Anker Innovations, a global consumer electronics brand, has recently released its first "2022 Environmental, Social, and Governance (ESG) Report." The report provides a detailed account of Anker's ESG management efforts, encompassing aspects such as green industry and product innovation, sustainable operations, corporate governance, and social responsibility.
The challenges posed by global climate change are increasingly severe, and society's understanding of ESG issues such as "clean and green," "sustainable development," and "technology for all" is deepening. Driven by both the "dual carbon" goals and market forces, ESG has become one of the central focuses for major corporations. Especially in the secondary market, ESG reports are beginning to be disclosed as a "second financial report" for companies.
Anker Innovations's ESG strategy is focused on green industries, product innovation, and the establishment of sustainable supply chain management. Through background analysis of sustainable development, stakeholder identification, and issue recognition, Anker Innovations has identified 25 key ESG issues, comprising 7 environmental aspects, 16 social aspects, and 2 governance aspects. These issues are categorized based on their importance to Anker Innovations and their significance to stakeholders, forming an ESG priority issue matrix that serves as the primary basis for reviewing the company's annual ESG performance. Now, let's delve into Anker Innovations's first ESG report using four key terms.
Products: Ultimate Sustainable Green Innovation, Empowering New Growth Areas
As a leading consumer electronics company, Anker Innovations's vision and mission are to "promote the beauty of Chinese manufacturing." In 2022, the company invested 1.081 billion yuan in research and development, with a research and development team of 1,820 people, accounting for over 50% of its total employees. Green innovation is also a major highlight of Anke's continuous innovation.
In the realm of products, the concept of greenness permeates product materials, design, technical development, and the entire product lifecycle. Concerning product materials, Anker Innovations employs renewable biomaterials extracted from plants and non-spray materials, reducing the usage of petroleum-based plastics by 30%-40%. They also utilize recyclable packaging to minimize plastic packaging usage. According to Anker Innovations's interview with EqualOcean, in 2023, they achieved "zero" plastic in their Anker Nano series new products in the charging category, while the GaN Prime series new products achieved a 97% reduction in plastic use. In the headphone category, the soundcore series new products also reached a 97% reduction in plastic. They anticipate achieving "zero" plastic in product packaging in categories such as smart security, wireless audio, and charging by 2024. In terms of design, many products are powered by solar panels, contributing to the adoption of clean energy. In technical development, Anker Innovations adopts a dual-drive innovation model of "technology + scenarios," forming innovative technological barriers. After products are discontinued, they refurbish and repair the functions, complete Amazon's second-hand product certification, effectively extending the product's lifespan and reducing resource consumption.
With increasing user demand for energy cost savings and safety, Anker Innovations has expanded its business into the energy storage sector. In 2022, they successfully launched a portable energy storage power supply that introduced gallium nitride (GaN) technology into the medium to high-power energy storage field, dramatically increasing battery product lifespan by six times. Combined with the use of high-spec electronic components, the product's design goal is to achieve a lifespan of 10 years. In the consumer-grade new energy brand series Anker SOLIX, Anker Innovations improved energy conversion rates, focusing more on consumer-grade new energy.
Environment: Green and Low-Carbon Operations, Embedded Sustainability
Anker Innovations achieves green and low-carbon operations through energy conservation and waste management. They have implemented paperless offices, continuously track and record energy consumption and greenhouse gas emissions in office spaces, and control the use of bottled water and water resources management. In 2022, the company reduced energy consumption per unit area by 69.70 kilowatt-hours per square meter, achieving energy-saving goals. By controlling the use of bottled water, they expect to reduce the production of 180,000 plastic bottles annually.
The concept of sustainable development isn't limited to operations but is intricately woven into supply chain management. Anker Innovations has established a comprehensive supplier lifecycle management standard from supplier introduction to supplier elimination, consisting of approximately 50+ procurement process documents, with ESG management elements integrated throughout the process.
Governance: Establishing an ESG Governance Framework to Empower Employee Development
In terms of corporate governance, Anker Innovations has established an ESG governance framework comprising an ESG special committee, an ESG office, and ESG special teams. This framework ensures the formulation of the company's ESG development strategy at decision-making, organizational, and execution levels and supervises ESG-related performance and progress to ensure effective ESG management.
Furthermore, Anker Innovations emphasizes caring for employee growth and creating a diverse, equal, and inclusive workplace. As a company committed to becoming a learning organization, it offers comprehensive training and development opportunities for employees through entities such as the Anker Innovations Empowerment Center and a dedicated research council. They also use a combination of online platforms and offline classes to provide comprehensive training and development opportunities. Additionally, Anker Innovations has established a robust welfare system, demonstrating concern for employees' well-being. The proportion of female employees has continued to increase, with 43.3% of female employees reported in 2022, including 6 female executives, comprising 20.7% of the executive team.
Social: Leading the Industry's Green Transformation and Building a Harmonious Community
Anker Innovations's social responsibility presents dual-track development.
Externally, in terms of leading industry sustainability, Anker Innovations is committed to driving the industry's green transformation. Since 2018, they have repeatedly advocated for the removal of standard chargers from electronic devices, suggesting the adoption of USB Type-C interfaces for universal charging devices. Anker Innovations emphasized in an interview with EqualOcean that "compatibility" helps achieve interoperability among multiple brands and devices, improving charger reusability, reducing waste generation, and conserving resources. Simultaneously, in the circular economy, Anker Innovations continues to enhance its global end-product recycling system. In 2022, they expanded the scope of recycling to include products from other brands, not just limited to Anker-branded products, to collectively drive the entire industry toward sustainable development.
Internally, in terms of responsible corporate operations, Anker Innovations places responsible marketing at the forefront. They have established a multi-dimensional and continuously effective privacy compliance management system, setting up privacy compliance operation norms and guidelines for various data collection and processing departments to ensure the security of user data privacy. Moreover, they have built a data intelligence platform, optimized customer complaint response mechanisms, and created a small, closed-loop for addressing customer complaints to protect consumer rights. In 2022, Anker Innovations issued a total of 325 complaint analysis reports, providing insights into customer pain points and demands, which were then fed back to product and quality departments, leading to a spiral improvement in user product experiences.
Additionally, Anker Innovations is deeply involved in various charitable activities, including green public welfare practices, social charity initiatives, and community development support, all contributing to building a harmonious community. In 2022, Anker Innovations's charity organization organized employees to participate in a green and low-carbon travel event, with 297 employees taking part. The company also donated CNY 17,000 to the Shenzhen Green Source Environmental Protection Volunteer Association to jointly promote a green ecological environment. During the reporting period, the company donated cash and materials worth over CNY 8 million.
ESG Risk Rating Is High, Efforts Needed in the Future
Internationally renowned ESG rating agency Sustainalytics has released an ESG rating report for Anker Innovations. The report shows that Anker Innovations has received a high ESG risk rating, with a risk score of 35.6, ranking second to last among the 270 companies in the electronic equipment industry classified by Sustainalytics. It ranks 13,176th among a total of 15,561 global enterprises. Overall, Anker Innovations's ESG risk rating is relatively high.
Sustainalytics' ESG risk rating consists of three core components: corporate governance, major ESG issues, and special ESG issues. Corporate governance is not differentiated by industry, while special ESG issues are often driven by random events. The primary rating portion focuses on major ESG issues, and the top five major issues based on the impact of unmanaged risks on the company are corporate governance, human capital, business ethics, product governance, and own carbon management.
From the first ESG report, it can be seen that Anker Innovations has weaknesses in managing major ESG risks. In terms of corporate governance, there is limited disclosure of ESG plans and practices, with relatively shallow overall disclosure in the report. Additionally, in terms of their own carbon management, they did not provide detailed information on carbon reduction plans and targets in the report, remaining focused on energy-saving and consumption reduction. Furthermore, there is limited data to support their claims, and the progress of carbon reduction is slower compared to other companies in the industry. As a consumer electronics company targeting the global market, ESG development is a green hallmark driving Anker Innovations's global business development. In terms of product governance, Anke also faces risks due to different requirements for product materials and after-sales services in different countries, with relatively limited disclosure in the report.
Anker Innovations stated in an interview with EqualOcean that ESG standards in the consumer electronics industry should be reflected in sustainable supply chains. They are willing to work with suppliers and partners to jointly push for the adoption of the same standards, promoting supplier commitment and fulfillment of social and environmental responsibilities. Despite ESG risk ratings, Anker Innovations's commitment to green technological innovation-driven social responsibility, industry development transformation, and global expansion is evident. While achieving a mutually beneficial connection between business value and social value, Anker Innovations is also writing a satisfactory answer to how Chinese outbound enterprises can establish a green reputation globally.