ESG
Environmental
protection
Promote innovative green products
Green materials and sustainable design on the value chain
The sustainability of a product begins with its design, so we take practical measures to incorporate environmental considerations into our sportswear products. In order to achieve our goal of minimizing the environmental impact of our products, we not only focus on our own manufacturing activities, but also on material selection and disposal.
In terms of raw materials, we are committed to steadily improving the use of environmentally friendly materials in the production process and addressing the environmental impact of the materials used. For example, the production of natural fibers, which are crucial for our clothing production, consumes a large amount of resources, leads to various environmental pollution, and has an impact on health. Therefore, we actively pursue the use of green alternative materials such as organic cotton, recycled plant materials, and biodegradable materials to produce our clothing and footwear products. The following are examples of green materials and their applications.
In addition to recycled cotton, we also introduce other recycled materials to reduce the amount of raw materials, minimize waste generation, and save energy. We collaborate with leading producers of advanced polymers and high-performance plastics, Business Thinker, to create products made from bio based materials extracted from vegetable oil, plant waste, residues, and kitchen waste oil.
In addition to the above cooperation, we also use recycled materials in different parts of our footwear products, most of which have been certified by relevant ecological standards. For example, we use PET materials that meet global recycling standards in various parts of our footwear products, including uppers, linings, shoelaces, webbing, and midsole fabric. We also have T-shirts made from recycled plastic bottle fibers, which will be showcased for the first time as licensed products for the 2023 Wuhan Marathon, providing functional design while incorporating sustainable materials.
The Paladin brand also incorporates different environmentally friendly materials, which are estimated to account for 30% to 40% of the overall product composition. Paladin uses different proportions of recycled materials in its footwear products based on the specific functional requirements of each shoe design, ensuring that the shoes are not only environmentally friendly but also meet the high-quality standards expected by the brand.
During the year, we continued to promote the use of polylactic acid materials extracted from recycled materials such as corn and sugarcane in our products. We are also exploring the use of other bio based materials, such as palm oil plastic and other bio based materials. Sokoni has also explored various bio based materials, such as natural plant dyes extracted from corn for shoe uppers and natural rubber for shoe soles.
In 2023, the Xtep brand will also introduce "coffee yarn" in six shoe products, which combines coffee grounds with the surface of the yarn and changes the characteristics of the filament. Compared to traditional cotton yarn, 'coffee yarn' has a faster drying time and additional odor absorption properties. The production process of coffee yarn also saves energy and reduces the impact of the product on the environment.
In order to further reduce the impact on the environment, we have introduced environmentally friendly waterproof membranes into our products and continued to increase the use of water-based adhesives in the production process. This water-based adhesive has been certified by SGS and meets the strict requirements of California Proposition 65 and EU REACH regulations.
We purchase leather from tanneries that have obtained LWG Gold certification, ensuring that leather production meets the highest environmental and quality standards.
Other noteworthy examples include Paladin using OEKO-TEX certified materials and using Forest Stewardship Council (FSC) certified inner paper boxes.
Xtep launches its first carbon footprint T-shirt series
Sokoni TRIUMPH RFG running shoes
Advocate for sustainable consumption
By actively exploring the use of various recyclable and bio based materials in our products, we are committed to improving the sustainability of sportswear. We launch new eco-friendly products every season to provide customers with more sustainable choices.
In 2023, Xtep developed 11 eco-friendly shoe products, including 5 in the sports category, including our flagship competitive running shoes, and 6 in the lifestyle category. We have successfully transformed bio based ecological products from concept to large-scale production, especially our leading competitive running shoes, achieving a leap from environmental protection concepts to performance. We are pleased to see consumers responding positively to our products' green materials and design concepts, and will continue to strive to develop more environmentally friendly products for consumers.
618 Recycling Festival promotes circular fashion
As consumers increasingly value social responsibility in their purchasing decisions, Xtep is embracing the concept of circular fashion. Our concept of 'creating a sustainable future' aims to inspire consumers to support and purchase environmentally friendly products. We not only create clothing, but also cultivate a sustainable culture, and every product is a step towards a more responsible future.
With a commitment to sustainable development, Xtep teamed up with Cainiaoji to participate in the 618 All Things Recycling Festival, aiming to integrate green living into consumers' daily lives. During the recycling festival, we collected old shoes and clothes from consumers for further recycling. For example, old shoe soles were recycled into rubber materials and transformed into sports and yoga mats, while discarded clothing was processed into recycled fibers for the production of eco-friendly bags and storage containers.
Participants in the recycling program can receive green energy points and exclusive rewards such as the "Step Green" eco-friendly tote bag to encourage recycling and reuse. This event has raised consumers' awareness of environmental protection and made them realize the potential for recycling waste clothing. With the success of this event, we will continue to integrate circular economy considerations into our operations and raise consumer awareness of this theme.
Protecting the natural environment
As a company in the sports equipment industry, we have been striving to promote the sustainable development of our operations and product portfolio. By implementing plans to improve energy efficiency, reduce waste, and lower emissions in our facilities, we aim to design clothing and sports equipment with minimal environmental impact throughout their lifecycle. By exploring innovative product design and sustainable business practices, we are committed to operating responsibly and adapting to customers' growing interest in eco-friendly brands.
Our ISO 14001 certified environmental management system provides a structural framework for monitoring the environmental performance of our daily operations and ensures full compliance with increasingly stringent environmental regulations. To guide our sustainable development work, we have identified key areas and goals for protecting the environment. For more details, please refer to the "10 Year Sustainable Development Plan" section of our Sustainable Development Framework and Measures.
Responding to climate change
Climate related risks and opportunities
As a sports equipment manufacturer, our group recognizes the importance of addressing the risks of climate change. We will continue to evaluate and implement various climate change risk management measures to remain vigilant and address climate related impacts and risks in our business.
Physical risks such as rising global temperatures, changing global climate patterns, and more frequent severe weather events may disrupt supply chains and reduce infrastructure resilience, thereby affecting our operations. The transformation risks brought about by policy changes and changes in market preferences will also have a significant impact on operations. For example, the global trend towards transitioning to a low-carbon economy may increase the production cost of investing in sustainable energy. However, by developing new technologies and products to address climate change, these risks will also bring us opportunities.
Energy efficiency and carbon reduction
Solar power generated by Hunan factory
-
Our group is committed to reducing our carbon footprint by enhancing energy management and supporting the transition to a low-carbon future. We have set four goals for responsible energy use and taken various measures to strive to achieve these goals.
-
We strive to use cleaner energy in our production factories. We have installed solar photovoltaic systems at our Hunan factory with the aim of reducing reliance on electricity purchased from the grid and evaluating the expansion of on-site renewable energy generation to other locations. We have started planning to implement a solar power consumption plan at the Shishi factory to evaluate the ways in which solar energy can be utilized for power generation at the factory.
-
Continuous upgrades to existing facilities can help improve the energy efficiency of our operations. We replaced the lighting fixtures in the factory with LED lights and installed a motion sensing lighting control system in the dormitory. The dormitory hot water system has been upgraded to intelligent energy hot water equipment, using electric driven heat pump technology to achieve higher energy efficiency. All boilers in the production base are powered by natural gas, which can improve energy efficiency and reduce air pollution and greenhouse gas emissions. We conduct regular maintenance on boilers to minimize potential resource waste caused by equipment aging or malfunction.
-
Cultivating an energy-saving culture in our operations is an important component of strengthening energy management. We have posted energy-saving practice guidelines and internal promotional materials in prominent locations at our brand stores, factories, and headquarters, providing information on how daily practices can support energy conservation. In addition, we closely monitor the power consumption of all our businesses and promptly detect any abnormal energy usage, continuously improving efficiency.
Energy consumption in 2023 7 (kWh)
Total energy consumption
-
electricity
44,805,385 8KWH2022: 38,610,163 KWH -
LPG
0 10KWH2022: 389 KWH -
DIESEL OIL
348,616 10KWH2022: 389,639 KWH -
gasoline
663,816 11KWH2022: 782,576 KWH -
natural gas
2,312,125 11KWH2022: 779,718 KWH
-
Total energy consumption by region (kWh)
-
Total energy consumption by region (kWh)
Exhaust emissions
In our production process, the combustion of fuel in boilers and other equipment inevitably results in certain exhaust emissions. We have replaced diesel with cleaner natural gas as the fuel for boilers, thereby reducing exhaust emissions and improving thermal efficiency. In addition, we also use activated carbon to treat the exhaust gas generated during the production process to remove pollutants before discharging them into the atmosphere. These activated carbons are replaced annually by qualified suppliers.
Paladin and K. SWISS have upgraded the exhaust collection hood of the exhaust gas treatment system to ensure optimal and stable performance of the treatment facility. In addition, we are considering developing an energy data reporting system to achieve standardized emission data collection and calculation processes, thereby achieving accurate data and establishing a more powerful air emission management system.
Water Management
Water consumption
Total water consumption
2022: 569,210m³
Most of the water used by our group comes from the production process and dormitories. In order to improve water efficiency in these areas, we have implemented various improvement processes and measures for recycling and reusing water to minimize water usage. We conduct regular inspections and maintenance of water pipeline infrastructure to ensure reliable system operation and avoid water resource waste caused by equipment failures. We have also adjusted the water pressure in the living area and installed timers to control the flushing frequency of the factory and dormitory restrooms, thereby reducing overall water usage.
In addition to improving processes and infrastructure, we are also committed to cultivating a culture of water conservation among our employees. We have conducted educational and promotional activities to raise employees' awareness of the importance of water sources and encourage practices to reduce daily water usage.
Sewage discharge
Using chemicals
-
As a responsible sports equipment manufacturer, our group is committed to ensuring product safety and minimizing the use of harmful chemicals. All of our business fully complies with internal standards and applicable national regulations regarding the use of chemicals. -
We have been researching safer alternatives and reducing the use of chemicals in our products. Meile collaborates with blue label dyeing assistant manufacturers to produce 80% of its clothing and plans to exceed this high proportion by 2025. Sokoni has also increased the adoption rate of fluorine free waterproofing agents in its clothing production to 10%, with the goal of increasing it to 40% by 2050.
-
Providing training to employees on proper handling of chemicals is also a key aspect of our operations. Paladin and K. SWISS provide rigorous training courses to ensure that employees understand the safety management of chemicals. In addition, our goal is to increase the use of safer and less polluting water-based adhesives in over 50% of footwear production under the main brand of Xtep, while maintaining high quality. The return and exchange ratio related to poor adhesive performance has decreased from 0.079% in 2022 to 0.057% in 2023, demonstrating our efforts in optimizing adhesive usage and reducing quality issues.
Packaging materials and waste disposal
Packaging materials for 2023
-
CARDBOARD AND SHOES
6,056 TONS -
adhesive tape
93 18TONS -
diesel oil
137 18TONS -
plastic bag
879 TONS