate with internationally renowned external law firms regarding export control
compliance to continuously improve our compliance and management capabilities.
Human Rights Governance
Hikvision respects the human rights as set forth in the Universal Declaration of Human
Rights, International Covenant on Civil and Political Rights and the International Covenant
on Economic, Social and Cultural Rights in commercial practice. Meanwhile, we will
incorporate these provisions into our business procedures and policies in accordance with the
UN Guiding Principles on Business and Human Rights Framework to enhance the value of
our business activities.
In 2018, the Company has appointed the Chief Compliance Officer, responsible for
promoting the compliance construction covering areas of human rights protection, data
security and privacy protection as well as social responsibility, etc. We have a professional
legal team conducting investigating, recognition and tracking the laws and regulations
applicable to global operation of the Company and carrying out the construction of human
rights compliance with the situation of the company.
1.4 ESG Management
The Company always regards ESG management as an important part of its daily operation
and management. We continuously integrate the concept of ESG responsibility into our
business strategy, adhere to honest management and scientific development, and execute
corporate social responsibility and sustainable development ideas in all aspects of operation
to take on more social responsibilities with a high sense of mission and responsibility.
Stakeholder Identification and Communication
The Company always seeks to have diverse communication and contacts with all
stakeholders, share ideas and experiences under bilateral, transparent and regular
communication mechanisms, and discuss issues closely related to our development. We hope
that all stakeholders can achieve win-win results based on mutual trust and respect.
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In the reporting period, we identified the following six categories of stakeholders who have
decision-making power and influence on the Company:
Client
Shareholder
Community
/Investor
Hikvision
Government
Partner and
Regulatory
Employee
Through communication with stakeholders, we came to understand their concerns, and
examined the results of relevant actions on a regular basis. Also, we improved
communication channels to better listen to stakeholders. The following table lists the topics
of interest of different stakeholder groups in the reporting period.
Stakeholder Issues Way of Frequency
Concerned
Communication/Response
Shareholder Economic growth Regular report/temporary Regular/Irregular
announcement
/Investor Sustainable Regular/Irregular
operation Site inspection
Irregular
R&D Telephone
Irregular
E-mail
Regular/Irregular
Information session/roadshow
Government Tax payment Regular report/temporary Regular/Irregular
announcement/letter
and Regulatory Employment Irregular
promotion Site inspection
Regular/Irregular
Environmental
protection
21
Client R&D Hotline Irregular
Product safety Information feedback Irregular
and quality
Satisfaction survey Regular/Irregular
Privacy and
information
security
Employee Wages and Health check-up Regular
benefits
Professional training Regular/Irregular
Professional
Activities Regular/Irregular
development
Benefits
Partner Good faith Public tendering Irregular
Regular/Irregular
Supplier Site inspection
management Regular/Irregular
Suppliers’ meeting
Privacy and
information
security
Community Community Community activities Irregular
communication Regular/Irregular
Media coverage
Environmental Irregular
Interview and investigation
protection
Product safety
and quality
The Company attaches great importance to the opinions and feedback of stakeholders and is
committed to establishing open and transparent communication channels for stakeholders.
The Company has maintained long-term effective communication with regulatory bodies,
actively cooperating with and responding to relevant work. Moreover, in the reporting period,
the Company carried out a number of investor relations activities, and had in-depth
communications with investors in One-on-One, One-on-multi, small group Meetings, and
other ways, and formed good interactions.
22
Materiality Assessment
During the reporting period, Hikvision conducted stakeholder surveys including in-depth
interviews in order to understand stakeholders' opinions and expectations of the Company's
response to and disclosure of economic, environmental, social and governance issues. The
surveys provide a strong basis for our long-term ESG strategy.
We perform materiality assessments in four steps. As shown in the figure below, we firstly
identify material economic, environmental, social, and governance issues that may affect our
business or stakeholders, rank the potential material issues in order of importance, after
which we verify from the management perspective. Lastly, we review the materiality
assessment procedures closely.
Through the assessment procedures above, we identified 8 issues of high importance, 14
topics of moderate importance, and 3 topics of relatively low importance to the Company.
The material ESG issues constitute the key parts of this report and are disclosed in later
sections.
23
Corporate Management Employment
Occupational health and
1 Economic growth 6
safety
Talent acquisition and
2 Sustainable operation 7
development
Diversification and
3 Anti-corruption 8
inclusiveness
4 Fair business practice 9 Employee benefits
Respect for human rights
5 Factory automation 10
and labor practice
Environment Operation Practices
Product safety and
11 Energy management 19
quality
Greenhouse gas emission Management of clean
12 20
reduction technology opportunities
Reduction and
Privacy and information
13 management of toxic 21
security
materials
24
Supply chain
14 Chemicals management 22
management
Environmental protection Shared development with
15 23
management partners
Water resource
16
management
17 Disposal management Community
Influence of climate
18 24 Public charity activities
change
25 Influence on local economy
25
Chapter 2 Innovative Development for Excellence
Hikvision adheres to the business philosophy of “professionalism, honesty, and integrity” and
refers to the core corporate value of “dedication to clients’ success, value oriented, integrity
and down-to-earth, pursuit of excellence” as the code of practice to continuously advance
video technology and serve the society. As for R&D and innovation, Hikvision continued to
increase R&D investment and dedicated resources to the development and application of
intelligent technologies. As for quality assurance, Hikvision upheld the principle of quality
and integrity, and aimed to foster a quality culture. As for cybersecurity, Hikvision improved
its management and control structure and conducted a number of explorations and
inspections on the existing structure.
2.1 Committed to Innovation and R&D
Strong R&D capability is one of the principal competitive edges we have maintained for a
long time. It has also firmly guaranteed the continuing steady growth of our core business.
Years of R&D practice not only provided us with a number of cutting-edge core technologies
and patented technologies, but also a high-quality R&D team with rich experience in R&D
and patent registration and ability to efficiently manage R&D process. These advantages have
been successfully applied to our R&D practices which laid a solid foundation for sustainable
development in the long run and become the core competitiveness of the Company. During
the reporting period, the Company invested RMB 4,482.78 million in R&D, which accounted
for 8.99% of the total operating income.
26
R&D Strategies and Strategic Objectives
In terms of technological innovation and product development, the Company follows a
four-in-one operation mechanism integrating strategic planning, business planning, action
planning and performance assessment, and focused on the layered decomposition of strategic
objectives to achieve implementation.
To ensure the competency of our products and technologies, we strengthen control of the
product development processes, and clarify the specifications and requirements of each link.
Intellectual Property
As we make progress in R&D, we are also committed to protecting intellectual property. We
have a professional team to manage our intellectual properties including trademark, patent,
and copyright, and deal with disputes in this regard. In accordance with applicable laws and
regulations, we issued and implemented Measures for the Management of Trademarks,
Measures for the Management of Patent Awards, and other internal rules and regulations.
27
During the reporting period, we reached a number of achievements concerning patent and
software copyright:
Number
New patents Patent for invention 116
Patent for utility model 270
Design patent 464
Total 850
New software copyrights 112
Newly registered trademarks 230
All patents Patent for invention 513
Patent for utility model 741
Design patent 1,555
Total 2,809
All software copyrights 881
All registered trademarks 1,070
Hikvision respects the intellectual property rights of others, abides by and applies
international intellectual property rules, and takes a friendly approach to resolve intellectual
property issues through negotiation, cross-licensing, business cooperation or other methods.
In the event of malicious infringement, we will take legal actions to protect our intellectual
property rights, such as complaint, civil litigation, or file the case to the judiciary divisions
and ensuring criminal responsibility.
R&D Cooperation
Hikvision not only attaches importance to its own innovation and R&D but also extends
collaboration in R&D with various institutions to seek intelligent solutions in various fields.
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Collaboration in R&D with various parties
Through cooperation with governments, enterprises, and universities, we continue to broaden
our R&D thinking, actively explore industrial applications and enhance our brand influence.
2.2 Quality Assurance
While seeking innovation in intelligent manufacturing R&D, we are deeply aware that
managing and improving quality integrity is the cornerstone for the Company to be
positioned well in the industry and society. To this end, we incorporate "integrity and
pragmatism" into our corporate culture and core values, include quality integrity into our
quality management system, and ensure product quality by virtue of rules and regulations.
Our philosophy and core value on quality is to "contribute to clients' success and deliver the
right products at the first time". Not only have we improved the quality of our own products
through a well-established management and control system, we have also facilitated the
formulation of national, industry and local standards to actively promote the industry
development. During the reporting period, the Company contributed to the preparation of 17
national standards, 44 industry standards, and 15 local standards.
Quality Management Architecture
In the light of the guideline of “Leading Technology, Quality First, Customer Satisfaction,
Continuous Innovation”, the Company has established quality management goals (including
quality integrity management goals, such as products failed in spot checks, customer
satisfaction, rate of unpacking defective products, annual repair rate, etc.) for various
departments. We analyze the achievement of quality management goals and the operation of
the system each year to identify problems and make improvements.
29
The Company established a Quality Management Committee as the highest division to guide
and promote the Company's quality works. Its principal responsibility is to initiate,
coordinate and institutionalize measures aimed at breakthrough quality improvement. Normal
operation of the Quality Management Committee is a top-down approach to systematic
quality improvement. Under the leadership of the Quality Management Committee, the
Company has established a hierarchical quality management system that involves product
development, implementation and after-sales. The quality management system is responsible
for the execution of quality management functions.
In addition, the Company has established a quality accountability system, identifying the
quality red line and quality standards to integrate quality responsibilities and requirements
into daily work and engage all employees in quality management process.
Quality Management System
The Company have been developing its own quality management system in accordance with
the requirements of ISO 9001 certification and quality management system since its
establishment. We obtained the ISO 9001 certification in 2005 and remain it till now. In
addition, we established a more comprehensive management system for specific processes
and products to effectively satisfy the needs of customers. For example, the R&D process is
certified by CMMI (Capability Maturity Model Integration)-Maturity Level 5 (the highest
level). The measurement process is certified by ISO10012 Measurement Management
System (AAA level). We have gradually formed a quality management system that covers
cultural awareness, code of practice, institutional guarantee, and technical support due to
relentless efforts.
30
ISO 9001 Certification ISO 10012 Certification
Quality Control Procedures
Assurance and improvement of product quality rely on the efforts of all employees and strict
control of all procedures. In order to improve the traceability of the entire process, and the
comprehensive competitiveness of the Company's products and solutions, the Company
clarifies the processes of various aspects including quality control, quality improvement,
quality monitoring and measurement, and control of non-conforming products, sets
restrictions on operation methods, and aims to standardize the Company's products and
solutions.
Product Quality and Safety
We strictly control harmful substances in products, especially harmful substances mentioned
in the RoHS (Restriction of Hazardous Substances, short for Directive on the Restriction of
the Use of Certain Hazardous Substances in Electrical and Electronic Equipment) in the
31
designing stage. As a part of our social responsibility for environmental protection, we take
strict measures to ensure that there is no harmful substance in product design and production
processes and that our products conform to the requirements of RoHS. During the reporting
period, more than 7,000 Hikvision specifications and models have been RoHS certified.
Moreover, around 5,000 Hikvision specifications and models have been REACH SVHC
(Registration, Evaluation, Authorization and Restriction of Chemicals) certified.
RoHS Certification Report REACH SVHC Certification Report
In addition to hazardous substance control, we actively develop and produce energy-saving
and environmentally friendly products. During the reporting period, more than 5,000
Hikvision specifications and models obtained the China Environmental Label. More than
5,000 Hikvision specifications and models were certified as China Energy Conservation
Product. These specifications and models fall into six categories, i.e. video camera, server,
monitor, all-in-one equipment, network hard disk video recorder and display. In addition,
during the reporting period, we obtained the WEEE (the Waste Electrical & Electronic
Equipment Directive issued by the European Union) certification. More than 2,000 Hikvision
specifications and models meet WEEE's requirements of recycling rate.
China Environmental Labeling China Energy Conservation WEEE Certification
Product Certification Product Certification
32
As for product labelling, we strictly comply with the product labeling requirements of various
countries and regions, and mark our products with corresponding environmental label on
their packages.
Quality Culture
We attach great importance to developing a quality culture. We introduce it to new employees
during the orientation training to unify their understanding of quality. In daily work, we instill
quality concepts of “contribute to clients' success and deliver the right products the first time”
into each employees’ mind from the cognitive level, the system level, and the behavior level
through various activities including quality education training, quality responsibility system,
quality promotions, and further ensured the implementation of quality concepts in each
employee's actions.
Quality Themed Activities
On March 23, 2018, the Company held the 2018 Hikvision Conference on Quality (6th) on the
theme of “Elimination of Problem, Pursuit of Excellence”. Nearly 300 people attended the
conference including heads of the R&D, supply chain and customer service departments. The
conference summarized quality results in 2017 and commended excellent teams on quality works
in 2017.
To promote the theme of “Elimination of Problem, Pursuit of Excellence”, we arranged posters,
"Boss's Interpretation", quality culture fans, quality quiz, quality awareness training, etc., to
engage employees and encourage them to pass on our quality culture to new employees.
33
Poster Fan Desktop Wallpaper Quiz
2.3 Cybersecurity
The “Internet of Everything” and intelligent IoT feature even more massive, diverse, and
powerful terminal devices, complex network architecture, extensive data, and diversified
applications. Therefore, we need to strengthen security protection and privacy protection at
more levels, such as terminal device, network, data, platform service, and application. We are
deeply aware of the importance of cybersecurity and are actively dealing with cybersecurity
challenges. While improving product quality and safety, we stick to the cybersecurity bottom
line. During the reporting period, the Company officially released Hikvision Cybersecurity
White Paper, which aims to share our cybersecurity experience and practice with the industry
and improve overall cybersecurity capabilities.
Security Management Structure
The Company has a well-established organizational structure to address cybersecurity threats.
Each division has clear responsibilities to integrate security management into R&D, supply
chain, marketing and sales, project delivery and technical services.
34
Through close cooperation among different departments and the establishment of work
processes, the Company can prevent cybersecurity problems the people to the maximum by
virtue of its organizational structure.
Procedures and Standards
In accordance with Law of the People's Republic of China on Guarding State Secrets and
Cybersecurity Law of the People's Republic of China, we formed a set of management
systems to protect internal information security, such as the "Information Security
Management Manual" and "Information Security Applicability Statement" and defined
departments and divisions subject to the systems.
We recognized that standardization could reduce the occurrence of cybersecurity problems.
Therefore, in accordance with domestic and international laws and regulations, industry
standards, customer security demands, third-party analysis, industry activities, peer
experience and the security requirements of certain businesses, we developed a series of
product security-related specifications and standards for general security baseline, security
code, secure password application, secure key management, secure session management,
security authentication, security testing, and security event management to ensure all aspects
of product security.
35
As to overseas operation, we followed the ISO 27001 information security management
system principally to establish an internal management system to protect the intellectual
property and privacy of customers and partners around the world to the maximum.
Security R&D Process
To provide customers with safer products and solutions, we integrated security works into
R&D (security design, security development, security testing, etc.) according to industry best
practices for security and customer feedback. We proposed our product development security
management process HSDLC (Hikvision Security Development Life-Cycle) to implement
security works at the R&D level.
HSDLC divides product life cycle into six stages: conception, design, development, testing,
delivery, and emergency response, and presents security guidelines and standards for each
stage.
Emergency Response
36
For post-delivery cybersecurity problems, the Company has established a product
cybersecurity problem response mechanism, and arranged a dedicated team to receive,
process, and disclose emergency responses to the security vulnerabilities in our products and
solutions. Moreover, the Company set time limits for security responses to ensure response
efficiency. For example, initial confirmation of security incidents must be completed in less
than 24 hours and high-risk vulnerabilities must be corrected within 30 days.
For emergency handling of post-delivery vulnerabilities, the Company established procedures
for security vulnerability and early warning disclosure based on ISO/IEC 30111, ISO/IEC
29147 information technology-security techniques -- vulnerability disclosure and other
standards. The procedures include vulnerability research and data collection, security
vulnerability assessments, analysis and verification, as well as tracking and solution.
While safeguarding our own cybersecurity, we proactively participate in industry and public
events. We have built long-term relationships with vulnerability disclosure platforms,
relevant divisions of our clients, other suppliers, researchers and third-party coordinating
bodies.
Invest more resources to ensure cybersecurity
Hikvision attaches great importance to product and cybersecurity. It has made many
explorations and implementations in the field of cybersecurity. Hikvision joined the Forum of
Incident Response and Security Teams (FIRST), China Cyber Threat Governance Alliance
and some other information security organizations, shared information on cyber threat, and
37
worked with other members to manage and report threats related to the dark web, improve
cybersecurity environments, and protect cybersecurity and benefits.
In addition, the Company implemented a series of measures to enhance security and ensure
cybersecurity:
Hire professional organizations to assess our information security to improve our
cybersecurity system;
Hire well-known domestic and foreign security testing teams to conduct penetration
testing on our products to minimize business risks and keep security risks within control;
Invite well-known security experts to the Company to give lectures to equip our R&D
personnel with stronger security abilities;
Enhance exchanges and cooperation with domestic and foreign security vendors to
improve the security of our products;
The Cyber and Information Security Lab holds exchanges with clients several times a
year on product security, emergency response mechanisms and security requirements to
keep us as well as clients updated;
We launched a “Security White Hat Reward Program” to reward white hats at home and
abroad that follow Hikvision's information security and excellent researchers of security
technologies that help Hikvision with product security.
For more information on cybersecurity, please refer to the 2018 Hikvision Cybersecurity
White Paper.
https://www.hikvision.com/en/Support/Cybersecurity-Center/Cybersecurity
38
Chapter 3 Empowering Customers’ Success for Win-Win Results
Hikvision follows the core values of “dedication to client’s success, value oriented, integrity
and down-to-earth, pursuit of excellence” and continuously innovates to provide global
clients with high-quality products and services and create longer-term value together.
Moreover, Hikvision continues to promote the industrial chain, and work together with
upstream and downstream partners in the supply chain to face challenges and opportunities
and pursue excellence.
3.1 Provide Quality Services
The Company closely focuses on the needs of clients, researches into market segments and
carries out product development. The Company continues to uncover the needs of clients and
provide customized solutions with sufficient industry-specific knowledge to create value for
users.
Satisfy Clients’ Needs
As a client-oriented business, we embrace "industry segmentation, expansion of channels to
cover more areas, and end-to-end business", always keep close to customers, constantly
improve our abilities to provide customized solutions and consultant sales, and translate
technologies into market value. Our clients are from different industries. They all have their
own business scenarios and business logic, which diversifies their needs. We take the
following measures to meet the diverse needs of our customers based on our understanding of
the market.
39
Hardware/Product Solution
We offer customized solutions and
customized hardware and software
portfolios for different industries and
In light of diversified scenarios, different customers.
we offer a wide range of products During the reporting period, the
and models to deliver the best Company upgraded its software
performance to customers with engineering capabilities and practice
different needs. in an all-round way by establishing a
unified software technology
architecture in light of the
development needs of the business,
and transformed its software R&D
model from the “market demand-
oriented” to the “market demand-
oriented and technology planning-
driven". Eventually, the Company
became able to launch high-quality
software products in a quick and
sustainable manner to meet the
rapidly growing demands of the
software market and support its
strategic planning.
Optimize Marketing Service System
We have a global marketing service system that enhances customer stickiness as well as our
brand popularity and enables effective resource allocation targeted on a global scale while
efficiently serving customers.
Global marketing network
Global marketing service network for global resource allocation
32 provincial business centers /first level branches in Mainland China
44 overseas branches
Products and solutions employed in more than 150 countries and regions.
To provide customers around the world with convenient, timely and high-quality services, we
have also established a three-tiered service system which consists of global customer service
centers, customer service departments under subsidiaries and authorized customer service
stations.
40
Global customer service
center
Customer service department
under subsidiary
Authorized customer
service station
To further improve service quality, we entered into partnership with tens of thousands of
contractors, distributors, outsourcing service providers, etc. to provide product delivery,
project delivery, software deployment, system operation and maintenance, and other services
to customers of all industries in all regions. Furthermore, we are constantly improving our
product and technical service standards, providing our partners with an all-round training and
certification system to help them improve their professional competencies and service
standards.
Technology-enabled Convenient Service
Internet technology is bringing us ever closer to our customers. Today, customers can reach
us more easily. They can also quickly solve common problems by self-service.
Central Service Online Materials and
One-stop Self-service
Protal Instructions
Where there is a product, there is Online robot assistant KK is We launched a mobile knowledge
information and service. We available 24/7 on all platforms. At library where customers can find
optimized the QR code on the present, KK can provide 80% of answers to frequently asked
device and enabled "one scan for customers with fast, convenient questions other than product-
all". In addition to basic and efficient solutions to their specific ones. It is easy to locate a
information on the device, users problems. Customers can talk to question and its answer by posting
can also access its instructions and human customer service or searching a question. In addition
information on latest products and representatives for more to texts and illustrations, we post
services easily; professional issues via our WeChat videos on certain product lines on
As for access to information and public account. a weekly basis for customers to
service resources, we greatly As for product maintenance, we learn how to operate the products;
improve the accessibility of provide one-stop repair services. Security calculation tools are
information and services without Customers can start a repair powerful and contain various
charging extra to customers; request by one click and check the calculation formulas. It is of great
repair status in real time. help in the design process of
security system solutions and is a
good choice for millions of
security practitioners.
In the future, we will continue to optimize our marketing system and listen to our customers.
We will expand and adjust the marketing system based on the characteristics of each market
to bring our sales and service system closer to customers.
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3.2 Protect User Privacy
Regulations to Protect Client/User Privacy
Hikvision adheres to the concept of “manipulating power of technology with the heart of awe,
and protecting data security with prudence”. Hikvision sticks to reasonable, transparent,
controllable and secure privacy policies and built a systematic and standardized data security
and privacy protection system. We set up a dedicated team to study laws and regulations as
well as national/industry standards on personal data, including but not limited to
Cybersecurity Law of the People's Republic of China, GB/T 35273-2017 Information
Technology – Personal Information Security Specification, and EU General Data Protection
Regulation (GDPR). We formulated personal data protection guidelines on R&D, sales,
service, after-sales service, technical support, etc. in accordance with laws and regulations
and standards and in light of our own data processing scenarios. We issued supporting
procedures and policies and gradually put them into practice.
Data Protection Practice for Products and Services
We factor data security requirements in product design and R&D. We benchmark our practice
with industry best practices to establish data security and privacy protection mechanisms that
cover compliance management, product review, security assurance, employee education, etc.
We adopt a variety of security technologies such as identity authentication, authority
management, desensitization, and encryption based on the scenario.
If a user uses Hikvision hardware only, we will not and are not able to collect or use the user's
personal data through hardware products. However, as a device manufacturer, we do our best
to suggest that users take necessary measures to protect their data.
If the user uses Hikvision cloud services as well, we will collect and use some user data. The
Company has established a data life cycle management system that covers data collection,
usage, transmission, storage and deletion to protect users' personal data. Moreover, we
present our readily understandable privacy policy in a prominent position, informing users
the purpose, method and scope of personal data collection and usage, and the rights of users.
Besides, we have established a prompt and effective emergency response mechanism for data
security event. We provide dedicated contact channels and personnel to deal with questions
and comments regarding personal data handling.
42
For online sales, after-sales service and technical support, we further regulate scenarios in
which user data is processed for operational purposes in documents such as Information
Security and Confidentiality Management System and Service Specifications. We strictly
manage the personal data of users collected for operational purposes, including but not
limited to authority management and regular deletion, etc.
During the reporting period, the Company has not been punished by any regulator for
violation of laws and regulations on data protection.
3.3 Listen to Customer Feedback
The Company continues to enhance communication with customers and actively responds to
consumer inquiries, complaints, and suggestions. While responding to customers, we
constantly examine and improve the quality of our products and services.
Feedback and Complaint Channels Provided by Hikvision
To optimize our service processes and therefore improve customer satisfaction, we developed
a Customer Complaint Handling and Closing Procedure to instruct and regulate the handling
of customer complaints lodged via the helpline, clarify the responsibility of each post, and
ensure that customer complaints are handled in a timely, effective and standardized
end-to-end manner.
After receiving a complaint, the customer service representative will enter it into the internal
system, categorize it and follow it up to ensure that the problem is properly solved within the
time frame. Then we will confirm with the customer and ask for his/her feedback.
43
In addition to solving specific problems, we analyze frequent complaints on a regular basis
and make a follow-up to implement the PDCA (Plan-Do-Check-Act) circle.
Satisfaction Survey
We have established a customer satisfaction management system to implement Helpline
Callback Service Procedure, After-sales Repair Satisfaction Callback Service Procedure,
doing callbacks and follow-ups on customer feedback.
In order to systematically analyze customer satisfaction and identify reasons for satisfaction
or dissatisfaction, we perform a customer satisfaction survey that involves all operations of
the Company at the end of each year. All relevant departments are involved to form a
satisfaction survey team to conduct the survey.
Net Promoter Score System
EZVIZ products are mostly used in everyday scenarios. To this end, EZVIZ established a
user Net Promoter Score (hereinafter referred to as "NPS") to improve user experience.
EZVIZ conducts satisfaction survey for each product at regular intervals. EZVIZ uses three
rounds of surveys to figure out to which degree a product meets the needs of users and user
satisfaction in an effort to optimize the product. Then it tests the effect of the improvement to
enhance user expectation of product experience and the competitiveness of the product.
44
NPS is not only an evaluation mechanism but also an reflection of experiential culture. We
measure our product improvement as well as operation with NPS as an indicator. According
to recent NPS results, user recognition and loyalty to EZVIZ products are rising.
3.4 Contribute to Industrial Ecosystem
As we improve our supply chain, we pay great attention to communication and interaction
with partners. Intelligent applications are scenario-based and fragmented. Therefore, we
believe that open integration is the trend of the video industry and it is going to be a new
format in the intelligent era. In order to achieve open integration, we established a complete
open system.
There is a massive scale of AI applications demands in real economy, especially
scenario-based, fragmented ones. However, various prerequisites for AI applications such as
data, algorithm, computing power, product and application system make it difficult for AI to
empower real economy. During the reporting period, in order to build an open and shared AI
industry ecological environment and help the implementation of AI, Hikvision launched the
AI open platform to provide complete services from demand mining to application release
and to help industries to upgrade. We work with different partners in the ecosystem to
generate synergy effects and create value for our clients together.
Hikvision AI Cloud Open Platform: A Solid Step for the AI Ecosystem
Hikvision launched Hikvision AI Cloud Open Platform at the 14th China International
Exhibition on Public Safety and Security 2018. Based on concepts of openness, equality,
innovation, and win-win, the platform provides partners with open infrastructure, open data
resources, open platform services, and open application interfaces. Hikvision will work
together with partners to build two ecosystems for products and services respectively via this
platform.
The platform brings together product providers and service providers from different parts of
45
the world and encourages them to work with each other, influence each other, and learn from
each other to further integrate AI and IoT and create great value for public security,
transportation, judiciary, education, energy, finance, building, real estate and other sectors.
In 2018, Hikvision has successfully applied the AI open platform to empower intelligence
upgrading in multiple industries. In pharmaceutical companies, AI standardizes employee
behavior and reduces security risks. In food companies, AI ensures food safety, standardizes
production and storage, and improves regulatory efficiency. As to seal management, AI
standardizes seal management and operational procedures to improve efficiency. As to
weather forecasting, AI recognizes frost and clouds and monitors weather phenomena
automatically.
3.5 Supply Chain Development
While providing high-quality security services to our suppliers, we are also committed to
creating a green supply chain to enhance the environmental awareness and abilities of
upstream and downstream suppliers and achieve win-win results. We instill the importance of
environmental protection, occupational health, safe production and some other factors to
production by setting entry standards and assessment standards as well as offering promotion
and training. We guide suppliers to do compliance management beforehand and attach
strategic importance to compliance management to realize a green supply chain.
Supplier Management
We are dedicated to mutually beneficial long-term stable partnerships with suppliers. For the
Company to develop in a sound and fast manner, we are committed to creating a stable and
high-quality supply chain. To this end, we established a quality index assessment system for
the entire supply chain management process, including material acceptance, production,
46
market, etc. Moreover, we perform assessment and examination at all levels and monitor
where we are at regular intervals. Besides, we update our goal each year to ensure continuous
improvement in supply chain management.
As of December 31, 2018, the Company has a total of 728 suppliers worldwide.
Introduction of New Supplier
When we need a
new supplier, we
combine our
supply chain Create a supplier
resource profile, sign
development contracts, and
strategy and include the
demand plan to
collect information Organize on-site supplier in the
about potential evaluation and list of qualified
suppliers through test their suppliers once it
various channels ; samples; is confirmed.
We identify our Decide whether
options after a supplier will
evaluating be introduced
suppliers that based on
have strong assessment
comprehensive results, sample
strength, operate test results, and
in line with other factors;
national laws
and regulations
and satisfy other
special
requirements.
As for existing suppliers, we draw up a plan each year to assess suppliers on a rolling basis
and track how they deal with problems and make improvements. Supplier assessment is
carried out in strict accordance with our internal Supplier Assessment Procedures quarterly
and annually. We reward, punish and eliminate suppliers based on the assessment results to
sustain high-quality supplier resources.
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Supplier Assessment Model
Quarterly Annually
assessment Assessment
measures material
quality, delivery, Annually
cost, technical assessment
support, etc. incorporates the
results of quarterly
Quarterly assessments within
Assessment the year.
We take the social responsibility performance of suppliers into consideration and strive to
continuously improve the awareness of responsibility and abilities of suppliers along the way.
Evaluate the environmental, social and governance system and practice of suppliers and
subcontractors in accordance with the Supplier and Subcontractor Social Responsibility
Assessment Report and rate suppliers by the results;
As stipulated in Supplier and Procurement Management Procedures, a single violation
of laws and regulations related to environmental protection and social responsibility
disqualifies a supplier;
Suppliers are required to sign a Supplier Social Responsibility Commitment, and agree to
legal employment, respect for human rights, protection of employees' health and safety,
environmentally friendly operation, etc.
Suppliers are required to sign a Procurement Framework Agreement which includes
human rights guarantees.
Conflict Minerals Management
To reduce the negative impact of supply chain on society, especially conflict minerals issues
on society, the Company took the initiative to take risk management actions. The Company
does not purchase or support the use of conflict minerals. We sign a Declaration of Metal
Conflict-Free with suppliers, requiring all suppliers to provide corresponding evidence and
prove that they do not use minerals from conflict areas, and subject their suppliers to the
same requirements. Suppliers are responsible to do due diligence to ensure that the gold,
antimony, tungsten, tin, etc. used are not obtained through trafficking from anarchy or illegal
group from conflict zones.
In the past few years, the Company has been working with industry trade groups to ensure
the transparency of raw material procurement. We will continue to pay attention to conflict
minerals issues and work with business partners to seek sustainable solutions to such
problems.
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Chapter 4 Serve the Society to Create a Better Future
Upholding our initial aspiration to serve the society and create a better future for all, we have
been taking actions to promote the sustainable development of society for years. We not only
encourage and organize employees to participate in social activities to make contributions to
the public welfare, but also strive to help build a smart ecosystem and a harmonious social
system by giving full play to Hikvision's expertise with reliance on innovative technologies
and professional knowhow.
4.1 Dedicated to Public Welfare
As a responsible corporate citizen, the Company pays great attention to public welfare and
continuously works to help more people and create more goodness to the world through
technological innovation. Based on the technology of “video plus AI”, the Company intends
to carry out a series of valuable projects of public benefit to continuously make new
contributions to the sustainable development of the society and the environment.
Voluntary Blood Donation
We have long maintained good relations with the Zhejiang Blood Center and the Zhejiang
Red Cross Society. With their support, the Company successfully established the
Hikvision Red Cross Society to proactively practice and carry forward the red cross spirit
of “Humanity, Devotion and Dedication”.
The Company organizes hundreds of employees to participate in the blood donation every
year. On July 1st 2018, the Company won the Excellent Organization Award in the event.
“Donate blood for July 1st” jointly organized by seven authoritative departments including
Hangzhou Spiritual Civilization Construction Committee Office, Hangzhou Health
Commission , Hangzhou Culture Broadcasting and Television Group, etc.
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Promote Fairness in Education and Development
For a long time, Ding'an County of Hainan Province had been confronted with many
difficulties including insufficient qualified teachers and uneven educational development.
To ameliorate the situation, the Company joins hands with local education authority,
creating more than 60 “transmitting classrooms” to enable children with timely access to
the high-quality educational resources of schools in urban areas, and synchronously enjoy
quality courses such as music and art.
Since the system was launch, it has been well playing its role as a bridge of friendship
between schools in city centers and rural schools by organizing many featured teaching
activities, thereby winning great popularity among local teachers and students.
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EZVIZ Serving for Filial Piety
Talking to the camera has become a new habit of the old people in Dashan Village, Yaolin
Town, Tonglu County, Hangzhou. In October 2018, Dashan Village Committee installed
two surveillance cameras in the houses of all elderly people over 80 years old so that their
children are able to keep in close touch with the elderly at home through the mobile phone
app EZVIZ Cloud which even allows video call.
We help shorten the distance among people through technologies and serve filial children
in the world. Filial love will never be absent anymore.
4.2 Help to Build Harmonious Ecology
Relying on the products and technological edges accumulated by the Company over the years,
we are also making great breakthroughs in adopting more high technologies in our
environmental protection actions, hoping to utilize science and technology to support
ecological protection work. We are applying innovative products and technologies to support
ecological research and conservation work, and to help maintain rich biodiversity of our
living earth. During the reporting period, the Company invested a total of more than 1 million
RMB (estimated based on value) in ecological protection projects.
Bring More Hope of Life to the World--Bar-headed Goose Protection Project
Located at the north bank of the Tuotuo River and at the foot of the Tanggula Mountain
which is the source of the Yangtze River, the Lake Bande is a typical plateau lake with an
altitude of over 4,700 meters in an arduous and unpopulated area on a hundred-mile radius.
The lake, within the jurisdiction of the Sanjiangyuan National Nature Reserve, is an
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unexpected paradise for wild birds including bar-headed geese. Threatened by the pilfering
of bird eggs and bird hunting, the number of bar-headed geese in Lake Bande previously
dropped to 1,000.
During the reporting period, Hikvision, as a technical supporter participated in the
bar-headed goose conservation project conducted by the Sichuan Green River
Environmental Protection Promotion Association (referred to as Green River), assisted in
establishing dozens of bird protection monitoring sites in high-altitude and unpopulated
area. The monitoring sites provide large-scale, all-weather and unremitting monitoring
through video technology. Its strong image and data support for bird protection helps to
effectively avoid the hardships and blind spots of the traditional human patrol mode, and
significantly reduce the impact of human activities on bird habitats. Besides, we also assist
Green River to carry out high-definition live video broadcast campaigns so as to attract
more people to deliver attention to and participate in protecting the bar-headed geese.
According to incomplete statistics, the number of bar-headed geese in Lake Bande has
increased from about 1,000 up to more than 3,000 till now, and our protection action
continues.
Bar-headed geese family roaming in the plateau lake area
At present, Hikvision has signed an ecological cooperation memorandum with Green
River. The two sides also announced that they will strengthen their cooperation next year
that Hikvision will apply customized products of video technology to high-altitude,
low-temperature and unpopulated areas to help protect the bar-headed geese. Given the
needs of wildlife monitoring and protection in the plateau environment, Hikvision will
cooperate with Green River to develop a feasible simulation camera, promoting the
practice of wildlife protection in video surveillance equipment, image processing, data
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storage and transmission with technological innovation. The two sides also work to
enhance the scope, timeliness and precision of monitoring, facilitate the effective
utilization of animal protection data and data accumulation, and endeavor to protect
biodiversity through science and technology. All these efforts are intended to build a
sustainable eco-environment for the source regions of Yangtze River .
Hikvision PTZ camera 24-hour guiding wild bar-headed geese habitats
Tiger Protection through AI
"It is a deed of great significance and honor to work together, grow together, take real
responsibility, and guard our home planet via technology with a group of lovely people."
——A member of the Hikvision AI tiger protection team
Siberian tigers are at the top of the natural food chain, therefore their living status presents
to be an important indicator of the soundness of the entire ecosystem. Plagued by increased
human activities, deforestation, habitat degradation and other factors, the population of
wild Siberian tigers and their habitats are constantly shrinking. In 2017, only 24 Siberian
tigers were detected alive through wild infrared cameras. In this regard, Hikvision works
jointly with Intel to help the World Wide Fund for Nature (WWF), in the field of wildlife
protection in China, utilize the design concept of edge computing combined with cloud
computing to intelligently identifying Siberian tigers. It works to give assistance to wild
animal protection and help promote the harmonious development between man and nature
through digital technology and artificial intelligence.
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Siberian tiger-the king of beasts-running in snowfield
Hikvision's newly developed intelligent capture cameras for wildlife protection, when
equipped with Intel MovidiusTM AI Vision Processing Unit (VPU), can realize the
support for front-end intelligent algorithms and greatly improve processing efficiency.
Based on the front-end target detection algorithm, a deep convolutional neural network
(CNN) designed and adapted specially for wild life would extract video frames layer by
layer, calculate the target position and confidence, and ultimately realize the accurate
recognition and capture of Siberian tigers. Through the front-end intelligent capture, the
system automatically filters out the photos of Siberian tigers that meet the requirements,
which later on lessens the manual load of distinguishing pictures and videos.
In the future, forest rangers can upload massive pictures through handheld terminals or
smart field capture cameras to realize automatic and efficient processing and intelligent
identification and analysis of front-end and back-end data. Animal traces and behavior
patterns can be identified through massive data mining, helping protect rare wild animals.
Through this project, Hikvision has realized the wide-range application of AI plus
environmental protection in actual scenarios. In the future, AI intelligent products and
solutions will be innovatively applied to inject new strength into the ecological protection
cause.
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Hikvision's newly developed intelligent capture camera for wildlife protection
Straw Burning Prohibition, Intelligent Environmental Protection
Pollution from straw burning causes great damage to the quality of the atmospheric
environment. Large-scale haze incidents occur frequently in every summer and autumn
harvest season when straw is burnt in great amount.
As an important technical means to prevent and control air pollution as well as to eliminate
open area straw burning, the Company's straw burning control system has been widely
applied in Hebei Province. During the reporting period, five regulatory agencies in
Shijiazhuang, Langfang, Zhangzhou, Xingtai and Hengshui have installed Hikvision
thermal imaging dual-spectrum surveillance cameras along high-speed rails, expressways
and in key straw burning areas, initially realizing full coverage of straw incineration
monitoring in agriculture-related areas and helping prevent haze more effectively to
improve air quality.
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The platform helps regulatory agencies solve the problems of time and labor consuming,
lags in discovery, low regulatory efficiency, and difficulty in obtaining evidence in
supervising straw incineration, and helps reduce the harm to atmospheric environment.
4.3 Build a Smart City Together
As an important technology and product provider for the construction of smart city, we have
always focused on fields closely related to social economy and people's life, such as public
security, transportation, production, etc., and proactively provided innovative solutions to
such ends. We use information technology to structure intelligent, efficient and convenient
life, exert our advantages to develop ecological cooperation, enabling the public to enjoy
happy life brought by scientific and technological progress.
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Safe Campus - Escort Campus Security
University is a part of the society. The method to ensure the safety of teachers and students
when social personnel and vehicles are entering and exiting the university frequently has
become an urgent problem for administrators of open universities. Take one of the
domestic universities for example, we proposed and built a comprehensive solution for
campus visual management in line with the customized needs of the security department,
helping comprehensively upgrade the campus security level. The proposal includes the
systems of monitoring suspected personnel, intelligent perimeter defence, vehicle
management, intelligent operation and maintenance and more, on the basis of which it also
sets up 2.5D maps, realizing the visualization of the whole process of business processing
and contributing to safeguarding the campus security management.
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Intelligent Transportation – a Dispatcher for Convenient Travel
Accompanied with the urban expansion, the urban population and the number of motor
vehicles have been growing rapidly, resulting in traffic congestion, traffic accidents, air
pollution and other issues which make people's daily life suffer. To improve the efficiency
of traffic management, the Company is assisting a city in Zhejiang Province in building an
intelligent traffic operation monitoring and dispatching center (“TOCC”). The platform is
designed in accordance with “One Center, Five Systems”, including:
We use big data technology to integrate the data and videos of various regulatory systems
in the local transportation industry, visualize the abstract data and analyze the key data,
greatly improving the operational efficiency of the transportation system, and alleviating
the traffic congestion, thereby enabling people to travel more conveniently and safely.
Food Safety - Reassured and Transparent
Through in-depth market research and analysis, we have promoted the “Clean Transparent
Kitchen” video networking supervision system solution catering for industry clients
through our accumulated advantages of video technology in EZVIZ cloud Internet plus.
The system can help solve problems in daily shop patrol, kitchen hygiene, emergencies,
data operation and other issues in catering outlets, and fulfil the demand of post-event
traceability and investigation.
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The “Clean Transparent Kitchen” project guarantees the rights of consumers to supervise
and to be informed, and provides an open, transparent supervision bridge between
government regulatory authorities, corporates and the public. Through the dustproof and
waterproof camera installed in the areas of warehouse, cleaning, cutting, cooking, special
room, sample retention, etc.in the back kitchen, customers can monitor the real-time
operation of the back kitchen anytime and anywhere through the Internet. Regulatory
departments can also view videos in their jurisdictions for food safety management and
supervision.
Health Care - Empower the Construction of Safe Hospitals
In order to help hospitals improve their capability of early warning and prevention of
emergencies, rapid and appropriate handling in the event, and prompt tracing after the
event, the Company built a full three-dimensional digital intelligent security management
platform based on AI Cloud security system. Based on this system, the Company assisted a
well-known hospital in Zhejiang Province in fulfilling a variety of safety prevention and
control functions, providing a guarantee for the orderliness and stability of the hospital.
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4.4 Embrace Intelligent Manufacturing
Hikvision keeps pace with the new era and new technologies and considers intelligent
manufacturing as an important market. Hangzhou Hikvision Robotic Technology Co., Ltd.
(hereinafter referred to as “Hikvision Robotics”), the holding company of Hikvision, is
mainly engaged in intelligent manufacturing regarding the development of mobile robots,
machine vision and industrial-level unmanned aerial vehicle (UAV), and persists in
independent design, R&D and production. Continuous innovation enables Hikvision
Robotics to produce quality products that are recognized by the industry and widely used for
various purposes including metal processing, industrial automation, and etc. These products
offer stable and reliable operation. Moreover, customized development is available to help
users greatly improve work efficiency and accuracy.
Mobile Robot
Hikvision Robotics independently developed a robot system for smart warehousing with
product lines of AGV (Auto-Guided Vehicles), and subsequently launched smart transfer
AGVs that shuttle between production lines, smart sorting AGVs for small packages, smart
forklift AGVs that reduce labor costs and improve automated warehousing logistics, and
smart parking AGVs that enhance the capacity of parking lots. These robots fulfill the needs
of intelligent manufacturing and redefine logistic revolution.
Machine Vision
Hikvison Robotics persists with independent design, R&D and production of machine vision
products, continues to innovate to launch well-recognized quality products and performs
strict testing to ensure the products present high-quality images. Hikvision Robotics ensures
that each product provides high precision, high efficiency, and high environmental
performance with examinations in design and R&D processes.
Industrial-level UAV
The core technology of industrial-level UAV is video image processing. Industrial-level
UAVs are safe and smart products used in a wide range of scenarios including fire rescue,
emergency command, counter-terrorism action, traffic management, facility inspection, and
event support, etc. Users may mount more than 10 kinds of devices on our UAVs, such as
visible light head, thermal imaging head, laser head, megaphone, release and drop device and
gas detector, which greatly enriches the functionality of UAVs.
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The Wide Application of Intelligent Manufacturing in Various Business Fields
Mobile robots, machine vision and UAVs of industry-level have been deployed in various
fields to help clients automatize factories and build intelligent factories as well as in domains
of source tracing, investigation and evaluation.
Intelligent warehousing robots for automated delivery
A company's production base launched a smart factory construction project, introducing
Hikvision's intelligent warehousing and in-plant logistics solutions to automate logistics
handling across the entire plant. In December 2017, the intelligent warehousing and in-plant
logistics solutions were set up and ran with remarkable efficiency, as the number of logistics
staff in the production workshops was reduced by 30%. Through this, logistics handling and
delivery processes have been automated, the delivery efficiency increases by more than 35%,
and the material delivery on-time rate increases by more than 95%.
Five-sided barcode reading system application
During the reporting period, the Company cooperated with customers to inspect the site and
analyze the situation, and formulated a traceability solution named Hikvision five-sided
barcode reading system in response to the problem of low barcode reading rate caused by the
irregular barcode direction in the on-site parcel information collection. It can collect, bind
and integrate the three types of basic information of express barcode, weight and volume. It
has the characteristics of high system flexibility and strong robustness. It can guarantee
ultra-high reading rate even on barcode with distortion, wrinkles and coat.
UAV forest fire protection application
The Hikvision UAV system is quick and easy to set up, and can reach the fire scenes for fire
detection and evaluation in a timely manner. At the same time, the flight image and data can
be transmitted back to the command center platform in real time for the command center
personnel to view and facilitate the formulation of the forest area emergency handling plan. it
can normalize the monitoring and early warning of forest fire prevention, wildlife regulation,
anti-drug in forest area and ecological environment protection. All these functions are of
great significance for protecting forest resources and enhancing the capbility in early warning
and monitoring.
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Chapter 5 Talent-Focused, Growing Together
Human capital is an important strategic resource for a company. Hikvision is a
people-oriented company that protects the rights and interests of employees, provides
development opportunities for employees, offers safe and healthy working conditions, and
shows concern and care for employees. We encourage employees to realize their own worth
and grow with the Company.
5.1 Protect the Rights and Interests of Employees
The basic rights and interests of employees are our top priority. We strictly abide by
applicable laws, regulations and local policies to protect the rights and interests of employees,
and provide them with equal opportunities and competitive compensation and benefits. We
encourage employee engagement in decision making and share our development with
employees. During the reporting period, the number of newly hired employees increased by
36.9% compared with 2017.
Legal Hiring
We strictly abide by Labor Law of the People's Republic of China, Labor Contract Law of the
People's Republic of China, labor Union Law of the People's Republic of China and other
laws and regulations. We developed and implemented normative documents such as
Recruitment Management System and Attendance Management Code. We recruit employees
of different races, nationalities, regions, ethnicities, and religious beliefs equally in the light
of our development needs. We sign a written labor contract with each employee.
We pay respect to the principles of international labor agreements such as International
Labor Organization Conventions and the Universal Declaration of Human Rights; we
developed an internal Social Responsibility Management Manual in accordance with SA8000:
2014 Social Responsibility Management System Requirements. We pay regard to the freedom
of association and right to collective bargaining of employees in accordance with domestic
law and out of free will. We pay attention to protecting the personal information and privacy
of employees and prohibit illegal employment in all forms such as child labor, forced labor
and deprivation of personal freedom. During the reporting period, 86% employees have been
the members of Labor Union in China, and the Company did not engage in forced labor or
child labor.
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As of December 31, 2018, the Company had a total of 34,392 employees. Employee
distributions are as follows.
Compensation and Benefits
We advocate reward by value contribution and provide employees with competitive
compensation and all kinds of benefits. Employees receive remuneration in full and on time.
The five social insurance and one housing fund (endowment insurance, medical insurance,
unemployment insurance, employment injury insurance, maternity insurance and the Housing
Provident Fund) are provided for employees in accordance with applicable national and local
laws and regulations. Besides, extra benefits such as supplementary medical insurance, free
breakfast and optional physical examination are also available for employees and their family
members each year.
Legal benefits Additional benefits
Social Optional physical examination for employees and their family
insurance members each year
Housing Commercial insurance for employees and their dependents
Provident Fund covering personal accidents, critical illnesses, supplementary
medical care, etc. Optional for employees' family members.
Public holiday
Overseas business travel insurance, covering personal accidents,
Paid leave emergency medical treatment, financial loss, travel
inconvenience, third-party liability, etc.
Health workshop and themed free treatment
Free nutritious breakfast, birthday benefits, team-building and
recreational activities, meal allowance, transportation subsidies,
communication subsidies, holiday benefits, high temperature
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subsidies, etc.
We provide employees with subsidies and personal accident
insurance when they go on business trips overseas. We provide
employees working abroad (and their family members) with
housing, subsidies, education allowance, and home leave and
allowance.
Democratic Management
We embrace democratic management to protecting employees' right to information,
participation and supervision. We set up a labor union and constantly improve our labor
union system. We provide communication channels for employees at different posts, different
departments and different levels to be heard. We listen to employees to understand what they
need and help them with workplace problems and life issues.
During the reporting period, we held the series of "Dialogue” once per month that allows
entry/junior-level employees to meet face-to-face with executives. We held "Listen to the
Forefront" symposium quarterly, where department chiefs listened attentively to the views of
frontline employees. In addition, we expanded communication channels for employees by
setting suggestions box, employee appeal mechanism, "Dabai Hotline", "I Have Something to
Say" and so on, having discussions with new employees, interns, employees at key posts,
experienced employees, employees on probation, employees that plan to quit, and doing
satisfaction surveys in an effort to arouse employees' enthusiasm and improve employee
satisfaction.
“Dialogue” Activity
5.2 Talent Training
We make great efforts to train talents as we develop our businesses. We provide promotion
channels for technical staff and staff in the management sector. We have well-organized
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professional development and training systems to help employees at all levels maximize their
values at their suitable positions.
Professional Development
We provide employees with dual professional development channels. We implement internal
promotion and post rotation mechanisms and follow three principles to help employees
achieve professional development goals. Employees can choose the Management or
Professional routine to achieve promotion and development.
Principle of fairness and justice
Follow established procedures to select, remove, promote and demote employees.
Ensure the fairness and validity of the procedures and provide each employee with
equal promotion opportunities according to the rules.
Value both ability and integrity, promote employees on the basis of competitive
selection
Consider integrity as the bottom line, performance as an important factor and ability
as the key when selecting and promoting employees.
Promotion and demotion
Evaluate the duties, abilities, performance, and values of employees that meet the
basic requirements of selection or promotion.
May break a rule to employ, promote, or skip a level to promote an employee that is
particularly capable or required by special circumstances.
Incompetent employees will be transferred to different posts or demoted. Employees
should be prepared for both promotion and demotion.
Training System
Based on business development strategies, we established a training system, enrich and
improve the sytem through continuous demand analysis and research. We provide leadership
training, managerial staff training all over the Company. The systems and learning platforms
are able to fully support talent development. During the reporting period, RMB 21.8 million
was dedicated to employee training. Training hours2 totaled 463,235 hours, equivalent to
2
“Training hours” refers to the hours of training organized by the Division of Learning and Development of the Department of Human
Resources. It includes induction training, general capacity building, general managerial skill building and operational training organized
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13.5 hours per employee.
Training Courses
We establish a two-channel training course system based on the two-channel employee career
path.
For employees in the Management track, courses provided focus on fostering their
leadership. We help staff at different levels to shift their roles, fulfill management
responsibilities and develop leadership;
For employees on the Professional track, coursed provided focus on upgrading their
expertise and trainings are provided to enhance their professional skills.
For new employees, we prepared a newcomer growth plan of introducing our
corporate culture, rules and regulations, and professionalism requirements, insomuch
that the newly employed can understand, recognize and fit in the Company and their
own positions.
by the Division of Learning and Development. Training programs organized by functional departments themselves are not included.
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LMS (Learning Management System) in Line with Our Global Talent Strategy
To further satisfy our strategic development needs of globalization, we developed and
launched a Learning Management System (hereinafter referred to as "LMS") based on our
organizational structure and in line with our global talent strategy. LMS aims to train talents
for the Company and build it into a lifelong learning organization. LMS allows employees
to attend online courses and have offline practice. It also enables mobile learning to provide
more diverse and flexible training.
During the reporting period, all employees of the Company, excluding entry-level staff,
have registered LMS accounts. As of the end of the reporting period, there were 143
general courses, 1,586 business specific courses, 605 test papers, together with 24 learning
and exchange communities in the system.
In addition, we developed a lecturer training program and formulated the In-house Trainer
Management System to engage all employees in training. Everyone can apply to be a trainer.
As of December 31, 2018, the lecturer training program trained a total number of 235
lecturers, including 78 lecturers for management courses, 54 lecturers for competency
courses, and 103 lecturers in business specific courses.
Themed Salon for In-house Trainers
5.3 Safeguard Health and Safety
Clearly aware of the primary role of safety and health in maintaining employees' strong
enthusiasm for work and enhancing work efficiency, holding the bottom line of ensuring
production safety, we strive to protect employees' health and safety in practical means by
continuously endeavoring to improve occupational health and safety system and occupational
health services.
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Guarantee Occupational Health
With the safety as well as physical and mental soundness of our employees always on our top
agenda, we regularly conduct occupational hazard factor testing, provide qualified labor
protection articles for personnel involved in occupational hazards, and organize occupational
health examinations on regular basis, all of which are in strict compliance with the national
laws and regulations and those in operation localities concerning occupational health,
including the Law of the People's Republic of China on the Prevention and Control of
Occupational Diseases, Provisions on the Supervision and Administration of Occupational
Health at Work Sites, the Regulations on Labor Protection in Workplaces Where Toxic
Substances, etc. During the reporting period, we passed the OHSAS 18001 Occupational
Health and Safety Management System Certification, and no new cases of occupational
diseases occurred during the year.
To enhance employees' self-protection awareness, we continue to provide employees with a
variety of occupational health and safety education and training, helping them learn to wear
and use all kinds of labor protection products. Alongside that, in order to provide employees
with a safe and healthy working environment, we keep optimizing the production process and
proactively promote intelligent production through intelligent transformation to improve the
safety of employees in operation. During the reporting period, our factory introduced a
number of intelligent transformation projects, including automatic machine palletizing,
machine dispensing, and automatic mounting of electrical heat sink fins.
Machine Automatic Palletizing to Improve Employees’ Work Safety
Traditional packaging pallets require manual lifting of products weighing up to 30 kg onto
pallets or shelves, long-time work of which is not only costly for employees’ physical
strength, but also has huge potential to injure employees during handling. During the
reporting period, to better the status of manual palletizing, the Company introduced
automatic palletizing equipment. which enables automatically palletizing to pallets or
shelves through machines after manual packaging, significantly improving the safety of
employees' working environment.
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Before transformation After transformation
Safety Production Management
Strictly abiding by the Work Safety Law of the People's Republic of China and
wholeheartedly adhering to the safety production policy of "safety foremost, prevention first,
manage comprehensively", we implement at every level the safety production responsibility
system of "horizontally and vertically, all covering" and, with safety production
standardization as the yardstick, establish and continuously improve the safety production
rules and regulations as well as management system. Apart from that, we implement safety
management objectives in accordance with the closed-loop working method, and
comprehensively take actions to investigate and handle hidden troubles to safety production.
During the reporting period, the safety education coverage rate of the Company's on-the-job
personnel, the rate of employment of special operators with certificates and the testing rate of
occupational hazard factors all reached 100% with no work-related fatalities throughout the
year.
During the reporting period, the Company lost a total of 111 workdays due to work-related
injuries. In terms of the types of accidents caused by work-related injuries, traffic accidents
and safety production accidents are in majority. In order to protect the legitimate rights and
interests of workers and employees, the Company intensified the implementation of the
Regulation on Work-Related Injury Insurance to ensure that employees receive medical
treatment and financial compensation after work-related injuries, and give due care to them
and their families. At the same time, in order to prevent and eliminate the recurrence of such
work-related accidents, the Company has increased security publicity through bulletin boards,
security themed activities and internal mails to increase safety awareness of employees so
that they can not only pay attention to the safety behaviors in work sites, working time and
their occupation, but also attach more heed to their safety of commuting and in business
hours.
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Safety Culture Construction
To create a sound safety culture in the Company, we have carried out special safety education
activities covering fire protection, electricity use, first aid, ascending, equipment, hazard
identification, and chemical use at various levels, in multiple channels, and in many forms,
aiming to effectively enhance employees' safety awareness and improve their risk prevention
capabilities. Through the combination of knowledge contests and VR experiences along with
a variety of such themed months as the safety production month and the fire protection month,
the Company makes the safety production theory and knowledge concrete and attractive,
aiming to enhance employees' safety awareness and ability through rich and colorful safety
culture.
Emergency Drill
Taking into account occupational health and safety risks from all sides, we have developed
ten emergency plans. According to the emergency plan, we also continue to carry out
corresponding emergency drills to strengthen employees' safety awareness, improve
employees' abilities of self-protection, self-rescue, disaster prevention and escaping from
danger, and accordingly minimize safety risks. During the reporting period, we organized
nine fire emergency evacuation drills as well as more than ten other safety drills, including
elevator trapping exercises, group food poisoning drills, flood control drills, anti-terrorism
drills, natural gas leakage drills, power outage emergency drills, etc.
Fire emergency evacuation drill Chemical leakage drill
5.4 Empathize Employees’ Well-being
We attach great importance to keeping work-life balance of employees, spare no effort to
perfect the care mechanism for all staff, strive by all means to optimize the office
environment with more humanistic atmosphere, show the most empathy to employees with
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their life, feelings, progress and all other aspects. All these efforts are meant to help
employees pursue happy and healthy life .
Care to Employees
For the sake of our employees’ physical and mental soundness, we carry out vast and varied
activities out of concern to protect the rights and interests of female employees, to help
employees in need so as to enhance employees' sense of belonging, identity and happiness in
the Company.
Open access to fitness center
A fitness center is permanently open to employees free of charge, which accommodates
various technical exercise venues, mechanical facilities, physical testing areas, dressing
rooms, shower and spa rooms. Professional instructors who provide on-site training and
fitness lessons are also accessible for employees with reservation.
Fitness Center
Launch “Dabai” EAP Care Plan
During the reporting period, “Dabai” EAP care plan was launched to offer tailored
psychological care to all staff with lectures on psychology and round-the-clock at-service
psychic hotline.
Dabai psychic hotline now allows a feedback mechanism with four channels, including
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consultation through phone calls, emails, skype as well as on-site consulting.
For telephone and on-site consultation: An instant feedback mechanism is set up. For
hard-cracked nuts that entail coordination or fail to be solved immediately, constant effort
and real-time feedback will be taken till they are solved. Besides, in terms of telephone
consultation, voice self –service will be available during non-working hours.
For consultation through emails: A 24h feedback mechanism is established to give
concise and clear response to employees about their concerns in a uniform format.
For consultation through Skype: A mechanism that all consultation before 18:00 must
be replied by the end of the day is set up.
As of December 31 2018, Dabai Hotline had received a total of 14,399 consultations.
Care to Pregnant Female Employees
The Labor Union of the Company set up a sound care mechanism for pregnant female
employees. To be specific, for their convenience, mother-and-baby rooms are provided,
which are well equipped with a variety of necessary facilities including refrigerators,
racks, disinfection cabinets, coat racks, and sinks.
Mother-and-baby room
While establishing a mechanism for visits and condolences to sick people, we have also set
up a support fund for relatives of employees suffering from major accidents or sudden
dangerous diseases or illnesses.
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Set up Care Fund for Employees Relatives
We set up care fund for employees’ relatives, which was established by Mr. Gong Hongjia,
one shareholder of Hikvision, and is now jointly managed by the Human Resources
Department, the Labor Union, and the Supply Chain Management Center. The fund is
targeted at caring the immediate family members of young and low-income employees
who are not on the regular payroll. The fund is used for the rescue when those people
mentioned above encounter major accidents or sudden dangerous diseases or illnesses, the
subsidies for their college fees and their life skill training expenses, as well as aid for their
daily life expenses. Since the launch of the fund, it has given aid to 6 employees with the
amount of assistance totalled 630,000 RMB.
Work-life Balance
We have, as always, advocated happy work and happy life. To this end, a variety of cultural
and sports activities are held to balance employees’ work and life. Six amateur clubs for
football, basketball, badminton, swimming, dance yoga, photography are set up. Activities
are carried out regularly every year among clubs for employees. Some sports games are also
threw inside the Company. More often than that, employees outstanding in some sports are
sent to participate in performances and competitions outside the Company. In addition, we
also hold a series of activities different themed topics such as “Happy New Year”, “Goddess”
and “Happiness” to enhance interaction among employees, bolstering their well-being and
sense of belonging.
4V4 basketball game Binjiang Youth football league
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“Happy New Year” Activities “Goddess” Activities
Every year of Spring Festival Eve, we During the Women's Day each year, we
celebrate the festival, create and pass the usually organize Female Excellence
festivity on to all people in the Company activities, and specifically carry out activities
with fun activities such as Inter-floor New such as Goddess Welfare Society, Goddess
Year greeting, Collecting Wufu, Gathering Training Course, Goddess Lecture Hall and
good luck, New Year sports meeting, New Goddess Lucky Star to promote the image of
Year garden party, Special reunion dinner ladies in new era with enterprising spirit and
and Executive Challenge. sagacious mind. The intention is to enable
everyone to make friends and enjoy
themselves with joy as well as knowledge
and growth amid relaxed afternoon tea time
and fun science class.
“Happiness” Activities
The Company's annual "Happiness" events
include three themes of "parents", "partners"
and "babies". Six to seven colorful and
warm fun activities are held for the family
members of employees, to get familiar with
the office environment, understand the work
content of the staff, and to enhance the
sense of belonging and identity of the
employees' family members through
inserting parent-child classroom link into
the activities.
75
Chapter 6 Pursue Green Operation, Empower Sustainable
Ecosystem
As a leader in the industry, Hikvision keeps up with domestic and international
environmental policies and trends. In this regard, it complies with related environmental
protection laws and regulations, on the basis of which it puts environmental protection high
on its agenda in pursuing sustainable development and incorporates it into the core values of
the Company’s daily operation Since its inception, Hikvision has been committed to creating
an environmental-friendly management and development mode. To this end, it continuously
endeavors to promote energy conservation, emission reduction and environmental greening,
seize opportunities to develop and utilize clean technologies, and explore more energy-saving
methods and channels.
6.1 Build Management System
The Company strictly abides by national, local and industrial environmental laws, regulations
and standards, including Environmental Protection Law of the People's Republic of China,
Energy Conservation Law of the People's Republic of China, Water Pollution Prevention and
Control Law of the People's Republic of China, 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 Solid Waste Pollution. It compiles an internal management system in line with
its conditions to clarify the roles, responsibilities and jurisdiction of managers, executives and
supervisory personnel in environmental management activities so as to continuously push
forward the Company's environmental protection work.
System Certification
The Company has obtained the ISO 14001 environmental management system certification,
the SA 8000 social responsibility standard certification, the QC 080000 hazardous substances
process management system certification and the ISO 50001 energy management system
certification, and a five-star assessment of its green supply chain.
ISO 14001 ISO 50001 SA 8000 QC 080000
76
Certificate of Green Supply Chain Assessment
In accordance with the requirements of the ISO 14001 environmental management system,
the Company evaluates the potential environmental risks in R&D phase, and has made
corresponding written formulation to manage the whole process of production to increase
investment in the construction of pollutant treatment facilities and strictly follow rules to
handle waste gas, wastewater and solid waste in the production process.
Target Setting
The Company encourages all subsidiaries to proactively carry out environmental
improvement projects on the one side and minimize the damage of business operations to the
environment on the other side. To this end, it is encouraged to strive to reduce consumption
in energy, water and other resources through such measures as process optimization and
source control, to increase resource recycling rate.
In order to ensure the effective implementation of environmental protection projects and the
continued promotion of sustainable development concepts, the Company has set performance
indicators for waste, chemicals and environmental protection equipment.
Hikvision Environmental Indicators in 2018
In addition, the Company is working to minimize environmental risks by setting specific
77
targets for power consumption, water consumption, and gas consumption of the plant,
continuing to increase investment in the construction of pollutant treatment facilities, and
striving to reduce discharge of wastewater, solid waste and emissions through compliance
treatment.
6.2 Practice Green Operation
The Company adheres to the principle of sustainable development of enterprises and
continuously strengthens the protection of the environment for building a low-carbon society.
During the reporting period, we continued to promote equipment energy-saving renovation
and process optimization, and gradually reduce consumption of energy and resources.
Energy Management
After years of exploration and attempts, the Company, by adopting a series of energy
management measures, has formulated an Energy Saving and Consumption Reduction
Control Procedure which clearly defines energy saving and control in the whole process of
utilizing electricity, natural gas and other energy in the main production process, auxiliary
production process and subsidiary production process. As a result, the Company has made
great headway in enhancing energy use efficiency comprehensively and meticulously, from
macro to micro level, from management to implementation. The Company has also launched
the establishment of an energy management system, putting in place refined energy
management. All these endeavors of the Company are meant to regulate energy management,
further improve energy management and reduce energy consumption in production and
operations.
The Company has formulated and issued environmental and energy indicators, refined the
energy targets of each department based on the company-level energy consumption per RMB
10,000 production value target, and set the 2017 value as the Company's energy benchmark
while selecting energy performance parameters after determining energy performance
parameters. During the reporting period, through unremitting efforts in energy conservation,
we over fulfilled the energy target in 2018, and the Company’s energy consumption of RMB
10,000 output value decreased by 3.8% compared to 2017.
Energy Types Unit Consumption amount
Unleaded gasoline ton 617.3
Diesel ton 52.8
Natural gas 10,000 cubic meters 143.5
Electricity MWh 105,643.3
Energy consumption Unit Amount
78
Direct energy consumption ton of standard coal 2,728.7
Indirect ton of standard coal 12,983.6
energy consumption
Total energy consumption ton of standard coal 15,712.3
Energy ton of standard coal per 0.32
consumption intensity million revenue
Greenhouse gas emission Unit Emission amount
Scope one ton of CO2 5,045.4
Scope two ton of CO2 72,602.6
Total emission ton of CO2 77,648.0
(only scope one and
scope two included)
Emission intensity ton of CO2 per million revenue 1.56
(RMB)
In addition, during the reporting period, the Company carried out a number of energy-saving
renovations and promoted intelligent production through intelligent transformation to create
light-free factories with the aim of improving energy efficiency and boosting the Company's
green development.
79
Water Resource Management
The Company has established a strict water resource management system in accordance with
the production technique level and relevant local laws, regulations and standards to promote
scientific and rational use of water resources, and significantly enhance the efficiency of
water use. We proactively adopt cutting-edge technologies for water conservation, choose
water-saving equipment and appliances and install water-saving and anti-overflow devices
while striving to reduce water consumption so as to increase the reuse rate of water resources.
At the same time, we enthusiastically promote water-saving culture, create a water-saving
atmosphere, and further intensify our efforts to conserve water resources.
Types of Water Resources Unit Consumption amount
Municipal water supply ton 895,000.9
Underground water(from overseas ton 1,014.7
exclusively)
Total ton 896,015.6
Intensity ton per million 17.98
revenue (RMB)
Packaging Material Management
The packaging materials used by the Company in the production process are mainly paper,
plastic, wood and metal.
During the reporting period, the Company continued to optimize the packaging and
packaging materials, such as changing the packaging method, and replacing the polystyrene
with air column bags. In the process of purchasing packaging materials from suppliers, we
strictly evaluate their environmental qualifications and take into evaluation whether they
have EIA certificates, sewage discharge permits, noise test reports, etc. Only when all
requirements are assessed to be met, the suppliers are qualified to supply us with packaging
materials.
At the same time, we proactively promote the recycling of packaging materials. The
recyclable packaging materials are uniformly recycled by the departments which use these
materials, stored at the warehouse at a fixed time, recycled or uniformly handled by
suppliers.
80
Packaging materials Unit Consumption amount
Plastic ton 5,389.4
Carton ton 171,015.9
Wood ton 23,753.7
Total ton 200,159.0
Intensity of the ton per million 4.02
packaging materials revenue (RMB)
Chemical Management
In order to standardize the procurement, transportation, loading and unloading, storage, use
and disposal of chemicals, the Company has formulated the Regulations on the Management
of Supply Chain Chemicals, which clarifies relevant requirements and operational
specifications, and requires employees to strictly follow the regulations.
6.3 Reasonably Reduce Emissions
The Company continues to strengthen the control of pollutants and endeavor to reduce
emissions of pollutants so as to minimize the pressure of its production and operation on the
environment. At the same time, it strives to further put into practice the concept of
81
sustainable development when pursuing environmental-friendly design of products.
Solid Waste Management
The Company has established Waste Management Procedure in accordance with its
production technique level and relevant local laws, regulations and standards to manage the
generation of waste more effectively. We classify waste into recyclable waste, non-recyclable
waste and hazardous waste.
Recyclable waste Unit Amount
Plastic ton 1,126.8
Wood ton 546.3
Paper ton 4,767.6
Metal ton 1,034.6
Others (harness, oil paper, etc.) ton 653.7
Total ton 8,129.0
Intensity ton per million 0.16
revenue (RMB)
Non-recyclable waste Unit Amount
Kitchen waste ton 2,281.1
Office garbage ton 5,929.3
General industrial waste ton 1,387.7
Total ton 9,598.1
Intensity ton per million 0.19
revenue (RMB)
Hazardous waste Unit Amount
Total amount of hazardous waste ton 121.6
Hazardous waste intensity ton per million 0.002
revenue (RMB)
82
In order to control all types of solid waste generated in all activities, products and services of
the Company, we have established Waste Management Procedure and Supply Chain
Hazardous Waste Management Regulations, which regulate the requirements for the
classification, collection, handover, temporary storage, processing of hazardous wastes.
Management of Electronics and Electrical Appliances
The Company has developed a recycling plan to handle waste electronics and electrical
appliances from products that has expired or fall short of quality, reduce the generation of
electronic waste, thereby lowering operating costs. The Company has achieved full control of
the recycling process by standardizing the whole five links in the process, namely material
return, material acceptance, disposal assessment, disposal execution and end-of-life
management.
83
Environmental Design Concept
The Company acts in line with the green design concept to design products and seeks to meet
the environmental-friendly requirements of products in as many links as demand analysis,
design, verification, release, manufacturing and sales of products. Apart from this, it also
takes action in a number of aspects including hazardous substance control, green energy
conservation and resource recycling.
84
The Company constantly keeps updated with clean technology application and integrates
environmental protection concepts into product design, product packaging and other aspects
in its endeavor to implement energy conservation and consumption reduction.
6.4 Create Environmental-friendly Culture
The creation of a green harmonious environment and the Company's sustainable development
is closely bound up with raising employees' environmental awareness. Believing that a
quality environment brings better work, we create an energy-saving and emission-reducing
atmosphere and subtly increase employees’ awareness of environmental protection by
releasing energy-saving and consumption-reducing initiatives, optimizing equipment
operating parameters, and appointing administrators in this regard.
85
In addition, the Company strives to create an environmental-friendly culture, maintain and
continuously enhance employees' environmental awareness through various environmental
protection activities, and encourage employees to translate environmental awareness into
down-to-earth environmental actions.
Publicity and activities on environmental protection
In order to ingrain environmental protection concept deeply into the daily life of
employees, during the reporting period, the Company launched a series of environmental
protection themed activities, continuously deepening the environmental-friendly concept,
publicizing environmental protection ideas, instilling the values of sustainable
development to every employee, and actively creating green atmosphere.
86
87
Appendix Report index: GRI Standards
Page
Disclosure
Disclosure title Chapter index number
issues/disclosures
index
GRI 101 Foundation 2016
GRI 102 General disclosures 2016
Organization Profile
102-1 Name of the organization About This Report 3-4
Activities, brands, products, 1.1 Company Profile 9-14
102-2
and services
102-3 Location of headquarters About This Report 3-4
102-4 Location of operations 1.1 Company Profile 9-14
102-5 Ownership and legal form Legal form: company limited -
102-6 Markets served 1.1 Company Profile 9-14
Scale of the organization Chapter 1: Our Company at 9-25
A Glance
102-7
5.1 Protect the rights and
63-65
interests of employees
Information about employees 5.1 Protect the rights and 63-65
102-8
and other workers interests of employees
Supply chain 3.5 Supply Chain 46-48
102-9
Development
Significant changes to the Not applicable, there were no -
organization and its supply major changes in the
102-10 chain organization and its supply
chain during the reporting
period.
Strategy
102-14 Statement from senior Letter from the Management 5-6
decision-maker
Letter from Chief Compliance 7
88
Officer
Morality and Integrity
102-16 Values, principles, standards 1.1 Company Profile 9-14
and norms of behavior
Governance
102-18 Governance structure 1.3 Corporate Governance 15-20
Stakeholder Involvement
102-40 List of stakeholder groups 1.4 ESG Management 20-25
102-42 Identifying and selecting 1.4 ESG Management 20-25
stakeholders
102-43 Approach to stakeholder 1.4 ESG Management 20-25
engagement
102-44 Key topics and concerns 1.4 ESG Management 20-25
raised
Reporting Practice
102-45 Entities included in the About This Report 3-4
consolidated financial
statements
102-46 Defining report content and About This Report 3-4
topic Boundaries
102-47 List of material topics 1.4 ESG Management 20-25
102-48 Restatements of information Not applicable, this report is -
the first ESG report, no
information restatement
102-49 Changes in the reporting Not applicable, this report is -
the first ESG report
102-50 Reporting period About This Report 3-4
102-51 Date of most recent report Not applicable, this report is -
the first ESG report
102-52 Reporting cycle About This Report 3-4
89
102-53 Contact point for questions About This Report 3-4
regarding the report
102-55 GRI content index Appendix Report Index: GRI 88-99
Standards
Material topic
Economy
GRI 201 Economic Performance 2016
GRI 103 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 1.2 Operational Performance 15
approach and its components
103-3 Evaluation of 1.2 Operational Performance 15
management approach
201-1 Direct economic value 1.2 Operational Performance 15
generated and distributed
GRI 202: Market Performance 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 1.2 Operational Performance 15
approach and its components
103-3 Evaluation of 1.2 Operational Performance 15
management approach
GRI 204: Procurement Practices 2016
GRI 103 103-1 Explanation of the 20-25
Management material topic and its 1.4 ESG Management
Approach 2016 Boundary
103-2 The management 3.5 Supply Chain 46-48
approach and its components Development
103-3 Evaluation of 3.5 Supply Chain 46-48
90
management approach Development
GRI 205: Anti-corruption 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 1.3 Corporate Governance 15-20
approach and its components
103-3 Evaluation of 1.3 Corporate Governance 15-20
management approach
205-2 Communication and training 1.3 Corporate Governance 15-20
about anti-corruption policies
and procedures
205-3 Confirmed incidents of 1.3 Corporate Governance 15-20
corruption and actions taken
GRI 206: Anti-competitive Behavior 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 1.3 Corporate Governance 15-20
approach and its components
103-3 Evaluation of 1.3 Corporate Governance 15-20
management approach
206-1 Legal actions for 1.3 Corporate Governance 15-20
anti-competitive behavior,
anti-trust, and monopoly
practices
Environment
GRI 301: Materials 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
91
103-2 The management 6.2 Practice Green Operations 78-81
approach and its components
103-3 Evaluation of 6.2 Practice Green Operations 78-81
management approach
301-1 Materials used by weight or 6.2 Practice Green Operations 78-81
volume
GRI 302: Energy 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 6.2 Practice Green Operations 78-81
approach and its components
103-3 Evaluation of 6.2 Practice Green Operations 78-81
management approach
302-1 Energy consumption within 6.2 Practice Green Operations 78-81
the organization
302-3 Energy intensity 6.2 Practice Green Operations 78-81
302-4 Reduction of energy 6.2 Practice Green Operations 78-81
consumption
302-5 Reductions in energy 6.2 Practice Green Operations 78-81
requirements of products and
services
GRI 303: Water and Effluents 2018
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 6.2 Practice Green Operations 78-81
approach and its components
103-3 Evaluation of 6.2 Practice Green Operations 78-81
management approach
303-1 Water withdrawal by source 6.2 Practice Green Operations 78-81
92
GRI 305: Emission 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 6.2 Practice Green Operations 78-81
approach and its components
103-3 Evaluationof 6.2 Practice Green Operations 78-81
management approach
305-1 Direct (Scope 1) GHG 6.2 Practice Green Operations 78-81
emissions
305-2 Energy indirect (Scope 2) 6.2 Practice Green Operations 78-81
GHG emissions
305-4 GHG emission intensity 6.2 Practice Green Operations 78-81
GRI 306: Effluents and Waste 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 6.2 Practice Green Operations 78-81
approach and its components
103-3 Evaluation of 6.3 Reasonably Reduce 81-85
management approach emissions
306-2 Waste by type and disposal 6.3 Reasonably Reduce 81-85
method Emissions
306-4 Transport of hazardous waste 6.3 Reasonably Reduce 81-85
Emissions
GRI 307; Environmental Compliance 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management Chapter 6 Pursue Green 76-87
approach and its components Operation, Empower
93
Sustainable Ecosystem
103-3 Evaluation of Chapter 6 Pursue Green 76-87
management approach Operation, Empower
Sustainable Ecosystem
GRI 308: Supplier Environmental Assessment 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 3.5 Supply Chain 46-48
approach and its components Development
103-3 Evaluation of 3.5 Supply Chain 46-48
management approach Development
308-1 New suppliers that were 46-48
screened using environmental 3.5 Supply Chain
criteria Development
Society
GRI 401: Employment 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management Chapter 5 Talent-Focused, 63-75
approach and its components Growing Together
103-3 Evaluation of Chapter 5 Talent-Focused, 63-75
management approach Growing Together
401-1 New employee hires and 5.1 Protect the Rights and 63-65
employee turnover Interests of Employees
401-2 Benefits provided to full-time 5.1 Protect the Rights and 63-65
employees that are not Interests of Employees
71-75
provided to temporary or
5.4 Empathize Employees’
part-time employees
Well-being
401-3 Parental leave 5.1 Protect the Rights and 63-65
94
Interests of Employees
GRI 403: Occupational Health and Safety 2018
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 5.3 Safeguard Health and 68-71
approach and its components Safety
103-3 Evaluation of 5.3 Safeguard Health and 68-71
management approach Safety
403-2 Types of injury and rates of 5.3 Safeguard Health and 68-71
injury, occupational diseases, Safety
lost days, and absenteeism,
and number of work-related
fatalities
GRI 404: Training and Education 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 5.2 Talent Training 65-68
approach and its components
103-3 Evaluation of 5.2 Talent Training 65-68
management approach
404-1 Average hours of training per 5.2 Talent Training 65-68
year per employee
404-2 Programs for upgrading 5.2 Talent Training 65-68
employee skills and transition
assistance programs
GRI 405: Diversity and Equal Opportunity 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 5.1 Protect the Rights and 63-65
95
approach and its components Interests of Employees
103-3 Evaluation of 5.1 Protect the Rights and 63-65
management approach Interests of Employees
405-1 Diversity of governance 5.1 Protect the Rights and 63-65
bodies and employees Interests of Employees
GRI 406: Non-discrimination 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 5.1 Protect the Rights and 63-65
approach and its components Interests of Employees
103-3 Evaluation of 5.1 Protect the Rights and 63-65
management approach Interests of Employees
GRI 407: Freedom of Association and Collective Bargaining 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 5.1 Protect the Rights and 63-65
approach and its components Interests of Employees
103-3 Evaluation of 5.1 Protect the Rights and 63-65
management approach Interests of Employees
GRI 408: Child Labor 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 5.1 Protect the Rights and 63-65
approach and its components Interests of Employees
103-3 Evaluation of 5.1 Protect the Rights and 63-65
management approach Interests of Employees
GRI 409: Forced or Compulsory Labor 2016
96
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 5.1 Protect the Rights and 63-65
approach and its components Interests of Employees
103-3 Evaluation of 5.1 Protect the Rights and 63-65
management approach Interests of Employees
GRI 413: Local Communities 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management Chapter 4 Serve the Society to 49-62
approach and its components Create a Better Future
103-3 Evaluation of Chapter 4 Serve the Society to 49-62
management approach Create a Better Future
GRI 414: Supplier Social Assessment 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 Management approach 3.5 Supply Chain 46-48
and its components Development
GRI 416: Customer Health and Safety 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 2.2 Quality Assurance 29-34
approach and its components
103-3 Evaluation of 2.2 Quality Assurance 29-34
management approach
416-1 Assessments of the health and 2.2 Quality Assurance 29-34
safety impacts of product and
service categories
97
GRI 417: Marketing and Labeling 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 2.2 Quality Assurance 29-34
approach and its components
3.1 Provide Quality Service 39-41
103-3 Evaluation of 2.2 Quality Assurance 29-34
management approach
3.1 Provide Quality Service 39-41
417-1 Requirements for product and 2.2 Quality Assurance 29-34
service information and
labeling
417-3 Incidents of non-compliance 3.2 Protect User Privacy 42-43
concerning marketing
communications
GRI 418 Customer Privacy 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management 3.2 Protect User Privacy 42-43
approach and its components
103-3 Evaluation of 3.2 Protect User Privacy 42-43
management approach
418-1 Substantiated complaints 3.2 Protect User Privacy 42-43
concerning breaches of
customer privacy and loss of
customer data
GRI 419: Socioeconomic Compliance 2016
GRI 103: 103-1 Explanation of the 1.4 ESG Management 20-25
Management material topic and its
Approach 2016 Boundary
103-2 The management Letter from Chief Compliance 7
98
approach and its components Officer 15-20
1.3 Corporate Governance
103-3 Evaluation of Letter from Chief Compliance 7
management approach Officer
15-20
1.3 Corporate Governance
Note:
This document is a translated version of the Chinese version 2018 Environmental, Social and
Governance Report (“2018年环境、社会及管治报告”), and the published announcements in
the Chinese version shall prevail. The complete published Chinese 2018 ESG Report may be
obtained at www.cninfo.com.cn.
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100
