Xtep International Holdings Limited - Sustainability

We have previously conducted stakeholders engagement with our high-level executives and continually engage other stakeholders through various channels such as our online platform, to attain their views on our ESG expectations. We have also set up interactive online groups to engage our consumers through questionnaires. Together with different online and offline activities, gratitude and surprise events, we are able to better understand the expectation of our stakeholders.

Our material ESG aspects and their respective relevance are summarized in the table below:

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Aspects	Material Issues	Relevance to the Business
Environmental	Emissions	Given the nature of our manufacturing processes, we generate insignificant amount of air emissions, waste water and solid waste. We strictly comply with the national environmental protection laws and regulations of the PRC.
	Use of Resources	4 main types of energy are essential to our daily business operations, namely, electricity, water, natural gas and diesel.
Social	Health and Safety	Occupational safety is another key issue to our manufacturing business. We are committed to providing our employees with a healthy and safe working environment. We strive to reach the goal of zero accident at all sites.
	Employment	A competitive compensation package is necessary to attract and retain talent, as our employees are the foundation of our Company’s success.
	Development and Training	We consider our employees as the most important asset of the Group. Providing employee training and aiding their career development are how we differentiate ourselves from peers in the industry.
	Labour Standard	Forced labour and child labour are regarded as key global issues and they are completely prohibited by law and in our Group’s operations.
	Supply Chain Management	Besides our own production sites, we relied on outsourced suppliers for the production of footwear and apparel products. As such, supply chain management regarding quality and ESG issues are important to the Group.
	Product Responsibility	As a leading Chinese sportswear brand, consistency and excellence in quality is the foundation of our business. Customer service and relationship management were crucial in maintaining our brand image.
	Community Investment	The Group consider community investment as one of the main drivers to increase our brand value. We strived to promote a healthy lifestyle nationwide. We also donate to different regions across the nation for poverty alleviation and education.

We care about and manage our stakeholders’ expectations on us through continuous engagements. We will review and update our materiality results regularly and/or as needed.