SUSTAINABILITY AT ZD AUTOMOTIVE

CORPORATE IDENTITY & ENVIRONMENTAL PROTECTION

Sustainability is the basis for all business activities of ZD Automotive Co., Ltd. Because without it, responsible action and economic activity are not possible. Our concept of sustainability combines four different areas, which must be taken into account by us and our suppliers at all times. In concrete terms, we place particularly high value on working conditions, environmental protection, business ethics and transparency.

The aim of this sustainability policy is to protect our employees as well as the environment and to act ethically. We also expect our direct suppliers and partner companies to comply with our guidelines and to pass them on to their subcontractors and ensure compliance. This means that our partners, direct suppliers and indirect suppliers must all comply with this policy. In this way we can ensure that all our products and services can be offered in accordance with the following environmental and social standards.

Working conditions and protection of employees

1. Prohibition of child labourChild labour must not be used at any stage of production or trade. That is why we, like our suppliers, proactively enforce the ILO conventions on the minimum age for employment and the protection of children, in particular No. 138. This also applies to the procurement and use of all raw materials in our products.

2. Wages, social benefits and working hoursIn order to show our appreciation to our employees, we naturally comply with all legally required, collectively agreed or ILO standards regarding working hours, overtime and wages, whichever is stricter. In addition, ZD Automotive Co., Ltd offers its employees further social benefits, support and additional benefits, which go far beyond the legal requirements.

3. Free choice of employmentWe do not accept any form of forced or compulsory labour, neither at our company nor our suppliers. It follows that employees must be free to terminate their employment at any time, subject to the usual notice periods. Similarly, they must not be required to surrender their identity card, passport or work permit as a condition of employment.

4. Freedom of associationWe value our employees and their opinions. Accordingly, they always have the right to communicate openly with management or their superiors about working conditions without fear of reprisal in any form whatsoever. They also always have the right to organize, join a trade union, appoint a representative and be elected as such.

5. Health and safetyThe health of our employees is the most important aspect of occupational safety. In order to guarantee this, we comply with all national regulations, focus on health-friendly workplaces, stress-reducing working time models and promote the continuous development of workplaces and conditions to improve health.

6. Prohibition of disciplinary sanctions, harassment and discriminationWe do not tolerate any form of discrimination. Particular emphasis should be placed on the prohibition of discrimination on the basis of sex, origin, culture, religion, colour, language, belief, political views, age and sexuality. This naturally also applies to our suppliers and partners, as does the ban on any physical or psychological punishment of employees. This applies in particular when employees report corporate practices that violate national, international or internal regulations. Furthermore, any form of harassment in the workplace is strictly prohibited.

We organize training courses on working conditions and human rights when necessary to communicate these guidelines to all our employees and make them aware of them.

Environmental protection

1. Environmental responsibilityEnvironmental protection can only succeed if the whole of society is involved. That is why companies are also obliged to take an active interest in environmental protection. In order to achieve this, we have committed ourselves to the precautionary principle, take initiatives to promote environmental responsibility and promote the development and dissemination of environmentally friendly technologies.

2. Environmentally-friendly productionOptimum environmental protection must be guaranteed in all phases of production. This includes a proactive approach to avoid or minimize the consequences of accidents that could have a negative impact on the environment. Particular importance is attached to the implementation and further development of energy and water-saving technologies, work processes and equipment. Their objectives are primarily the reduction of emissions, reuse and recycling of waste. Similarly, the protection of air quality must always be enforced. For example, all necessary measures must be taken to ensure that at a minimum the legal standards are met, and further concepts to reduce air pollution to the absolutely necessary minimum must also be developed. In this way we want to keep the environmental pollution we cause as low as possible.

3. Ecologically safe products and servicesIn order to make our entire product range as environmentally friendly as possible, all products manufactured along the supply chain and their precursors must meet the environmental standards of their respective market segment. This includes all materials and substances used in production. Chemicals and other substances that may pose a risk when released into the environment must be strictly controlled to prevent damage to the environment. To this end, a hazardous substance management system must be established to ensure that potentially hazardous substances can be safely handled, transported, stored, reprocessed, reused and disposed of by appropriate procedures. In this way we can ensure that our production has the least possible impact on the environment.

4. Responsible acquisition of raw materialsIn order to ensure that the entire supply chain is sustainable, we require our suppliers to ensure responsible raw material procurement. The procurement and use of raw materials that have been obtained illegally or through ethically reprehensible or unreasonable measures is therefore not permitted. The use and procurement of raw materials affected by embargos or other import restrictions, such as conflict minerals, is also excluded. In order to apply these regulations consistently, suppliers are therefore obliged to disclose the origin and sources of supply of the raw materials they use.

If necessary, we organise training courses on environmental management to communicate these guidelines to all our employees and to make them aware of them.

Business ethics

1. Combating corruptionCorruption seriously damages the economy, trust and fair competition. We therefore expect the highest level of integrity in all business activities and relationships, both in our dealings with us and with our suppliers and partners. All forms of corruption, bribery, extortion and embezzlement are strictly prohibited and will be punished by us. In order to prevent or, if a conflict of interest, especially in management and decision-making positions, or, if it has arisen, to settle it, important political offices and decision-making positions must be reported to the management. Since integrity and trust in ZD Automotive is of the highest priority, positions from which conflicts of interest may arise are not acceptable.

2. Safety and qualityWe stand with our name for highest quality and reliability. To be able to keep this promise, our suppliers must guarantee that all products and services meet the contractually agreed quality and safety criteria on delivery and can be used safely for their intended purpose. We make the same promise to our customers and partners.

3. Management systemsIn order to be able to implement all the above regulations, we expect our suppliers to maintain management systems that ensure the implementation, control and documentation of the principles listed. Furthermore, we prefer suppliers who actively implement a quality management system according to ISO TS 16949, an environmental management system according to ISO 14001 and OHSAS 18001 for occupational health and safety or equivalent systems. Business relations with companies that violate the rules of these sustainability regulations are not possible.

4. Fair competitionWe expect our suppliers to comply with international and national laws on fair competition without being asked to do so. This includes in particular the provisions on unfair competition and antitrust laws. Agreements with competitors on prices, sales conditions, quantity restrictions, division of territories or on offers in public tenders are strictly prohibited.

5. Protection of intellectual propertyProtection of intellectual property, rights holders and know-how are of particularly high value to us. Accordingly, we do not use or manufacture any technologies, application processes or goods that infringe intellectual property or are plagiarisms. We expect the same from our suppliers.

6. Export controls and economic sanctionsIn order to enable effective punishment of offences and sanctions, ZD Automotive complies strictly with all official restrictions regarding the import, export and re-export of goods, services, technologies, know-how and software. These restrictions can affect countries, regions, companies, organizations and individuals.

We organize training courses on business ethics as needed to communicate and educate all our employees about these guidelines.

Transparency

1. Information of business partners and employeesIn order to make this policy available to all stakeholders, it must be posted in the local language at our own facilities and those of our business partners, or made available to employees in some other way.

2. Electronic formIn order to make accessibility as easy as possible, the latest version of the policy is available at any time on our website at the following link:https://www.zd-automotive.cn/sustainability

3. Monitoring and verificationOn request, potential suppliers must provide us with all the information necessary for an initial assessment correctly and comprehensively as part of a self-assessment. In addition, they must provide us with further information to demonstrate compliance with the Sustainability Guidelines. We have the right to monitor the implementation of this Code and to verify this at any time by means of supplier audits. If violations of the guidelines occur, suppliers must inform us immediately and without being asked about all events.

4. Protection of whistleblowersTo enable the implementation and control of this policy, we protect whistleblowers from all negative consequences. Specifically, no one who reports, publishes or uncovers violations of these guidelines may be punished for this in any form whatsoever. This includes the threat of criminal or disciplinary action.

5. Financial responsibility and disclosure of informationAs a company, we naturally assume our social responsibility, especially with regard to our finances and transparency. We conscientiously manage and maintain our business documents, such as financial reports and quality reports, and provide information in accordance with legal requirements. Our books and records are kept in accordance with applicable law and generally accepted accounting principles. Recording and maintenance also includes the legal disclosure of financial and non-financial information in accordance with regulations and industry standards.

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