China Resources Beverage (Holdings) Company Limited ("CR Beverage" or the "Company") fully recognizes the impact of the Company’s procurement activities on the environment, society and economy. Therefore, the Company incorporates environmental, social and governance factors into its procurement decisions, aiming to enhance the overall sustainability and resilience of the supply chain as well as the competitiveness of the Company and its suppliers.

This policy is supplementary in nature, and should be adopted in conjunction with relevant procurement management policies, such as the CR Beverage Procurement Management System, the CR Beverage Supplier Management Measures and the Detailed Rules for the Management of Production Material Suppliers of CR Beverage.

1 Purpose

This Policy aims to actively promote the balanced development of environmental protection, social responsibility and economic feasibility while ensuring the stability and efficiency of the supply chain. By selecting suppliers that meet environmental standards, respect human rights and support fair trade principles, and through procuring products that are environmentally and socially responsible, the Company seeks to effectively enhance the transparency and sustainability of the supply chain, thus contributing positively to the long-term prosperity of the Company and social well-being.

2 Scope of Application

This Policy applies to CR Beverage and its subordinate entities at all levels. All business partners, including cooperative partners, contractors and suppliers, are encouraged to comply with this Policy.

3 Policy Content

3. 1 Green Procurement

The Company continues to practice the concept of green procurement and prioritize green and healthy materials in the procurement process to reduce its environmental impact. The Company procures products conforming the following conditions where appropriate. 

·  Reduce the environmental impact throughout the lifecycle of products or services;

·  Effectively use resources and reduce energy and/or water consumption;

·  Minimize or avoid the use of packaging materials;

·  Use products made from recycled, recyclable or biodegradable materials wherever possible;

·  Non-toxic and non-polluting to humans and the environment;

·  Prioritize local products or raw materials to reduce carbon emissions from transportation;

·  Prioritize products with environmental labels or certification.

3. 2 Responsible and Ethical Procurement

The Company is committed to responsible and ethical procurement, and adheres to the following principles in its procurement practices:

·  Equal Employment: Suppliers are encouraged to provide employees with a workplace free from discrimination and harassment and to provide equal opportunities and treatment;

·  Health and Safety Management: Suppliers are required to strictly comply with national and industry health and safety regulations, provide comprehensive safety training and necessary protective equipment for their employees, and endeavor to reduce accidents and occupational diseases in the workplace to ensure the health and safety of employees;

·  Employee Compensation and Benefits: Suppliers are advised to ensure timely payment of reasonable compensation, which should not be lower than local statutory minimum wages. Suppliers are also advised to provide employees with reasonable rest time, benefit packages stipulated by relevant laws, and reasonable monthly wages on the agreed payday;

·  Transparent Procurement: Suppliers are required to conduct transparent procurement, and attach the Integrity and Compliance Commitment or the Sunshine Declaration as an appendix to all bidding invitations, covering all contracts executed with partners, so as to create an honest, efficient and candid cooperation atmosphere with their partners;

·  Social Responsibility: Suppliers are required to actively fulfill corporate social responsibility, give back to the society through community services and charitable activities, and enhance their social image and brand value through Corporate Social Responsibility (CSR) projects.

3. 3 Incorporating Sustainability Principles into New Supplier Selection

Suppliers meeting the following conditions will be prioritized:

·  Abide by all applicable laws and regulations relating to environment, society and governance;

·  Fully comply with the CR Beverage Supplier Management Measures and the Detailed Rules for the Management of Production Material Suppliers of CR Beverage;

·  Adopt internationally recognized environmental, social and governance management systems, such as ISO 14001 Environmental Management System, ISO 50001 Energy Management System, ISO 45001 Health and Safety Management System, ISO 9001 Quality Management System and other equivalent management systems.

3. 4 Incorporating Sustainability Principles into Supplier Management and Certification

·  The Company regularly evaluates environmental, social and governance performance of its suppliers to ensure compliance and continuous improvement;

·  In the management of full supply chain lifecycle, the Company should include the human rights respect and protection, health and safety, business ethics and employee diversity in the scope inspection, and incorporate sustainability into the performance evaluation of suppliers;

·  The Company should provide suppliers with knowledge and policy training on sustainable procurement to enhance their awareness of sustainable production and management.

4 Revision and Review

The Company will regularly review this Policy and make appropriate revisions when necessary.