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CONTENTS To/Enable/Connectivity/And/Trust/Everywhere CONTENTS To/Enable/Connectivity/and/Trust/Everywhere Sustainability Strategy and Management Foundation for Corporate Development Optimizing Governance and 03 Preventing Operational Risks 17 Sustainability Management Process A Message from the President 09 04 Adhering to Compliance in Operations A Message from the COO Stakeholder Engagement and Keeping away from Red Lines 18 05 11 Materiality Analysis and 2019 Highlights Putting Employees First to 12 Ensure Continuous Growth 25 External Recognition and Membership About ZTE 15 Leading 5G Innovations and 06 Enabling Different Industries 33 Assurance Report 64 Special Report: Reporting Index Never Yield to COVID-19 59 65 Creating Positive Impacts Readers' Feedback Form 72 Securing Customers’ Trust by Sustainability Performance in 2019 Defending Their Rights and Interests 40 Supporting the Circular Economy through Green Development 44 Policy List 60 Upholding Win-Win 2019 Sustainability Performance Cooperation to Grow with Partners 50 62 Shouldering Responsibilities and Contributing to the Global Community 54 A Message Sustainability Strategy Foundation for Special Report: Sustainability Performance Assurance Reporting About This Report About ZTE Creating Positive Impacts from the President and Management Corporate Development Never Yield to COVID-19 in 2019 Report Index About Preparation basis Definition of terms used in this report This report is prepared in accordance with the For the convenience of expression and reading, "ZTE This Report Appendix 27 Environmental, Social and Governance Corporation", "ZTE", "this Company", "the Company" Reporting Guide (ESG Guide) in the Main Board and "We" in this report refer to ZTE Corporation and its Listing Rules issued by Hong Kong Stock Exchange. subsidiaries. The sustainability report is issued It also takes reference to the Global Reporting annually by ZTE Corporation. Initiative (GRI) Standards, the UN Global Compact, Unless otherwise specified, the terms used in this It adheres to the principles of and ISO26000: Guidance on Social Responsibility. report have the same meanings as those defined in the "Materiality, Quantitativeness, Company's Annual Report 2019. Balance, and Consistency", and This report is finally formulated by identifying discloses the principles, major important stakeholders, analyzing and rating material Data source and reliability statement progress, achievements and issues to achieve sustainable development, making All data used in the report comes from ZTE Corporation future plans of ZTE Corporation decisions on the scope of the report, as well as and its subsidiaries. The board of directors of the and its subsidiaries in terms collecting, summarizing, organizing and reviewing Company is responsible for the truthfulness, accuracy and of environmental, social and relevant data and materials in the preparation completeness of this report. governance performance, with a process. time span from January 1, 2019 This report is issued in both Chinese and English. In to December 31, 2019. the event of any conflict or ambiguity between the two versions, the Chinese report shall prevail. Since 2009, ZTE has annually Scope and boundaries of this report released sustainability reports/ Confirmation and approval corporate social responsibility Unless otherwise specified, the policies, statements reports for 12 consecutive years. This report has been approved by the board of directors for and materials in this report cover the actual business release. scope of ZTE Corporation and its subsidiaries, which is the same as that of the annual report issued by ZTE Corporation. Access and response to this report Unless otherwise specified, CNY is the currency unit You can access to the electronic version of this report through used in this report. the following website: https://www.zte.com.cn/global/ ZTE Corporation 2019 Sustainability Report 3 A Message Sustainability Strategy Foundation for Special Report: Sustainability Performance Assurance Reporting About This Report About ZTE Creating Positive Impacts from the President and Management Corporate Development Never Yield to COVID-19 in 2019 Report Index A Message from the President The year of 2019 was the first year of 5G commercialization. serve vertical industries and becomes the information Further consolidate the Company's three cornerstones, Adhering to the business strategy for stable and healthy infrastructure that facilitates the digital transformation of namely talent, compliance, and internal control. For development, ZTE has moved through its recovery national economy. In response to customers' requirements, talent cultivation, we have optimized the talent cultivation phase and entered the growth phase as a 5G pioneer as ZTE proposed the innovative 5G network operation mechanism, created a benign, inclusive, and personalized scheduled. During this year, by focusing on main business principle of "Addition, Subtraction, Multiplication, and environment for them, and provided interdisciplinary talent and strengthening execution, the Company has achieved Division", thereby making networks simpler and smarter, in this 5G era with appropriate platforms to advance their stable performance growth and been ranked among ensuring the stable operation and coexistence of growth and promotion. By taking compliance as a strategic the world-leading 5G vendors. Regarding the efforts in differentiated industry scenarios, and boosting flexible 5G cornerstone of the Company, we have incorporated global markets, ZTE always stays committed to creating innovation in the society through in-depth integration of 5G compliance requirements into our daily work to ensure value for the society through constant innovation. As technologies and vertical industries. With such a principle, healthy and stable business operations. In addition to for technological development, the Company has been ZTE is committed to benefiting the society and advancing continuously optimizing the internal control system, ZTE investing substantially in R&D, striving for higher-level sustainable development by optimizing the business model also has established a complete operating mechanism and cybersecurity, and maintaining its leadership in 5G product of each industry. end-to-end processes for internal control. To eliminate risks innovation and their implementation in vertical industries. and ensure the Company's healthy operation, ZTE has As simplicity prevails, ZTE has simplified internal attached greater importance to the capability building in As a high-tech company, ZTE always takes the initiative management through digital transformation and cloud internal control, strengthened accountability for violations in making exploration for business sustainability. Facing platforms to better satisfy the ever-changing economic against the Company's internal control requirements, and up to the 5G era, we are committed to the improvement of environment in the world. In addition, the Company, in further optimized the corporate governance model. core competitiveness. Over the years, we have taken the pursuit of high-quality growth, has been strengthening leadership in 5G standards, 5G products, and 5G markets, execution and improving the quality of its operations. As As a world-leading telecommunications solution provider, and have further strengthened our core competitiveness making wise choices is crucial for building a time-honored ZTE is committed to realizing the Internet of Everything in the 5G RAN, CN, and TN fields. Furthermore, we have brand, we shall put long-term value ahead of short-term (IoE), reducing both communication costs and social attained remarkable achievements in core self-developed benefits. To this end, the Company has taken multiple long- functioning costs, and enhancing mutual trust between products such as the self-developed chipsets, OS, and range measures: people. “To Enable Connectivity and Trust Everywhere" database. reflects not only our vision but also our commitment to Propose the focus strategy and refrain from our don'ts. sustainable development. The deployment and commercialization of 5G are We have been focusing on our main business and making accelerating in the global market. 5G is supposed to intensive use of social resources. Xu Ziyang President and Executive Director ZTE Corporation 2019 Sustainability Report 4 A Message Sustainability Strategy Foundation for Special Report: Sustainability Performance Assurance Reporting About This Report About ZTE Creating Positive Impacts from the President and Management Corporate Development Never Yield to COVID-19 in 2019 Report Index A Message from the COO February 7, 2020 marks the 35th anniversary of the developed distributed database in the core business through AI power conservation and other advanced founding of ZTE. Maintaining a steady momentum of systems of major banks, strategic partnership with technologies, we help other industries to reduce carbon development, ZTE aspires to become a time-honored multiple industry leaders in 5G, and the empowerment of emissions and facilitate their green development enterprise that is trustworthy for all stakeholders. High vertical industries through 5G innovations. To date, the accordingly. The Company keeps demonstrating good moral standards that come into being during both internal Company has consolidated its core competitiveness in faith to global communities through the Care for Veterans, and external development lay a solid foundation for the Standard-Essential Patents (SEPs), key technologies,
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