06Care for Employees,Gathering Power for Sustainable GrowthEmployee GrowthFeature Growth and Change,.
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XPeng Inc.2020 Environmental,Social and Governance ReportPublished in October 202123X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TReport IntroductionReporting StandardsReporting ScopeInformation ResourcesAccess to this ReportDisclaimerThis is the first Environmental,Social and Governance Report issued by XPeng Inc.(hereafter“the Company”),which aims to demonstrate the management,commitment,actions and performance of XPeng Inc.and its subsidiaries(hereafter“the Group”,“XPeng”or“we”)in terms of sustainable development.This report refers to the Global Reporting Initiative(GRI)Standards and the Environmental,Social and Governance(ESG)Reporting Guide in Appendix 27 of the Main Board Listing Rules of the Hong Kong Exchanges and Clearing Limited(HKEx).The United Nations Sustainable Development Goals(SDGs)and the Recommendations of the Task Force on Climate-related Financial Disclosure(TCFD)have also been taken into account during the preparation of this report.Therefore,this report is presented in a framework conforming with recognized international and market practices.Unless otherwise specified,this report covers XPeng Inc.and its subsidiaries.The reporting period is from January 1,2020 to December 31,2020(hereafter“the reporting period”),which is in line with the Groups fiscal year,with some sessions dated back to previous years or updated to the issuance of this report.Unless otherwise specified,the information and data cited in this report all come from the Groups official documents,statistical and financial reports as well as other ESG information collected,summarized and reviewed by the Group.This report is electronically available in both Chinese and English.Please view or download this report from the Groups official website().Certain statements in this report,including the statements regarding future development,are forward-looking statements that are subject to risks and uncertainties.These forward-looking statements are based on managements current expectations.Uncertainties might arise and cause materially different results.XPeng Inc.disclaims no obligation to update any forward-looking statement contained in this report.About The Report45X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TCorporate Governance and ComplianceAbout The ReportESG OverviewAbout UsHigh Quality and Innovative Smart EV ProductsEco-friendly Operation and Environmental Protection StrategyHuman Capital DevelopmentCare for Community,Responsible for SocietyCONTENTS1.1.Corporate Governance1.2.Code of Conduct1.3.Sustainability Development1820231062163468961102.1.Product Quality and Safety2.2.Product Planning and Innovation2.3.Supply Chain Management2.4.Customer Service and Communication2.5.Information Security and Privacy Protection37485559657072808592981021041071121121131143.1.Environmental Management System3.2.Eco-friendly Operation3.3.Zero-emission Products3.4.Climate Actions and Low-Carbon Strategies3.5.Environmental Key Performance Indicators4.1.Employment4.2.Occupational Health and Safety4.3.Employee Training and Development4.4.Diversity and Equal Opportunities5.1.Flood Control and Disaster Relief5.2.Fighting the COVID-195.3.Poverty Alleviation and Agricultural SubsidizingAppendix:GRI Content Index3452167X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TEnvironmentTechnology and InnovationCompared with the internal combustion engine vehicles,XPengs smart EVs delivered in 2020 reduced the carbon emission by approximatelytons of CO2 equivalent.products.5,520XPeng has been producing popular smart EVs for Chinese consumers with innovativeADAS,connectivity and core vehicle systems.XPeng received MSCI ESG AA rating for two consecutive years,the highest ESG rating among auto companies globally.Our proprietary XPILOT 3.0 represents one ofthe most advanced ADAStechnologies in China.As of May 2021,the Group has achieved an 100%recycling and reuse rate of recyclable solid waste.As of March 31,2021,39.8%of our employees are in our research and development function.Eco-friendly and high quality manufacturing with Photovoltaic Roof Power Generation.As of March 31,2021,we hadin China and certain other jurisdictions.759504patentsregistered trademarksXPeng innovatively adopts the core concept of X-SEG(Smart,Efficiency and Green),builds and operates green factories,produces allzero-emissionThe painting workshop of Zhaoqing plant achieved automation rate.energy consumption reduction,overoverwaste paint residue reduction,94%ESG Performance HighlightsESG Overview89X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R Tintelligent vehicle testingSocialGovernanceXPeng P7 became the first to receive the platform.from the Chinese i-VISTA 5-Stars5-Starsrating rating XPengs in-house quality management system has passed theISO 9001:2015.and obtained the certificate ofIATF 16949In 2020,the Group reported of the COVID-19 pandemic.The Board has established Committees531including the Audit Committee,the Compensation Committee,the Nomination Committee,the Corporate Governance Committee,and the ESG committee to enhance the Boards efficiency.XPeng G3 and P7 received C-NCAP Crash and Safety Test.with scores of 92.2%and 89.4%respectively in the Superior product quality and technology,contributing to a customer satisfaction rate.96%positions created in 2020.2,488culture to attract talents withOpen and inclusiveA comprehensivecorporate governancestructure to comply with NYSE and HKEx requirements.In 2020,the Group reported 0 case 0 case 0%of Lost-Time Injury Frequency Rate.of work-related fatalities and Contribute toSupport the community to control the pandemic of COVID-19.disaster relief,poverty alleviation and subsidy of agriculture.providing comprehensive job trainings for our employees and expanding our database of training courses.XPENG talent cultivation system,We created our of them is female.and9 directors of the Board are independent directors,of the existing1011X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R T Chengxing Zhidong was founded.Entered into our Series A,Series A1 and Series A2 financing arrangements.Entered into our Series B,Series B1 and Series B2 financing arrangements.The Company was founded as a part of the Reorganization to facilitate an initial public offering in the United States.Commenced delivery of the Companys first Smart EV model,the G3.Entered into our Series C financing arrangements.Entered into Series C financing.Commenced delivery of the Companys second Smart EV model,the P7.Completed our initial public offering and listing on the NYSE as well as a follow-on offering.Rolled out navigation guided pilot(NGP)for highway driving,a function of XPILOT 3.0 which is the Companys latest proprietary advanced driver-assistance system(ADAS)released in January,via OTA.XPeng Inc.was listed on HKEx(stock code:9868).201520172018201920202021Within only six years since our inception in 2015,we have become one of the leading smart electric vehicle(hereafter,“EV”)companies in China,with leading software,data and hardware technology at our core and bringing innovation in advanced driver-assistance,smart connectivity and core vehicle systems.ABOUT USXPeng Inc.was listed on New York Stock Exchange(NYSE)(stock code:XPEV)on August 27,2020 and raised USD 1.7 billion.On July 7,2021,XPeng Inc.was listed on HKEx(stock code:9868),becoming the first Chinese company dual primary listed in both NYSE and HKEx within three years.In October 2020,XPeng Inc.initially received a rating of AA(on a scale of AAA-CCC)in the MSCI ESG Ratings assessment and the rating was maintained in the annual update of 2021.HKEX Listing CeremonyXPeng Business Milestone1213X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TXPeng Smart EVsXPeng Smart Manufacturing FacilitiesXPeng Zhaoqing Smart EV Manufacturing BaseXPeng strives to transform Smart EVs with technology and data,shaping the mobility experience of the future.Our proprietary ADAS offers our customers more freedom when driving and delivers a comfortable and safe mobility experience.Our proprietary ADAS XPILOT 3.0 represents one of the most advanced driver-assistance technologies adopted on commercially available vehicles.Today,we have become a proven leader in the rapidly growing Smart EV market in China,producing popular and environmentally-friendly vehicles,namely the G3 a smart SUV,the P7 a smart sports sedan,the P5-the worlds first mass-produced Smart EV equipped with LiDAR.Our Smart EVs offer attractive design and high performance,coupled with safety and reliability.XPengs manufacturing philosophy centers on quality,environmental-friendly,flexibility and high operating efficiency.We take a lean production approach,with the aim of continuous optimization in operating efficiency and product quality.We have an eco-friendly,digitalized and intelligent manufacturing facilities,which produce multiple models concurrently based on customer orders.The Zhaoqing plant houses five highly-automated major manufacturing workshops covering stamping,welding,painting,assembling and battery packing.The plant has a designed annual production capacity of 100,000 vehicles,with a flexible manufacturing capability of several models from multiple platforms.We utilize an advanced manufacturing execution system(MES),that coordinates a large number of robots and automated guided vehicles(AGVs),to manage our production processes based on customer orders.In our quality control process,we utilize advanced technological systems,such as vehicle control unit(VCU)testing system and advanced driver-assistance sensors intelligent calibration system,to ensure the quality of our Smart EVs.Apart from the XPengs Zhaoqing Smart EV Manufacturing Base,we are also planning to establish a smart manufacturing plant in Guangzhou,Guangdong and Wuhan,Hubei,in order to meet the booming demand for XPeng Smart EVs.Leading the Smart EV transformation with technology and innovationEnvironmental friendly and quality manufacturingAdvanced driver-assistance,vehicle connectivity and electrification are expected to revolutionize the future of mobility,which represents a smarter,more energy-efficient and more environmental-friendly mobility experience.XPeng is dedicated to developing smart EVs and leading the environmental-friendly and low-carbon transformation of the traditional auto industry which has been dominated by internal combustion engine(hereafter“ICE”)vehicles.1415X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TXPengs in-house quality management system has passed the IATF 16949(Automotive Quality Management System Standard)and obtained the certificate of ISO 9001:2015(Quality Management System).XPeng also developed and verified key components in accordance with the functional and safety requirements of ISO 26262 for road vehicles.The XPeng P7 electric sports sedan became the first to receive the 5-star rating from the Chinese i-VISTA intelligent vehicle testing platform.Our smart features including smart driving,smart safety,smart connectivity,and smart energy are well recognized by the industry.XPengs G3 was selected by consumers as the best compact new energy vehicle(NEV)in terms of quality and ranked first in consumer satisfaction on driving experience,infotainment system and seating based on the China New Energy Vehicle Initial Quality Study(NEV-IQS1)conducted by J.D.Power2Auto Business Review and EFS Consulting China Harvard Business Review,Institute for Global Industry,Tsinghua University and SAPThe Organizing Committee of the 10th Guangdong Governor Cup Industrial Design Competitioni-VISTAChina Automotive Engineering Research Institute and i-VISTA3Quality Smart EV ProductsAwards and RecognitionsThe 8th Xuanyuan Award Car of the Year(P7)Auto Parking Award in the 2020 i-VISTA China Intelligent Vehicle Indexes(G3)Dingge Award China Digital Transformation Pioneer EnterprisesThe 10th Guangdong Governor Cup Industrial Design Competition,Gold Award(Xmart OS2.0 intelligent operating system)The First 5-star Rating from the 2021 i-VISTA(P7)The XPeng G3 and P7 received five stars with overall scores of 92.2%and 89.4%respectively in the crash and safety test conducted by of C-NCAP.In addition,the XPeng P7 scored 98.51%in C-NCAP active safety,which is the highest score among EVs so far.3 Intelligent Vehicle Integrated Systems Test Area(i-VISTA)is a third-party intelligent vehicle test system under the guidance of China Automotive Engineering in China.XPeng Smart EVs1 NEV-IQS,the New Energy Vehicle Initial Quality Study,is based on the Voice of the Customer to measure and count the quality problems encountered by new energy vehicle owners during the first 2-6 months ownership period.According to brands,models,and market segments,the study analyzes the quality of traditional products(production quality)and potential products(using defects caused by design).This study is based on the IQS system and adds a charging experience specially among new energy vehicles.2 J.D.Power,a world-leading company,provides services in consumer insight,market research,consulting,data and analysis.It is dedicated to helping companies improve customer satisfaction,enhance driving performance and increase profits.1617X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TCorporate Governance and ComplianceXPeng operates in accordance with laws and regulations,strives to build a robust modern corporate governance structure and a culture of trust and integrity,and continuously improves the effectiveness of the risk management and internal control system,in an effort to safeguard the legitimate rights and interests of our stakeholders.1819X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R Twith enhanced investment decision-making efficiency and quality.The Board has established five professional committees,namely the Audit Committee,the Compensation Committee,the Nomination Committee,the Corporate Governance Committee,and the ESG Committee to enhance the Boards efficiency.Three of the existing 9 directors of the Board are independent directors,and one of them is female.Independent directors account for a majority stake in all the five professional committees,and matters within the responsibilities of each professional committee are submitted to the Board for review after being approved by the professional committees,which facilitates independent directors to play a more engaged role.Senior management is responsible for the operation and management of the Group.Specifically,it organizes and implements the 1.1.2.Board Diversity1.1.3.Risk Management and Internal ControlFIRST LINE OF DEFENSESECOND LINE OF DEFENSETHIRD LINE OF DEFENSEWe believe that action on promoting board diversity is one of the key elements to maintain the Groups strengths and can contribute to the Groups sustained growth.Our diverse board members come from three different background-technology,automobiles and finance and have shaped the unique DNA of XPeng.Our board members have deep industry experience,among whom one non-executive director and two independent non-executive directors have industry experience in consumer discretionary industry,while one independent non-executive director has experience in risk management and governance.Three of the existing 9 directors of the Board are independent directors,and one of them is female.Meanwhile,we are aware of the fiduciary duties of our directors and the Board to safeguard the rights and interests of our shareholders.To ensure our diversity practice is in line with stakeholders expectation,we respect the rights of electing and re-electing directors at the shareholders general meeting and actively provide sufficient information for shareholders to make judgement.The Board is responsible for making decisions and overseeing the operation of the Groups risk management and internal control systems.On behalf of the Board,the Audit Committee reviews how management deploys,implements and supervises risk management and internal controls on a quarterly basis and whether the risk management and internal control systems work on an annual basis.To ensure the effectiveness of the risk management and internal control systems,an internal control model of“three lines of defense”is applied with reference to the actual conditions of the Group:Mainly composed of the Companys business and functional departments in charge of daily operations and management,design and implementation of relevant controls and risk response.Mainly composed of finance,internal control,legal and product quality departments.Key responsibilities are to assist the first line of defense in establishing and improving the risk management and internal control systems,and to oversee and ensure the effectiveness of risk management and internal controls carried out by the first line of defense.Mainly composed of the audit team and the supervision team of the Internal Control Department.Key responsibilities are to assure and monitor the effectiveness of risk management and internal control systems of the first and second lines of defense,perform supervision and investigation functions,and implement the rectification and improvement to the Groups“three lines of defense”.The General Meeting of Shareholders has the decision-making rights as stipulated by laws and regulations and the Articles of Association,and exercises such rights to decide on significant matters such as the Groups business strategy and policies,financing,investment and profit distribution in accordance with the law.The Board of Directors(hereafter“the Board”)is accountable to the General Meeting of Shareholders and exercises the management rights of the Group in accordance with the law.Specifically,it reviews the overall operation and development strategy of the Group,and makes decisions on operating principles and investment plans.The Board also supervises and gives guidance to management,including guidance on improvement of existing policies and guidelines,formulation of a comprehensive decision-making mechanism,standardization of work processes,establishment of stricter approval procedures etc.in order to build an organization structure 1.1.1.Governance StructureXiaopeng HeCo-founder,Chairman of the Board,Executive Director and CEOHeng XiaCo-founder,Executive Director and PresidentBrian GuHonorary Vice Chairman of theBoard and PresidentTao HeCo-founder and Senior VicePresident1.1 Corporate GovernanceIn accordance with the Company Law of the Peoples Republic of China,NYSE Listed Company Manual,HKEx Listing Rules4 and relevant laws and regulations,we have developed a comprehensive corporate governance structure.Our General Shareholders Meeting,Board of Directors,and Senior Management exercise responsibilities and obligations in line with our Articles of Association,with special committees under the Board of Directors and independent directors actively dedicating to their roles.This enables us to effectively implement corporate governance,safeguard interests of shareholders and the Group,and to ensure the Groups sustainable growth.For more details about the Groups corporate governance,please refer to the XPeng Inc.Annual and Transition Report 2020.We specified in the Charter of the Nomination Committee that,the Nomination Committee should consider the contributions that the candidates can bring to the Board in terms of independence,knowledge,skills,industry experience,education background,gender,age and diversity in the context of the Groups business and development plans when exercising their fiduciary duties,such as review of the structure and composition of the Board,examination of the criteria and procedures for the selection of directors and senior management and search for qualified candidates for directors and senior management.As part of Nomination Committees responsibility,policies and specific rules as mentioned above will be reviewed periodically and revised if necessary.resolutions of the Board and the Groups annual plans and investment programs,formulates specific rules and regulations of the Group,and exercises other powers and responsibilities granted by the Articles of Association or the Board.We have established a system of policies and rules to support our operations and regulate our daily activities.The above-mentioned system includes over 300 policies,regulations and process guidelines covering R&D,procurement,production,sales,human resources,finance and other areas.4 Rules that have been exempted are not included.2021X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TXPeng incorporates requirements of compliant operation and expectations into daily operations and management of the Group.In the past six years since our inception,we established and have been improving our code of conduct and ethics at the Group level,and have formulated the Employee Code of Conduct,Code of Integrity,Administrative Measures for Conflict of Interest,Measures for Data and Information Disclosure and Amended and Restated Statement of Policies Governing Material Non-public Information and the Prevention of Insider Trading,which are applicable to all employees of the Group and have been uploaded to our office system for reference at any time.All employees will be required to receive onboard training on code of conduct and ethics,to stay aware of the Groups basic policies on employee behavior with different types of incentives.In this way,the Group requires its employees to comply with the law and business ethics,and ensures our code of conduct is in place throughout their employment at XPeng.During the reporting period,we have organized 15 anti-1.2 Code of Conductcorruption and anti-bribery trainings and achieved 7,626 training hours in total.The Group has also established a standardized fraud reporting process,as well as several communication channels for customers,suppliers,media,investors and employees on the Groups official website,including the fraud reporting mailbox(report_),hotline,WeChat Official Account,to enable external feedback and communication in a timely and effective manner.Investigators in charge will carefully look into complaints and reports,and keep the information of complainants and informants identities strictly confidential.The audit team of Internal Control Department is responsible for gathering and investigating frauds,preparing reports,coordinating the investigation under the supervision of the Audit Committee and the Board.As part of our due diligence,we include integrity and confidentiality terms in the agreements with our third-party partners and provide them with dedicated whistleblowing channels.This demonstrates our zero tolerance to fraud.We have been a member the Enterprise Anti-Fraud Alliance(EAFA)5 since April 2018,and we take initiatives to promptly cease partnership with suppliers who violate the Groups integrity rules and hold them accountable for rectification.Any cases of violation by suppliers will be published to EAFAs supplier information platform accordingly.In 2020,XPeng Inc.joined the Trust and Integrity Enterprise Alliance(TIEA)6,in an joint effort with other enterprises to combat corruption,fraud,counterfeiting and cybersecurity crimes with internet-related technologies.We are committed to take initiatives to strengthen the anti-bribery control and create an integrated workplace.5 EAFA is an alliance co-founded in 2015 together by several Chinese leading enterprises,including Vanke,Alibaba and Sun Yat-sen University.The establishment of the alliance aims to build a resource sharing platform to improve companys anti-fraud capabilities and to create a clean business environment.6 TIEA was founded in 2017 by JD Group and other Chinese leading enterprises with Criminal Law Research Center of Renmin University of China.It aims to form a positive cycle of honesty and integrity within the alliance.2223X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R T1.3.1.Sustainability ManagementThe Board of XPeng assumes overall responsibility for the review and supervision of the Groups sustainable development issues.The Board is responsible for setting the sustainability strategy and reporting to stakeholders.In order to establish a robust governance structure in line with our goal of sustainable value creation,the Board formed an ESG Committee in August 2021 to assist the Board to monitor the Groups sustainable development and to implement strategies related to sustainability.With the formation of the ESG Committee,the Group aims to establish a four-tier sustainability management structure consisting of the Board,the ESG Committee,the ESG Executive Committee and execution-level ESG-related departments.With this top-down structure aligning both the Boards oversight and managements execution,we will be able to ensure an efficient decision-making and communication channel to identify the most material ESG issues and incorporate them in the Companys agenda.1.3 Sustainability DevelopmentOver the past year,the world has experienced challenges including the global pandemic,extreme weather such as forest fires and large-scale social unrest activities in different parts of the world.The impacts of such environmental and social events are either acute or chronic,ranging from short-term economic downturn to long-term shifts in how we work,live and do business.These impacts present various risks and opportunities to our business activities.Despite the uncertainty,XPeng will continue to take a long-term horizon to create values for shareholders,customers,employees and the broader community.To achieve this goal,we are committed to uphold XPengs values to refine and explore ways to achieve our mission.XPeng Governance StructureShareholders Audit CommitteeCompensation Committee Nomination CommitteeCorporate Governance Committee Board of DirectorsESG CommitteeESG Execution Committee Legal FunctionsInternal Control FunctionsCapital Market&InvestmentProduct R&D FunctionsManufacturing FunctionsBranding FunctionsIT FunctionsHR FunctionsAdministrative FunctionsSales and Services FunctionsFinanceFunctionsSupply ChainFunctions2425X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TIn September 2015,17 SDGs released by UN,which provide guidance on global social,economic and environmental development from 2015 to 2030,came into force.UNSDGs is a call for global actions to address sustainability challenges.In addition,with Chinese Governments commitment on“Carbon Emission Peak”and“Carbon Neutrality”,we believe that the development of EVs will have a significant potential to drive contributions to carbon neutrality.The Group actively responds to the SDGs through dynamic identification of the ESG issues that are most relevant to our business.XPeng is dedicated to shaping the sustainable image of Smart EVs with advanced technology and quality products,leading future transportation of 100%electric,zero-emission,safer and smarter vehicles.Based on identification of the most material SDG aspects to our business and stakeholders,we will continue to enhance our ESG performance in response to stakeholders expectations and supporting our long-term business strategy through systems,targets,roadmaps,regular reviews and timely adjustments.1.3.2.Sustainability StrategyAreasSDGsOur RisksOur OpportunitiesOur ActionsBusiness OperationEnvironment ProtectionHiring and EmploymentCommunity Quality of product and service Customer relationship management Information security Intellectual property rights Supply chain management R&D Manufacturing processes and facilities Transformation to shared services in the automobile industry Policy and regulatory risks Market trends Energy consumption Water pollution Waste management Extreme weather Carbon emission from production processes Unlawful employment Labor costs Staff welfare Turnover Equal opportunity Occupational health and safety Reputation Public security Intelligent technology Innovation of management Integration of industry resources Improvements in supply chain reliability and capability Human capital empowerment Use of technology tools Multi-channel learning Establishing charity foundation Offering public travel convenience Expanding zero-emission,low-carbon footprint products and services Reducing production cost and our carbon footprint through the use of renewable energy Improvement of environmental protection and green technologies Optimization of resource acquisition and allocation Climate-change emergency plans Material reuse Battery recycling Quality management Customer demand study and satisfaction survey Ensuring customers information security Protecting intellectual property rights Strict review of marketing contents Paying attention to the anti-corruption,environmental and social performance of supply chain Independent R&D and product innovation Developing car sharing business Setting medium and long-term carbon neutrality targets Planning product life cycle assessment Monitoring pollutant emissions Promoting paperless office Monitoring the use of company vehicles Managing waste classification Constructing green plants Providing equal opportunities Ensuring employee diversity Offering reasonable compensation and benefits Well-designed trainings and promotion systems Protecting occupational health and safety of employees Enhancing social value of our brand Creating job positions Engaging in public welfare Actively participating in poverty alleviation2627X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TXPeng actively integrates sustainability management into all aspects of the Groups operations and management.We actively consider stakeholders demands and suggestions in our business,and have developed the stakeholder communication and engagement procedures as demonstrated in the table below.With the establishment of the ESG Committee,we will further improve the regular stakeholder 1.3.3.Stakeholder Communications StakeholdersAgendaCommunication Channels/MethodsCustomers and ConsumersEmployeesInvestorsSuppliersIndustry/Standard AssociationsThe PublicMediaGovernments7 Product quality Service and experience Information security and privacy protection Remuneration and benefits Occupational health and safety Training and education Diversity and equal opportunities Corporate governance Return on investment Risk management and control Information transparency Supply chain management Cost control Fair competition Product quality and safety Product planning and innovation Pandemic prevention and reaction Poverty alleviation Assistance for the disadvantaged groups Brand reputation Compliant operation Tax payment in accordance with laws Energy conservation and emission reduction Online promotion Offline showcase and promotion activities WeChat Official Account New product release conference Market research Customer satisfaction survey Townhall meeting Employee training General meeting of shareholders Roadshows Regular information disclosure Email and telephone enquiries On-site investigation Supplier meetings and review Supplier contracts and agreements Supplier trainings Industry information exchange and sharing Participation in community projects Public welfare activities Offer job opportunities Press release Media exchange meetings Government-enterprise seminarscommunication to engage stakeholders in reviewing the current status of the Groups sustainable development,identifying the risks and opportunities that the Group may face in the development process(including climate risk management and target setting),and will take effective measures to respond to the expectations and demands of stakeholders.7 We did not make any contributions to and spending for political campaigns,political organizations,lobbyists or lobbying organizations,trade associations and other tax-exempt groups.Xpeng Team2829X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TWe recognize the importance of the identification and management of sustainable development issues.Through stakeholder communications and investigations,we collect opinions and feedback from shareholders,governments,employees,customers and other stakeholders to identify important ESG issues.We disclose the most material issues identified in this report and will enhance our sustainable management continuously.Review the material issues related to the Groups sustainable development,take into consideration of the stakeholders concerns,conduct benchmarking analysis on the best practices of domestic and global peers in order to identify the most material issues of the EV industry.Summarize the evaluation criteria of the ESG rating and index in the capital market,such as the criteria of MSCI ESG Rating and the Dow Jones Sustainability Indexes(DJSI),and refer to GRI Standards and HKExs ESG Reporting Guide,in order to identify the Groups targets and potential risks in the field of sustainable development.Collect opinions from directors,management,employees,customers,investors,partners,media,the public and other stakeholders on the XPengs sustainable development issues in daily operations.We rank the identified material issues by two dimensions,i.e.“importance to the companys development”and“importance to stakeholders”based on relative materiality and we engage with the Groups management and external professionals to review the results of materiality assessment.1.3.4.Materiality Assessment1)Identification and management of material issues2)Stakeholder communications3)Ranking of identified material issues4)Materiality Mapping MatrixXPengs Materiality AssessmentImportance to Xpengs Sustainable DevelopmentOccupational Health and SafetyOperationComplianceTalent Attrationand RetentionCustomer Servicesand CommunicationsProduct Quality and SafetyInformation Securityand Customer PrivacyGreen ProductResource EfficiencyProduct Planningand InnovationSupply ChainManagementLow ImportanceMedium ImportanceHigh ImportanceImportance to Stakeholders3031X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TAreaPlanDoCheckAct Safeguard shareholders interest with a stable governance structure and risk management;Adhere to laws®ulations and business ethics to develop a sustainable operation for economic development.Create an exceptional mobility experience via technology and innovation;Apply technological breakthroughs in new energy,intelligence,connectivity and shared mobility on consumers products;Set indicators to formulate relevant workplan to provide quality products and excellent services.Support Chinas carbon neutrality goal and global climate change mitigation;Obtain green certifications in products,construction and factories;Continuously refine a life-cycle environmental management system to lower energy consumption and pollution.Cultivate employees to support enterprise sustainable development,help employees achieve their goals and protect their interests;Set a life-cycle plan for XPeng employees and plan for their compensation and benefits,training and development,health and safety,etc.Refine our governance structure&risk management according to listing rules,investors suggestions,and laws and regulations;Implement policies and trainings on compliance,to fulfil our commitment on laws and regulations and business ethics.Invest in various technologies and apply on new products to realize its uses;Refine quality management system and implement various quality assurance and improvement;Obtain quality management certification like ISO 9001,IATF 16949,ISO 26262;Trainings for enhancing service personnel to provide better service;Continuous communication with customers and resolve customer complaints quickly.Develop advanced technologies to provide a variety of high-performance new energy vehicles;Build green factories,upgrade production process and equipment to lower energy consumption;Upgrade facilities for better treatment on wastewater&air pollutants.Tailor-made trainings for different employees;Improve and safeguard employees benefits and interests;Eliminate and mitigate risks and hazards according to the system of occupational health and safety;Communicate with employees via various channels to increase their cohesiveness.Continuous review on the effectiveness of risk management by the Board,management,internal control department.;Listen to regulators,investors and capital markets suggestions.Market reception on new products to validate the outcome of R&D;Complete trainings on service personnel and handled 100%of customers complaints;Conduct customer satisfaction survey and benchmark with peers.Review sales and market reception of new energy products;Monitor various environmental indicators performance.Check the completion of employee training programs;Conduct employee engagement survey to identify weakness and room for improvement;Review occupational safety indicators performance.Continue to refine governance structure&risk management,and enhance the information transparency to our stakeholders.Optimize product planning and innovation based on market;Enhance measures on quality management to improve quality;Improve based on feedback from complaints and surveys,enhance customers experiences.Swiftly adjust strategy to accommodate market and fulfil strategic goal;Set up specialized task force to accelerate formulation of carbon reduction;Rectification based on the environmental indicators accomplishment.Broaden paths for employees personal development and communication channel to improve their trust in the enterprise.Corporate GovernanceBusiness OperationEnvironment ProtectionHiring and Employment8 Currently,we have just started our explorations in the social welfare area.Referring to the PDCA management model,we aim to provide volunteer services or convenience in the focused contribution areas with the advantage of our brand and products.XPeng is proactively taking social responsibilities and improving our social values.In light of the findings of the above signification issues,we examined the consistency between the results and the current sustainability plan,further strengthened the management and disclosure of material issues,and made appropriate adjustments to the work plan for the next year.Meanwhile,in the corporate governance,business operation,environment protection,hiring and employment and community contribution8 areas,we effectively control and manage processes and improve the quality of our work in accordance with the PDCA(i.e.plan,do,check,act)management model in order to promote our development through a virtuous circle and meet the demands and expectations of our stakeholders.3435X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R THigh Quality and Innovative Smart EV Products2XPeng adheres to the core principle of“quality manufacture and ecological operation”,aiming to build high quality smart EVs with“full-stack in-house R&D,continuous innovation”.We intend to offer revolutionary mobility experiences to our consumers.We believe this can be achieved by rapid software innovation and seamless integration with hardware,which enable us to lead the innovation of technologies and provide differentiated Smart EV products to our consumers.In addition to the improvement of the product quality,we also make comprehensive efforts in sales,after-sales and charging services,aiming to provide customers an all rounded experience throughout the product life cycle with operation and service.3637X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R T2.1.1.Product Quality ManagementXPeng values quality in our corporate culture and emphasizes the sense of responsibility on quality to all employees.Rooted in our constant quest to improve the user experience,we aim to build safe and quality smart electric vehicles,equipped with global leading advanced driver-assistance software,hardware and services.2.1 Product Quality and SafetyQuality ManagementSystemQuality System EvaluationQuality Objective ManagementProduction Preparation ManagementProduction Process ManagementAfter-sales Service ManagementComponents Quality Management Formulate the Quality Management System Manual in strict accordance with the National Standard of the Peoples Republic of China-Quality Management Systems Requirements,establishing a quality management system covering the entire process and value chain from parts procurement,new vehicle development,manufacturing to marketing.Regularly review the Groups quality system in accordance with the Management Review Procedures of the Group to optimize our management methods in a timely manner,and continuously improve our product quality.Set up quality objectives at various levels in accordance with the Quality Objective Management Procedures of the Group.The Quality Department of the Automotive Technology Centre is responsible for breaking down and managing the quality objectives and establishing the quality performance evaluation system.Ensure the vehicle development meets the expected schedule,quality and cost in accordance with the Vehicle Design and Development Control Procedures;carry out process development and ensure new vehicle quality maturity based on the New Vehicle Production Preparation Management,standardizing production preparation management and improving the efficiency and effectiveness of production.Standardize management on vehicle production process in accordance with the Production Process Management Procedures of the Group to control the quality during the production process and ensure mass production quality.Provide customer service in accordance with the After-sales Service Management Procedures and Customer Complaint Handling Procedures of the Group,and quickly respond to customers comments and suggestions.Manage and control the quality of suppliers parts and components in accordance with the Management Measures for Approval of Production Parts of the Group.XPeng Quality Management System3839X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TEstablishing Quality System ManagementImproving the Customers Service ProcessOptimising Product Development ProcessEnhancing Supply Chain ManagementRaising Quality Inspection StandardsThrough establishing a closed-loop quality management system and periodic review mechanism,we have optimized quality control over R&D,manufacturing,supply chain and after-sales market.Given the connectivity features of smart EVs,XPeng has been enhancing the smartification and the driving quality of our production vehicles.In addition,XPeng also spares efforts on improving the quality of suppliers and adopts reasonable suggestions from customers to make our products even smarter and more reliable.In 2020,in line with the Groups quality control policy and business strategy,we continuously improved our product competitiveness and service capabilities,effectively operated and continuously improved our quality management system to enhance product quality and customer satisfaction.We set up the Quality Management Center to release annual quality objectives at the beginning of each year,and release project quality objectives at the conceptual stage of project development.We develop quality objectives in line with the SMART principles(Specific,Measurable,Attainable,Relevant and Time-bound)”,and delegate these objectives to different business units and processes.We also continuously track,analyze and monitor the implementation to improve quality performance.Set up quality system management for Zhaoqing Manufacturing Base,and certify the entire process,including the R&D quality control,production process,and sales services.Objectives directly related to vehicle quality or customer satisfactionProduct quality objectives directly related to process control resultsQuality objectives on process control by each centre/department/unitImprove the collection and working process,build a complete recall mechanism and a sound customer complaint system;rapid response and follow up on customer complaints on Xpeng G3.Promote the mass production of XPeng new model P7,optimise and improve the development process of new models,prevent existing problems from getting into the development of new models,strengthen design verification and road simulation tests,so as to expose problems in advance and get timely improvement.Optimise and improve quality control over the supply chain,strengthen supplier management for mass-produced models;drive the quality maturity of new models of suppliers to ensure stable quality of new models of suppliers.Establish and improve the quality assurance system of Zhaoqing Manufacturing Base,implement process quality supervision and control over the five major workshops;set process quality indicators and quality threshold,formulate special measures for improvement;and establish complete vehicle quality inspection standards to ensure the delivery quality of XPeng P7.XPengs Key Measures for Product Quality Management in 2020XPeng Three-tiers Quality Objective SystemXpeng Five Parts of Product Quality ManagementTier-1 Quality ObjectivesTier-2 Quality ObjectivesTier-3 Quality ObjectivesR&D QualitySupply Chain QualitySystem QualityManufacturing QualityMarketing Quality XPeng P5 Test4041X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R T4243X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TAt present,XPengs in-house quality management system,covering R&D,manufacturing,sales and services,has passed the IATF 16949(Automotive Quality Management System Standard)and obtained the certificate of ISO 9001:2015(Quality Management System).XPeng also develops and verifies key components in accordance with the functional and safety requirements of ISO 26262 for road vehicles.XPeng Quality Management System CertificationXpeng P7 Top ViewXpeng P7 InteriorISO 9001:2015Quality Management SystemIATF 16949Automotive Quality Management System StandardISO 26262Road Vehicles-Functional Safety2.1.2.Product Quality AssuranceXPeng conducts product quality assurance in accordance with the requirements of relevant laws,regulations and rules of the Peoples Republic of China,guaranteeing that the models being sold meet the requirements of national mandatory standards,and are consistent with the declaration information of the Announcement of the Central Peoples Government of the Peoples Republic of China,the Catalogue of New Energy Vehicle Models Recommended for Promotion and Application,and the Catalogue of New Energy Vehicle Models Exempted from Vehicle Purchase Tax.We have established an integrated after-sales service,emergency response system,power battery recycling and product quality and safety responsibility program to ensure that we comply with relevant laws and regulations within the jurisdictions of our operations.XPeng offers competitive warranty terms for different models,covering vehicle repair,replacement and refund,which meet the required standards of product failure warranty services stipulated by laws and regulations.We annually make provisions to product warranty by referencing to the sales volume and the expected unit costs for warranty.As of December 31,2020,we had product warranty provisions of RMB111.35 million(USD 17.1 million).Since the implementation of the Regulations of the Peoples Republic of China on the Recall of Defective Automobile Products in 2004,XPeng has fully implemented the automobile recall mechanism.To protect consumers rights and interests,we have been strictly following the Letter of Commitment for After-sales Service of Vehicles and Power System that we drafted.In the event of safety-related technical problems,we will analyze the cause of the incident through technical support,and report the incident in accordance with the requirements of relevant government entities;if a recall is required,our internal departments will work together to suspend the sales or delivery of vehicles with found but yet to be eliminated defects;after the recall,XPeng will provide a summary report to facilitate continuous quality improvement.During the reporting period,XPeng had no incidents related to product recalls.In order to realize the goal of“building first class smart EVs shaping mobility experience of the future”,XPeng identified three pillars of quality control,i.e.quality design&development,quality products and quality services and focuses on developing four core capabilities,i.e.control over software quality,reliability management of batteries,motors and electronic control,lean production,and supply chain quality.We also plan to improve management from organization,capability,process,system and culture,strengthen comprehensive and efficient quality control.We believe quality and execution of it is the key to deliver internationally renowned smart,reliable and quality products.The result of the 2021 JD Power China New Energy Vehicle Initial Quality Study(NEV-IQS)proves our efforts in upholding quality.As mentioned,Xpengs G3 was selected by consumers as the best compact NEV in terms of quality and ranked first in consumer satisfaction on driving experience,infotainment systems as well as seats.4445X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R T2.1.3.Product SafetyXPeng has established a New Energy Vehicle(NEV)corporate monitoring platform in accordance with GB/T 32960-2016 Technical Specifications of Remote Service and Management System for Electric Vehicles.The platform integrates functions such as fault monitoring,data monitoring and remote diagnosis and enables real-time monitoring on the vehicle,power battery,driving motor,vehicle failure,etc.The platform also passes the testing by Chinas regulatory platform and has obtained the conformity report from the National Monitoring and Management Platform for New Energy Vehicles.In order to ensure the safe operation of vehicles,XPeng has produced the Management Measures for Fault Alert Handling of Vehicle Management Platforms to monitor vehicle faults in real time.When there is a fault,the monitoring platform will automatically send the information to the customer service center,and the customer service staff and after-sales technicians will address it in a timely manner.XPeng always utilizes the latest safety protection technology and safety products,and continues to fulfil its commitment to build the safest vehicles.The batteries of XPeng P7 and G3 have passed 17 rigorous inspections,out-performing national standards.Dustproof and waterproof reach the highest level of IP68,where the battery pack can still work normally after being immersed in 1m deep water for 48 hours.In 2020,XPeng dismantled and analyzed an XPeng G3 after driving for a mileage up to 150,000 kilometers and found that the vehicle remained satisfactory in terms of passive safety protection,product quality,vehicle durability and reliability.Vehicle Body Safety Assessment for XPeng G3 and XPeng P7Battery Safety Outperforms the International StandardsIn-depth Research on the Durability of VehiclesXPeng P7 Leads the Industry with the first i-VISTA 5-star Smart Car RatingXPengs G3 and P7 received five stars with a comprehensive score of 92.2%,89.4%respectively in the crash and safety test of China New Car Assessment Program(C-NCAP),while XpengsP7 scored 98.51%in active safety,the highest score for electric vehicles so far.In addition,XPeng G3s received 4“excellent”and 2“good”in China Insurance Automotive Safety Index(C-IASI).According to the i-VISTA(Intelligent Vehicle Integrated Systems Test Area)test of the first batch of intelligent vehicles of 2021,the XPeng P7 became the first vehicle to receive the 5-star rating from the i-VISTA intelligent vehicle testing platform in China.The P7 achieved“Excellent”rating from the i-VISTA in smart safety.The car also obtained full marks in active safety technologies,such as AEB(Autonomous Emergency Braking),LDW(Lane Departure Warning)and RCW(Rear Collision Warning),bringing consumers safer and smarter travel experience.XPeng G3 Receives C-NCAP Five-StarXPeng P7 Receives i-VISTA Five-star4647X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R T2.1.4.Production Safety ManagementIn order to strengthen the production safety management of XPeng and effectively prevent and control production safety and occupational hazards and accidents,in strict compliance with the Production Safety Law of the Peoples Republic of China,Fire Control Law of the Peoples Republic of China,Law of the Peoples Republic of China on Prevention and Control of Occupational Diseases and GB/T33000 Guideline of China Occupational Safety and Health Management System,the Group has set up a special safety management office to organize and coordinate safety management,and formulated the Production Safety Management Measures,which is applicable to three major production safety areas,including production safety,vehicle driving safety and information safety.A safety and health committee was established.One or two meetings were organized every year.The President and Senior Vice President of the Company serve as the directors of the safety and health committee,they are responsible for reviewing and making decisions on safety and health strategies and other major related issues.In addition,we have developed the production safety responsibility system covering all departments and all positions following the principles of“one position with dual responsibilities”and“territorial management”,which specifies the production safety responsibilities and assessment standards for each company member.The safety management office has formulated a five-year safety plan and an annual safety activity plan,and delegate specific responsibilities to implement and report the plans to corresponding business units.We have established a sound production safety education and training system,conducting safety education and training for employees in various forms to ensure they are equipped with necessary safety capabilities.Employees who have not passed safety education and training are not allowed to onboard.In addition,in order to implement the principle of“safety first,one-vote veto policy against safety incidents”,we have also formulated the Production Safety Reward and Punishment System for supervision and implementation,and conducted production safety assessments for all business units,in an effort to achieve zero production safety accident throughout the year.Safety Feature4849X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TXPeng is committed to creating a safe,comfortable and transformational mobility experience through business development driven by innovative technology and quality production under strict control.XPeng has currently launched three smart electric vehicles,and will continue to accelerate product development and expand our product portfolio.Our Vehicle Design and Development Control Process defines 15 milestone stages for vehicle design and development.We have established a product pre-research process to demonstrate the definition,competitiveness,and feasibility of our new products from five perspectives:market,users,competition,In addition to robust product planning and development systems,XPeng also has a large R&D team,which equips us with best-in-class innovation capabilities and forms our core competitiveness.As of March 31,2021,our group had 2,440 employees in China and the United States from research and development team,of which 62.1%,16.3%and 21.5%were on automotive design and engineering,advanced driver-assistance and intelligent operating system,respectively.For the year ended December 31,2020,R&D expenses were RMB 1,725 million.2.2.1.Product Development and Ecosystem2.2 Product Planning and InnovationThe 10,000th G3 and P7 Rolled OutXPILOT2.5 ADAS,Xmart OS in-car intelligent system,dynamic design,C-NCAP five-star safety standards,super charging.SEPA intelligent platform,XPILOT 3.0 ADAS,intelligent cockpit,Xmart OS in-car system,concert hall on the move,advanced sport sedan curve design,NEDC 706km super-long range,cage-shaped vehicle body structure,wing door design.XPILOT 3.5 ADAS,dual LiDAR,Xmart OS 3.0 in-car system,customized third space for XPeng owners,X Robot Face dynamic intelligent aesthetics design,X-Safety carefree safety,X-HP practical endurance.XPeng G3*9XPeng P7*XPeng P5*technology,and resources.We conduct internal discussions every year to determine the product portfolio and the product launch time in the next 5 to 10 years through product spectrum management and provide guidance on our future product development.On October 20,2020,the 10,000th XPeng P7 officially rolled off the assembly line,setting the fastest rolled out record among the emerging NEV makers.9 *Vehicle features might vary from version to version.5051X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TWith its strategic positioning of“Smart EVs Tailored for the China Market”,XPeng has been producing popular smart EVs for Chinese consumers via the innovation of ADAS,connectivity and core vehicle systems.Now,XPeng has become one of the top players in ADAS.Our Smart EVs offer impressive performance,attractive design,and a fun driving experience.Our in-house engineering know-how and close collaboration with various business partners enable our products to achieve high technical 2.2.2.Product Innovation ManagementXPeng LiDARAI Voice AssistantXPeng Products R&D and Innovations in 2020goals in various areas,such as safety,reliability,range,vehicle dynamics,as well as noise,vibration and harshness.We design and develop our own software,data and core hardware technologies,and we also design powertrain and E/E architecture in-house,which we regard as our core competency.In 2020,XPeng has been constantly innovating its ADAS and in-car intelligent operating system to create innovative mobility experience for consumers:The global mass production model-XPeng P5 is the first mass production model to be equipped with LiDAR.With the 150-degree lateral front vision,centimetre-level positioning accuracy with a maximum detection range of 150 metres,the angular resolution of 0.16 degrees and higher spatial resolution,XPeng P5 can better detect pedestrians and obstacles on the road,irrespective of ambient light.XPeng P5 is set with up to 32 perceptual sensors,integrating vision,radar and high-precision positioning units Global Navigation Satellite System(GNSS)and Inertial Measurement Unit(IMU)for environment perception,and showing stronger perception ability,which is more suitable for Chinas complicated road conditions.Our AI voice assistant is capable of supporting natural and continuous dialogs without having to be activated repeatedly.We have developed natural language processing and natural language understanding capabilities based on deep-learning neural networks,which can identify keywords,categorize text and understand semantics.In addition,the AI voice assistant can focus on instructions from one person without being distracted by the voice from others in the vehicle,based on our deep-learning neural network technology,which can dynamically reduce semantic noises in the vehicle.Leveraging our full-duplex concurrent voice streaming technology,our A I voice assistant currently can receive and execute as many as 10 requests in only 25 seconds.Furthermore,it can execute requests covering a broad range of scenarios.Advanced Driver-Assistance TechnologiesAI Voice Assistant5253X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TDigital Car KeyIntelligent Third SpaceIntelligent HardwareLeveraging our in-car app store,we have built a broader ecosystem to better serve our customers.The in-car app store offers a wide selection of apps,including music,audio books,games and video ones,thereby making the in-car experience more enjoyable.To build our smart connectivity ecosystem,we have also opened certain vehicle hardware functions to third-party apps.XPeng P5 develops a number of intelligent hardwares compatible with the vehicles:drones,smart car air freshers,car refrigerators,remote-controlled and portable 12V power supply,etc.,bringing more possibilities to smart life on the road.We have developed two types of digital car keys for the convenience of our customers.First,our XPeng mobile app offers a car key function by utilizing Bluetooth.Secondly,through collaboration with third parties,we have enabled car key functions on certain third-party devices equipped with NFC capabilities.The car in the future is no longer just a means of transportation,but a mobile and intelligent third space,to satisfy more different needs of users.Based on the user-centred scenario,we have developed X-sleep(smart sleep system),X-play(movie-watching,games,singing,etc.),X-life(office and life)and other modes and corresponding product packages,which provides better user experience.Ecosystem for Third-party Apps and ServiceAIoT Hardware EcosystemDigital Car KeysScenario Planning for Intelligent Third Space,Configuration and Development of In-car ProductsXPeng will continuously invest in smart electric vehicles,and explore the mainstream market segments of passenger vehicles,sedan and SUV,providing users with smart electric vehicle products for various living and working scenarios.5455X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TIn order to establish a sound intellectual property protection system,encourage corporate inventions and creations,protect the companys own intellectual property rights,resist unfair competition,and protect ourselves from infringement and improper use of third-party intellectual property rights,XPeng established and implemented the Intellectual Property Protection Rules and Intellectual Property Management Measures.Meanwhile,in order to promote the companys technological innovation,strengthen the companys management and protection of innovation achievements,and establish an effective company patent management system,we followed the Patent Law of the Peoples Republic of China and the Regulations for the Implementation of the Patent Law of the Peoples Republic of China and formulated and implemented the Patent Administrative Measures.As of March 31,2021,we had 759 patents(including 202 invention Our procurement and supply chain department,technical department,quality center,project management department and other departments jointly further shortlist the qualified suppliers.The procurement and supply chain department organizes on-site investigations of the suppliers conducted by the quality department and the technical department to conduct,and arranges a meeting to determine the supplier selection plan.For the selection of suppliers,we promise that all cooperating suppliers must strictly comply with the national regulations on employee occupational health and business ethics.We also comprehensively consider the suppliers quality level,delivery capability,price level,technical capabilities,support services,human resources,reputation,business ethics track record,and existing cooperation status;for supplier access standards and qualification requirements,we require our suppliers to be qualified for IATF 16949/ISO 9001 or other equivalent certifications.Meanwhile,we will prioritize the cooperation with leading domestic and international suppliers in the passenger vehicle sector,and uphold strict standards on technology,quality,strategic cooperation,cost reduction and order delivery,to ensure that we work with the best suppliers who share our sustainable development vision.For suppliers who cooperate with us for the first time,we require them to fill in the“Supplier Basic 2.2.3.Intellectual Property Managementpatents),1,375 pending patent applications,504 registered trademarks and 116 pending trademark applications in China and certain other jurisdictions.Furthermore,we have confidentiality and proprietary rights agreements with our employees,and have due diligence questionnaires for prospective employees to assess the risks of potential disputes arising from hiring employees of our competitors.We regularly monitor the status of intellectual property rights of our products under development to avoid infringement.In addition,we include contract clauses relating to the ownership and protection of intellectual property in each of our research and development agreements with business partners.We also require our business partners to avoid infringement of intellectual property rights of other third parties.During the operation,XPeng maintains close cooperation with partners to promote the coordinated development of the industrys value chain and achieve synergies within all parties.In compliance with the Law of the Peoples Republic of China on Tenders and Bids,we have established a supplier management system to promote fair and open procurement practices.We have formulated and implemented multiple internal management policies,including the Supplier Selection and Management Measures,Procurement Control Process,and Compliance Management on Prohibited Substances and Recycling.This enables us to implement closed-loop management processes,including supplier sourcing and pre-selection,supplier site inspection,supplier selection and designation,agreement signing,component product development/integrated procurement design phase,purchase order release,payment processing,supplier list management,supplier performance evaluation and supplier information change management.These processes enhance the quality control within our supply chain and ensure that we select the most qualified suppliers.As of December 31,2020,among the Groups more than 300 suppliers in the procurement of components,which are all located in mainland China.2.3.1.Supplier Selection2.3 Supply Chain ManagementInformation Survey Form”.To improve the cost effectiveness and manage the supply chain risk,we are aiming to localize our supply chain where practicable and thus a majority of our components are sourced and purchased in China.XPeng Assembly WorkshopSupplier Site Inspection5859X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TFor parts and components procurement,we will evaluate supplier performance from three aspects,i.e.quality,business terms,and delivery.The performance evaluation cycle is divided into two categories:monthly performance and annual performance.For comprehensive procurement,we will factor in the progress of each project in our evaluation and rate suppliers after project delivery.For marketing/administrative procurement,we conduct performance evaluations on suppliers every six months based on project progress.In addition,to establish a sustainable supply chain,we review suppliers regularly by means of process In 2020,in order to help suppliers better understand the quality management process and requirements of XPeng for new models and mass-produced parts,we carried out a series of supplier trainings for 100%tier 1 suppliers,including trainings on APQP(Advanced Product Quality Planning)promotion,29 quality assurance methods,OTS(Off Tooling Samples)/PPAP(Production Part Approval Process)authentication process,error-proofing,4M(Man,Machine,Method,Material)change management,historical defect verification,promotion of key management projects,5 Principles/8D(Eight Disciplines Problem Solving)problem solving,variability management,etc.In the future,the procurement and supply chain department will strive to implement more effective measures of supply chain management.2.3.2.Supplier Performance Evaluation2.3.3.Supplier TrainingXPeng adheres to the after-sales service concept of“friendly service and comfortable experience”,attaches great importance to quality control and comprehensive after-sales service management system,and has sophisticated service standards and process systems in place to offer all-rounded and diversified after-sales service,to improve customer satisfaction.As of December 31,2020,XPeng operated 54 services stores in 43 cities.To bring the premium“XPeng Club ”service experience to every consumer,XPeng Service Centre has developed the Service Operation Manual to standardize and provide guidelines to after-sales service operations.2.4 Customer Service and CommunicationXPeng Supply Chain Management Sustainability KPIsXPeng Guiding principles of Service Operation ManualSupplier TrainingCoverage&NumbersSupplier AuditCoverage&NumbersPercentage of supplier using environmentally friendly materials and recycled packaging materialsOur key activities will include separating the powertrain procurement and electrical equipment procurement,extending the supply chain management,sourcing key products from tier 2 and tier 3 suppliers,and tapping into potential risks for prevention and control in advance.We will also adopt specialized classification of products by their materials and manufacturing features,shifting from previous generic classification to facilitate centralized management based on material and manufacturing features,and gather resources for the purpose of quality improvement and cost control.Meanwhile,we will also focus on the recruitment and training of international talents,and strengthen operation capabilities to prepare for international business development and multi-base production.In line with the characteristics of the XPeng Motors Service Center,service standards and operation procedures are tailored to effectively guarantee the consistency of user experience.Service operation solutions are formulated and implemented based on the latest situation of the Xpeng Motors Service Center,which can enhance service operational efficiency and reduce operational risk.Management experience of outstanding stores in the automotive market is gathered to give high-level management guidance to the Centers management team.Improving User Service ExperienceEnhancing Operation EfficiencyUpgrading Management Levelreview,product review,special review,spot check,technical review,to improve suppliers quality assurance capabilities and ensure consistent product quality.We have set three sustainability related KPIs for our supply chain management and are aiming for a 100%coverage for our tier 1 suppliers by 2021.6061X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TXPeng Service Center is equipped with intelligent customer service robots and offers 24/7 comprehensive vehicle troubleshooting service in response to consumers demand with timely all-rounded support.We strive to deliver XPeng owners a smooth and carefree user experience and continuously promote customers mobility experience with our intelligent services including remote diagnosis and smart claim settlement”.We address customers concerns with value-added services centering on customer welfare,including ultra-long vehicle warranty and domestic roadside assistance services for unlimited times and mileage.To timely respond to customers requests,properly handle customer complaints,and enhance customer satisfaction and loyalty,the Group has formulated the Management Procedures/Measures for Customer Complaint Handling and Letter of Commitment for the After-sales Services of Vehicles and Power Systems.We follow the principles of“resolution at the first time”and“quick response”for simple online complaints,and adopt classified resolutions for offline complaints that require support from other departments based on our assessment of severity and urgency of such complaints.We aim to solve customers problems efficiently and continuously deliver our promise to customers.XPeng Service Center collects customer satisfaction data from after-sales stores on a daily basis and aggregates monitoring data and analysis in weekly and monthly reports to enhance customer satisfaction.In our 2020 customer satisfaction survey,customers responding to the survey accounted for 31%of all XPengs customers,with a satisfaction rate of 96%.In 2021,in response to customers feedback,we adopt an online evaluation method,we refine the rules for customer satisfaction survey,i.e.roll out a 5-second instant evaluation to encourage participation,and set 93%as the annual target for rate of CSI(Customer Satisfaction Index)5-star rating.2.4.1.Customer Complaint Management2.4.2.Customer Satisfaction Management%of satisfied respondents out of total number of respondents to the surveyN/AFY 2018FY 2019FY 2020Target forFY 2020N/A84%10%of customers/consumers surveyedXPeng Service Center6263X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TXPeng has always pursued to establish a virtuous mechanism to interact and communicate with the owners of Xpeng vehicles.We have established XPeng Club to serve as the first line of contact with customers.Staff from the Customer Relations Department are active in the communities as well as various XPeng customer groups and work cohesively to maintain trusted relationship with XPeng owners online and offline through listening to their feedback and communicating with them.Our Customer Service team aims to serve as a channel between our company and users and enable smooth communication,mutual growth and success.We also organize diverse customer engagement activities to strengthen customer satisfaction and loyalty,including X-MOMENT,XPeng Club and XPeng Owners Day.On July 17,2021,a sudden heavy rainfall occurred in Henan.XPeng quickly issued an announcement and organized nation-wide resources to fully carry out emergency and rescue services for the disaster-stricken area in Henan.XPeng strives to provide effective help to customers under emergency situation and provide support to the front line.In 2020,XPeng held 20 meetings of medium to large scale to celebrate the“get-together of XPeng owners”and to demonstrate the“XPeng-owners-centered”concept.These activities were widely recognized with over 1,000 customers participating.To show its“sincere love for customers”,XPeng celebrates the 10th of every month as“XPeng Owners Day”,carrying out customer care activities with various themes such as“Free Masks”,“Assisting Farmers”,“Customized P7 Model”,etc.During the reporting period,11 sessions of“XPeng Owners Day”were held with 86,000 participants,equivalent to 93%of owners.XPeng institutes a coordinated operation mechanism of headquarters-region-store and draws on stores,the smallest operating unit,to reach out to customers and enhance customer relationship.During the reporting period,167 stores organized 758 owner activities in total,with 15,200 participants and a 5-star rate of 96.2%.2.4.3.Shaping the XPeng Owner Culture2.4.4.Emergency Service“X-MOMENT”in 20 CitiesCustomer Care on“XPeng Owners Day”Extensive Store Network Across the NationRescue ServicesEmergency SupportCharging TroubleshootingEmergency rescue:arrange rescue vehicles around Zhengzhou to participate in the rescue,and notify local stores in Zhengzhou to assist customers in carrying out trailer services;Spare parts support:increase the spare parts support for the Zhengzhou central spare parts warehouse,and try to shorten the follow-up maintenance time;Transport service:provide free transport service to car owners whose vehicles were damaged in the disaster in the form of taxi vouchers;Green service channel of insurance claims:collaborate with Insurance Companies to provide green claims service guarantee for Xpeng vehicle owners.7x24 hours support:the stores and service teams in Zhengzhou area will be on standby 724 hours to provide car owners with services within their capabilities;Emergency response suggestions and reminders:emergency inquiries were pushed forward to car owners and communities through service SMS and XPeng APP during the disaster;Community support:XPeng community,groups and official channels published the latest disaster announcements in real time,so that XPeng vehicle owners can get the latest news.The charging operation team conducted a comprehensive overhaul of home charging piles and self-operated charging stations,eliminating risks and restoring services.XPeng APP will also update the operation status of all charging stations in a timely manner.6465X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TThe global regulatory development regarding data security,e.g.the launch and adoption of the Personal Information Security Regulations and breakthroughs in new technologies such as 5th Generation Mobile Communication Technology(5G),Internet of Things(IoT),Artificial Intelligence(AI),Big Data create new challenges for data security and privacy protection.Data governance becomes a key to secure confidentiality,completion and usefulness of data.In providing products and services to customers,XPeng considers data security and privacy as our utmost priority in delivering our products and services to customers.Since the delivery of XPeng vehicles until the end of the reporting period,there were no incidents related to information security leakage or other cybersecurity violations.We are dedicated to safeguarding data security at each stage of our product and service delivery to meet customers expectations.We have launched our Privacy Policies based on the following principles:purpose;customer consent;data restriction;openness and transparency;data security;data ownership,etc.In addition,we pledge to take proper measures to protect customers personal information in line with established safety standards of the industry,to prevent unauthorized access,unauthorized public disclosure,unauthorized use,modification,damage or loss of data.We provide employees with data privacy-related trainings and require employees to report any data security breaches.Since the delivery of XPeng vehicles to the end of the reporting period,we did not receive any complaints in relation to violation of customers privacy from the customers or the regulators.In compliance with ISO27001:2013 Information Security Management Systems,we build our Information Security Management System 2.5 Information Security and Privacy Protection(ISMS),which enhances the capability of privacy protection and information security governance in terms of organizational support,process standardization,technology application,and safety operation.We are expecting ISO 27001 Information Security Management System certification and ISO 27701 Privacy Information Management System certification in late 2021.We set up the Data Compliance Committee,which is chaired by the President,and the committee is dedicated to leading our data security exploration.We also appointed professional legal privacy compliance team,IoT security team,information and technology security,privacy and security specialists to implement the committees data compliance strategy at execution level.Meanwhile,specific privacy compliance and information security protection are carried out by professional legal privacy compliance team,IoT security team,information and technology security,privacy and security specialists.With regard to personal data protection,we strictly abide by the Personal Information Security Regulations,the Measures on Data Disclosure Management.We always follow the privacy compliance requirements throughout the entire development process,and implement the“privacy compliance development guidelines”.We periodically evaluate our privacy compliance security,invite specialists to assess our privacy compliance security,and continuously cross-check our monitoring systems containing personal data.In 2020,we performed the“Special Review on Data Access Rights”on systems containing personal data to ensure compliance with laws,regulations,security requirements of privacy protection throughout the life cycle of personal data.In 2021,we will continue to carry out the evaluation of crucial systems such as the National Cybersecurity Level Protection evaluation.Data Compliance CommitteeOverseas Data Compliance Team Data Compliance Working Team Mutual cooperationReport upwardReport upwardDecision downwardDecision downwardXPeng Data Compliance Committee Organizational Structure6667X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TWe have disciplinary measures against any department or employees intentional misconduct or negligence that violates the principles,regulations on data disclosure in the Measures on Data Disclosure Management,relevant laws or regulations.We attach great importance to improving information security management and promoting awareness of information security among employees.In 2020,we conducted online and offline information security trainings for all employees,including 8 offline sessions,covering 10 core departments.Throughout our daily operations,our colleagues are also required to increase their awareness of data security through examinations,sign confidentiality agreements,and properly handle the disposal of confidential assets.During our cooperation with the third parties,we also sign confidentiality agreements with them and evaluate their security level,clarifying confidential information,obligations and liability for breach of contract,to ensure that both parties confidential information and intellectual property are properly protected,laying the foundation for long-term cooperation.6869X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TEco-friendly Operation and Environmental Protection StrategyXPeng has integrated environmental protection into all our business aspects,including construction,production,operation and daily administration.We implement the concept of“environmental protection and resource-saving”.XPeng strictly complies with laws and regulations of the countries and regions where it operates,including the Environmental Protection Law of the Peoples Republic of China,the Law of the Peoples Republic of China on the Prevention and Control of Air Pollution,and the Law of the Peoples Republic of China on the Prevention and Control of Soil Pollution.We are committed to making positive changes to promote green sustainable development and reduce the operation and production impact on the environment.7071X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TIn accordance with laws and regulations,such as the Environmental Protection Law of the Peoples Republic of China,the Law of the Peoples Republic of China on the Prevention and Control of Air Pollution,the Law of the Peoples Republic of China on Prevention and Control of Water Pollution,the Law of the Peoples Republic of China on the Prevention and Control of Solid Waste Pollution,the National Catalogue of Hazardous Wastes,the Law of the Peoples Republic of China on Environmental Impact Assessment,and the Law of the Peoples Republic of China on the Prevention and Control of Environmental Noise Pollution,XPeng establishes and implements the Environmental Protection Management Procedures,the Emergency Plan for Environmental Pollution Incidents,the Procedures for Control and Management of Sewage Pollution,the Procedures for Control and Management of Hazardous Wastes,the Regulations for Management of General Wastes,the Procedures for Control and Management of Exhaust Gas Pollution,the Procedures for Control and Management of Noise Pollution,the Environmental Monitoring In light of the actual situation,we have set up an Environmental Emergency Response Team to strengthen the prevention,management and quick and effective treatment of sudden environmental pollution accidents.We conscientiously implement the policies of“Environmental Impact Assessment on new,renovated and expanded projects”and“Three Simultaneities”,meaning that the pollution prevention and control measures should be designed,constructed and operate in sync with the main part of the project.We invest in environmental governance for optimization and improvement in processes,raw and auxiliary materials,equipment,facilities and other source aspects;We focus on equipment operation,abnormal handling,process supervision,etc.;We standardize our equipment and facility operation management and improve the level of“Three Wastes”management.We regulate the waste management in our manufacturing bases,ensure the safety of the Groups property,strengthen waste recycling and disposal process,rationally use existing resources,enhance management,turn waste into resources,and prevent waste loss.We initiate and improve the environmental and occupational health and safety management system,safeguard the environmental and occupational health and safety in the Groups office and production areas,and improve our green manufacturing capability.We organize internal promotion and training,as well as annual emergency drills and assessments to hoist the Groups ability to respond to environmental incidents and effectively prevent and control the occurrence of environmental incidents.To effectively fulfil environmental protection obligations,we act on our fiduciary duties and welcome public supervision.We regularly commission qualified third parties to monitor wastewater,waste gas,and groundwater.The monitoring results are all up to standards.During the past three fiscal years we have not paid any significant fines(USD$10,000)related to environmental or ecological issues.3.1 Environmental Management Systemand Management Procedures,the Environmental Protection Facilities Management Procedures,the Environmental Factors Identification and Evaluation Management Procedures,the Environmental and Occupational Health and Safety Management Manual.We standardize the management of environmental impact including the management of the Groups“Three Wastes”(solid wastes,waste gas,and wastewater)and noise,identify and evaluate various environmental factors to provide a basis for determining the goals and metrics of significant environmental factors,clarify the division of responsibilities of each department,safeguard the occupational environmental safety for employees,and actively promote resource conservation measures.P5 Test Drive Event7273X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TXPeng adheres to the corporate culture of quality and efficiency,innovatively adopts the core concept of X-SEG(Smart,Efficiency and Green),takes the guiding principles of“Put compliance and safety first;Keep pollution and contamination the lowest;Keep improvement and enhancement uninterrupted”,establishes and achieves environmental goals,builds and operates green factories,as well as initiates and improves the environmental occupational health and safety management system for the continuous improvement of green manufacturing level.3.2 Eco-friendly OperationStarting from the design and planning stage of our manufacturing plants,we practice the strategy of“environmental protection and energy conservation”and deploy energy-using products in conformity with the standards of“Government Procurement List of Energy-saving Products”issued by the Ministry of Finance of the Peoples Republic of China and the National Development and Reform Commission of the Peoples Republic of China.For instance,we adopt smart LED,electric machines with energy efficiency grade 210,office appliances with energy efficiency grade 1,amorphous metal transformer,and environmental-friendly refrigerants.The integrated LED light boxes that we installed for assembly line are 70%more energy efficient than fluorescent lights in traditional automobile factories.We took energy saving measures in our daily operations,such as using light/voice operated switch along the staircase,using time-delay switch for lights in courtyard,neon signs on exterior walls as well as decorative lights,applying manual lighting control in office areas to save energy during non-peak hours,using radar-sensor lights for parking lots,controlling lighting in office areas and the use of air conditioner,and adopting a central air conditioner monitoring system to adjust the room temperature according to seasonal changes.XPeng implement clean energy R&D and application projects to control carbon emission from its source.In 2021,it is estimated that the cost of electricity would be reduced by approximately RMB 2.3 million through the planned 22.6 MW Photovoltaic Carport and Roof Power Generation Project at Zhaoqing plant.The Project will generate approximately an amount of electricity of 20 million kWh and reduce greenhouse gas emissions of approximately 11,000 tons of carbon dioxide equivalents.Meanwhile,the photovoltaic 3.2.1.Energy Consumption10 Energy Efficiency Index is a classification method to indicate the energy efficiency of household appliances.Chinas energy efficiency label divides energy efficiency into five levels.Grade 1 refers to that products reach the advanced international level with the lowest energy consumption;Grade 2 for better energy conservation;Grade 3 refers to that energy efficiency of products reaches the average level of domestic market;Grade 4 refers to that energy efficiency of products is maintained below average market level;Grade 5 stands for high energy consumption and is an indicator for market access.Zhaoqing Plants Photovoltaic Carport and Roof Power Generation ProjectZhaoqing Plants Photovoltaic Carport and Roof Power Generation Projectpower generation project in Guangzhou and Wuhan Manufacturing Plants are under planning and construction,and are expected to generate energy and connect to the electricity grids in 2023 and 2025,respectively.Going forward,the Group s Zhaoqing plant will promote the use of energy-efficient equipment,turning the facility to green building,drive the use of clean energy,and reuse heat from power plants to generate hot water.XPeng focuses on effective management of water quality and usage across the operation.We actively introduce advanced sewage treatment and reclaimed water recycling technologies to improve the water use efficiency and reduce water consumption and pollution.In manufacturing plants,we recycle air conditioning condensation water,cooling tower drainage,and concentrated water of reverse osmosis(RO)membrane in electroplating stations;meanwhile,recycling water is used in cooling tower and the recycling rate of industrial water reaches 96%.A rain and sewage diversion system was equipped during the planning and construction stage of the plant to discharge clean rainwater directly into the nature.In addition,a sewage interceptor was installed at the rainwater main outlet to ensure that the polluted rainwater returns to the sewage treatment station.The waste water generated in the production process was discharged to the sewage treatment station after filter and quantified diversion;in addition,the advanced physical and 3.2.2.Water Consumptionchemical treatment technologies,biochemical treatment technologies,and membrane treatment technologies were applied to the waste water treatment to meet the standards.To improve water consumption efficiency,a treatment processing system was adopted in the Zhaoqing plant to convert waste water from the sewage treatment station into grey water.This water can reuse for factory greenery,toilet flush,car wash,and cooling towers.It can save up to 110,000 tons of fresh water annually.Going forward,we will strengthen the rain and sewage treatment systems in the plants,improve the discharge efficiency of municipal sewage,and ensure the smooth running of drainage pipes in the plants to avoid blockage.We will continue to implement water conservation measures.The Zhaoqing plant plans to use 304,000 tons of tap water,saving up to 243,000 tons.7475X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TWe strictly control the disposal of non-hazardous and hazardous solid waste.We apply cement hardening anti-seepage treatment at the waste storage sites.We have built ground leakage collection trenches,and we classify,recycle,and treat metal scraps,waste packaging materials,hazardous waste(paint residues,waste organic solvents,sludge,waste paint buckets,etc.),and domestic garbage,etc.in order to minimize the negative impact on the environment.Our painting workshop was planned in the design phase to include sustainable development concept and environmental protection features.We adopt advanced pre-treatment film technologies to reduce the production of waste paint residue by 94%and energy consumption by more than 25%;We have 49 spraying robots,and the automation rate of spraying line is more than 90%,which greatly improves the spraying efficiency and reduces the waste of paint.In terms of process selection,we adopt the worlds leading b1b2 intermediate-free coating processes to reduce the air volume and baking times of the topcoat;in addition,we circulate the air in the spray room to save energy and reduce the exhaust emission by 30%.According to the annual maintenance plan,our technicians in coating workshop regularly maintain the spraying robot and slag scraper equipment to ensure the smooth operation of the equipment and reduce material use and paint waste.We recycle empty plastic buckets tighter with our supplier and consider the ton tank recycling and transportation feasibility for the industry.The average reduction in coating waste was about 16.4%.In addition,weve built our own waste storage,and it started to operate in June 2021.This waste storage provides better storage and transfer conditions for recyclable materials and improves the recycling efficiency of recyclable resources.3.2.3.Waste ManagementXPeng Targets and Progresses of Solid Waste ManagementXPeng Measures on Waste Classification ManagementTo reduce the disposable packaging from the source,we require our suppliers to gradually adopt recyclable packaging of parts.Currently,80%of our parts are packed with recyclable boxes.As of May 2021,the Group has achieved an 100%recycling and reuse rate of recyclable solid waste.In the future,we will continuously optimize solid waste management measures with a target of 100%solid waste recovery.In response to Chinese governments policies,we have developped a waste classification,recycling and treatment system in advance,and have deployed trash bins wih waste classification signboard in all plants.In addition,we closely cooperate with the production unit to build a recyclable resource management platform to classify and recycle all types of solid waste,and increase the reuse rate of recyclable resources.Provide trash bins with waste classification signs in all areas of the headquarter building in accordance with the Guangzhou municipal policies on waste classification;place tea dregs bins and kitchen waste bins beside the drinking fountains and pantry;place recyclable waste and trash cans in the public halls in the office area and the photocopying areas;place trash cans in the restroom;cooperate with government entities to report the status of waste sorting daily,and make daily waste sorting account records.Regularly organise and carry out domestic waste classification publicity to guide employees to develop the habit of waste classification and recycling;gradually implement waste classification at each plant;post waste classification publicity knowledge in front of the TV and garbage room on each floor to improve the environmental protection awareness of all employees.Build a recyclable resource management platformSet up waste classification and recycling stationsBuild up awareness of waste classificationIn the future,we will apply waste solvent reduction equipment to separate 80%of the water in the waste solvent,and the remaining 20%of the concentrated waste solvent will be outsourced for treatment.It is estimated that RMB 2,560 would be saved per ton of waste solvent and the equipment can also further reduce the amount of hazardous waste and the disposal costs.XPeng Automated Workshop7677X P E N G I N C.E N V I R O N M E N TA L,S O C I A L A N D G O V E R N A N C E R E P O R TWe use high-efficiency filter collectors in the welding workshop to absorb smoke and dust,realizing a dust removal efficiency of 99%.We have installed a mobile welding fume purifier to purify the welding fume exhaust gas,absorb dispersed carbon dioxide,and release the purified gas into the workshop.This system can improve the air quality in the working environment,reduce exhaust gases and other pollutants,and achieve green production.We use environmentally friendly water-soluble paints in the paint shop,which greatly reduce the production and emission of organic pollutants from the source.In addition,we adopt the most advanced“Regenerative Thermal Oxidizer(RTO)”device in the industry,which can achieve the fully burning and decomposition of the organic pollutants in the exhaust gas and purify the organic pollutants.XPeng integrates the concept of sustainable development into our business activities to increase the utilization rate of resources and advocate a parallel system of green management and manufacturing.Weve formulated and implemented the Conference Room Management Rules,5S(Seiri,Seiton,Seiso,Seiketso,and Shitsuke,that is,tidying,neatening,sweeping,cleaning,and maintaining)Management Rules,Business Travel Management Rules,Administrative Measures on Car Renting by Employees,Vehicle Management Rules,Administrative Measures We take greening measures at the manufacturing plants.We have planted trees and low shrubs in the greening areas to form a green belt that can absorb and reduce noise.We keep equipment that generates enormous noise such as air compressors and other equipment inside a building to reduce noise pollution.We apply full-line sound insulation closure systems made of sound-absorbing materials in the press workshop.We also select low-noise equipment and take necessary shock absorption and noise reduction measures.3.2.4.Exhaust Emission Management3.2.6.Green BusinessXPeng Measures on Saving Resources3.2.5.Noise ControlEncourage not to enable the screen protection function of LCD,and to power off the display when a long-time idle is expected;encourage to adopt for the computer with a power management setting that will activate the sleep mode if the screens not in use for over 5 minutes;encourage not to place any high-power electric device at employees seats,such as electric pot,induction cooker,microwave oven,etc.The Company has established a hardware and software system for paperless office to build online series connections between different links such as approval and signing that used to be processed separately,giving more convenience at the links of review,approval and signing,saving the onerous steps of document printing,and reducing paper consumption;a high-efficiency instant communication tool is applied,which enables instant commenting and communication on the circulated documents in the form of online documents,so as to improve the general working efficiency;the Company has an email and Office Automatic(OA)system to reduce the amount of printing and copying for daily document review&approval and communication;double-sided printing with recycled paper is encouraged in the use of printer or copier.A meeting room management sys
2022-07-20
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任何前瞻性陈述仅以本协议日期或陈述书中指明的日期为准。根据GRIs定义报告内容的原则，吉利德在制定2021年年度回顾时考虑了利益相关者的包容性、可持续性背景、重要性、完整性和其他报告原则。除另有说明外，本报告所载活动和数据涵盖2021年1月1日至2021年12月31日期间。
2022-07-14
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Compensation Report 2021Deutsche Bank1 Deutsche Bank Compensation Report 2021 Compensation Report Introduction.2 Compensation Report for the Management Board and the Supervisory Board.2Employee Compensation Report.2Compensation of the Management Board.3 Principles for Management Board Compensation.3Responsibility and procedures for setting and reviewing Management Board compensation.3Guiding principle:Alignment of Management Board compensation to corporate strategy.3Compensation principles.4Compensation-related developments in 2021.4Adjustment to the compensation system from January 1,2021.4Approval of the new compensation system by the Annual General Meeting 2021.6Changes on the Management Board in 2021.6Development of business and alignment of Management Board compensation to corporate strategy in 2021.6Principles governing the determination of compensation.7Structure of the Management Board compensation system 2021.7Composition of the target total compensation and maximum compensation.8Application of the compensation system in the financial year.10Non-performance-based components(fixed compensation).10Performance-based components(variable compensation).10Appropriateness of Management Board compensation and compliance with the set maximum compensation.20Deferrals and holding periods.22Backtesting,malus and clawback.23Information on shares and fulfilling the share ownership obligation(Shareholding Guidelines).23Benefits as of the end of the mandate.24Benefits upon early termination.25Other service contract provisions.26Deviations from the compensation system.26Management Board compensation 2021.27Current Management Board members.27Former members of the Management Board.30Outlook for the 2022 financial year.31Planned changes on the Management Board.31Total target compensation and maximum compensation.31Targets and objectives for 2022.31Compensation of members of the Supervisory Board.33 Supervisory Board Compensation for the 2021 and 2020 financial years.33Comparative presentation of compensation and earnings trends.36 Independent auditors report.38 Responsibilities of the executive directors and the supervisory board.38Auditors responsibility.38Opinion.38Other matter formal audit of the remuneration report.38Limitation of liability.39Compensation of the employees(unaudited).40 Regulatory Environment.40Compensation Governance.41Compensation Strategy.42Group Compensation Framework.43Employee Groups with specific Compensation Structures.44Determination of performance-based Variable Compensation.45Variable Compensation Structure.46Ex-post Risk Adjustment of Variable Compensation.47Compensation Decisions for 2021.48Material Risk Taker Compensation Disclosure.49 2 Deutsche Bank Introduction Compensation Report 2021 Introduction The compensation report for the year 2021 provides detailed information on compensation in the Deutsche Bank Group.Compensation Report for the Management Board and the Supervisory Board The Compensation Report for the Management Board and the Supervisory Board for the 2021 financial year was prepared jointly by the Management Board and the Supervisory Board of Deutsche Bank Aktiengesellschaft(hereinafter:Deutsche Bank AG or the Bank)in accordance with Section 162 of the German Stock Corporation Act(AktG).The Compensation Report describes the fundamental features of the compensation systems for Deutsche Banks Management Board and Supervisory Board and provides information on the compensation granted and owed by Deutsche Bank in the 2021 financial year to each incumbent or former member of the Management Board and Supervisory Board.The Compensation Report fulfills the current legal and regulatory requirements,in particular of Section 162 of the German Stock Corporation Act(AktG)and the Remuneration Ordinance for Institutions(InstitutsVergV)and takes into account the recommendations set out in the German Corporate Governance Code(GCGC).It is also in compliance with the applicable requirements of the accounting rules for capital market-oriented companies(German Commercial Code(HGB),International Financial Reporting Standards(IFRS)as well as the guidelines issued by the working group Guidelines for Sustainable Management Board Remuneration Systems.Employee Compensation Report This part of the compensation report discloses information with regard to the compensation system and structure that applies to the employees in Deutsche Bank Group(including DWS Group).The report provides details on the Group Compensation Framework and it outlines the decisions on Variable Compensation for 2021.Furthermore,this part contains quantitative disclosures specific to employees identified as Material Risk Takers(MRTs)in accordance with the Remuneration Ordinance for Institutions(Institutsvergtungsverordnung InstVV).3 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Compensation of the Management Board Principles for Management Board Compensation Responsibility and procedures for setting and reviewing Management Board compensation The Supervisory Board as a whole is responsible for the decisions on the design of the compensation system as well as for setting the individual compensation amounts and procedures for awarding the compensation.The Compensation Control Committee supports the Supervisory Board in its tasks of designing and monitoring the implementation of the system and prepares proposals for resolutions for the Supervisory Board.As necessary,the Compensation Control Committee recommends that the Supervisory Board makes adjustments to the system.In the case of significant changes,but at least every four years,the compensation system for the Management Board is submitted to the General Meeting for approval in accordance with Section 120a(1)of the German Stock Corporation Act(AktG).The compensation system was last approved by the General Meeting 2021 by a majority of 97.76%.On the basis of the approved compensation system,the Supervisory Board sets the target total compensation for each Management Board member for the respective financial year,while taking into account the scope and complexity of the respective Management Board members functional responsibilities,the length of service of the Management Board member on the Management Board as well as the companys financial situation.In the process,the Supervisory Board also considers the customary market compensation,also based on both horizontal and vertical comparisons,and sets the upper limit for total compensation(maximum compensation)(additional information is provided in the section“Appropriateness of Management Board compensation and compliance with the set maximum compensation”).Guiding principle:Alignment of Management Board compensation to corporate strategy Deutsche Bank aims to make a positive contribution to its clients,employees,investors and society in general by fostering economic growth and social progress.Deutsche Bank would like to offer its clients solutions and provide an active contribution to foster the creation of value by its clients.This approach is also intended to ensure that Deutsche Bank is competitive and profitable and can operate on the basis of a strong capital and liquidity position.Deutsche Bank is committed to a corporate culture that appropriately aligns risks and revenues.Deutsche Bank has set ambitious targets for the Group for the period up to and including 2022.These include the further stabilization of the Bank,the successful completion of the transformation of the Group,and sustainable profitability.The achievement of these goals can be measured in concrete terms by the following key figures communicated by the Management Board:(1)a planned revenue for the Group of around 24.4 billion,(2)a continuous reduction in costs,(3)a Common Equity Tier 1 ratio(CET1 ratio)of over 12.5%,and(4)a return on equity(RoTE)of 8%.In the interest of the shareholders,the Management Board compensation system is aligned to the business strategy as well as the sustainable and long-term development of Deutsche Bank and provides suitable incentives for a consistent achievement of the set targets.Through the composition of total compensation comprising non-performance-based(fixed)and performance-based(variable)compensation components,through the assessment of performance across short-term and long-term periods and through the consideration of relevant,challenging performance parameters,the implementation of the Group strategy and the alignment with the sustainable and long-term performance of the Group are rewarded in a clear and understandable manner.The structure of the targets and objectives therefore comprises a balanced mix of both financial and non-financial parameters and indicators.Through the structuring of the compensation system,the members of the Management Board are motivated to achieve the targets and objectives linked to Deutsche Banks strategy,to work individually and as a team continually towards the long-term positive development of Deutsche Bank,without taking on disproportionately high risks.The Supervisory Board thus ensures there is always a strong link between compensation and performance in line with shareholder interests(“pay for performance”).4 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Compensation principles The design of the compensation system and thus the assessment of individual compensation amounts are based on the compensation principles outlined below.The Supervisory Board takes them into consideration when adopting its resolutions in this context:Corporate strategy The compensation system for the Management Board members is closely linked to Deutsche Banks strategy,thereby focusing their work on its implementation and the long-term positive development of the Group,without taking disproportionatel risks.Shareholders interests The interests of shareholders are always taken into account when designing the specific structure of the compensation system,determining individual compensation amounts and structuring the means of compensation allocation and delivery.Individual and collective objectives Setting individual,divisional and collective objectives fosters not only the sustainable and long-term development of each of the business divisions,infrastructure areas or regions the Management Board members are responsible for,but also the performance of the Management Board as a collective management body.Long-term perspective A long-term link to Deutsche Banks performance is secured by setting a greater percentage of long-term objectives in comparison to short-term objectives and by granting variable compensation exclusively in deferred form and mostly as share-based compensation with vesting and holding periods of up to seven years.Sustainability Economic,social and ecological objectives in accordance with Deutsche Banks ESG(Environmental,Social and Governance)strategy provide incentives to act responsibly,also in the context of sustainability,and thus make an important contribution to Deutsche Banks long-term performance.Appropriateness and upper limits(caps)The appropriateness of the compensation amounts is ensured through the review of the compensation based on a horizontal comparison with peers and a vertical comparison with the workforce as well as suitable compensation caps on the achievable variable compensation and maximum compensation.Transparency By avoiding unnecessary complexity in the structures and through clear and understandable reporting,the transparency of the compensation system is increased in accordance with the expectations of investors and the public as well as the regulatory requirements.Governance The structuring of the compensation system and the assessment to determine the individual compensation take place within the framework of the statutory and regulatory requirements.Compensation-related developments in 2021 Adjustment to the compensation system from January 1,2021 The compensation system for the members of the Management Board was lastly adjusted effective as of January 1,2021.In its review of the compensation system,the Supervisory Board pursued in particular the following objectives:Simplification of the compensation structures to improve understandability and transparency Consideration of current market practices of comparable financial institutions(peers)Implementation of recent legal and regulatory developments As a result of the review,the Supervisory Board identified three areas requiring action and decided to make the related adjustments:5 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Option to facilitate a more rapid compliance with the shareholding obligation The Supervisory Board can resolve to increase the proportion of share-based variable compensation to as much as 100%until the shareholding obligation agreed with the Management Board members is fulfilled.This does not lead to an increase in overall variable compensation but only to an increase in the percentage awarded on the basis of shares.Increased consistency within the compensation system through structural adjustments Consistent weightings and clearer structures provide greater transparency regarding the compensation components.-The variable compensation components are no longer weighted differently but in the same manner for all members of the Management Board.-All individual and divisional objectives are bundled within the short-term component and the objectives to be achieved collectively are reflected in the long-term component.-The maximum target achievement levels for the short-term component and the long-term component are harmonized at 150%(instead of previously 200%for the short-term component).Management Board compensation closely linked to Deutsche Banks ESG strategy The compensation structures are more strongly linked to sustainability objectives derived from Deutsche Banks ESG strategy.-ESG targets are included in the Balanced Scorecards as part of the short-term component.ESG targets can also be included in individual objectives.-Within the long-term component there is an ESG Matrix with objectives to be achieved collectively in the Environmental,Social and Governance areas.This results in an ESG-Factor of 20%of the total variable compensation.The following overview shows the changes in the compensation structure applicable with effect from 2021 in comparison to the previous compensation system:6 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Approval of the new compensation system by the Annual General Meeting 2021 The compensation system for members of the Management Board of Deutsche Bank as adjusted with effect from January 1,2021,was submitted to the ordinary General Meeting on May 27,2021,for approval in accordance with Section 120a(1)of the German Stock Corporation Act(AktG).The General Meeting approved the compensation system with a majority of 97.76%.Implementation of the adjusted compensation system took place within the framework of the Management Board service contracts through the voluntary agreement of the Management Board members to the required contract amendments and applied to all Management Board members incumbent during the 2021 financial year.Changes on the Management Board in 2021 Frank Kuhnke resigned from office as member of the Management Board and Chief Operating Officer with effect from April 30,2021.Rebecca Short was appointed member of the Management Board with effect from May 1,2021,for a period of three years.With effect from May 1,2021,the Supervisory Board resolved changes in the functional responsibilities assigned to individual Management Board members.The Management Board comprised 10 members throughout 2021.The proportion of women in the Management Board has been 20%since May 1,2021.Development of business and alignment of Management Board compensation to corporate strategy in 2021 Management Board compensation is closely aligned with Deutsche Banks strategic targets.All of the individual and collective objectives agreed with the Management Board members as well as their assessment parameters for the 2021 financial year were discussed by the Compensation Control Committee at the beginning of the year and subsequently resolved on by the Supervisory Board.The objectives serve overall in fostering the strategic transformation of the Group.The achievement levels determined with respect to the objectives for the 2021 financial year at the beginning of the year 2022 reflect the extent to which the individual objectives were achieved and thus contributed to the Banks performance.Despite the persistently challenging economic environment,and also during the second year of the COVID-19 pandemic,Deutsche Bank was successful in delivering on its transformation and generated the highest net profit in a decade.In 2021,Deutsche Bank continued to realign its business model,while significantly reducing costs and regaining sustainable profitability.97%of the planned restructuring costs were already recognized by the end of 2021.Profit before tax amounted to 3.4 billion and net profit rose to 2.5 billion,which is more than four times the amount achieved in 2020.All business segments were profitable in 2021 and revenues increased by 6%to 25.4 billion.This is largely due to strong growth in new business and gains in market share:The Corporate Bank loan book grew by 8 billion in 2021.Investment Bank revenues rose by 4%compared to an already strong previous year.The Private Bank recorded 23 billion in net inflows into investment products and 15 billion in net new client loans,while deposits grew by 7 billion.Asset Management saw net inflows of 48 billion and a good performance in assets under management,now at 928 billion both record levels.In all business areas Deutsche Bank saw a strong growth in client demand for products that take Environmental,Social and Governance(ESG)aspects into account.By the end of 2021,sustainable financing and investments product offerings accounted for 157 billion.Thus the 200 billion target initially projected for 2025 in this context will probably already be achieved in 2022.Sustainability,as one of the top management priorities since 2019,has increasingly taken center stage in Deutsche Banks endeavors.The individual objectives are bundled in the short-term component(Short-Term Award(STA)and account for a share of 40%of the total variable compensation.The Supervisory Board determined an achievement level for these components for the 2021 financial year of between 130%and 142%.The performance of the Management Board as a collective body is reflected in the long-term component(Long-Term Award(LTA),which accounts for a share of 60%of the total variable compensation.Overall,the achievement level of the collective objectives based solely on the 2021 financial year was 71.21%.This achievement level accounts for 60%of the Long-Term Award to be granted for the 2021 financial year.30%will be for the 2022 financial year and 10%for the 2023 financial year.As achievement levels for prior years(at 30%from 2020 and 10%from 2019)also affected the Long-Term Award for the 2021 financial year,the achievement level of this component for the 2021 financial year was 66.27sed on the weighted achievement levels of the three financial years.Details on the individual achievement levels are presented as an overview in this report in the chapter Application of the compensation system in the financial year.7 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Principles governing the determination of compensation Structure of the Management Board compensation system 2021 The compensation system consists of non-performance-based(fixed)and performance-based(variable)components.The fixed compensation and variable compensation together form the total compensation for a Management Board member.The Supervisory Board defines target and maximum amounts(caps)for all compensation components.Management Board Compensation System 2021 Components Objective Implementation Non-performance related compensation Base salary The base compensation rewards the assumption of the role and responsibility of the respective member of the Management Board.The fixed compensation is intended to ensure a fair and market-oriented income and to ensure that undue risks are avoided.In addition,members of the Management Board are granted recurrent,other benefits and contributions for pension benefits.-Monthly payment;Amount of basic compensation on an annual basis between 2.4 million and 3.6 million.Fringe benefits -Company cars and driver services,if applicable moving expenses,rent subsidies,insurance premiums and business representation expenses Pension -A single and contractually agreed annual contribution or allowance of 650,000 for adequate pension provision Performance related compensation Short Term Award(STA)The STA rewards the individual value contribution of each member of the Management Board to achieving short-and medium-term corporate objectives in accordance with the corporate strategy.It consists of three elements,which are tailored to the role and responsibilities of the respective Management Board member and can be individually influenced by their degree of achievement by the respective Management Board member.-40%of the total variable compensation with 3 elements related to individual performance(1)Individual objectives(20%);(2)Individual Balanced Scorecard(10%);(3)Annual priorities(10%)-Maximum target reached 150%-Assessment period 1 year -Earliest possible disbursement in 4 tranches in cash(Restricted Incentive Awards)-after 1,3,5 and 7 years after grant -Target Contribution at 100hievement:Between 1.640 million and 2.160 million Long Term Award(LTA)In calculating variable compensation,the focus is on achieving long-term objectives linked to the strategy.To underline this,the Supervisory Board has put a focus on this component with a share of the LTA of 60%of the total variable target compensation.For the LTA,the Supervisory Board sets common objectives for the members of the Management Board.Since 2021,the ESG factor has been an important part of the LTA.With its implementation and development,Deutsche Banks sustainability strategy is systematically linked to the Management Board compensation.-60%of total variable compensation with 4 group targets(1)ESG factor(20%);(2)Relative total shareholder return(15%);(3)Organic capital growth(15%);(4)Group component(10%):core capital ratio,leverage ratio,adjusted costs,return on tangible equity -Maximum target reached 150%-Assessment period 3 years with a weighting of 60%(FY),30%(FY 1),10%(FY 2)-Payment in 4 tranches exclusively in shares(Restricted Equity Awards)earliest possible payment after 2,3,4,5 years plus a respective holding period of 1 year after grant -Target Contribution at 100hievement:Between 2.460 million and 3.240 million 8 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Overview Detailed information on the compensation system for members of the Management Board of Deutsche Bank AG is available on the companys website:Compensation system for the Management Board Members from January 2021 onwards.Composition of the target total compensation and maximum compensation The Supervisory Board determines for each Management Board member a target(reference)total compensation on the basis of the compensation system approved by the General Meeting.It also determines,in accordance with the recommendation of the German Corporate Governance Code,what relative proportions the fixed compensation on the one hand and short-term and long-term variable compensation on the other hand have in the target total compensation.In this context,the Supervisory Board ensures in particular that the performance-based compensation linked to achieving long-term objectives exceeds the portion of performance-based compensation linked to short-term objectives.When setting the target total compensation for each member of the Management Board,the Supervisory Board takes into account the scope and complexity of the respective Management Board members functional responsibility as well as the experience and length of service of the member on the Management Board.Furthermore,the compensation amounts are reviewed for their appropriateness on the basis of market data for suitable peer groups.On the basis of these criteria,the Supervisory Board set the relative percentages for the compensation components within the target total compensation as follows:Relative shares of the total annual target compensation allocated to the different compensation components(%)Compensation components Relative share of total compensation inse Salary 33-37%Regular fringe benefits 1%Pension service costs/pension allowance 7-9%Short-Term Award 22-23%Long-Term Award 33-34%Reference total compensation 100%The compensation of the Management Board members is limited(capped)in several ways(maximum compensation).Pursuant to 25a para.5 of the German Banking Act(Kreditwesengesetz KWG),the ratio of fixed to variable compensation is generally limited to 1:1(cap regulation),i.e.the amount of variable compensation must not exceed that of fixed compensation,unless the shareholders of a bank resolve to increase the ratio to up to 1:2.The General Meeting in May 2014 made use of this possibility and increased the ratio to 1:2.9 Deutsche Bank Compensation of the Management Board Compensation Report 2021 The Supervisory Board additionally limited the maximum possible achievement levels for the short-term objectives(STA)and long-term objectives(LTA)consistently to 150%of the target variable compensation.Furthermore,it specified an additional amount limit(cap)for the aggregate amount of base salary,STA and LTA of 9.85 million.This means that even with target achievement levels that would lead to higher compensation amounts,compensation is capped at a maximum of 9.85 million.After the target achievement level is assessed,if the calculation should result in variable compensation or total compensation that exceeds one of the specified caps,the variable compensation is to be reduced.This is to take place through a pro rata reduction of the STA and LTA.Target and maximum amounts of base salary and variable compensation 2021 2020 in Base salary Short-Term Award Long-Term Award Total compensation2 Total compensation2 CEO Target value 3,600,000 2,160,000 3,240,000 9,000,000 8,700,000 Maximum value 3,600,000 3,240,000 4,860,000 9,850,000 9,850,000 President and ordinary board member responsible for PB/AM1 Target value 3,000,000 1,760,000 2,640,000 7,400,000 7,400,000 Maximum value 3,000,000 2,640,000 3,960,000 9,600,000 9,850,000 Ordinary Board Members responsible for Finance(CFO)and Risk Management(CRO)Target value 2,800,000 1,680,000 2,520,000 7,000,000 6,700,000 Maximum value 2,800,000 2,520,000 3,780,000 9,100,000 9,400,000 All other Ordinary Board Members Target value 2,400,000 1,640,000 2,460,000 6,500,000 6,500,000 Maximum value 2,400,000 2,460,000 3,690,000 8,550,000 9,200,000 1 PB=Retail Bank/AM=Asset Management 2.Limit the maximum total amount of basic salary and variable compensation to the upper limit set by the Supervisory Board.In addition,in accordance with Section 87a(1)sentence 2 No.1 of the German Stock Corporation Act(AktG),the Supervisory Board also set an upper limit for the maximum total compensation of 12 million for each Management Board member(Maximum Compensation).The Maximum Compensation is set consistently for all Management Board members.The Maximum Compensation corresponds to the sum of all compensation components for any financial year.This comprises not only the base salary,STA and LTA,but also the fringe benefits and service costs for the company pension plan or pension allowances.10 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Application of the compensation system in the financial year Non-performance-based components(fixed compensation)The fixed compensation components in the form of base salary,fringe benefits and contributions to the pension plan or pension allowances were granted in the financial year as non-performance-based compensation and in accordance with the individual agreements in the service contracts.The expenses for fringe benefits and pension service costs vary in their annual amounts.Although the contribution to Deutsche Banks pension plan is defined consistently for all Management Board members,the amounts to be contributed by Deutsche Bank during the year in the form of pension service cost accruals vary,however,based on the length of service on the Management Board within the financial year,the age of the Management Board member and actuarial figures(additional information is provided in the section“Benefits upon regular contract termination”).Performance-based components(variable compensation)The Supervisory Board,based on the proposal of the Compensation Control Committee,determined the variable compensation for the Management Board members for the 2021 financial year.Variable compensation comprises two components,a short-term component(Short-Term Award(STA)with a weighting of 40%and a long-term component(Long-Term Award(LTA)with a weighting of 60%in relation to the target variable compensation.All objectives,measurements and assessment criteria that were used for the assessment of performance for the 2021 financial year are derived from Deutsche Banks strategy and are in line with the compensation system approved by the General Meeting.The objectives were selected to set suitable incentives for the Management Board members,to promote the development of Deutsche Banks earnings and the alignment with the interests of shareholders as well as to fulfill Deutsche Banks social responsibility through the inclusion of sustainability aspects and climate protection.The challenging objectives reflect the Banks ambitions.If the objectives are not achieved,the variable compensation can be zero;in case of over-achievement,the maximum achievement level is limited to 150%of the target value.Balance of financial and non-financial objectives Financial and non-financial objectives are considered in a balanced way when setting the objectives.In relation to the total variable compensation,the financial targets prevailed in the 2021 financial year with a share of around 54%.Both the financial and non-financial objectives have been chosen in such a way that they are quantitatively or qualitatively measurable at the end of the financial year.Around 73%of the targets are quantitative measurable and a portion of around 27%is measured qualitatively.Short-Term Award(STA)The amount of the Short-Term Award for the 2021 financial year is based on the achievement level of the short and medium-term individual and divisional objectives.It comprises the following three elements with a weighting within the STA as indicated:Individual Objectives(50%)Individual Balanced Scorecards(25%)Annual Priorities(25%)For each of these elements,the Supervisory Board determines the achievement level based on an assessment at the beginning of the following year of the performance during the previous year.The achievement of the three components determines the achievement level for each Management Board member which determines the amount of the short-term component for the previous fiscal year.11 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Determination of the cash value of the Short-Term Award*On the basis of 100%.Pro rata temporis upon joining or leaving during the year All objectives of the STA are assessed over a period of one year.The achievement levels for the STA objectives can be up to a maximum of 150%.If an objective is not met,the achievement level can be as low as zero.The STA determined for the financial year is generally granted in the form of cash compensation(Restricted Incentive Awards).The disbursement takes place in 4 tranches of 25ch,after 1,3,5,and 7 years,i.e.over a total vesting period of 7 years after the performance period.All tranches are subject to specific performance and forfeiture conditions during this retention period.The Supervisory Board can resolve to grant the STA in the form of Restricted Equity Awards instead of cash compensation in order to facilitate a faster fulfillment of the shareholding requirement agreed with the Management Board members.Individual objectives At the beginning of the year,the Supervisory Board sets individual and divisional objectives for each member of the Management Board,the weightings of these objectives in relation to one another and the relevant quantitatively or qualitatively measurable performance criteria for their assessment.In this context,the objectives are chosen in such a way that they are challenging,ambitious and sufficiently concrete in order to ensure there is an appropriate alignment of performance and compensation and that the“pay-for-performance”principle is taken into account.The individual and divisional objectives are derived from the corporate strategy and foster its implementation.They are set for each Management Board member in consideration of his or her respective area of responsibility and the contribution of this area of responsibility to advancing Deutsche Banks overall strategy.Individual objectives can also be defined as project or regional targets.Besides operational measures,the implementation of strategic projects and initiatives can be agreed as objectives as well,if they are directly instrumental in the implementation of the strategy,by contributing to,for example,the structure,organization and long-term development of Deutsche Bank.12 Deutsche Bank Compensation of the Management Board Compensation Report 2021 At the beginning of the 2021 financial year,between 4 and 6 individual objectives were set with different weightings for each Management Board member.In light of the changes on the Management Board effective May 1,2021,an adjustment was made during the year to the Business Allocation Plan.The objectives were correspondingly adjusted to reflect the new areas of functional responsibility.Accordingly,the Management Board members had up to 8 objectives in total in the financial year,including some that applied only for part of the year.All of the objectives that applied during the year were taken into account in the year-end assessment in accordance with their weightings and pro rata temporis according to the duration of their respective applicability.The following overview shows the objectives resolved by the Supervisory Board for the Management Board members according to their objective category and their weightings pro rata in relation to the full year.Management Board Member Duration Weighting%Individual objectives Christian Sewing Jan-Dec 21.67%Continue to develop Deutsche Bank culture&vision 20.00liver on Deutsche Bank Group strategy execution and group objectives 15.00%Further evolve Deutsche Bank culture,with a focus on integrity and conduct 10.00%Implement Bank-wide ESG&Sustainable Banking strategy 10.00%Strengthen positioning with key political stakeholders Jan-Apr 6.67liver on strategy for the divisions Corporate Bank and Investment Bank to achieve sustainable profitability 3.33%Ensure delivery of critical remediation activities within the area of financial crime May-Dec 13.33%Provide oversight to transformation for the Human Resources and Real Estate divisions Karl von Rohr Jan-Dec 40.00liver on strategy execution for the division Private Bank 20.00%Provide Oversight for Regions Germany&EMEA 15.00%Support the execution of the DWS strategy as DWS chairman 10.00%Ensure delivery on critical remediation activities within the area of financial crime 10.00%Further evolve Deutsche Bank culture,with a focus on integrity and conduct 5.00hieve group-wide financial objectives 2021 Fabrizio Campelli Jan-Apr 16.67%Drive Deutsche Banks transformation agenda 8.33%Manage the transformation of the Human Resources division 5.00%Drive delivery of Management Board priorities across Deutsche Bank Jan-Dec 10.00%Further evolve Deutsche Bank culture,with a focus on integrity and conduct May-Dec 24.58liver on strategy for the divisions Corporate Bank and Investment Bank to achieve sustainable profitability 16.67%Ensure delivery of critical remediation activities within the area of financial crime 14.58%Drive stronger front-to-back alignment for the Corporate Bank and Investment Bank divisions Aug-Dec 4.17%Provide oversight to Region UK and Ireland Bernd Leukert Jan-Dec 36.67%Execute strategy for the division Technology,Data&Innovation 20.00%Technology:Continue improvement of IT-structures 16.67ta:Drive quality enhancements 15.00%Innovation:Drive client-centric technology approach across the bank 5.00%Further evolve Deutsche Bank culture,with a focus on integrity and conduct May-Dec 6.67%Integrate certain areas under the former COO responsibility Stuart Lewis Jan-Dec 30.00%Foster a strong risk-return culture throughout the bank 23.75%Continue to develop and strengthen the risk organization 22.08%Processing of regulatory and internal audit findings 8.33%Further evolve Deutsche Bank culture,with a focus on integrity and conduct Jan-Apr 10.00%Ensure delivery of critical remediation activities within the area of financial crime Jan-Jul 5.83%Provide oversight to Region UK and Ireland James von Moltke Jan-Dec 40.00%Ensure execution of Group financial plan through Group Performance Management 25.00%Strengthen investor and Rating Agencies engagement 15.00liver Balance Sheet&Liquidity Optimization 15.00%Execute Group Finance strategy,including Financial&Analytics Enhancement 5.00%Further evolve Deutsche Bank culture,with a focus on integrity and conduct Alexander von zur Mhlen Jan-Dec 40.00%Execute strategy for the region APAC 30.00%Strengthen APAC franchise and client focus 20.00%Ensure delivery of critical remediation activities within the area of financial crime 10.00%Further evolve Deutsche Bank culture,with a focus on integrity and conduct 13 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Management Board Member Duration Weighting%Individual objectives Christiana Riley Jan-Dec 30.00%Execute strategy for the regions North and South America 25.00%Strengthen engagement with US regulators 20.00%Ensure delivery of critical remediation activities within the area of financial crime 20.00%Strengthen client engagement 5.00%Further evolve Deutsche Bank culture,with a focus on integrity and conduct Rebecca Short May-Dec 30.00%Drive Capital Release Unit reductions 30.00%Drive Deutsche Banks transformation agenda 30.00%Drive direct cost reduction 10.00%Further evolve Deutsche Bank culture,with a focus on integrity and conduct Prof.Dr.Stefan Simon Jan-Dec 26.67%Further drive down bank-wide litigation portfolio 25.00%Improve strategic engagement with regulatory authorities 13.33%Drive overhaul of policy including setting and implementation 8.33%Further evolve Deutsche Bank culture,with a focus on integrity and conduct May-Dec 26.67%Ensure delivery of critical remediation activities within the area of financial crime For the qualitative objectives,the Supervisory Board set expectations and financial and/or non-financial performance criteria at the beginning of the year(and at the time of the realignment of the objectives as of May 1,2021).These enable the Supervisory Board to objectively assess the performance contribution of the respective Management Board member towards the concrete execution of the objectives which are to be assessed for the performance year at the beginning of the following year.The achievement levels thus determined for the individual objectives are combined into an average for each Management Board member according to pre-defined weightings.The achievement level determined in this manner is multiplied by 50%of the target amount of variable compensation for the STA.This results in the calculated payment amount for the component comprising the individual objectives.The achievement levels for the individual objectives were between 123%and 146%for the 2021 financial year.An overview of the overall achievement levels of the Management Board members individual contributions to performance in the financial year is provided at the end of this sub-section Short-Term Award.Individual Balanced Scorecard In addition to the individual objectives,the Short-Term Award(STA)is also based on the results of the individual Balanced Scorecards of the Management Board members.Balanced Scorecards make it possible to transform strategic objectives into operating practices through concrete actions.With the Balanced Scorecards,the Bank has an appropriate tool for the steering and control of key performance indicators that can be used to check the achievement level of financial and non-financial objectives against pre-defined measurement parameters at any time and to measure them transparently for the performance year at the beginning of the following year.At the same time,the Balanced Scorecards provide an overview of the priorities of the individual divisions across the entire Group.The respective Management Board members functional responsibilities are linked with pre-defined key financial figures and non-financial targets from various categories.A total of 53 Key Performance Indicators(KPIs)are assigned to these categories,of which 10 to 28 are relevant for each Management Board member depending on their areas of functional responsibility and the respective number of scorecards.The following chart shows the categories and some of the KPIs,in particular those with general applicability:14 Deutsche Bank Compensation of the Management Board Compensation Report 2021 The methodology for the Balanced Scorecards has been continually developed further since their introduction and adjusted to meet changing requirements.In order to link aspects from Environmental,Social and Governance(ESG)areas as well as sustainability more closely to the compensation system,these topics were given an even greater consideration in 2021.The objectives within the individual categories are set at the beginning of the year for each Management Board member individually and corresponding Key Performance Indicators or parameters are assigned thereto.In addition,the percentage weighting is set for each category.The weightings that the individual categories have within the overall Balanced Scorecard can be up to 65pending on the functional responsibility of the Management Board member.The objectives in the Balanced Scorecard cannot be the same as the objectives of the sub-component“individual objectives”in order to avoid that individual objectives are considered and assessed more than once.The key performance indicators of the BSC are measured continuously throughout the year and an overall assessment is made at the end of the year.For each individual objective,the Balanced Scorecard shows if it was fulfilled or exceeded based on the defined performance criteria(“green”),or only achieved to less than 100%(“amber”)or not achieved(“red”).When all objectives of a category are exceeded,the achievement level can be up to 150%.However,if none of the targets of a category is met,the achievement level is 0%.From the overall achievement levels of the three categories and their weightings,an overall achievement level for the individual Balanced Scorecard is derived.1 Resulting bands of KPI categories:Green(100-150%);Green to amber(75-125%),Green to red(50-100%),Amber to red(25%-75%),Red(0%).The individual Balanced Scorecard achievement levels were between 100%and 147%for the 2021 financial year.An overview of the overall achievement levels of the Management Board members individual contributions to performance in the financial year 2021 is provided at the end of this sub-section Short-Term Award.Annual Priorities With the help of Annual Priorities,the Supervisory Board assesses the profitability and performance-related contributions of each Management Board member towards consistently pre-defined focus topics for the year.These focus topics are derived from,and meant to further support,Deutsche Banks strategy.They are different from the individual objectives and Balanced Scorecards in order to avoid that the same objectives are considered or assessed more than once.This provides the possibility to set operational focal points annually depending on the current priorities and the stage of strategy execution.The performance criteria to be used for the assessment can be of both a financial and non-financial nature.For the 2021 financial year,the Supervisory Board specified focal point topics as Annual Priorities that are related to the following areas:Corporate strategy/transformation Risk management Within the corporate strategy/transformation area,the Supervisory Board assesses the achievement levels of project-related activities that are related to the corporate and transformation strategy in the“Book of Work”assigned to the individual Management Board members and measured throughout the year.Each activity is in turn linked to measurement criteria that enable a quantitative measurement.Based on this,an individual level of achievement of the performance of each individual Management Board member can be derived at the end of the financial year.15 Deutsche Bank Compensation of the Management Board Compensation Report 2021 With regard to risk management,the Supervisory Board assesses how each individual member of the Management Board reacted to certain and sometimes unforeseen events and developments that occurred during the financial year,particularly from the risk management perspective.At the end of the year,the achievement level is assessed qualitatively.The achievement levels with respect to the Annual Priorities were between 125%and 150%for the 2021 financial year.An overview of the overall achievement levels of the Management Board members individual contributions to performance in the financial year is provided at the end of this sub-section Short-Term Award.Overall achievement of the Short-Term Award For the 2021 financial year,the following overall levels of achievement have been determined for the members of the Management Board on the basis of the level of achievement with respect to the objectives for the three components identified by the Supervisory Board in the Short-Term Award:Short-Term Award overall achievement Target Value(in)Target achievement level(in%)Overall achievement STA(in)Christian Sewing 2,160,000 142%3,065,400 Karl von Rohr 1,760,000 136%2,393,600 Fabrizio Campelli 1,640,000 135%2,218,783 Bernd Leukert 1,640,000 132%2,161,383 Stuart Lewis 1,680,000 134%2,258,200 James von Moltke 1,680,000 136%2,278,500 Alexander von zur Mhlen 1,640,000 130%2,132,000 Christiana Riley 1,640,000 132%2,162,750 Rebecca Short1 1,093,333 132%1,440,467 Prof.Dr.Stefan Simon 1,640,000 130%2,134,050 Frank Kuhnke2 546,667 116c4,133 1 Member since May 1,2021.2 Member until April 30,2021.The target achievement level was determined in connection with the departure.Long-Term Award(LTA)When determining the variable compensation,a major focus is placed on the achievement of long-term objectives linked to Deutsche Banks strategy.To emphasize this,the Supervisory Board decided that the LTA accounts for 60%of the total target variable compensation.At the beginning of each financial year,the Supervisory Board specifies the collective long-term objectives for the Management Board members for the LTA.The objectives and their weighting in the LTA for 2021 are:ESG Factor(33.33%)Relative Total Shareholder Return of the Deutsche Bank share(25%)Organic Capital Growth(25%)Group Component(16.67%)The Relative Total Shareholder Return(RTSR)of the Deutsche Bank share and Organic Capital Growth already formed the basis for the assessment of the LTA when the compensation system was approved by the General Annual Meeting in 2017 and have been retained for the measurement of the LTA.For the consistent alignment of Management Board compensation with the Banks sustainability strategy,the Client&Culture Factor applicable until 2020 was transferred into the ESG Factor,which was newly introduced starting from the 2021 financial year.The importance of the ESG Factor is particularly emphasized through the highest weighting within the LTA at 33.33%,as well as its weighting of 20%of total variable compensation.Through the continuation of the objectives underlying the Group Component relating to core capital,leverage ratio,costs and return on equity,the long-term tracking of these metrics for Deutsche Banks capital,risk,costs and earnings profile is ensured.By moving the Group Component from the STA to the LTA,there is a bundling of all collective objectives for the Management Board members in the long-term component,and the contribution to sustainability is emphasized as an aspect relevant for the compensation of all Management Board members.16 Deutsche Bank Compensation of the Management Board Compensation Report 2021 All objectives of the LTA are assessed over a period of three years.At the end of each financial year,the Supervisory Board determines the level of achievement for each of the collective objectives during the preceding year.60%of the target amount of each objective of the LTA is multiplied by the achievement level determined in this manner,and this amount feeds into the variable compensation for the preceding financial year.In the following year,30%of the target amount is multiplied by the respective achievement level,and in the next following year 10%.This ensures that weighted outcomes of the achievement levels for three financial years feed into the amount of the LTA to be determined each year.The achievement levels for the LTA objectives can be up to a maximum of 150%.If the objective is not met,the achievement level can be as low as zero.The LTA determined for a financial year is granted in the form of Restricted Equity Awards,which vest over a deferral period of 5 years,in 4 tranches after 2,3,4,and 5 years,and are subject to the share price performance during this period.Each tranche that vests is followed by an additional one-year holding period so that the Management Board members can dispose of the first LTA tranche at the earliest after three years,and of the full amount only after six years.During the deferral and holding periods,the tranches are subject to specific performance and forfeiture conditions.ESG factor Deutsche Bank has set for itself the aim of spearheading sustainability initiatives in the financial sector and thus contributing to a more environmentally,socially and financially well-governed economy.To closely and consistently link Management Board compensation to the Banks sustainability strategy,the Supervisory Board resolved to combine the Banks strategic sustainability targets in an Environmental,Social and Governance Matrix(ESG Matrix)and to implement the results as one of the collective objectives,the ESG Factor,within the LTA.To this end,the targets and objectives related to corporate governance,the control environment and improvement measures for the prevention of financial crime,which were bundled together in the Client&Culture Factor that was applicable until 2020,were expanded to include environmental and social aspects and were combined in the newly implemented ESG Matrix.The ESG Factor comprises the largest portion of the LTA with a share of 33.33%.This corresponds to 20%of the total variable compensation and emphasizes the importance of the ESG agenda for Deutsche Bank.At the beginning of each financial year,the Supervisory Board sets target amounts as well as upper and lower limits for all of the objectives bundled in the ESG Matrix.Based on these fixed threshold values,the assessment of the achievements for the previous year takes place retrospectively.The following chart shows the target amounts,the results as of the end of the year and the resulting achievement level for the 2021 financial year:17 Deutsche Bank Compensation of the Management Board Compensation Report 2021 In the 2021 financial year,the performance figures of the ESG Matrix,measured against the pre-defined target amounts and upper and lower limits,developed as follows:Based on a total volume of sustainable financings and investments of 46 billion euros by the end of 2020,the objective set for 2021 for an increase of 31 billion euros was clearly exceeded with an actual increase of 111 billion to a total volume of 157 billion.This means that the objective reached the maximum achievement level of 150%.The Supervisory Board took this development as a reason to set a more ambitious target for this objective for the 2022 financial year in order to make this objective a stronger incentive for Management Board members(see section“Outlook for the 2022 financial year”).With regard to the second objective under Environment,i.e.own operations,already 87%of the Banks own energy consumption was drawn from renewable energy sources as of the end of the year.Assuming a target of 80%and a cap of 90%,the achievement level for this objective was 135%.The total building-related energy consumption was successfully lowered in 2021 by 19.2%compared to 2019.The target value of a 15%reduction was thus exceeded and reached the target achievement level of 150%.In the Social area,the objective“Employee feedback culture”was measured on the basis of the last employee survey,which is decisive for the full-year figure of 70%.The achievement level reached in 2021 was thus 100%.The development with regard to Gender diversity,however,remained below the target figure.Here the achievement level was 80%,The two performance indicators taken over from the former Culture&Client Factor in the Governance area fed into the assessment with achievement levels of 50%for the so-called Control Environment Assessment Grade and 42%in terms of measures to combat economic crime and prevent money laundering activities and the fulfillment of regulatory requirements.From the weighted achievement levels for the individual objectives,an overall achievement level for the ESG Factor for the 2021 financial year has been calculated and set at 89,38%.A portion of 60%of the variable target compensation attributable to the ESG factor is multiplied by the overall target achievement level for 2021 and thus determines the largest portion of the variable compensation granted for 2021.A portion of 30%of the target compensation is based on the achievement level for the Client&Culture Factor that was applicable for the 2020 financial year and set at 37,5%,and a portion of 10%is determined based on the achievement level for the 2019 financial year at 50%.This results in a weighted overall achievement level of 69.88%for the granting of the portion of the LTA that is attributable to the ESG Factor.18 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Relative Total Shareholder Return(RTSR)A key strategic target of the Bank is the performance of the Deutsche Bank share in comparison to the performance of the shares of its competitors(Relative Total Shareholder Return(RTSR).The target for the RTSR for the Deutsche Bank share in comparison to selected financial institutions is intended to strengthen the sustainable performance of the Deutsche Bank share.The RTSR links the interests of the Management Board with those of shareholders.In addition,the RTSR provides a relative measurement of performance,creating an incentive to outperform the relevant peers.The RTSR is derived from the total shareholder return of the Deutsche Bank share in relation to the average total shareholder returns of a selected peer group.The Total Shareholder Return is defined as the share price performance plus theoretically reinvested gross dividends.The RTSR is calculated as a percentage based on the total shareholder return of the Deutsche Bank share in relation to the average total shareholder returns of the peer group.If the RTSR average is greater than 100%,then the target achievement level increases proportionally to an upper limit of 150%of the target figure,i.e.,the target achievement level increases by 1%for each percentage point above 100%.If the RTSR average is less than 100%,the target achievement level declines disproportionately.For each percentage point decline of the RTSR in the range of 80%and less than 100%the target achievement level declines by two percentage points.In the range between less than 60%and 80%,the target achievement level is reduced for each percentage point decline by three percentage points.If the RTSR does not exceed 60%over the entire assessment period,the target achievement level is zero.The peer group used as the basis for calculating the RTSR is selected from among the companies with generally comparable business activities as well as a comparable size and international presence.The Supervisory Board reviews the composition of the peer group regularly.The peer group for the RTSR in 2021 is comprised of the following 11 banks:Banco Santander,BNP Paribas,HSBC,UBS,Bank of America,Citigroup,JP Morgan Chase,UniCredit,Barclays,Credit Suisse and Socit Gnrale.19 Deutsche Bank Compensation of the Management Board Compensation Report 2021 In 2021,Deutsche Banks share price increased by 123.1%and developed better than the shares of 4 out of 11 competitors in the peer group with an average share price plus of 130.6%but remained below the average share price development of the peer group.The achievement level for the 2021 financial year thus came to 88%.A portion of 60%of the target variable compensation attributable to the RTSR is multiplied by the overall achievement level for 2021.A portion of 30%of the target compensation is based on the achievement level for the 2020 financial year,which was 160%,and a portion of 10%is determined based on the achievement level of 60%for the 2019 financial year.This results in a weighted overall achievement level of 106.8%for the granting of the portion of the LTA that is attributable to the RTSR.Organic Capital Growth Another key objective of Deutsche Bank is its growth.As an incentive for the Management Board members to promote growth,the Supervisory Board defined organic capital growth on a net basis as a long-term objective for the LTA.Organic Capital Growth is defined as the balance of the following changes(which are reported in the Consolidated Statement of Changes in Equity)occurring during the financial year,divided by total shareholders equity as of December 31 of the preceding financial year:Total comprehensive income,net of tax Coupon on additional equity components,net of tax Remeasurement gains(losses)related to defined benefit pension plans,net of tax Option premiums and other effects from options on Deutsche Bank shares Net gains(losses)on treasury shares sold Based thereon,“inorganic”changes in equity,in particular the payment of a dividend or a capital increase,are of no relevance to the achievement of the objective.Starting from an average Organic Capital Growth of 2.5%(lower limit),the target achievement level increases by 1%for each 0.05%of growth up to the 150p,which will be reached upon an Organic Capital Growth of 10%or more(upper limit cap).If capital growth does not exceed 2.5%in the assessment period,the target achievement level is zero.20 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Organic Capital Growth pursuant to the definition specified above developed positively in 2021 at 3.83%and thus for the first time in the three-year period was above the lower limit of 2.5%.This results in an achievement level of 26%.A portion of 60%of the target variable compensation attributable to Organic Capital Growth is multiplied by the overall achievement level for 2021.A portion of 30%of the target compensation is based on the achievement level for the 2020 financial year,which was 0%,and a portion of 10%is determined based on the achievement level for the 2019 financial year of 0%.This results in a weighted overall achievement level of 15.6%for the granting of the portion of the LTA that is attributable to Organic Capital Growth.Group Component Through the Group Component,the Supervisory Board links the key financial figures supporting the corporate strategy with the Management Boards compensation and thus establishes an incentive to sustainably foster the Banks capital,risk,costs and earnings profile.The Group Component also provides a link to the compensation for employees,as this is an employee compensation system component.The Supervisory Board resolved to take the Group Component out of the STA and integrate it as a fourth objective in the LTA.As a result,all of the objectives to be achieved collectively are bundled in the long-term component.The measurement over a three-year period supports the long-term monitoring of these objectives.The key financial figures of the Group Component have remained unchanged since 2017.LTA group component Core capital ratio Common Equity Tier 1 capital ratio of the Bank in relation to its risk-weighted assets Leverage ratio The Banks core capital as a percentage of its total leverage exposure pursuant to the definitions of the Capital Requirements Regulation/Capital Requirements Directive 4 Adjusted costs(excluding transformation charges)Total noninterest expenses,excluding transformation costs,restructuring,severance and litigation costs as well as impairments of goodwill and other intangible assets Return on tangible equity Net income(or loss)attributable to shareholders as a percentage of average tangible shareholders equity.The latter is determined by deducting goodwill and other intangible assets from shareholders equity The four objectives specified above have been assigned an equal weighting.If the performance metric-based objectives are not achieved during the assessment period,the Supervisory Board may determine that a Group Component will not be granted.In the 2021 financial year,the four performance indicators for the Group Component of the LTA developed as follows:The target achievement levels of the Common Equity Tier 1(CET1)capital ratio and the leverage ratio(additional information is provided in the“Leverage ratio”section of the Risk Report)were 100%and the target achievement rate for the adjusted non-interest expenses was 20%.The target achievement level of the objective for the Group Return on tangible equity reached 90%in 2021.The overall achievement level of all four equally weighted objectives of the Group Component was 77.5%.A portion of 60%of the target variable compensation attributable to the Group Component is multiplied by the overall achievement level for 2021.A portion of 30%of the target compensation is based on the achievement level for the 2020 financial year,which was 72.5%,and a portion of 10%is determined based on the achievement level for the 2019 financial year at 60%.This results in a weighted overall achievement level of 74.25%for the granting of the portion of the LTA that is attributable to the Group Component.Long-Term Award overall achievement in%Objectives Relative portion Target achievement level Overall achievement LTA Long-Term Award(cumulative over 3 years)ESG-Factor 33.33i.88f.27%Relative return on shares 25.006.80%Organic capital-growth 25.00.60%Group component 16.67t.25%Appropriateness of Management Board compensation and compliance with the set maximum compensation The Supervisory Board regularly reviews the appropriateness of the individual compensation components as well as the amount of total compensation.The review of the appropriateness of Management Board compensation concluded that the Management Board compensation resulting from the achievement levels for the 2021 financial year is appropriate.21 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Horizontal appropriateness Through the horizontal comparison,the Supervisory Board ensures that the target total compensation is appropriate in relation to the tasks and achievements of the Management Board as well as the companys situation and is also customary in the market.In this context,the level and structure of compensation,in particular,are examined at comparable companies(peer groups).Suitable companies in consideration of Deutsche Banks market position(in particular with regard to business sector,size and country)are used as the basis for this comparison.The assessment of horizontal appropriateness takes place in comparison with the following three peer groups.The horizontal appropriateness of the Management Board compensation is reviewed annually by the Supervisory Board.The Supervisory Board regularly engages external compensation advisors for the review of horizontal appropriateness,making sure that these advisors are independent from the Management Board and Deutsche Bank.The Supervisory Board takes the results of the review into consideration when setting the target total compensation for the Management Board members.Vertical appropriateness In addition to the horizontal comparison,the Supervisory Board considers a vertical comparison,which compares the compensation of the Management Board and the compensation of the workforce.Within the vertical comparison,the Supervisory Board considers in particular,in accordance with the German Corporate Governance Code,the development of the compensation over time.This involves a comparison of the Management Board compensation and the compensation of two groups of employees.Taken into account are,on the one hand,the compensation of the senior management,which comprises the first management level below the Management Board and members of the top executive committees of the divisions,as well as of management board members of significant institutions within the Deutsche Bank Group and of corresponding management board-1 level positions with management responsibility.The senior management compensation is compared to,on the other hand,the compensation of all other employees of Deutsche Bank Group worldwide(tariff and non-tariff employees).Compliance with the set maximum compensation(cap)The maximum compensation limit(cap)is set at 12 million for each Management Board member.This is based on the actual expense and/or actual disbursement of the compensation awarded for a financial year.The base salaries are fixed amounts.The expenses for fringe benefits vary from Management Board Member to Management Board Member in any given year.The contribution to Deutsche Banks pension plan or pension allowance is set at the same amount for all Management Board members.However,the amount to be recognized by the Bank during the year for Deutsche Banks pension service costs fluctuates based on actuarial variables.As the expense amount for the multi-year variable compensation components of the STA and LTA are not determined until up to seven years due to the deferral periods,compliance with the maximum compensation set for the 2021 financial year can only be conclusively reported within the framework of the Compensation Reports for the financial years up to 2029.Compliance with the maximum compensation limit as defined under Section 87a of the German Stock Corporation Act(AktG)is,however,already ensured for the 2021 financial year.22 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Deferrals and holding periods The Remuneration Ordinance for Institutions(InstitutsVergV)generally stipulates a three-year assessment period for the determination of the variable compensation for Management Board members.Deutsche Bank complies with this requirement by assessing each of the objectives of the LTA over a three-year period.If the relevant three years cannot be attributed to a member of the Management Board due to that member having joined the Bank only recently,the achievement level for the objectives will be determined for the period that can be attributed to the member.The deferral period for the LTA is in principle five years.If the assessment period is shorter than the prescribed minimum,the deferral period of the variable compensation to be granted is extended by the number of years missing for the minimum assessment period.The STA has an assessment period of one year.The deferral period for the STA is in principle seven years.The LTA is granted in the form of a share-based instrument(Restricted Equity Awards(REAs).The disbursement takes place over a deferral period of 5 years in 4 tranches,beginning with a tranche of 40%in year 2 after the end of the performance period and 3 tranches of 20%in years 3,4,and 5 after the end of the performance period.After the deferral period,the REAs of each tranche are also subject to an additional holding period of one year.Accordingly,the Management Board members cannot dispose of the shares underlying the REAs until after 3 years,at the earliest,and in full until after 6 years.During the deferral and holding periods,the value of the REAs is linked to the performance of the Deutsche Bank share and is therefore tied to the long-term performance of the Bank,and thereby strengthens the alignment of the Management Board members incentives with Deutsche Banks performance.The STA is generally granted in the form of deferred cash compensation(restricted incentive awards-RIAs).It is paid out in four tranches of 25ch over a total period of seven years after 1,3,5 and 7 years after the end of the assessment period.However,if the STA accounts for more than 50%of the total variable compensation,the portion exceeding 50%is also granted in the form of restricted equity awards.This ensures that at least 50%of the total variable compensation is always granted in share-based form in accordance with the regulatory requirements.The portion exceeding 50%is subject to the same deferral rules as the share-based compensation from the LTA.Instead of receiving Restricted Equity Awards and Restricted Incentive Awards as described above,holders of specific functions at certain Deutsche Bank U.S.entities are required by applicable regulation to be compensated under different plans.Restricted compensation for these persons consist of restricted share awards and restricted cash awards.The recipient will be the beneficial owner of the awards from the Award Date and the awards will be held on the recipients behalf.These awards will be restricted for a period of time(subject to the applicable plan rules and award statements,including performance conditions and forfeiture provisions).The restriction period is aligned with retention periods applicable to Deutsche Banks usual deferred awards.With regard to the Management Board of Deutsche Bank AG,these rules apply to Christiana Riley due to her role as CEO of Deutsche Bank USA Corp.For the RIAs and REAs,specific forfeiture conditions apply during the deferral and holding periods(additional information is provided in the section“Backtesting,malus and clawback).23 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Backtesting,malus and clawback By granting compensation components in a deferred form spread out over several years,a long-term incentive is created.In addition,the individual tranches are subject to specific forfeiture conditions until they vest.The Supervisory Board regularly reviews the results achieved by Management Board members in the past are sustainable(backtesting).If the outcome is that the achievements rewarded by the granting of the variable compensation were not sustainable,the awards may be partially or fully forfeited.Also,if the Groups results are negative,previously granted variable compensation may be declared fully or partially forfeited during the deferral period.In addition,the awards may be fully or partially forfeited if specific solvency or liquidity conditions are not met.Furthermore,awards may be forfeited in whole or in part in the event of individual misconduct(including breaches of regulations),dismissal for cause or negative individual contributions to performance(malus).In addition,the contracts of the Management Board members also enable the Supervisory Board to reclaim already paid or delivered compensation components due to certain individual negative performance contributions by the Management Board member(clawback)in accordance with the provisions pursuant to Sections 18(5)and 20(6)of the Remuneration Ordinance for Institutions(InstitutsVergV).The clawback is possible for the entire variable compensation for a financial year until the end of two years after the end of the deferral period of the last tranche of the compensation elements awarded on a deferred basis for the respective financial year.The Supervisory Board regularly reviews in due time before the respective due dates the possibility of a full or partial forfeiture(malus)or reclaiming(clawback)of the Management Board members variable compensation components.In the 2021 financial year,the Supervisory Board made use of the possibility to partially declare the forfeiture of variable compensation and,at its meeting on February 3,2021,resolved that a portion of the variable compensation granted to a former member of the Management Board on March 1,2019,in the form of Restricted Incentive Awards,is to be forfeited.Information on shares and fulfilling the share ownership obligation(Shareholding Guidelines)All members of the Management Board are required to acquire a significant amount of Deutsche Bank shares and to hold them on a long-term basis.This requirement is meant to foster the identification of the Management Board members with Deutsche Bank and its shareholders and to ensure a long-term link to the development of the Deutsche Banks business.For the Chief Executive Officer,the number of shares to be held is equal to 200%of his annual gross base salary,and for the other Management Board members,100%of their annual base salary.The requirements of the shareholding obligation must first be fulfilled on the date on which the share-based variable compensation that has been granted to the Management Board member since his or her appointment to the Management Board(waiting period)in total corresponds to 1.33 times the shareholding obligation.Compliance with the requirements is reviewed semi-annually.If the required number of shares is not met,the Management Board members must correct any deficiencies by the next review.In the context of granting variable compensation,the Supervisory Board can resolve on an individual basis that not only the LTA but also parts of the STA or the STA as a whole may be awarded in shares until the shareholding obligation is fulfilled.This will ensure faster compliance with the shareholding obligation.Members of the Management Board The following table shows the number of outstanding share awards of the current Management Board members as of February 19,2021 and February 11,2022 as well as the number of share awards newly granted,delivered or forfeited in this period.24 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Members of the Management Board Balance as of Feb 19,2021 Granted Delivered Forfeited Balance as of Feb 11,2022 Christian Sewing 485,115 208,115 693,230 Karl von Rohr 392,851 153,343 26,356 519,839 Fabrizio Campelli 278,603 145,836 85,540 338,899 Bernd Leukert 25,309 136,115 10,124 151,300 Stuart Lewis 348,142 134,859 483,001 James von Moltke 430,513 145,836 11,884 564,465 Alexander von zur Mhlen 251,256 103,422 76,397 278,282 Christiana Riley 215,841 134,8591 102,3542 248,3453 Rebecca Short4 92,754 Prof.Dr.Stefan Simon 31,740 130,329 12,696 149,373 1 Under the underlying plan,the 134,859 restricted shares originally granted were taxed at the time of grant,with 70,917 shares remaining on an after-tax basis.We refer to the corresponding presentation in the chapter Deferral and retention periods.2 Included are 63,942 share awards delivered to cover the amount of tax due under the underlying plan(see footnote 1).3 Includes a net number of 70,917 share entitlements under the underlying plan(see footnote 1).4 Member since 1 May 2021.The table below shows the total number of Deutsche Bank shares held by the incumbent Management Board members as of the reporting dates February 19,2021,and February 11,2022 as well as the number of share-based awards and the fulfillment level for the shareholding obligation.as of February 11,2022 Members of the Management Board Number of Deutsche Bank shares(in Units)as of Feb 19,2021 Number of Deutsche Bank shares(in Units)Restricted Equity Award(s)/Outstanding Equity Units(deferred with additional retention period)(in Units)thereof 75%of Restricted Equity Award(s)/Outstanding Equity Units chargeable to share obligation(deferred with additional retention period)(in Units)Total value of Deutsche Bank shares and Restricted Equity Award(s)/Outstanding Equity Units chargeable to share obligation(in Units)Share retention obligation must be fulfilled Yes/No Level of required shareholding obligation(in Units)1 Fulfillment ratio(in%)Christian Sewing 163,665 192,000 693,230 519,923 711,923 No 500,069 142%Karl von Rohr 17,283 30,058 519,839 389,879 419,937 Yes 208,362 202brizio Campelli 86,303 132,010 338,899 254,174 386,184 No 166,690 232rnd Leukert 1,500 7,882 151,300 113,475 121,357 No 166,690 73%Stuart Lewis 174,434 174,434 483,001 362,251 536,685 Yes 194,471 276%James von Moltke 68,486 74,753 564,465 423,349 498,102 Yes 194,471 256%Alexander von zur Mhlen 270,333 320,829 278,282 208,712 529,541 No 166,690 318%Christiana Riley 55,082 82,504 248,345 186,259 268,763 No 166,690 161%Rebecca Short2 0 36,451 92,754 69,566 106,017 No 166,690 64%Prof.Dr.Stefan Simon 0 0 149,373 112,030 112,030 No 166,690 67%Total 837,086 1,050,921 3,519,488 2,639,616 3,690,537 1 The calculation of the total value of the Deutsche Bank shares and share awards/outstanding shares eligible for the shareholding requirements is based on the share price 14,3980(Xetra closing price on February 11,2022).2 Member since May 1,2021.All Management Board members fulfilled the shareholding obligations in 2021 or are currently in the waiting period.The Chairman of the Management Board,Mr.Sewing,voluntarily committed to invest 15%of his monthly net salary in Deutsche Bank shares from September 2019 until the end of December 2022.In each case,purchases take place on the 22nd day of each month or on the following trading day.Benefits as of the end of the mandate Benefits upon regular contract termination The Supervisory Board allocates an entitlement to pension plan benefits to the Management Board members.These entitlements involve a defined contribution pension plan.Under this pension plan,a personal pension account is set up for each participating member of the Management Board with effect from the start of office as a Management Board member.The members of the Management Board,including the Management Board Chairman,receive a uniform,contractually defined,fixed annual contribution amount of 650,000.The contribution accrues interest that is credited in advance and determined by means of an age-related factor,up to the age of 60.For entitlements from a first-time or renewed appointment starting from the 2021 financial year,interest accrues at an average rate of 2%per annum,for legacy entitlements 4%.From the age of 61 onwards,an additional contribution equal to the amount resulting from applying the above interest rate to the balance of the pension account as of December 31 of the previous year will be credited to the pension account.The annual contributions,taken together,form the pension capital amount available to pay the future pension benefits upon the occurrence of a pension event(retirement age,disability or death).The pension account balance is vested from the start.25 Deutsche Bank Compensation of the Management Board Compensation Report 2021 If a Management Board member is subject to non-German income tax,the granting of an annual pension allowance of 650,000 may be selected as an alternative to the defined-contribution pension plan entitlement.This is subject to the precondition that receiving the customary pension plan contributions entails not insignificant tax-related disadvantages for the Management Board member compared to receiving a pension allowance.This option can be exercised once and from then on applies to the entire term of office of the Management Board member.The following table shows the annual contributions,the interest credits,the account balances and the annual service costs for the years 2021 and 2020 as well as the corresponding defined benefit obligations for each member of the Management Board in office in 2021 as of December 31,2020 and December 31,2021.The different balances are attributable to the different lengths of service on the Management Board,the respective age-related factors,and the different contribution rates.Members of the Management Board Annual contribution,in the year Interest credit,in the year Account balance,end of year Service cost(IFRS),in the year Present value of the defined benefit obligation(IFRS),end of year in 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 Christian Sewing 773,500 936,000 0 0 6,516,000 5,742,500 701,494 936,063 6,263,328 5,816,960 Karl von Rohr 754,000 786,500 0 0 4,721,001 3,967,001 772,131 831,427 4,866,754 4,205,087 Fabrizio Campelli 1,007,500 1,046,500 0 0 2,234,918 1,227,418 906,767 1,008,742 2,091,609 1,224,209 Bernd Leukert 812,500 1,135,334 0 0 1,947,834 1,135,334 785,526 851,694 1,957,432 1,181,299 Stuart Lewis 754,000 786,500 0 0 6,411,938 5,657,938 756,618 818,838 6,919,079 6,358,878 James von Moltke 871,000 903,500 0 0 4,189,250 3,318,250 820,820 895,972 4,095,605 3,385,498 Alexander von zur Mhlen1 0 0 0 0 0 0 0 0 0 0 Christiana Riley1 0 0 0 0 0 0 0 0 0 0 Rebecca Short2 554,668 0 0 0 554,668 0 476,303 0 496,829 0 Prof.Dr.Stefan Simon 871,000 1,293,501 0 0 2,164,501 1,293,501 824,015 903,039 2,128,664 1,335,674 Frank Kuhnke3 812,500 845,000 0 0 2,528,500 1,716,000 799,956 867,588 2,500,385 1,759,798 1 The Management Board member receives a pension allowance,which is shown in the chapter Compensation granted and owed(inflow table)”.2 Member since May 1,2021.3 Member until April 30,2021.Benefits upon early termination The Management Board members are in principle entitled to receive a severance payment upon an early termination of their appointment,provided the Bank is not entitled to revoke the appointment or give notice under the contractual agreement for cause.In accordance with the recommendation of the German Corporate Governance Code,the severance payment amounts to up to two times the annual compensation at the maximum and must not exceed the amount that would be payable as compensation for the remaining term of the service contract.The calculation of the severance payment is based on the annual compensation for the previous financial year and,if applicable,on the expected annual compensation for the current financial year.The severance payment is determined and granted in accordance with the statutory and regulatory requirements,in particular with the provisions of the Remuneration Ordinance for Institutions(InstitutsVergV).Frank Kuhnke left the Management Board with effect from the end of April 30,2021.As foreseen in his service contract,severance benefits were agreed with him.The severance agreement provided for compensation for a non-compete clause(“Karenzentschdigung”)in line with his service contract in the amount of 1,560,000 as well as a severance payment as compensation for the early termination of his service contract in the amount of 1,902,111.33.The first installment of 20%amount was disbursed in April 2021 as a cash payment.Another installment equivalent to 20%was awarded in shares and is due for delivery on June 1,2022.A further installment of 30%was awarded as deferred cash compensation with a holding period until June 1,2026.A final installment of 30%was awarded as deferred compensation in shares with a holding period until June 1,2027.The severance payment,is subject to all contractually agreed provisions on variable compensation components,including the possibility of a clawback of variable compensation.In the event of a change of control,Management Board members have a special right to termination of their service contract.However,in such case,there is no entitlement to a severance payment.26 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Other service contract provisions Term of the service contract The term of the Management Board service contracts is linked to the duration of the appointment and is a maximum of five years in accordance with Section 84 of the German Stock Corporation Act(AktG).The Supervisory Board shall decide at an early stage,no later than six months before the expiry of the appointment period,on a renewed appointment.In the case of the Management Board members reappointment,the service contract is extended for the duration of a renewed appointment.For first-time appointments,a contract term of three years is not to be exceeded.The Management Board service contract ends automatically with the expiry of the appointment period without requiring the express notice of termination.Reduction of base salary regarding compensation from other mandates The employment contracts of the Management Board members contain an obligation of the members to ensure that they will not receive any compensation to which they would otherwise be entitled in their capacity as a member of any corporate body,in particular a supervisory board,advisory board or similar body of any group entity of the Bank pursuant to 18 Stock Corporation Act.Accordingly,Management Board members do not receive any compensation for mandates on boards of Deutsche Bank subsidiaries.A Management Board members base salary will be reduced in an amount equal to 50%of the compensation from a mandate in particular supervisory board or advisory board mandates at a company that does not belong to Deutsche Bank Group.There is no such deduction of any compensation that does not exceed 100,000 per mandate and calendar year.In the 2021 financial year,the base salary of one member of the Management Board was reduced by the amount of the compensation from one mandate at a company that does not belong to Deutsche Bank Group,since the compensation exceeded the threshold amount.Post-contractual non-compete clause After their resignation from the Management Board,the members are as a general rule subject to a one-year non-compete clause.During the non-compete period,Deutsche Bank pays the Management Board member compensation(waiting allowance“Karenzentschdigung”)amounting to 65%of his or her annual base salary.The waiting allowance shall be credited against any claim for severance pay.In addition,the waiting allowance will be reduced by any income that the Management Board member earns during the non-compete period from self-employed,salaried or other paid activities that are not subject to the non-compete clause.Deutsche Bank may waive a Management Board members compliance with the post-contractual non-compete clause.From the date of the waiver.If and when such waiver is granted,Deutsche Banks obligation to pay the waiting allowance(“Karenzentschdigung”)ends.Deviations from the compensation system There were no deviations from the compensation system in the 2021 financial year.27 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Management Board compensation 2021 Current Management Board members Total compensation 2021 The Supervisory Board determined the aforementioned compensation on an individual basis for 2021 and 2020 as follows:2021 2020 in Base salary1 Short Term Award Long Term Award Total compensation Target Total compensation Ratio to Target Total compensation2 Christian Sewing 3,600,000 3,065,400 2,147,048 8,812,448 9,000,000 98%7,368,045 Karl von Rohr 3,000,000 2,393,600 1,749,447 7,143,047 7,400,000 97%5,882,495 Fabrizio Campelli 2,400,000 2,218,783 1,630,166 6,248,949 6,500,000 96%5,179,137 Bernd Leukert 2,400,000 2,161,383 1,630,166 6,191,549 6,500,000 95%4,909,270 Stuart Lewis 2,800,000 2,258,200 1,669,926 6,728,126 7,000,000 96%4,979,403 James von Moltke 2,800,000 2,278,500 1,669,926 6,748,426 7,000,000 96%5,262,470 Alexander von zur Mhlen 2,400,000 2,132,000 1,630,166 6,162,166 6,500,000 95%2,094,333 Christiana Riley 2,400,000 2,162,750 1,630,166 6,192,916 6,500,000 95%4,779,103 Rebecca Short3 1,600,000 1,440,467 1,086,777 4,127,244 4,333,333 95%Prof.Dr.Stefan Simon 2,400,000 2,134,050 1,630,166 6,164,216 6,500,000 95%2,124,126 Frank Kuhnke4 800,000 634,133 543,389 1,977,522 2,166,667 91%4,760,403 Total 26,600,000 22,879,266 17,017,343 66,496,609 69,400,000 96G,338,785 1 In the column Basic salary,the target values set by the Supervisory Board are shown in EUR for reasons of comparability.The actual inflow differs from this target value for Management Board members Alexander von zur Mhlen and Christiana Riley due to currency fluctuations and for Bernd Leukert due to the offsetting of compensation from mandates.The inflow is shown in the chapter Compensation granted and owed(inflow table).2 For the Management Board members Alexander von zur Mhlen and Christiana Riley,currency fluctuations were excluded for reasons of comparability.3 Member since May 1,2021.4 Member until April 30,2021.The number of share awards granted to the members of the Management Board in the form of Restricted Equity Awards(REA)in 2022 for the 2021 financial year was calculated by dividing the respective amounts in euro by the higher of either the average Xetra closing price of the Deutsche Bank share during the last ten trading days in February 2022 or the Xetra closing price on February 28,2022(12.8930).Members of the Management Board Restricted Equity Award(s)(deferred with additional retention period)(in Units)1 Christian Sewing 202,143 Karl von Rohr 160,670 Fabrizio Campelli 149,265 Bernd Leukert 147,039 Stuart Lewis 152,336 James von Moltke 153,123 Alexander von zur Mhlen 145,900 Christiana Riley 147,092 Rebecca Short2 98,008 Prof.Dr.Stefan Simon 145,979 Frank Kuhnke3 45,665 Total 1,547,220 1 The Restricted Equity Awards are commercially rounded for presentation purposes.2 Member since May 1,2021.3 Member until April 30,2021.Granted and owed compensation(inflow table)The following table shows the compensation paid and owed in the 2021 and 2020 financial years to incumbent members of the Management Board in the 2021 financial year,pursuant to Section 162(1)sentence 1 of the German Stock Corporation Act(AktG).This involves the compensation components that were either actually paid or delivered to the individual Management Board members within the reporting period(“paid”)or were already legally due during the reporting period but not yet delivered(“owed”).Besides the compensation amounts,the table additionally shows the relative proportions of fixed and variable compensation of the total compensation pursuant to Section 162(1)sentence 2 of the German Stock Corporation Act(AktG).28 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Christian Sewing Karl von Rohr 2021 2020 2021 2020 in t.in%in t.in%in t.in%in t.in%Fixed compensation components:Base salary 3,600 93%3,117 93%3,000 93%2,750 94%Pension allowance 0 0%0 0%0 0%0 0%Fringe benefits (8)1 0%4 0$ 1 0%Total fixed compensation 3,592 93%3,120 93%3,024 93%2,761 94%Variable compensation components:Deferred variable compensation thereof Restricted Incentive Awards:2017 Restricted Incentive Award:Buyout 0 0%0 0%0 0%0 0 17 Restricted Incentive Award:Sign On 0 0%0 0%0 0%0 0 19 Restricted Incentive Award for 2018 232 6#2 79 59 6 20 Restricted Incentive Award for 2019 43 1%0 0C 1%0 0%thereof Equity Awards:2017 Restricted Equity Award:Buyout 0 0%0 0%0 0%0 0 15 DB Equity Plan for 2014 0 0%0 0%0 0%0 0%Fringe benefits 0 0%0 0%0 0%0 0%Total variable compensation 275 7#2 7!1 79 6%Total compensation 3,867 100%3,352 100%3,235 100%2,930 100%1 Due to the economic participation in the costs of a company car provided,which exceeds the amount of the other fringe benefits,a negative balance is to be shown for the financial year 2021.Fabrizio Campelli Bernd Leukert 2021 2020 2021 2020 in t.in%in t.in%in t.in%in t.in%Fixed compensation components:Base salary 2,400 99%2,200 99%2,3941 99%2,200 99%Pension allowance 0 0%0 0%0 0%0 0%Fringe benefits 12 0 1% 1 1%Total fixed compensation 2,412 100%2,222 100%2,419 100%2,222 100%Variable compensation components:Deferred variable compensation thereof Restricted Incentive Awards:2017 Restricted Incentive Award:Buyout 0 0%0 0%0 0%0 0 17 Restricted Incentive Award:Sign On 0 0%0 0%0 0%0 0 19 Restricted Incentive Award for 2018 0 0%0 0%0 0%0 0 20 Restricted Incentive Award for 2019 7 0%0 0%0 0%0 0%thereof Equity Awards:2017 Restricted Equity Award:Buyout 0 0%0 0%0 0%0 0 15 DB Equity Plan for 2014 0 0%0 0%0 0%0 0%Fringe benefits 0 0%0 0%0 0%0 0%Total variable compensation 7 0%0 0%0 0%0 0%Total compensation 2,420 100%2,222 100%2,419 100%2,222 100%1 The fixed compensation shown includes the crediting of compensation from mandates.Stuart Lewis James von Moltke 2021 2020 2021 2020 in t.in%in t.in%in t.in%in t.in%Fixed compensation components:Base salary 2,800 91%2,283 78%2,800 70%2,283 63%Pension allowance 0 0%0 0%0 0%0 0%Fringe benefits 80 3) 1R 1C 1%Total fixed compensation 2,880 94%2,312 79%2,852 71%2,326 64%Variable compensation components:Deferred variable compensation thereof Restricted Incentive Awards:2017 Restricted Incentive Award:Buyout 0 0%0 00 3(0 8 17 Restricted Incentive Award:Sign On 0 0%0 0g 2g 2 19 Restricted Incentive Award for 2018 156 56 59 49 5 20 Restricted Incentive Award for 2019 43 1%0 0C 1%0 0%thereof Equity Awards:2017 Restricted Equity Award:Buyout 0 0%0 04 37 5 15 DB Equity Plan for 2014 0 0D3 15%0 0%0 0%Fringe benefits 0 0%0 0a6 15a6 17%Total variable compensation 199 6Y9 21%1,157 29%1,309 36%Total compensation 3,079 100%2,912 100%4,009 100%3,635 100) Deutsche Bank Compensation of the Management Board Compensation Report 2021 Alexander von zur Mhlen Christiana Riley 2021 2020 2021 2020 in t.in%in t.in%in t.in%in t.in%Fixed compensation components:Base salary 2,3451 7431 75%2,3281 76%2,1941 72%Pension allowance 650 211 21e0 21e0 21%Fringe benefits 64 2 1 3 3%Total fixed compensation 3,059 97%1,249 97%3,063 99%2,938 97%Variable compensation components:Deferred variable compensation thereof Restricted Incentive Awards:2017 Restricted Incentive Award:Buyout 0 0%0 0%0 0%0 0 17 Restricted Incentive Award:Sign On 0 0%0 0%0 0%0 0 19 Restricted Incentive Award for 2018 0 0%0 0%0 0%0 0 20 Restricted Incentive Award for 2019 0 0%0 0%0 0%0 0%thereof Equity Awards:2017 Restricted Equity Award:Buyout 0 0%0 0%0 0%0 0 15 DB Equity Plan for 2014 0 0%0 0%0 0%0 0%Fringe benefits 98 33 3 1 3%Total variable compensation 98 33 3 1 3%Total compensation 3,157 100%1,282 100%3,079 100%3,034 100%0 0 0 0 1 As the fixed compensation is granted in local currency,it is subject to FX-rate changes.Rebecca Short(Member since May 1,2021)Prof.Dr.Stefan Simon 2021 2020 2021 2020 in t.in%in t.in%in t.in%in t.in%Fixed compensation components:Base salary 1,600 100%-2,400 98%1,000 99%Pension allowance 0 0%-0 0%0 0%Fringe benefits 6 0%-46 2%7 1%Total fixed compensation 1,606 100%-2,446 100%1,007 100%Variable compensation components:Deferred variable compensation thereof Restricted Incentive Awards:2017 Restricted Incentive Award:Buyout 0 0%-0 0%0 0 17 Restricted Incentive Award:Sign On 0 0%-0 0%0 0 19 Restricted Incentive Award for 2018 0 0%-0 0%0 0 20 Restricted Incentive Award for 2019 0 0%-0 0%0 0%thereof Equity Awards:-2017 Restricted Equity Award:Buyout 0 0%-0 0%0 0 15 DB Equity Plan for 2014 0 0%-0 0%0 0%Fringe benefits 0 0%-0 0%0 0%Total variable compensation 0 0%-0 0%0 0%Total compensation 1,606 100%-2,446 100%1,007 100%Frank Kuhnke(Member until April 30,2021)2021 2020 in t.in%in t.in%Fixed compensation components:Base salary 800 35%2,200 100%Severance benefits1 1,420 63%0 -Pension allowance 0 0%0 0%Fringe benefits 1 0%7 0%Total fixed compensation 2,221 98%2,207 100%Variable compensation components:Deferred variable compensation thereof Restricted Incentive Awards:2017 Restricted Incentive Award:Buyout 0 0%0 0 17 Restricted Incentive Award:Sign On 0 0%0 0 19 Restricted Incentive Award for 2018 0 0%0 0 20 Restricted Incentive Award for 2019 43 2%0 0%thereof Equity Awards:2017 Restricted Equity Award:Buyout 0 0%0 0 15 DB Equity Plan for 2014 0 0%0 0%Fringe benefits 0 0%0 0%Total variable compensation 43 2%0 0%Total compensation 2,264 100%2,207 100%1 For details to the severance benefits,please refer to chapter“Benefits upon early termination”.30 Deutsche Bank Compensation of the Management Board Compensation Report 2021 With respect to the deferred compensation components of previous years approved in the reporting year,the Supervisory Board confirmed that the respective performance conditions were met.Former members of the Management Board Granted and owed compensation(inflow table)The following table shows the compensation paid and owed to the former members of the Management Board in the 2021 financial year pursuant to Section 162(1)sentence 1 of the German Stock Corporation Act(AktG).This involves the compensation components that were either actually delivered to the former Management Board members within the reporting period(“paid”)or were already legally due during the reporting period but not yet delivered(“owed”).Pursuant to Section 162(5)of the German Stock Corporation Act(AktG),no personal data is provided on former members of the Management Board who ended their work for the Management Board before December 31,2011.Werner Steinmller Member until July 31,2020 Sylvie Matherat Member until July 31,2019 Garth Ritchie Member until July 31,2019 Frank Strau Member until July 31,2019 2021 2021 2021 2021 in t.in%in t.in%in t.in%in t.in%Severance benefits 130 4%0 0%1,639 79%0 0ferred variable compensation Restricted Incentive Awards 191 66 88C2 2126 100%Equity Awards 0 0%0 0%0 0%0 0%Fringe benefits 130 4& 12%0 0%0 0%Pension benefits 2,6661 86%0 0%0 0%0 0%Total compensation 3,117 100!1 100%2,071 10026 100%1 The shown value represents capital payments.Nicolas Moreau Member until Dec 31,2018 2021 DB AG DWS Management GmbH Overall in t.in t.in t.inferred variable compensation Restricted Incentive Awards 79 90 169 57%Equity Awards1 0 130 130 43%Fringe benefits 0 0 0 0%Pension benefits 0 0 0 0%Total compensation 79 220 299 100%1 The equity awards shown are share-based instruments granted by DWS Management GmbH.Details of these instruments can be found in the DWS Annual Report.Kimberly Hammonds Member until May 24,2018 Dr.Marcus Schenck Member until May 24,2018 John Cryan Member until April 8,2018 Hermann-Josef Lamberti Member until May 31,2012 2021 2021 2021 2021 in t.in%in t.in%in t.in%in t.inferred variable compensation Restricted Incentive Awards 52 42e 100G 100%0 0%Equity Awards 0 0%0 0%0 0%0 0%Fringe benefits 73 59%0 0%0 0%0 0%Pension benefits 0 0%0 0%0 0%1,414 100%Total compensation 124 100e 100G 100%1,414 100%Josef Ackermann Member until May 31,2012 2021 in t.inferred variable compensation Restricted Incentive Awards 0 0%Equity Awards 0 0%Fringe benefits 0 0%Pension benefits 924 100%Total compensation 924 1001 Deutsche Bank Compensation of the Management Board Compensation Report 2021 Outlook
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Corporate Governance Statement 2021Deutsche Bank1 Deutsche Bank Corporate Governance Report 2021 Corporate Governance Statement according to Sections 289f and 315d of the German Commercial Code/Corporate Governance Report 2 Management Board and Supervisory Board 14 Reporting and Transparency 14 Related Party Transactions 15 Auditing and Controlling 18 Compliance with the German Corporate Governance Code 2 Deutsche Bank Management Board and Supervisory Board Corporate Governance Report 2021 All information presented in this Corporate Governance Statement according to Section 289f and 315d of the German Commercial Code is as of February 11,2022.Management Board and Supervisory Board Management Board The Management Board of Deutsche Bank AG is responsible for the management of the company in accordance with the law,the Articles of Association of Deutsche Bank AG and the Terms of Reference for the Management Board with the objective of creating sustainable value in the interests of the company.It considers the interests of shareholders,employees and other company-related stakeholders.The members of the Management Board are collectively responsible for managing the banks business.The Management Board,as the Group Management Board,manages Deutsche Bank Group in accordance with uniform guidelines;it exercises general control over all Group companies.The Management Board decides on all matters prescribed by law and the Articles of Association and ensures compliance with the legal requirements and internal guidelines(compliance).It also takes the necessary measures to ensure that adequate internal guidelines are developed and implemented.The Management Boards responsibilities include,in particular,the banks strategic management and direction,the allocation of resources,financial accounting and reporting,control and risk management,as well as a properly functioning business organization and corporate control.The Management Board decides on the appointments to the senior management level below the Management Board and,in particular,on the appointment of Global Key Function Holders.In appointing people to management functions in the Group,the Management Board takes diversity into account and strives,in particular,to achieve an appropriate representation of women(more detailed information in section“Targets for the proportion of women in management positions/gender quota“in this Corporate Governance Statement).The Management Board works closely together with the Supervisory Board in a cooperative relationship of trust and for the benefit of the company.The Management Board reports to the Supervisory Board at a minimum within the scope prescribed by law or administrative guidelines,in particular on all issues with relevance for the Group concerning strategy,the intended business policy,planning,business development,risk situation,risk management,staff development,reputation and compliance.A comprehensive presentation of the duties,responsibilities and procedures of our Management Board is specified in its Terms of Reference,the current version of which is available on our website( changes to the Management Board and the current members of the Management Board The following members of the Management Board were appointed for a three-year period:Rebecca Short with effect from May 1,2021 Olivier Vigneron with effect from May 20,2022.The following member left the Management Board:Frank Kuhnke as of April 30,2021.Furthermore,in March 2021,Stuart Lewis informed the Supervisory Board of his decision to retire after the Annual General Meeting in May 2022.The following information is provided on the current members of the Management Board on the year in which they were born,year in which they were first appointed and year in which their term expires as well as their current positions and area of responsibility according to the current Business Allocation Plan for the Management Board.Also specified are their other board mandates or directorships outside of Deutsche Bank Group as well as all memberships in legally prescribed supervisory boards or other comparable domestic or foreign supervisory bodies of commercial enterprises.The members of our Management Board have generally undertaken not to assume chairmanships of supervisory boards of companies outside Deutsche Bank Group.3 Deutsche Bank Management Board and Supervisory Board Corporate Governance Report 2021 Christian Sewing Year of birth:1970 First appointed:2015 Term expires:2026 Christian Sewing became a member of our Management Board on January 1,2015,and is our Chief Executive Officer with effect from April 8,2018.He is responsible on the Management Board for Communications&Corporate Social Responsibility(CSR),Research and Group Audit.He was responsible for the Corporate Bank and the Investment Bank until April 2021.Since May 2021 Mr.Sewing has been responsible for Human Resources.Prior to assuming his role on the Management Board,Mr.Sewing was Global Head of Group Audit and held a number of positions before that in Risk,including Deputy Chief Risk Officer(from 2012 to 2013)and Chief Credit Officer(from 2010 to 2012)of Deutsche Bank.From 2005 until 2007,Mr.Sewing was a member of the Management Board of Deutsche Genossenschafts-Hypothekenbank.Before graduating with a diploma from the Bankakademie Bielefeld and Hamburg,Mr.Sewing completed a bank apprenticeship at Deutsche Bank in 1989.Mr.Sewing does not have any external directorships subject to disclosure.Karl von Rohr Year of birth:1965 First appointed:2015 Term expires:2023 Karl von Rohr became a member of our Management Board on November 1,2015,and President as of April 8,2018.He is responsible on the Management Board for the Private Bank and Asset Management.He is also Regional Chief Executive Officer(CEO)for Germany,as well as for the EMEA Region(Europe,Middle East and Africa).Mr.von Rohr joined Deutsche Bank in 1997.From November 2015 to November 2019 he was the Management Board member responsible for Human Resources and until July 2020,he was responsible for Legal,Group Governance and Government&Regulatory Affairs.From 2013 to 2015 he was Global Chief Operating Officer,Regional Management.Prior to this,he was Head of Human Resources for Deutsche Bank in Germany and member of the Management Board of Deutsche Bank Privat-und Geschftskunden AG.During his time at Deutsche Bank,he has held various senior management positions in other divisions in Germany and Belgium.He studied law at the universities of Bonn(Germany),Kiel(Germany),Lausanne(Switzerland)and at Cornell University(U.S.A.).Mr.von Rohr does not have any external directorships subject to disclosure.He is Chairman of the Supervisory Board of DWS Group GmbH&Co.KGaA.Fabrizio Campelli Year of birth:1973 First appointed:2019 Term expires:2022 Fabrizio Campelli became a member of our Management Board on November 1,2019.He was our Chief Transformation Officer and the Management Board member responsible for Transformation and Human Resources until April 2021.Since May 2021,Mr.Campelli is responsible for the Corporate Bank and the Investment Bank and since August 2021 also for UK&Ireland.He previously spent four years as the Global Head of Deutsche Bank Wealth Management.Before that,he was Head of Strategy&Organizational Development as well as Deputy Chief Operating Officer for Deutsche Bank Group.He joined Deutsche Bank in 2004 after working at McKinsey&Company in the firms London and Milan offices,focusing on strategic assignments mainly for global financial institutions.He holds an MBA from MIT Sloan School of Management and a Business Administration degree from Bocconi University in Milan.4 Deutsche Bank Management Board and Supervisory Board Corporate Governance Report 2021 Mr.Campelli has been a member of the following Supervisory Boards:BVV Versicherungsverein des Bankgewerbes a.G.and BVV Versorgungskasse des Bankgewerbes e.V.Bernd Leukert Year of birth:1967 First appointed:2020 Term expires:2022 Bernd Leukert became a member of our Management Board on January 1,2020.He is our Chief Technology,Data and Innovation Officer and is responsible for the Chief Information Offices for the Infrastructure areas and the business divisions,Chief Technology Office and the Chief Security Office.He has also been responsible for Data Governance and Oversight and Trade Settlement since May,2021,as well as for Cloud and Innovation since August 2021.He joined Deutsche Bank on September 1,2019.He previously worked for many years at SAP SE,the global software company.From 2014 to 2019,he was responsible for product development and innovations as well as the Digital Business Services division on the Executive Board.He joined SAP in 1994 and held various management positions.Mr.Leukert studied Industrial Engineering and Management at the University of Karlsruhe and at Trinity College Dublin,graduating in 1994 with a Masters Degree in Business Administration.He is member of the Supervisory Board of Bertelsmann SE&Co.KGaA.He is a member of the Supervisory Board of DWS Group GmbH&Co.KGaA.Stuart Lewis Year of birth:1965 First appointed:2012 Term expires:2023 Stuart Lewis became a member of our Management Board on June 1,2012.He is our Chief Risk Officer responsible for the functions managing Credit Risk,Non-Financial Risk,Market Risk and Liquidity Risk as well as for the Risk-Infrastructure units.He was responsible for Compliance,Anti-Financial Crime(AFC)and the Business Selection and Conflicts Office until April 2021 and for the United Kingdom&Ireland region until July 2021.He joined Deutsche Bank in 1996.Prior to assuming his current role,Mr.Lewis was Deputy Chief Risk Officer and subsequently Chief Risk Officer of the Corporate&Investment Bank from 2010 to 2012.Between 2006 and 2010 he was Chief Credit Officer.Before joining Deutsche Bank in 1996,he worked at Credit Suisse and Continental Illinois National Bank in London.He studied at the University of Dundee,where he obtained an LLB(Hons),and he holds an LLM from the London School of Economics.He also attended the College of Law,Guildford.Mr.Lewis does not have any external directorships subject to disclosure.He has held the position of Visiting Professor in Practice in the Finance Department at the London School of Economics since 2017.James von Moltke Year of birth:1969 First appointed:2017 Term expires:2023 James von Moltke became a member of our Management Board on July 1,2017.He is our Chief Financial Officer and in this function he is responsible for,among other things,Finance,Group Tax,Treasury and Investor Relations.Before Mr.von Moltke joined Deutsche Bank he served as Treasurer of Citigroup.He started his career at Credit Suisse First Boston in London in 1992.In 1995,he joined J.P.Morgan,working at the bank for 10 years in New York and Hong Kong.After next working at Morgan Stanley in New York for four years,where he led the Financial Technology advisory team globally,Mr.von Moltke joined Citigroup as Head of Corporate M&A in 2009 and three years later became the Global Head of Financial Planning.He holds a Bachelor of Arts degree from New College,University of Oxford.Mr.von Moltke does not have any external directorships subject to disclosure.5 Deutsche Bank Management Board and Supervisory Board Corporate Governance Report 2021 Alexander von zur Mhlen Year of birth:1975 First appointed:2020 Term expires:2023 Alexander von zur Mhlen became a member of our Management Board on August 1,2020.He is our Regional CEO Asia Pacific.Mr.von zur Mhlen joined Deutsche Bank in 1998 and over the years has held a range of management roles in London and Frankfurt across infrastructure and business divisions.From 2018 to 2020 he was responsible for the Groups strategic development and was the advisor to the Chief Executive Officer(CEO).Before that,he served as Co-Head of Global Capital Markets,with a regional focus on Asia Pacific and EMEA.From 2009 to 2017,he was Group Treasurer.Alexander von zur Mhlen holds a Diploma in Business Administration from the Berlin School of Economics and Law in Berlin.Mr.von zur Mhlen does not have any external directorships subject to disclosure.Christiana Riley Year of birth:1978 First appointed:2020 Term expires:2022 Christiana Riley became a member of our Management Board on January 1,2020.She is our Regional CEO Americas.Mrs.Riley joined Deutsche Bank in 2006 where she was recently the Chief Financial Officer of the Corporate&Investment Bank.She previously spent nine years in Group Strategy&Planning,which she lead from 2011 to 2015.Prior to this Mrs.Riley worked at the management consultancy McKinsey&Company and at the investment bank Greenhill&Co.She graduated cum laude in 2000 from Princeton University in America where she studied Romance Languages,Literature and Linguistics.She also studied at London Business School in the UK,where she gained a Master of Business Administration in 2005.Mrs.Riley is a member of the Supervisory Board of The Clearing House Payments Company LLC.She is Chief Executive Officer of DB USA Corporation.Rebecca Short Year of birth:1974 First appointed:2021 Term expires:2024 Rebecca Short became a member of our Management Board on May 1,2021.She is our Chief Transformation Officer and the Management Board member responsible for Transformation,Global Procurement and the Capital Release Unit.She previously spent almost six years within Finance as Head of Group Planning&Performance Management.She joined Deutsche Bank on its graduate programme in Auckland in 1998.She moved to London in 2000 with Credit Risk Management where she spent 12 years,formerly as European Head of Corporates.She then set up a new Risk-wide team,Strategic Risk Analysis&Reporting,in 2012 before moving to a senior central management role in Audit in 2013 where she spent two years.She has a BCom(Honours)degree in Finance&Accounting from the University of Otago,Dunedin,New Zealand.Mrs.Short does not have any external directorships subject to disclosure.6 Deutsche Bank Management Board and Supervisory Board Corporate Governance Report 2021 Professor Dr.Stefan Simon Year of birth:1969 First appointed:2020 Term expires:2023 Professor Dr.Stefan Simon became a member of our Management Board on August 1,2020.He is our Chief Administrative Officer(CAO)and is responsible for Government and Regulatory Affairs as well as for Legal and Governance.Additionally,since May 2021 he has been responsible for Compliance,Anti-Financial-Crime(AFC)and the Business Selection and Conflicts Office,as well as for Controls Testing&Assurance since August 2021.Professor Dr.Simon joined Deutsche Bank on August 1,2019.He was a member of Deutsche Banks Supervisory Board from August 2016 until July 2019 and was Chairman of its Integrity Committee.He is a lawyer and tax consultant and between 1997 and 2016 worked at the law firm Flick Gocke Schaumburg,where he became a partner in 2002.Since 2008 he has also been an Honorary Professor at the University of Cologne.He studied law at the University of Cologne and received his doctorate there in 1998.Professor Dr.Simon is Chairman of the Advisory Council of Leop.Krawinkel GmbH&Co.KG.7 Deutsche Bank Management Board and Supervisory Board Corporate Governance Report 2021 Supervisory Board The Supervisory Board of Deutsche Bank AG appoints,supervises and advises the Management Board and is directly involved in decisions of fundamental importance to the bank.It works together closely with the Management Board in a cooperative relationship of trust and for the benefit of the company.The internal organization of the Supervisory Board and its committees as well as the tasks and profiles of the individual members are subject to specific statutory and regulatory requirements that further specify and supplement the corporate-law regulations concerning corporate governance.Such requirements are founded on,among other things,the German Banking Act(Kreditwesengesetz),the Remuneration Ordinance for Institutions(Institutsvergtungsverordnung),the guidelines of the European Banking Authority(EBA)and European Securities and Markets Authority(ESMA)and the administrative practices of the European Central Bank as our supervisory authority.In individual cases,these diverge from the recommendations of the German Corporate Governance Code(“GCGC”).The Supervisory Boards tasks,meeting preparations and follow-ups,as well as general rules for the committees,are set out in Terms of Reference for the Supervisory Board.The current version is available on the Deutsche Bank website( number of meetings held during the financial year is specified in the Report of the Supervisory Board.Together with the Management Board,the Supervisory Board arranges for a long-term succession planning:The Nomination Committee supports the Chairmans Committee and the Supervisory Board in identifying candidates to fill a position on the banks Management Board.In doing so,the Committee prepares a position description with a candidate profile and states the expected time commitment.Suitable candidates are identified,in some cases in collaboration with external recruiting consultants,and structured interviews are conducted.Besides this external succession planning,the Management Board and Supervisory Board maintain a list of internal candidates.The Nomination Committee and the Supervisory Board regularly receive reports from the Management Board on the internal succession planning and the process from the perspective of the Management Board.For the selection of suitable candidates,external and internal,the Nomination Committee takes into account the balance and diversity of the knowledge,skills and experience of all members of the Management Board.It also seeks to foster diversity on the Management Board,for example,with regard to gender,nationality and age.Building on the work of the Nomination Committee,the Chairmans Committee submits a recommendation for the Supervisory Boards resolution.Based on this,the Supervisory Board decides on the appointment of Management Board members.Besides proposals for the appointment of members of the Management Board,the Chairmans Committee also submits proposals for the dismissal of Management Board members.The decision on such dismissal is the Supervisory Boards responsibility.Based on proposals of the Compensation Control Committee,the Supervisory Board determines the total compensation of the individual members of the Management Board,resolves on the compensation system for the Management Board and reviews it regularly.The Supervisory Board receives reports from the Management Board at least within the scope prescribed by law or administrative guidelines,in particular on all issues of relevance for the Group concerning strategy,intended business policy,planning,business development,risk situation,risk management,staff development,reputation and compliance.Furthermore,Group Audit informs the Audit Committee of any deficiencies identified regularly,and in the case of severe deficiencies without undue delay.The Chairman of the Supervisory Board is informed accordingly of any serious findings relating to the members of the Management Board.The Supervisory Board and Management Board adopted an Information Regime,which specifies not only the reporting to the Supervisory Board,but also,among other things the Supervisory Boards enquiries and requests for information from employees of the company as well as the exchange of information in connection with preparations for the meetings and between the meetings.The Chairman of the Supervisory Board plays a crucial role in the proper functioning of the Supervisory Board and has a leadership role in this.He can issue internal guidelines and principles concerning the Supervisory Boards internal organization and communications,the coordination of the work within the Supervisory Board and the Supervisory Boards interaction with the Management Board.Between meetings,the Chairman of the Supervisory Board,and,to the extent expedient,the chairpersons of the Supervisory Board committees,maintain regular contact with the members of the Management Board,especially with the Chairperson of the Management Board,and deliberate with them,among other things,on issues of Deutsche Bank Groups strategy,planning,the development of its business,risk situation,risk management,risk controlling,governance,compliance,compensation systems,IT,data and digitalization as well as material litigation cases.The Chairman of the Supervisory Board and within their respective functional responsibility the chairpersons of the Supervisory Board committees are informed without delay by the Chairman of the Management Board or by the respectively responsible Management Board member about important events of material significance for the assessment of the situation,development and management of Deutsche Bank Group.The Chairman of the Supervisory Board engages in discussions with investors on Supervisory Board-related topics when necessary and regularly informs the Supervisory Board of the substance of such discussions.8 Deutsche Bank Management Board and Supervisory Board Corporate Governance Report 2021 The types of business that require the approval of the Supervisory Board to be transacted are specified in the Article of Association of Deutsche Bank AG.The Supervisory Board meets regularly without the Management Board.After due consideration and insofar as materially appropriate,the Supervisory Board,or any of its committees,may,in order to perform their tasks,consult auditors,legal advisors and other internal or external advisors.In performing their tasks,the Chairman of the Supervisory Board,the chairpersons of the committees and the Supervisory Board members are supported by the Office of the Supervisory Board,which is independent of the Management Board.The Nomination Committee and Supervisory Board addressed the assessment prescribed by law of the Supervisory Board pursuant to Section 25d of the German Banking Act(KWG),which is also the self-assessment of the Supervisory Board pursuant to Section D.13 of the German Corporate Governance Code(GCGC)at several meetings.The concrete implementation of and the schedule for the assessment were deliberated on and set out at the meetings of the Nomination Committee on September 16,2021 and October 25,2021.Services of an external advisor were not mandated in this context.The assessment was performed essentially on the basis of extensive questionnaires regarding the work of the Supervisory Board,of the Supervisory Board committees and of the Management Board,individual interviews conducted by members of the Nomination Committee with the members of the Management Board,and an assessment of the individual members of both the Management Board and Supervisory Board.The final discussion of the assessment took place at the Supervisory Board meeting in plenum on February 2,2022,and the results were set out in a final report.The Supervisory Board continues to hold the opinion that the Supervisory Board and Management Board have achieved a high standard and that there are no reservations,in particular,regarding the professional qualifications,personal reliability and time availability of the members of the Management Board and of the Supervisory Board.Members of the Supervisory Board The Supervisory Board has 20 members.In accordance with the German Co-Determination Act(Mitbestimmungsgesetz),it comprises an equal number of shareholder representatives and employee representatives.In accordance with the Articles of Association,the members of the Supervisory Board are elected for the period until the conclusion of the General Meeting which adopts the resolutions concerning the ratification of the acts of management for the fourth financial year following the beginning of the term of office.For the election of shareholder representatives,the General Meeting may establish that the terms of office of individual members may begin or end on differing dates.In accordance with the Terms of Reference for the Supervisory Board since July 2020,shareholder representatives are proposed to the General Meeting for election for a maximum of approximately four years,i.e.until the conclusion of the General Meeting which adopts the resolutions concerning the ratification of the acts of management for the third financial year following the beginning of the term of office,whereby the financial year in which the term of office begins is not taken into account.The following table shows information on the current members of our Supervisory Board.Member Principal occupation Supervisory board memberships and other directorships Dr.Paul Achleitner Year of birth:1956 First elected:May 31,2012 Term expires:2022 Chairman of the Supervisory Board,Deutsche Bank AG Bayer AG;Henkel AG&Co.KGaA(member of the Shareholders Committee)Ludwig Blomeyer-Bartenstein*Year of birth:1957 First elected:May 24,2018 Term expires:2023 Spokesman of the Management Bremen,Deutsche Bank AG Frowein&Co.Beteiligungs AG;Brgschaftsbank Bremen GmbH(Member of the Board of Directors)Mayree Clark Year of birth:1957 First elected:May 24,2018 Term expires:2023 Supervisory Board member Ally Financial,Inc.(Member of the Board of Directors),Allvue Systems Holdings,Inc.(Member of the Board of Directors)(since August 2021)Jan Duscheck*Year of birth:1984 Appointed by the court:August 2,2016 Term expires:2023 Head of National Working Group Banking,trade union ver.di(Vereinte Dienstleistungsgewerkschaft)No memberships or directorships subject to disclosure Dr.Gerhard Eschelbeck Year of birth:1965 First elected:May 18,2017 Term expires:2022 Chief Information Security Officer,Aurora Innovation,Inc.Onapsis Inc.(Member of the Board of Directors);WootCloud Inc.(Member of the Board of Directors)9 Deutsche Bank Management Board and Supervisory Board Corporate Governance Report 2021 Member Principal occupation Supervisory board memberships and other directorships Sigmar Gabriel Year of birth:1959 Appointed by the court:March 11,2020 Term expires:2025 Former German Federal Government Minister GP Gnter Papenburg AG;Siemens Energy AG Timo Heider*Year of birth:1975 First elected:May 23,2013 Term expires:2023 Staff Council member BHW Bausparkasse AG(Deputy Chairman);PCC Services GmbH der Deutschen Bank(Deputy Chairman);Pensionskasse der BHW Bausparkasse AG VVaG(Deputy Chairman)Martina Klee*Year of birth:1962 First elected:May 29,2008 Term expires:2023 Staff Council member Sterbekasse fr die Angestellten der Deutsche Bank-Gruppe VVaG Henriette Mark*Year of birth:1957 First elected:June 10,2003 Term expires:2023 Staff Council member No memberships or directorships subject to disclosure Gabriele Platscher*Year of birth:1957 First elected:June 10,2003 Term expires:2023 Staff Council member BVV Versicherungsverein des Bankgewerbes a.G.(Deputy Chairperson);BVV Versorgungskasse des Bankgewerbes e.V.(Deputy Chairperson);BVV Pensionsfonds des Bankgewerbes AG(Deputy Chairperson)Detlef Polaschek*Year of birth:1960 First elected:May 24,2018 Term expires:2023 Deputy Chairman of the Supervisory Board;Staff Council member No memberships of directorships subject to disclosure Bernd Rose*Year of birth:1967 First elected:May 23,2013 Term expires:2023 Staff Council member Postbank Filialvertrieb AG;ver.di Vermgensverwaltungsgesellschaft m.b.H.(Deputy Chairman)John Alexander Thain Year of birth:1955 First elected:May 24,2018 Term expires:2023 Supervisory Board member Uber Technologies Inc.(Member of the Board of Directors);Aperture Investors LLC(Member of the Board of Directors);Pine Island Acquisition Corp.(Chairman of the Board of Directors)(since January 2021)Michele Trogni Year of birth:1965 First elected:May 24,2018 Term expires:2023 Operating Partner Eldridge SE2 LLC(Chairperson of the Board of Directors);Horizon Acquisition Corporation(Member of the Board of Directors)(until October 2021)Dr.Dagmar Valcrcel Year of birth:1966 Appointed by the court:August 1,2019 Term expires:2025 Supervisory Board member amedes Holding GmbH;Antin Infrastructure Partners S.A.(Member of the Board of Directors(since September 2021)Stefan Viertel*Year of birth:1964 Succession as substitute member:January 1,2021*Term expires:2023 Staff Council member No memberships or directorships subject to disclosure Dr.Theodor Weimer Year of birth:1959 First elected:May 20,2020 Term expires:2025 Chief Executive Officer,Deutsche Brse AG Knorr Bremse AG Frank Werneke*Year of birth:1967 Appointed by the court:November 25,2021 Term expires:2023 Chairman of the trade union ver.di(Vereinte Dienstleistungsgewerkschaft ZDF Enterprises GmbH;Member of the Television Council of the Zweites Deutsches Fernsehen(ZDF);ver.di Vermgensgesellschaft m.b.H.10 Deutsche Bank Management Board and Supervisory Board Corporate Governance Report 2021 Member Principal occupation Supervisory board memberships and other directorships Professor Dr.Norbert Winkeljohann Year of birth:1957 First elected:August 1,2018 Term expires:2023 Supervisory Board member Bayer AG(Chairman);Heristo AG(Chairman)(until January 2021);Georgsmarienhtte Holding GmbH;Sievert AG(Chairman);Bohnenkamp AG(Chairman)Frank Witter Year of birth:1959 First elected:May 27,2021 Term expires:2025 Supervisory Board member Traton SE;Vfl Wolfsburg-Fuball GmbH(Chairman);NorthVolt AB(until July 2021);CGI Inc.(Member of the Board of Directors(since July 2021)*Employees representatives.*Mr.Viertel already was a member of the Supervisory Board from August 1,2010 to May 23,2013.On November 19,2021,the Nomination Committee of Deutsche Banks Supervisory Board announced that it recommends proposing Alexander Wynaendts for election to the Supervisory Board.From 2008 to 2020,he served as CEO of Aegon N.V.,a leading European financial institution providing life insurance,pensions and asset management.The Supervisory Board followed this recommendation and intends to propose to shareholders at the Annual General Meeting on May 19,2022 that Mr.Wynaendts be elected to the Supervisory Board.Subject to and following this election,the members of the Supervisory Board intend to elect him as Chairman.11 Deutsche Bank Management Board and Supervisory Board Corporate Governance Report 2021 Objectives for the composition of the Supervisory Board,Profile of Requirements,diversity concept and status of implementation The composition of the Supervisory Board should ensure the effective and qualified control of and advice for the Management Board of an internationally operating,broadly positioned bank.In this connection,its members as a whole must possess the knowledge,abilities and expert experience to properly complete its tasks,and the members in their entirety of the Supervisory Board and the Audit Committee must be familiar with the banking sector.Attention should be placed,in particular,on the integrity,personality,willingness to perform,professionalism and independence of the individuals proposed for election.Furthermore,the members must be able to devote sufficient time to performing their mandates.The objective is for the Supervisory Board as a whole to possess all of the knowledge and experience considered to be essential while taking into account the activities of Deutsche Bank Group,also with regard to the observance of the relevant bank supervisory regulations.The suitability of each individual member to perform their mandate is assessed both internally and externally by the Nomination Committee and the Supervisory Board as well as by regulatory authorities,determined and monitored continuously.The suitability assessment covers the expertise,reliability and time available of the individual members.In addition,there is an assessment of the knowledge,skills and experience of the Supervisory Board in its entirety that are necessary for it to perform its control function(collective suitability).Passing the suitability assessment and the continual suitability of the Supervisory Board member during the entire mandate with Deutsche Bank AG are mandatory regulatory prerequisites for the performance of his or her work.As set out in the Profile of Requirements for the Supervisory Board,each Supervisory Board member must have an understanding of the fields of expertise specified below that is appropriate for the size and complexity of Deutsche Bank AG.The Profile of Requirements was last discussed and subsequently adopted at the meeting of the Supervisory Board on December 16,2021 with an expansion in the fields of expertise to include Environmental,Social and Governance(ESG)and Anti-Money Laundering and the prevention of terrorist financing.Experts shall have profound expertise in the individual fields.The fields of expertise include,in particular,the fields listed below:Knowledge in the areas of banking,financial services,financial markets and the financial industry,including the home market and the banks key markets outside Europe Knowledge of the relevant clients for the bank,the market expectations and the operational environment Risk management(investigation,assessment,mitigation,management and control of financial and non-financial risks,capital and liquidity management,shareholdings)Accounting(according to International Financial Reporting Standards(IFRS)and the German Commercial Code(HGB)and audits of annual financial statements(financial expert)Environmental,Social and Governance(ESG)as well as Corporate and Social Responsibility(CSR),including reporting Taxation Internal audit Compliance and internal controls Anti-Money Laundering and prevention of terrorist financing Strategic planning,business and risk strategies as well as their implementation Digitalization Information technology(IT),IT systems and IT security Regulatory framework and legal requirements,in particular,knowledge of the legal systems relevant for the bank Knowledge of the social,political and regulatory expectations in the home market Selection procedure for management body members and assessment of their suitability Governance and corporate culture Human resources and staff management Compensation and compensation systems(compensation expert)Management of a large,international regulated company Internal organization of the bank The Supervisory Board believes that it complies with the specified concrete objectives regarding its composition and the Profile of Requirements.The members of the Supervisory Board as a whole possess the knowledge,ability and expert experience to properly complete their tasks.The Supervisory Board shall be composed such that the number of independent members among the shareholder representatives will be at least six.The following shareholder representatives are independent:Dr.Paul Achleitner,Ms.Mayree Clark,Dr.Gerhard Eschelbeck,Mr.Sigmar Gabriel,Mr.John Alexander Thain,Ms.Michele Trogni,Dr.Dagmar Valcrcel,Dr.Theodor Weimer,Professor Dr.Norbert Winkeljohann and Mr.Frank Witter.In the preceding financial year,there were no former members of the Management Board on the Supervisory Board.12 Deutsche Bank Management Board and Supervisory Board Corporate Governance Report 2021 There is a regular maximum age limit of 70.In well-founded,individual cases,a Supervisory Board member may be elected or appointed for a period that extends at the latest until the end of the fourth Annual General Meeting that takes place after he or she has reached the age of 70.This age limit was taken into account in the election proposals to the General Meeting and shall also be taken into account for the next Supervisory Board elections or subsequent appointments for Supervisory Board positions that become vacant.For members of the Supervisory Board elected or appointed after July 2020,the length of each individual Supervisory Board membership shall not,as a rule,exceed 12 years.Otherwise,the Supervisory Board member on the shareholder representatives side will not be considered independent.The Supervisory Board respects diversity when proposing members for appointment.In light of the international operations of Deutsche Bank,care should be taken that the Supervisory Board has an appropriate number of members with long-term international experience.Currently,the professional careers or private lives of five members of the Supervisory Board are centered outside Germany.Furthermore,all of the shareholder representatives on the Supervisory Board have many years of international experience from their current or former activities,for example,as management board members or chief executive officers or in a comparable executive function of corporations or organizations with international operations.In these two ways,the Supervisory Board believes the international activities of the company are sufficiently taken into account.The objective is to retain the currently existing international profile.Special importance has already been attached to an appropriate consideration of women in the selection process since the Supervisory Board elections in 2008.For the election proposals to the General Meeting,the Supervisory Board takes into account the recommendations of the Nomination Committee and the legal requirements according to which the Supervisory Board shall be composed of at least 30%women and at least 30%men.In reviewing potential candidates for a new election or subsequent appointments to Supervisory Board positions that have become vacant,qualified women are included in the selection process and appropriately considered in the election proposals.At the end of the financial year,three women and seven men were members of the Supervisory Board on both the employee representatives side and shareholder representatives side.The statutory minimum quota of 30%has thus been fulfilled for many years now.The age structure is diverse,ranging from 38 to 66 years of age at the end of the financial year and spanning three generations,according to the general definition of the term.The length of membership on the Supervisory Board of Deutsche Bank ranged from under one year to around 19 years at the end of the financial year.The diverse range of the members educational and professional backgrounds includes banking,business administration,economics,law,German studies,political science and information technology.The resumes of the members of the Supervisory Board are published on Deutsche Banks website( members of the Supervisory Board may not exercise functions on a management body of,or perform advisory duties at,major competitors.Material conflicts of interest involving a member of the Supervisory Board that are not merely temporary shall result in the termination of that members Supervisory Board mandate.Members of the Supervisory Board may not hold more than the allowed number of supervisory board mandates according to Section 25d of the German Banking Act(KWG)or mandates in supervisory bodies of companies which have similar requirements.These requirements were met in the preceding financial year.Some members of the Supervisory Board are,or were last year,in high-ranking positions at other companies that Deutsche Bank has business relations with.Business transactions with these companies are conducted under the same conditions as those between unrelated third parties.These transactions,in our opinion,do not affect the independence of the Supervisory Board members involved.13 Deutsche Bank Management Board and Supervisory Board Corporate Governance Report 2021 Committees of the Supervisory Board The Supervisory Board has established the following eight standing committees.Chairmans Committee,Nomination Committee,Audit Committee,Risk Committee,Integrity Committee,Compensation Control Committee,Strategy Committee and Technology,Data and Innovation Committee.To the extent required,the committees coordinate their work and consult each other on an ad hoc basis.The committee chairpersons report regularly to the Supervisory Board on the work of the committees.The tasks and further details of the standing committees are regulated in separate Terms of Reference.The current versions are available on the Deutsche Bank website( members of the committees are listed below:Chairmans Committee:Dr.Paul Achleitner(Chairman),Frank Bsirske(until September 26,2021),Detlef Polaschek,Frank Werneke(since December 16,2021),Professor Dr.Norbert Winkeljohann Nomination Committee:Mayree Clark,(Chairperson),Dr.Paul Achleitner,Frank Bsirske(until September 26,2021),Detlef Polaschek,Gerd Alexander Schtz(until January 28,2021),Frank Werneke(since December 16,2021),Professor Dr.Norbert Winkeljohann(since February 3,2021)Audit Committee:Professor Dr.Norbert Winkeljohann(Chairman),Dr.Paul Achleitner,Henriette Mark,Gabriele Platscher,Detlef Polaschek,Bernd Rose,Dr.Dagmar Valcrcel,Stefan Viertel(since July 29,2021),Dr.Theodor Weimer,Frank Witter(since July 29,2021)Risk Committee:Mayree Clark(Chairperson),Dr.Paul Achleitner,Ludwig Blomeyer-Bartenstein,Jan Duscheck,Michele Trogni,Stefan Viertel,Professor Dr.Norbert Winkeljohann Integrity Committee:Dr.Dagmar Valcrcel(Chairperson),Dr.Paul Achleitner,Ludwig Blomeyer-Bartenstein,Sigmar Gabriel,Timo Heider,Gabriele Platscher Compensation Control Committee:Dr.Paul Achleitner(Chairman),Frank Bsirske(until September 26,2021),Dr.Gerhard Eschelbeck(since February 3,20219,Detlef Polaschek,Bernd Rose,Gerd Alexander Schtz(until February 1,2021),Dr.Dagmar Valcrcel,Frank Werneke(since December 16,2021)Strategy Committee:John Alexander Thain(Chairman),Dr.Paul Achleitner,Frank Bsirske(until September 26,2021),Mayree Clark,Timo Heider,Henriette Mark,Detlef Polaschek,Michele Trogni,Frank Werneke(since December 16,2021)Technology,Data and Innovation Committee:Michele Trogni(Chairperson),Dr.Paul Achleitner,Jan Duscheck,Dr.Gerhard Eschelbeck,Timo Heider(since July 29,2021),Martina Klee,Bernd Rose,Frank Witter(since July 29,2021)The Report of the Supervisory Board provides information on the concrete work of the committees over the preceding financial year.In addition to the eight standing committees,the Mediation Committee,which is required by German law,makes proposals to the Supervisory Board on the appointment or dismissal of members of the Management Board in cases where the Supervisory Board is unable to reach a two-thirds majority decision.The Mediation Committee only meets if necessary.Its members are:Dr.Paul Achleitner(Chairperson),Frank Bsirske(until September 26,2021),Detlef Polaschek,Professor Dr.Norbert Winkeljohann and Frank Werneke(since December 16,2021).Share Plans For information on our employee share plans,please refer to the additional Note 33“Employee Benefits”to the Consolidated Financial Statements.14 Deutsche Bank Related Party Transactions Corporate Governance Report 2021 Reporting and Transparency Directors Share Ownership Management Board:For information on the share ownership of the Management Board,please refer to our detailed Compensation Report in the Management Report.Supervisory Board:The members of our Supervisory Board held the following numbers of our shares and share awards under our employee share plans.Members of the Supervisory Board Number of shares Number of share awards Dr.Paul Achleitner 145,000 0 Ludwig Blomeyer-Bartenstein 4,631 2,7391 Mayree Clark 109,444 0 Jan Duscheck 0 0 Dr.Gerhard Eschelbeck 0 0 Sigmar Gabriel 0 0 Timo Heider 0 0 Martina Klee 2,621 10 Henriette Mark 1,524 0 Gabriele Platscher 1,615 10 Detlef Polaschek 693 10 Bernd Rose 0 0 John Alexander Thain 100,000 0 Michele Trogni 15,000 0 Dr.Dagmar Valcrcel 0 0 Stefan Viertel 1,007 0 Dr.Theodor Weimer 108,000 0 Frank Werneke 0 0 Professor Dr.Norbert Winkeljohann 0 0 Frank Witter 0 0 Total 489,535 2,769 1 Restricted Equity Awards.Mr.Blomeyer-Bartenstein has an entitlement linked to 2,739 shares through Restricted Equity Awards as part of his variable compensation.These are due in 2022 till 2026.The members of the Supervisory Board held 489,535 shares,amounting to less than 0,02%of our shares as of this Corporate Governance Statement.As listed in the“Number of share awards”column in the table,the members who are employees of Deutsche Bank hold matching awards granted under the Global Share Purchase Plan,which are scheduled to be delivered to them on November 1,2022,as well as Restricted Equity Awards(deferred share awards),which are granted to employees with deferred variable compensation.The latter are marked separately in the table,and the further details concerning them as a compensation instrument are reported in the section“Employee Compensation Report”.As described in the“Management Report:Compensation Report:Compensation System for Supervisory Board Members”,25%of each members compensation for services as a member of the Supervisory Board for a given prior year is,rather than being paid in cash,converted into notional shares of Deutsche Bank AG in February of the following year.The cash value of the notional shares is paid to the member in February of the year following their departure from the Supervisory Board or the expiration of their term of office,based on the market price of the Deutsche Bank share near the payment date.Related Party Transactions For information on related party transactions please refer to Note 36“Related Party Transactions“.15 Deutsche Bank Auditing and Controlling Corporate Governance Report 2021 Auditing and Controlling Audit Committee Financial Expert The Supervisory Board determined that the following members of the Audit Committee are“Audit Committee Financial Experts”,as such term is defined by the implementation rules of the U.S.Securities and Exchange Commission issued pursuant to Section 407 of the Sarbanes-Oxley Act of 2002:Dr.Paul Achleitner,Dr.Dagmar Valcrcel,Dr.Theodor Weimer,Professor Dr.Norbert Winkeljohann and Frank Witter.These audit committee financial experts are“independent”of the bank,as defined in Rule 10A-3 under the U.S.Securities Exchange Act of 1934.In accordance with the provisions of Sections 107(4)and 100(5)of the German Stock Corporation Act(AktG)as well as Section 25d(9)of the German Banking Act(KWG),they have the required expert knowledge in financial accounting and auditing.Compensation Control Committee Compensation Expert Pursuant to Section 25d(12)of the German Banking Act(KWG),at least one member of the Compensation Control Committee must have sufficient expertise and professional experience in the field of risk management and risk controlling,in particular,with regard to the mechanisms to align compensation systems to the companys overall risk appetite and strategy and the banks capital base.The Supervisory Board determined that Dr.Paul Achleitner,Chairman of the Compensation Control Committee,and Dr.Dagmar Valcrcel fulfill the requirements of Section 25d(12)of the German Banking Act(KWG)and therefore have the required expertise and professional experience in risk management and risk controlling as Compensation Control Committee Compensation Experts”.Values and leadership principles of Deutsche Bank AG and Deutsche Bank Group Deutsche Bank Group Code of Conduct and Code of Ethics for Senior Financial Officers Deutsche Bank Groups Code of Conduct sets out Deutsche Bankss purpose,values and beliefs and minimum standards of conduct that we expect all members of our Management Board and employees to follow.These values and standards govern employee interactions with our clients,competitors,business partners,government and regulatory authorities,and shareholders,as well as with other employees.In addition,the Code forms the cornerstone of our policies,which provide guidance on compliance with applicable laws and regulations.In accordance with Section 406 of the Sarbanes-Oxley Act of 2002,we adopted a Code of Ethics for Senior Financial Officers of Deutsche Bank AG and Deutsche Bank Group with special obligations that apply to our“Senior Financial Officers”,which currently consist of Deutsche Banks Chairman of the Management Board and the Chief Financial Officer as well as certain other Senior Financial Officers.There were no amendments or waivers to this Code of Ethics in 2021.The current versions of the Code of Conduct as well as the Code of Ethics for Senior Financial Officers of Deutsche Bank AG and Deutsche Bank Group are available from Deutsche Banks website: Deutsche Bank Auditing and Controlling Corporate Governance Report 2021 Corporate Governance at Deutsche Bank AG and Deutsche Bank Group Deutsche Bank established a Group Governance function to define,implement and monitor the corporate governance framework of Deutsche Bank AG and Deutsche Bank Group and to perform this governance function throughout the Group.Group Governance addresses corporate governance issues in Deutsche Bank AG and Deutsche Bank Group,while focusing closely on clear organizational structures aligned to the key elements of good corporate governance.Deutsche Bank AG and Deutsche Bank Group are committed to ensuring a corporate governance framework in accordance with international standards and statutory provisions.In support of this objective,Deutsche Bank AG and Deutsche Bank Group have instituted clear corporate governance principles.Further details on corporate governance are published on Deutsche Banks website( accountant fees and services In accordance with German law,our principal accountant is appointed at our Annual General Meeting based on a recommendation of our Supervisory Board.The Audit Committee of our Supervisory Board prepares such a recommendation.Subsequent to the principal accountants appointment,the Audit Committee awards the contract and in its sole authority approves the terms and scope of the audit and all audit engagement fees as well as monitors the principal accountants independence.Ernst&Young GmbH Wirtschaftsprfungsgesellschaft(EY“)was our principal accountant for the 2020 and 2021 fiscal years,respectively.The tables set forth below contain the aggregate fees billed for each of the last two fiscal years by EY in each of the following categories:(1)Audit fees,which are fees for professional services for the audit of our annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years,(2)Audit-related fees,which are fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported as Audit fees,(3)Tax-related fees,which are fees for professional services rendered for tax compliance,tax consulting and tax planning,and(4)All other fees,which are fees for products and services other than Audit fees,Audit-related fees and Tax-related fees.These amounts include expenses and exclude Value Added Tax(VAT).Fees billed by EY Fee category in m.2021 2020 Audit fees 54 53 Audit-related fees 8 5 Tax-related fees 1 0 All other fees 1 0 Total fees 1 64 58 The Audit fees include fees for professional services for the audit of our annual financial statements and consolidated financial statements and do not include audit fees for DWS and its subsidiaries that are not audited by EY.The Audit-related fees include fees for other assurance services required by law or regulations,in particular for financial service specific attestation,for quarterly reviews,for spin-off audits and for merger audits,as well as fees for voluntary assurance services,like voluntary audits for internal management purposes and the issuance of comfort letters.Our Tax-related fees include fees for services relating to the preparation and review of tax returns and related compliance assistance and advice,tax consultation and advice relating to Group tax planning strategies and initiatives and assistance with assessing compliance with tax regulations.Under SEC regulations,the principal accountant fees are required to be presented as follows:audit fees were 56 million in 2021 compared to 55 million in 2020,audit-related fees were 6 million in 2021 compared to 3 million in 2020,tax-related fees were 1 million in 2021 compared to 0 million in 2020,and all other fees were 1 million in 2021 compared to 0 million in 2020.17 Deutsche Bank Auditing and Controlling Corporate Governance Report 2021 United States law and regulations,and our own policies,generally require that all engagements of our principal accountant be pre-approved by our Audit Committee or pursuant to policies and procedures adopted by it.Our Audit Committee has adopted the following policies and procedures for consideration and approval of requests to engage our principal accountant to perform non-audit services.Engagement requests must in the first instance be submitted to the Accounting Engagement Team.If the request relates to services that would impair the independence of our principal accountant,the request must be rejected.Our Audit Committee has given its pre-approval for specified assurance,financial advisory and tax services,provided the expected fees for any such service do not exceed 1 million.If the engagement request relates to such specified pre-approved services,it may be approved by the Accounting Engagement Team and must thereafter be reported to the Audit Committee.If the engagement request relates neither to prohibited non-audit services nor to pre-approved non-audit services,it must be forwarded to the Audit Committee for consideration.In addition,to facilitate the consideration of engagement requests between its meetings,the Audit Committee has delegated approval authority to several of its members who are“independent”as defined by the Securities and Exchange Commission and the New York Stock Exchange.Such members are required to report any approvals made by them to the Audit Committee at its next meeting.Additionally,United States law and regulations permit the pre-approval requirement to be waived with respect to engagements for non-audit services aggregating to no more than five percent of the total amount of revenues we paid to our principal accountant,if such engagements were not recognized by us at the time of engagement and were promptly brought to the attention of our Audit Committee or a designated member thereof and approved prior to the completion of the audit.In 2020 and 2021,the percentage of the total amount of revenues we paid to our principal accountant for non-audit services that was subject to such a waiver was less than 5%for each year.18 Deutsche Bank Compliance with the German Corporate Governance Code Corporate Governance Report 2021 Compliance with the German Corporate Governance Code Declaration pursuant to Section 161 German Stock Corporation Act(AktG)(Declaration of Conformity 2021)In updating the Declaration of Conformity last issued on October 30,2020,the Management Board and Supervisory Board of Deutsche Bank AG approved the following Declaration of Conformity on October 29,2021.“The Management Board and Supervisory Board of Deutsche Bank Aktiengesellschaft state pursuant to Section 161 German Stock Corporation Act(AktG):1.The last Declaration of Conformity was issued on October 30,2020.As of this date on,Deutsche Bank Aktiengesellschaft complied with the recommendations of the“Government Commission on the German Corporate Governance Code”in the Code version dated December 16,2019,and published in the Federal Gazette(Bundesanzeiger)on March 20,2020,with the following deviations:Deutsche Bank Aktiengesellschaft deviated from recommendation G.1,first bullet point,according to which the compensation system for Management Board members among other things shall define“the amount that the total remuneration must not exceed(maximum remuneration).”Although the compensation system did provide for a maximum compensation,this did not include the service costs for contributions to the company pension plan for the members of the Management Board.By resolution of the Supervisory Board on February 3,2021,which was approved by the General Meeting on May 27,2021,with regard to the compensation system,the maximum compensation was adjusted in conformity with the Code with retroactive effect as of January 1,2021,to that the bank has complied with all of the recommendations of the German Corporate Governance Code applicable to credit institutions since then.The German Corporate Governance Code limits the applicability of the Codes recommendations to credit institutions and insurance companies to the extent that the recommendations apply to them only insofar as there are no statutory provisions to the contrary.Deutsche Bank Aktiengesellschaft last reported on these statutory regulations and the effects for the Declaration of Conformity in its Corporate Governance Statement in the Annual Report 2020.2.Deutsche Bank Aktiengesellschaft complies with all of the recommendations applicable to it and will also comply with them in the future.Frankfurt am Main,in October 2021 The Management Board The Supervisory Board of Deutsche Bank Aktiengesellschaft of Deutsche Bank Aktiengesellschaft”19 Deutsche Bank Compliance with the German Corporate Governance Code Corporate Governance Report 2021 Inapplicable Code recommendations due to the precedence of statutory provisions Pursuant to the recommendation in Section F.4 of the German Corporate Governance Code in the version of December 16,2019,companies subject to special legal regulations shall specify in the Corporate Governance Statement which Code recommendations were not applicable due to over-riding legal stipulations.For Deutsche Bank Aktiengesellschaft,this currently applies to the recommendation in Section D.5 of the German Corporate Governance Code in the version of December 16,2019,which states that the Supervisory Board shall form a Nomination Committee composed exclusively of shareholder representatives.Deutsche Bank Aktiengesellschaft,as a supervised credit institution,is subject to the special legal regulations of the German Banking Act(KWG).The Supervisory Board of Deutsche Bank Aktiengesellschaft has to establish a Nomination Committee in accordance with Section 25d(11)of the German Banking Act(KWG)whose tasks are to support the Supervisory Board in the following tasks:identifying candidates to fill a position on the Management Board and preparing proposals for the election of members of the Supervisory Board;drawing up an objective to promote the representation of the under-represented gender on the Supervisory Board as well as a strategy for achieving this;the regular assessment,to be performed at least once a year,of the structure,size,composition and performance of the Management Board and of the Supervisory Board and making recommendations regarding this to the Supervisory Board;the regular assessment,to be performed at least once a year,of the knowledge,skills and experience of the individual members of the Management Board and of the Supervisory Board as well as of the respective body collectively;and the review of the Management Boards principles for selecting and appointing persons to the upper management level and the recommendations made to the Management Board in this respect.The Nomination Committee to be established in accordance with the German Banking Act(KWG)therefore has numerous tasks that go beyond the preparation of the election proposals for the shareholder representatives on the Supervisory Board.A general exclusion of a supervisory boards employee representatives from a membership on a committee is only admissible,according to prevailing opinion,if there is a material reason for this.Whereas such a material reason can exist for a committee that solely handles the preparation of the proposals to the General Meeting for the election of shareholder representatives,a justification for the exclusion of employee representatives is lacking for a nomination committee with the range of tasks assigned to it by the German Banking Act(KWG).Due to the Nomination Committees range of mandatory tasks stipulated by the German Banking Act(KWG)and the inadmissibility of discriminating against employee representatives in the composition of the committees,the recommendation in Section D.5 of the German Corporate Governance Code is therefore not applicable to Deutsche Bank Aktiengesellschaft.Nonetheless,in order to take this recommendation into account,Section 2(3)of the Terms of Reference for the Nomination Committee provides that the election proposals to the General Meeting are prepared only by the shareholder representatives on the Nomination Committee.Goals for the proportion of women in management positions/gender quota As of the date of this Corporate Governance Statement,the percentage of women on the Supervisory Board of Deutsche Bank AG is 30%.The statutory minimum of 30%pursuant to Section 96(2)of the German Stock Corporation Act(AktG)is thereby fulfilled.On July 27,2017,the Supervisory Board set a goal of at least 20%for the percentage of female members of the Management Board as of June 30,2022.For a Management Board size of between eight and 12 members,this corresponds to two women.When the decision was made two women were members of the Management Board.At the end of the financial year and as of the date of this Statement,there are two women on the Management Board of Deutsche Bank AG,Christiana Riley and Rebecca Short.In accordance with the legal framework conditions and based on the banks own strategy on diversity and inclusion on May 4,2021 the Management Board renewed its goals for the representation of women at the two management levels below the Management Board:These goals are now at least 30%at the first management level and at least 30%at the second management level below the Management Board,and are to be reached by December 31,2025.These goals were also announced at the banks Sustainability Deep Dive on May 20,2021.Deutsche Bank believes that improved gender balance in leadership roles will meaningfully contribute to the banks future success and hence set more ambitious goals.20 Deutsche Bank Compliance with the German Corporate Governance Code Corporate Governance Report 2021 The population of the first management level comprises Managing Directors and Directors who report directly to the Management Board and managers with comparable responsibilities.The population of the second management level comprises Managing Directors and Directors who report to the first management level.Implementing German gender quota legislation at Deutsche Bank AG in%(unless stated otherwise)Status as of Dec 31,2020 Status as of Dec 31,2021 Target for Dec 31,2020 Target for Jun 30,2022 Women on the Supervisory Board 30.00.00.0%-Women on the Management Board 10.0 .0%-20.0%First management level below the Management Board 20.0 .0 .0%-Second management level below the Management Board 23.9.5%.0%-1 Legal requirement.2 For a Management Board size of between eight and 12 members,this corresponds to two women.As of December 31,2021,the proportion of women is 20%(2020:20%)in the first management level below the Management Board and 27,5%(2020:23,9%)on the second management level below the Management Board.Key conditions have changed since the goal was set in September 2015 for the percentage of women on the two levels below the Management Board.These changes include the banks transformation program approved in July 2019,as well as our decisions regarding the IPO of DWS and the merging of the DB Privat-and Firmenkundenbank AG into Deutsche Bank AG.Furthermore,our extensive cost reduction program imposed restrictions on hiring and appointments at these two levels.In fact,the already relatively low number of employees on the two levels below the Management Board declined further in the period since September 2015,by nearly 36%(2020:36%).Small changes in absolute numbers led to relatively high fluctuations in terms of percentages.While our commitment to increase representation of women in senior leadership positions is global our implementation is local.Each region,each business has its own diversity and inclusion needs because cultures and current social challenges differ from nation to nation and from business area to business area.However,the Management Board remains committed to these goals and focused initiatives are put in place to accelerate change.These initiatives impact on the full lifecycle of people spanning across Talent Attraction,Talent Development,Talent Retention and Promotion.Within this framework,our decisions on promotions and appointments are aligned,in particular,to the suitability of the candidates for the respective roles,their demonstrated performance and their future potential.In line with our basic diversity concept,we also take into account the knowledge and skills required for the proper performance of tasks and the necessary experience of the employees for the composition of the two levels below the Management Board.Diversity concept As an integral part of our strategy as a leading European bank with a global reach and a strong home market in Germany,Diversity is a decisive factor for our success.Diversity&Inclusion help Deutsche Bank in forming sustainable relationships with our clients and partners and in taking part in the societies where we do business.Age,gender as well as educational and professional backgrounds have long been accepted as key aspects of our far more comprehensive understanding of Diversity at Deutsche Bank.We are convinced that Diversity&Inclusion stimulate innovation,for example,and help us to take more balanced decisions and thus play a decisive role for the success of Deutsche Bank.Diversity&Inclusion are therefore integral components of the banks values and beliefs and its Code of Conduct.The Supervisory Board and Management Board strive to and should serve as role models for the bank regarding Diversity&Inclusion.In accordance with our values and beliefs specified above,diversity in the composition of the Supervisory Board and the Management Board also facilitates the proper performance of the tasks and duties assigned to them by law,the Articles of Association and Terms of Reference.Based on Deutsche Banks understanding of Diversity&Inclusion,the values and beliefs and the measures described in the following for their implementation also apply to the extent legally admissible to the Supervisory Board and the Management Board of Deutsche Bank AG.The Supervisory Board considers diversity in the company,in particular,when filling positions on the Management Board and Supervisory Board.21 Deutsche Bank Compliance with the German Corporate Governance Code Corporate Governance Report 2021 On December 16,2021,the Supervisory Board of Deutsche Bank AG updated the Suitability Guideline for selecting members of the Supervisory Board and Management Board of Deutsche Bank AG,which also continues to comprise diversity principles.This Suitability Guideline implements the“Guidelines on the assessment of the suitability of members of the management body and key function holders”issued jointly by the European Banking Authority and European Securities and Markets Authority.Diversity concept for the Supervisory Board The diversity concept for the Supervisory Board and its implementation are described above in the section“Objectives for the composition of the Supervisory Board,Profile of Requirements,diversity concept and status of implementation”.Diversity concept and succession planning for the Management Board Through the composition of the Management Board,it is to be ensured that its members have,at all times,the required knowledge,skills and experience necessary to properly perform their tasks.Accordingly,when selecting members for the Management Board,care is to be taken that they collectively have sufficient expertise and diversity within the meaning of our objectives specified above.Furthermore,the Supervisory Board and the Management Board should ensure long-term succession planning.By way of resolution of the Supervisory Board,the Management Board should be composed of at least 20%women by June 30,2022.For a Management Board size of between eight and 12 members,this corresponds to two women.In general,a Management Board member should not be older at the end of his or her appointment period than the regular retirement age according to the rules of the statutory pension insurance scheme applicable in Germany for the long-term insured to claim an early retirement pension.Implementation In accordance with the law,the Articles of Association and Terms of Reference,the Supervisory Board adopted candidate profiles for the members of the Management Board,based on a proposal from the Nomination Committee.These profiles take into account an“Expertise and Capability Matrix”,specifying,among other things,the required knowledge,skills and experience to perform the tasks as Management Board member,in order to successfully develop and implement the banks strategy in the respective market or the respective division and as a management body collectively.The Management Board reviews succession plans for Management Board positions,both individually and as a group.Successions plans are reviewed and succession candidates are discussed in detail based on potential,leadership,fit and proper suitability.As gender diversity is a key focus of Deutsche Bank respective succession metrics and data analytics support this process.After approval by the Management Board these plans are submitted to the Nomination Committee and the Supervisory Board in principle at a meeting for extensive deliberation.In identifying candidates to fill a position on the banks Management Board,the Supervisory Boards Nomination Committee takes into account the appropriate diversity balance of all Management Board members collectively.Furthermore,it also considers the targets set by the Supervisory Board in accordance with statutory requirements for the percentage of women on the Management Board.The Nomination Committee supports the Supervisory Board with the periodic assessment,to be performed at least once a year,of the knowledge,skills and experience of the individual members of the Management Board and of the Management Board in its entirety.22 Deutsche Bank Compliance with the German Corporate Governance Code Corporate Governance Report 2021 Results achieved in the 2021 financial year At the end of the financial year,the Management Board comprised two women(20%)and nine men.The target of 20%of the members or two women adopted for June 30,2022 for the Management Board was met.As of the date of this Corporate Governance Statement,the Management Board of Deutsche Bank AG comprised two women and eight men.The age structure is diverse,ranging from 43 to 56 years of age as of the date of this Corporate Governance Statement.As of the date of this Corporate Governance Statement the length of experience as member of the Management Board of Deutsche Bank ranged from under one year to around nine years.Also with our strategy in mind of being a leading European bank with a global reach and a strong home market in Germany,six of the ten Management Board members as of the date of this Corporate Governance Statement have a German background.The other members of the Management Board come from Italy,the United Kingdom,New Zealand and the USA.However,the ethnic diversity of the Management Board does not currently reflect the full diversity of the markets where we do business or the diversity of our employees.The diverse range of the members educational and professional backgrounds includes banking,business administration,economics,law,linguistics and engineering.The bank transparently reports on Management Board diversity in addition to the information presented above in this Corporate Governance Report in the section“Management Board and Supervisory Board:Management Board”as well as on the banks website:(Heading“Corporate Governance”,“Management Board”).
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Our Mission in Action2021 Sustainability ReportIntroductionOur People and CultureEnvironmental Health22021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataIntroductionA message from our CEO A message from our CSO 2021 sustainability highlights Our commitmentsAbout UnitedHealth Group Sustainability at UnitedHealth GroupHelping to Build a Modern,High-Performing Health System Advancing health equity Achieving better health outcomesExpanding access to careImproving health care affordabilityEnhancing the health care experienceBuilding healthier communitiesEnvironmental Health Our path to net-zero operationsLeading systemic change across the health systemMinimizing the use of paper in the consumer and provider experienceDiverting waste from landfillsWater efficiency and reductionOur People and Culture Advancing diversity,equity and inclusionEmployee health and well-beingDeveloping and growing our talentResponsible Business Practices Corporate governanceCompliance and ethicsSupply chain managementSupplier diversityData privacy and securityResponsible use of artificial intelligence and machine learningPublic policyAppendices Performance dataSustainability Accounting Standards Board IndexAbout this reportContents346781216 1922303745515961646566676870757980828488919497 99102108111IntroductionOur People and CultureEnvironmental Health32021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataAt UnitedHealth Group,we believe a healthy population is at the very heart of the idea of sustainability in our society.The more than 350,000 people across Optum and UnitedHealthcare are committed to furthering our mission to help people live healthier lives and to help make the health system work better for everyone.Given our reach and resources and the millions of people we touch each day we feel a deep sense of responsibility to chart a more sustainable path forward,helping to build a modern,high-performing health system that improves access,affordability,outcomes and experiences for people who depend on it.Thats what makes a health care system sustainable,and it is embedded in our mission and throughout our business strategy.This report,told through the stories of our colleagues and partners in their own words,work and deeds is our way of sharing our progress.It is a story of partnership,collaboration and investment seeking to improve the experiences of those who rely on the health system.It is also a story of humility,as there is so much more work left to do.But as you will see in the pages of this report,my colleagues find a profound sense of purpose and inspiration in this work.We approach these challenges with determination,intensity and focus setting clear,measurable goals and objectives,raising the bar at every point of progress and holding ourselves accountable when we fall short.To drive greater alignment and coordination across our enterprise efforts,in February we appointed Patricia L.Lewis to serve as our first chief sustainability officer and lead this important work.The goals,actions and initiatives outlined in this report are bold ambitions.But bold ambitions are what these challenges require and that is what inspires my colleagues to carry this work forward every day.Sincerely,Andrew Witty CEO,UnitedHealth GroupA message from our CEOIntroductionOur People and CultureEnvironmental Health42021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataA message from our CSOUnderpinning all our efforts are strong governance practices.UnitedHealth Group has a long-standing history of board diversity and independence and of championing ethics,compliance and equitable workplace policies.We now have newly expanded board oversight for ESG,including our corporate citizenship activities and the environmental and climate change initiatives described in this report.In the following pages,youll see evidence of our progress and of our ambition.Youll see enhanced transparency,clear commitments and measurable goals.Youll see how far weve come and where we have yet to go.Despite the many challenges we face as a society,what gives me great confidence and hope is the phenomenal talent,expertise and steadfast commitment to our mission I see in our team every day.We touch virtually every aspect of the health system.We understand what an extraordinary privilege it is for a person to entrust us with their care.We are in this to help people our families and yours for today and far into the future.Sincerely,Patricia L.Lewis Chief Sustainability Officer,UnitedHealth GroupAs one of the worlds leading health care organizations,we understand the responsibility we have to our stakeholders and the people we serve to uphold and advance every facet of our sustainability strategy.It is integral to our mission and inextricably linked with our priorities for long-term growth.We see our company,together with a broad spectrum of partners,as well positioned to help advance health equity.We believe every person deserves the opportunity to live their healthiest life and we are determined to do our part to break down barriers,whether social,economic,environmental or otherwise,wherever they exist.This means closing gaps in care and connecting patients and members to the resources and support they need to stay healthy.It means addressing the social determinants of health connecting individual people to critical resources and working at the community level to help solve systemic challenges.It means building a robust,capable and compassionate health workforce as diverse as the communities were fortunate to serve.We must also be conscious and judicious about the resources we use and continually refine our processes and operations to reduce the footprint we leave behind.Once again,the beneficiaries of thoughtful resource stewardship especially include those who are already marginalized,in particular poor communities and communities of color.IntroductionOur People and CultureEnvironmental Health52021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataOur approach to sustainability reflects our belief that the health of any society can be measured only by the health and well-being of its people.IntroductionOur People and CultureEnvironmental Health62021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance Data2021 sustainability highlightsEnhanced board oversight of the companys ESG agenda.Formed the Global Diversity,Equity and Inclusion(DEI)Office and an Advancing Diversity,Equity and Inclusion Board.28Mvirtual care visits delivered to UnitedHealthcare members in 2021.2M in-home clinical visits through HouseCalls program in 2021.14.4MUnitedHealthcare members access care from physicians in value-based arrangements.$800Minvested in affordable housing since 2011.Grew Optum Healths network to300K behavioral health providers serving 37M individuals.$3.8B spent with diverse suppliers over the last decade.35%lower costs for Medicare Advantage members served by Optum Health physicians in value-based arrangements.IntroductionOur People and CultureEnvironmental Health72021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataOur commitmentsNew commitmentsEnvironmental Health Reach operational net-zero by 2035.Achieve a 60%reduction in scope 1 and scope 2 emissions by 2030.Commit to the Science Based Targets initiative(SBTi)Net-Zero Standard.Invest and source 100%of our global electricity demand with renewable sources by 2030.69%Our progress 69%of our members received preventive care services in 2021.Expanding Access to Care85%of our members will receive preventive care services annually by 2030.Advancing Health EquityOur progress 110 million gaps in care were closed for our members in 2021.55% of our outpatient surgeries and radiology services will be delivered at high-quality,cost-efficient sites of care by 2030.Our progress 50%of outpatient surgeries and radiology services were delivered at high-quality,cost-efficient sites of care in 2021.600 million gaps in care will be closed for our members by the end of 2025.$100 million from the United Health Foundation to create a new health workforce diversity program and train 10,000 clinical professionals by 2033.Improving Health Care AffordabilityAchieving Better Health Outcomes50U0M110MIntroductionOur People and CultureEnvironmental Health82021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataAbout UnitedHealth GroupWho we areUnitedHealth Group is a health care and well-being company with a mission to help people live healthier lives and help make the health system work better for everyone.We are 350,000 colleagues in two distinct and complementary businesses working to help build a modern,high-performing health system through improved access,affordability,outcomes and experiences.Optum delivers care aided by technology and data,empowering people,partners and providers with the guidance and tools they need to achieve better health.Our core valuesIntegrity Honor commitments.Never compromise ethics.Compassion Walk in the shoes of the people we serve and those with whom we work.Relationships Build trust through collaboration.Innovation Invent the future and learn from the past.Performance Demonstrate excellence in everything we do.UnitedHealthcare offers a full range of health benefits,enabling affordable coverage,simplifying the health care experience and delivering access to high-quality care.We work with governments,employers,partners and providers to care for 147 million people and share a vision of a value-based system that provides compassionate and equitable care.At UnitedHealth Group,our mission calls us,our values guide us and our culture connects us as we seek to improve care for the consumers we are privileged to serve and their communities.Who we serve Individuals Employers Brokers Governments Care Providers Employees PayersIntroductionOur People and CultureEnvironmental Health92021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance Data2021 by the numbers350Kemployees worldwide,including:135K clinical professionals.43K customer-facing professionals.32K technology professionals.147Munique individuals served.$287.6Btotal revenues.$5.1Binnovation/technology/research and development investments.$122Min charitable contributions.$47Mcontributed through our employee giving program.3.7Mhours volunteered by employees.IntroductionOur People and CultureEnvironmental Health102021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataRecognitionUnitedHealth Group is proud to be recognized by the following organizations:The top-ranked company in the insurance and managed care sector on Fortunes 2022 Worlds Most Admired Companies list for the 12th consecutive year.Named to the Dow Jones Sustainability World and North America Indices since 1999.Ranked as one of Americas most community-minded companies for the 10th consecutive year in 2021 by the Civic 50 and named the leader in the Healthcare Sector category.Named to Forbes list of 2021 Worlds Best Employers and Americas 500 Best Large Employers for 2022.Named one of the Best Places to Work for LGBTQ Equality by the Human Rights Campaign Foundations Corporate Equality Index 2022,with a perfect score of 100.Recognized with the 2021 Brillante Award for Corporate Excellence by Prospanica for outstanding contributions to the educational,economic and social well-being of the Hispanic community.Named one of the best places to work for disability inclusion in 2021 by the Disability Equality Index.Ranked 4th in the nation on the 2022 Military Friendly Employers list and also as a Top Ten 2022 Military Spouse Friendly Employer.IntroductionOur People and CultureEnvironmental Health112021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataOur strategic growth prioritiesValue-Based,Comprehensive Care Delivery With more than 60,000 employed or aligned physicians serving nearly 20 million patients and more than 100 payer partners,UnitedHealth Groups care delivery business is strongly positioned to help providers and payers transition from fee-for-service to value-oriented models designed to achieve higher-quality outcomes at lower cost.We continue to integrate our capabilities across our clinical,in-home and virtual assets,strengthening physician incentives across our care models.Health Benefits As the market leader in health benefits,UnitedHealthcare serves more than 50 million people across its commercial and government programs.We continue to prioritize making coverage more affordable,simplifying the member experience and incentivizing high-quality,supported care.Were expanding provider relationships that reward value and provide a human touch,while investing in areas like affordable housing and food security to help address factors that play a vital role in a persons health but fall outside the clinical setting.Health Technology We believe we can play a vital role in using clinical data and intelligence to help redesign,automate and deploy new technologies to simplify administrative processes and clinical decision-making.This enables physicians and health systems to operate more efficiently and effectively,and to better serve their patients.As a payer,provider and technology company,we are uniquely positioned to bring greater transparency and quality to the marketplace.Health Financial Services Streamlining payment processes for consumers and providers is a fundamental aspect of a modern health system.We believe integrating the end-to-end health banking and payments experience will help providers get paid more accurately,faster and with less administrative burden,making payments simpler,more convenient and affordable for consumers.Pharmacy Services As the most common touch point in health care,pharmacy care services are vital to improving patient outcomes and reducing total cost of care throughout the health system.We continue to innovate as one of the industrys largest pharmacy benefit managers,strengthening our direct-to-consumer offerings and seamlessly integrating our medical,pharmacy,behavioral and community health capabilities.IntroductionOur People and CultureEnvironmental Health122021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataSustainability at UnitedHealth GroupSustainability is an integral part of our business strategy,culture and mission as we work to ensure the health care system works better for everyone both now and in the future.Our approach to sustainability reflects our belief that the health of any society can be measured only by the health and well-being of its people.Informed by our stakeholders,our sustainability priority areas reflect our commitment to providing distinct value to those we are privileged to serve,and to society more broadly.Our five strategic growth priorities value-based,comprehensive care delivery;health benefits;health technology;health financial services;pharmacy services reflect the ways in which we see our business objectives and mission working in tandem to support a healthier society.Our sustainability prioritiesEnvironmental Health We recognize the important role the environment plays in the health of every community,and we are committed to mitigating our impact on the environment by setting a science-based target to reduce emissions,reducing our paper usage and leading systemic change to decarbonize the health care industry.Helping to Build a Modern,High-Performing Health System We are committed to a future that expands access to care,improves health care affordability,enhances the health care experience and achieves better health outcomes for everyone.Our partnerships with key,localized stakeholders are helping us build healthier communities across the U.S.Our People and Culture We celebrate our people,ideas and experiences,creating a culture where all team members are appreciated,valued and able to reach their full potential.We join together as individuals forming a team as diverse as the people we serve in meeting our responsibility to improve the health system and building the health workforce with a diverse pipeline of talent.Responsible Business Practices For more than 40 years,weve developed strong and effective governance practices through compliance,board diversity and independence,a commitment to ethics and integrity,and an emphasis on data security and supply chain management.IntroductionOur People and CultureEnvironmental Health132021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataSustainability governanceUnitedHealth Group has a long-standing commitment to sustainability supported by our senior leaders and Board of Directors.As part of its ongoing oversight,the board reviewed committee charters and made several changes in 2021,including assigning oversight for the companys environmental,social and governance(ESG)agenda to the Governance Committee and having other committees oversee specific ESG elements within their purview.The Governance Committee is responsible for providing oversight of ESG policies and practices,including identifying key ESG topics,ensuring appropriate board or committee oversight of those topics,overseeing the companys environmental and climate change initiatives and corporate citizenship activities,and reviewing the companys ESG sustainability reports.The Audit and Finance Committee oversees managements processes to identify ESG investment criteria and to ensure the accuracy of key disclosures related to ESG matters.The committee also oversees our Compliance and Ethics program.The Compensation and Human Resources Committee reviews the companys strategies,programs and outcomes related to human capital management,as well as diversity,equity and inclusion.We reconstituted our Public Policy Committee,now renamed the Health and Clinical Practice Policies Committee,to better reflect its expanded oversight of clinical care and practice matters and access to care,in addition to health policy matters.The Health and Clinical Practice Policies Committee oversees managements efforts and initiatives to expand access to health care;improve health care affordability;advance clinical care and safety;enhance the health care experience;achieve better health outcomes;advance health equity;and reduce health disparities.To support our growing focus on sustainability,the company created the role of chief sustainability officer,responsible for developing and implementing a comprehensive ESG strategy;establishing annual and long-term sustainability goals,performance metrics and a governance structure to achieve them;and helping to shape our ESG agenda.The chief sustainability officer,appointed in 2022,is assisted in overseeing our day-to-day sustainability agenda through close partnerships with a wide range of leaders across Optum,UnitedHealthcare,Operations and Facilities Management,Sourcing and Procurement,Clinical,Human Capital,Finance,Compliance and Privacy,Legal and Risk Management,Compliance and Regulatory Affairs,Communications,and Enterprise Resiliency and Response.Additionally,in 2022,we plan to establish a cross-enterprise steering committee composed of senior-level leaders and key internal stakeholders who will be responsible for collaborating and executing on all aspects of the enterprise ESG strategy.IntroductionOur People and CultureEnvironmental Health142021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataStakeholder engagementWe proactively engage our stakeholders in continuous dialogue regarding our business and sustainability efforts.In 2021,we continued to embrace a broad and proactive engagement process with stakeholders,holding more one-on-one discussions and applying feedback in our ongoing efforts.We solicit input from a diverse group of stakeholders through a variety of formal and informal methods,including forums,surveys and individual meetings.Each stakeholders unique perspective informs our priority sustainability topics and ongoing approach to sustainability.We will continue to take an intentional approach to stakeholder engagement efforts and take action on the feedback we receive.Consumers We conducted a comprehensive online survey to learn more about the ESG issues most important to our consumers.Employees We encouraged employees to participate in three formal surveys in which they shared opportunities to improve their work experience.Customers and Health Care Professionals We invited key customers to participate in one-on-one meetings with UnitedHealth Group leaders to better understand how we can work together more effectively.Peer Companies We collaborate with peers through the National Academy of Medicine to better understand priorities for the health care industry.Suppliers We engaged key suppliers in one-on-one conversations to better discuss relevant ESG issues.Policymakers We engaged regularly with policymakers through meetings,lobbying activities,conferences and industry association participation.Shareholders In addition to our annual report,shareholders meeting and annual investor outreach,we regularly communicated with investors regarding financial performance and ESG issues.We engaged deeply with our investors to ensure we are driving long-term value.Community-Based Partners We engaged with community-based partners on a regular basis through one-on-one meetings with key partners,grant-making and volunteer efforts.IntroductionOur People and CultureEnvironmental Health152021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataOur sustainability prioritiesAssessing our sustainability priority issues is a continuous process informed by ongoing engagement with our stakeholders.We understand stakeholder priorities may evolve over time,and in 2021 we strengthened our processes to understand their perspectives on an ongoing basis.Please see page 14 for a full discussion of our stakeholder engagement.Although the priorities of each stakeholder may vary,there is a common expectation that UnitedHealth Group has the responsibility and capabilities to address the most pressing challenges facing the health care system.We focus our work and report on the following topics.Helping to Build a Modern,High-Performing Health System Health Equity Expanding Access to Care Improving Health Care Affordability Enhancing the Health Care Experience Achieving Better Health Outcomes Building Healthier CommunitiesOur People and Culture Diversity,Equity and Inclusion Pay Equity Employee Health and Well-Being Training and DevelopmentEnvironmental Health Reducing Carbon Emissions Reducing Waste Water ManagementResponsible Business Practices Corporate Governance Compliance and Ethics Data Privacy and Cybersecurity Supply Chain Management Supplier DiversityIntroduction162021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataBuilding a Modern,High-Performing Health SystemIntroductionOur People and CultureEnvironmental HealthA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataIntroduction172021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataUnitedHealth Group and our distinct,yet complementary,businesses of Optum and UnitedHealthcare are working to help build a modern,high-performing health system with improved access,affordability,outcomes and experiences.50Mpeople served through UnitedHealthcares portfolio of products.60M people served through Optum Rx in 2021.2.2M people served through value-based care arrangements by Optum Health.Introduction182021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataA modern,high-performing health system anticipates the needs of its consumers with systemwide collaboration,supported by value-based arrangements that coordinate every aspect of patient care.It is responsive to the most urgent health issues,focusing on driving measurable outcomes for local communities and the people it serves,while lowering costs across the system.It is equipped with the data and technology to facilitate better decision-making and better experiences,and a dedicated focus on improving the health of this generation and the next.We have made significant progress by focusing on consumer needs,collaborating across our business and the health system,and using technology to make health care simpler and easier to navigate.Home-based and virtual capabilities are helping more people access the care they need.Value-based care models are improving patient outcomes and lowering the total cost of care.A whole-person approach to behavioral and medical care is driving better health outcomes.Our health system partnerships are creating greater efficiencies while helping providers focus on providing high-quality patient care.But there is still work to do.Our fragmented health care system is still difficult to navigate for many.Costs remain an impediment to accessing care,particularly for those in underserved communities.Long-standing disparities in care have led to unequal outcomes for various populations.We have the opportunity to address todays challenges through the impact of our work across UnitedHealth Group and our mission to help people live healthier lives and help make the health system work better for everyone not just for the 147 million people our company serves,but for anyone who interacts with the health care system.What were focused on Advancing Health Equity:By focusing on data,organizational strategy,programmatic response and community partnerships,our work to advance health equity is rooted in our mission,embedded in our enterprise strategy and connected to the growth of our business.Achieving Better Health Outcomes:By taking a holistic approach to care delivery,we are working to reduce the burden of chronic disease,provide comprehensive,evidence-based behavioral health care,and address social determinants of health with community partnerships.Expanding Access to Care:Reflecting our belief that everyone should have access to high-quality,affordable care,our integrated care models and virtual and home-based capabilities are helping more people get the care they need where and when they need it.15M people nationwide supported with personalized navigation.35%lower costs for Medicare Advantage members served by Optum Health physicians in value-based arrangements.Improving Health Care Affordability:We are focused on reducing the total cost of care across the health system by advancing value-based care models,optimizing site of service and working to lower prescription drug costs.Enhancing the Health Care Experience:Were working to create a seamless,simple experience for consumers and providers with personalized navigational support and streamlined health care payments,and by partnering with health systems to provide better care for the communities they serve.Building Healthier Communities:We are combining our knowledge,experience and passion to support the communities where we live and work,partnering with community-based organizations to transform our health system locally,and removing barriers to good health.Introduction192021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataAdvancing health equityHealth equity is achieved when every person,regardless of race,gender,location or circumstance,has the opportunity to live their healthiest life.UnitedHealth Group is committed to enabling and delivering equitable care that addresses health disparities and improves health outcomes an enterprise priority reflected in our mission and supported by our five strategic growth areas.Ultimately,our company is successful when we are able to improve access to affordable,high-quality care for everyone.Today,however,there are still far too many barriers to good health disproportionately experienced by people of color,historically marginalized communities and people with fewer economic resources.Health care inequities are rooted in long-standing disparities in health across a broad range of social and economic factors.High health costs and inadequate access are key contributors.Institutional bias in evidence-based care impacts the health status of different populations.Social determinants of health,such as food insecurity,education level and income,are among the many factors that contribute to widening gaps in health and well-being.Although the COVID-19 pandemic has brought more attention to health equity,we know disparities existed well before it occurred.The United Health Foundations inaugural Health Disparities Report,released last year,underscored the depth,breadth and persistence of health disparities across the country.We know women had a 70%higher rate of depression than men between 2017-2019.And adults with less than a high school education had a 123%higher rate of frequent mental distress than college graduates in that same time frame.Racial disparities in maternal health have widened since 2005,with Black mothers continuing to face a disproportionately higher rate of mortality over time.Deeply rooted disparities cannot be solved through a singular program or initiative.We see the opportunity to advance health equity in nearly every aspect of our ambition to help build a modern,high-performing health system by improving access,affordability,experiences and outcomes for every person it serves.Introduction202021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataOur health equity focus areasHealth equity is ingrained in our business operations,from our organizational strategy to our population health insights.Our core areas of focus are reflective of the specific areas where we can make significant headway to address long-standing disparities.Health Equity Data and Analytics We are leveraging data to drive population-level insights both within our company and across the health system.We are using those insights to set goals and inform our business strategy.For more than 30 years,we have used findings from Americas Health Rankings reports,along with additional data and insights from our 350,000 employees,to devise and deliver targeted,meaningful solutions that address Americas health disparities in health care,insurance,clinical expertise and financial support.We are also working with partners across the health care system to improve data transparency and address social determinants of health.Our diversity,equity and inclusion strategy is informed by the workforce and leadership data across the organization.Organizational Strategy Our commitment to advancing health equity is embedded in our mission and supported by senior leaders across the organization,including the Board of Directors.Our chief sustainability officer oversees our health equity agenda,which is informed by data and supported by enterprisewide collaboration and our strategic focus on comprehensive,value-based care delivery,pharmacy services,health benefits,health technology and health financial services.Community Partnerships We seek to improve the health of underserved communities by collaborating with community partners and organizations that understand distinct,local population health needs.We are working to assemble partners through grant partnerships overseen by the United Health Foundation,and we are convening like-minded organizations to contribute expertise,knowledge,data and insights that can reduce health care disparities.Programmatic Response Our large-scale philanthropic efforts combined with long-standing programs to improve health outcomes seek to address some of the most pervasive health disparities.Our work is focused specifically on access to care,health workforce diversity,social determinants of health and maternal health.The United Health Foundation is making significant,targeted investments of$100 million that will measurably advance health equity by 2033.Introduction212021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataOur commitment$100 million to create a new philanthropic program and partnerships that will measurably advance a diverse health workforce by 2033The United Health Foundation recently announced a$100 million investment to deepen and scale our efforts in health workforce diversity to achieve meaningful and sustained progress in addressing health disparities and advancing health equity.Through this commitment we will provide scholarships and support to 10,000 underrepresented current and future clinicians.Research shows that eliminating health care access disparities for underserved populations is estimated to result in a demand for up to 145,500 additional physicians by 2033.Our investment in a more diverse clinical workforce that better reflects our society and is prepared to provide culturally competent care to all patients can help reduce disparities in health conditions,experiences and outcomes.Building a more equitable futureThroughout this report,we have highlighted the specific ways we are helping advance health equity.UnitedHealthcare Catalyst is using data and community partnerships to develop sustainable solutions to meet local needs.Were caring for an increasingly diverse population in Medicare Advantage,providing in-home assessments and connecting them to support services.Were working to build a health workforce reflective of the communities we serve,both through philanthropic giving and our own diversity,equity and inclusion strategy.Our work to decarbonize our business and the health care sector reflects the fact that certain populations are disproportionately impacted by our changing climate,exacerbating existing health inequities.Over the last two decades,we have led hundreds of local and national initiatives,and invested millions of dollars in partnerships with like-minded change-making organizations,making advancing health equity part of the fabric of our enterprise.From the development of our clinical policies,to the organizations we partner with across the country,to building a more diverse and inclusive health workforce well beyond our own walls,a drive toward health equity is embedded in who we are and how we operate as a company.Introduction222021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataUnitedHealth Group is committed to improving health outcomes and reducing the burden of disease.Achieving better health outcomesWe provide a holistic approach to care for those with chronic,complex or behavioral health conditions that require more coordinated care.We are helping to achieve better health outcomes by:Delivering comprehensive behavioral health services with health benefits that treat the whole person with high-quality,supported care.Addressing social determinants of health with data-driven insights and community-based partnerships designed to reduce health disparities.Managing chronic disease with personalized pharmacy services and a whole-person approach to care management.Introduction232021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataComprehensive behavioral health care An estimated 1 in 4 American adults are affected each year by mental health disorders.There has been a clear and growing need for more comprehensive behavioral health care amid the COVID-19 pandemic,with 1 in 3 adults reporting symptoms of anxiety or depression,compared to 1 in 10 in 2019,and 13%of adults reporting new or increased substance use to manage stress.UnitedHealth Group is addressing behavioral health challenges by delivering wraparound health benefits that treat the whole person with high-quality,supported care.Clinical and behavioral care are addressed in coordination with support from virtual,pharmacy and in-person services.Our network of 300,000 behavioral health providers serves 37 million individuals,with additional support through on-demand clinical capabilities and digital self-care tools.12%increase in behavioral health providers since 2020.15Mbehavioral virtual visits in 2021.Our People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataIntroductionOur People and CultureEnvironmental Health242021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataOur integrated approach to medical and behavioral care is demonstrated through more than 600 clinically integrated community pharmacies co-located within community mental health centers that work to bridge the gap between behavioral and medical care to better serve individuals with mental illness,substance use disorders and other complex conditions.“I now have 19 medications for my daughter,a stroke victim,from four different doctors and a certified nurse practitioner.The pharmacists recommended the pill pack due to the difficulty of correctly taking a large number of pills at various times of the day.This has been an answer we needed to solve a real problem.”Family member of a community pharmacy patient,Wentzville,Missouri.Introduction252021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataCommunity pharmacy impactBehavioral health partnership impact 90%medication adherence.13wer repeat ED visits for behavioral health issues through Childrens Wisconsin partnership.18wer emergency room visits for behavioral health patients.In addition to pharmacy,these facilities provide access to a range of services and can include primary care,labs,imaging and support from social workers who can connect patients with food banks,transportation and other community support services.Community pharmacies have driven better outcomes for underserved populations,with higher medication adherence,while significantly reducing emergency room visits and hospitalizations.Beyond care delivery,we are helping achieve better behavioral health outcomes by investing nearly$30 million in more than 20 states and Washington,D.C.,since 2019.These strategic philanthropic grants and community partnerships are designed to improve access to behavioral health services,including substance abuse treatment,and to grow and diversify the behavioral health workforce pipeline.Children and teens in particular have struggled with mental health challenges,according to the 2021 Health of Women and Children Report by Americas Health Rankings that showed a 21%increase in the number of children reporting anxiety and a 26%increase in teen suicide.To meet the growing need,we partnered with local organizations like Valle del Sol in Arizona to establish mobile medical units providing psychiatry,behavioral health and primary care services to nearly 11,000 children at local schools and foster homes over the next three years.In Wisconsin,our partnership with Childrens Wisconsin established a crisis response team in the emergency department available 24/7 for children with acute mental and behavioral health needs.We have partnered with the University of San Francisco and the University of San Diego to build a diverse pipeline of child and adolescent psychiatrists by creating new educational opportunities and providing students with financial support,which enables them to pursue a career to address the distinct mental health needs of children and young people.Introduction262021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataAddressing social determinants of health Social determinants of health(SDOH)are factors that influence a persons health and well-being,including housing,food and transportation.Too often,underserved communities have limited resources in these areas to provide a supportive environment for a healthy population.Connecting those communities to the right social services can help address health disparities by closing gaps in care.Collaboration with community partners is vital to addressing community needs,improving health outcomes and reducing health disparities.UnitedHealthcares Catalyst initiative is a distinctive community partnership model that works with the Council of Large Public Housing Authorities,public housing agencies,federally qualified health centers and local community-based organizations to improve health outcomes and reduce health inequities.80%of a persons health is influenced by what happens outside a clinical setting.92M people in the U.S.live with incomes 200low the federal poverty level.UnitedHealthcare and its partners analyze claims,health care utilization and local data to identify communities with large racial and health disparities and challenges.Working together,UnitedHealthcare and its partners develop common goals and collaborative interventions that enable each organization to leverage its capabilities to address local health challenges.UnitedHealthcare Catalyst impact22communities participating 10 with public housing authorities.1.5MMedicaid members reside in counties where community partnerships were launched.40community partners engaged.Alicia,UnitedHealthcare member,Phoenix,ArizonaIntroduction272021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance Data1.9M individuals served through food programming in 2021.“Optum and UnitedHealthcare worked with me and advocated for close to four years to finally help me get housed with services to help me live independently,which I did not think I would ever be able to do.”Adam Burns,a member who received psychological,social services and housing coordination help through Optum and UnitedHealthcareSDOH impact61M pounds of food distributed in 2021.710K people referred to social services through community-based partnerships in 2021.$800Minvested in affordable housing since 2011.Introduction282021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataManaging chronic disease Treatment of chronic conditions accounts for more than$1 trillion in direct health care costs each year,and the prevalence of chronic disease continues to grow.We are helping patients with complex needs achieve better outcomes by taking a whole-person,integrated approach to care management.Beginning in 2021,UnitedHealth Group,including the United Health Foundation and UnitedHealthcare,is investing$4.5 million to increase access to health care,improve health outcomes and advance health equity in communities across Oklahoma,a state that ranks 42nd in the U.S.in access to primary care providers,and 43rd in multiple chronic conditions,particularly among Native Americans,according to Americas Health Rankings.Local partnerships are providing integrated services for people with diabetes and comprehensive geriatric care for Native Americans,and supporting people experiencing trauma,food insecurity and social isolation.Impact in Oklahoma80%of the 3,800 patients served now have controlled diabetes.100Kmeals provided in 2021.1.6K patients 65 screened for depression in 2021.Introduction292021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataMedication management is a critical part of caring for people with complex or chronic conditions,as they often require multiple drugs or treatments for rare diseases.To help consumers manage complex medication regimens,our personalized multidose packaging solutions support adherence and better health outcomes.These solutions are integrated into Optum Rxs home delivery operations and have seen a meaningful increase in medication adherence.For people prescribed high-cost medications for complex conditions,such as cancer and diabetes,our specialty pharmacy business provides access to limited-distribution drugs,a supportive care provider experience and disease-area expertise.Through Optum Infusion Pharmacy,our network of more than 1,100 nurses delivers infusion therapy in patient homes as well as community infusion suites,providing patients with easier,more convenient access to therapies that typically treat chronic or serious disease.We use advanced analytics to ensure drugs are administered at the most appropriate and cost-effective site of care.Home delivery outcomes for consumers taking multiple medications90herence rates for 30-day prescriptions compared to 60%-70%at retail pharmacies.12%higher NPS.17%higher savings compared to retail.Our commitmentClose 600 million gaps in care for our members by the end of 2025.In 2021,we closed approximately 110 million gaps in care toward our commitment to close 600 million gaps from 2021 through 2025.Overall gap closure rates were impacted by the reduced level of preventive care during the pandemic.We worked to mitigate this by increasing in-home visits and member outreach activities.The 600 million gap closure target was based on the 2019 Healthcare Effectiveness Data and Information Set(HEDIS)measures established by the National Committee for Quality Assurance(NCQA).600M110MOur progressIntroduction302021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataUnitedHealth Group is committed to helping ensure every person has access to high-quality,affordable care that meets their unique health care needs and financial means.We are expanding access to care by:Maintaining a commitment to achieve universal coverage in the United States by building on existing,proven coverage platforms.Building seamless,integrated care models that combine virtual,primary,specialty,behavioral and post-acute care.Bringing care into the home with in-home assessments,drug delivery and post-acute care planning.Connecting people to care through virtual services that can lead to better health outcomes.Expanding access to careIntroduction312021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataA seamless system of integrated care Our integrated care models that bring together primary,specialty,behavioral,post-acute and home-based care enable us to provide individuals with the services they require when and where they need them.With more than 60,000 dedicated physicians,Optum Healths care delivery businesses serve nearly 20 million patients with a wide range of services including primary,specialty,urgent and surgical care.Primary care physicians are the anchor point for all patient care and are empowered with the latest information,insights and best practices to help them efficiently coordinate care,manage referrals and identify higher-quality,lower-cost options.This approach strengthens the critical provider-patient relationship and streamlines access to care.Through its Dual Special Needs Plans(D-SNP),UnitedHealthcare provides services for nearly 1.3 million Medicare and Medicaid members,who often have multiple chronic conditions and limited incomes.Members benefit from our clinical programs that support the whole person by taking an integrated approach to care management based upon a comprehensive view of a persons needs,ensuring any medical,behavioral,pharmacy,social and environmental support needs are addressed.D-SNP benefits include dental,hearing and eye care,in-home clinical care and social services,behavioral health consultations,and access to up to$225 per month for covered over-the-counter products and groceries,such as vitamins,first-aid items and healthy foods.UnitedHealthcares provider network1.5Mphysicians and health care professionals.7Khospitals.Introduction322021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataHome and community care Increasingly,expanding access to care means bringing personalized care into the home,particularly for patients with complex medical,behavioral and social needs.Shifting care into the home can drive better health outcomes,access and experiences,particularly for vulnerable members with physical limitations and those who live in rural and underserved areas.For people in our Medicare Advantage plans,HouseCalls is a key element of our approach to primary care delivery,providing comprehensive in-home clinical health and wellness assessments by advanced practice clinicians to identify health conditions and close gaps in care.The ability to engage patients in their home provides better visibility into members diagnoses,medications and overall health.Available across the nation,HouseCalls provides Medicare Advantage members with an in-home annual medical exam that includes a complete health history,a physical exam,the identification of health risks and gaps in care,and the development of an individualized care plan that is shared with the members primary care physician.Members are also assessed and referred to social services for needed assistance with determinants of health,including food,medication and housing affordability,transportation issues and employment assistance.Introduction332021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance Data323K social determinants of health referrals completed.“The HouseCalls team has come in and made it a lot easier for us to maintain our health.Theyre able to write prescriptions for us right from home and we dont have to call our PCP or a specialist.Its made life a lot easier for us.”Daniel Parker,HouseCalls patient with multiple chronic health conditionsHouseCalls impact76%of members who have an in-home visit have a physicians office visit within 90 days.99%satisfaction rate.2M in-home clinical visits in 2021.Introduction342021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataFor those transitioning home from the hospital,our post-acute care planning and coordination works to bring together physician advisory services,hospital medicine,emergency medicine and transition care to help individuals recover faster.Nearly 10 million people benefit from post-acute care planning that provides personalized care for their physical,mental and social needs.Our whole-person approach to home-based care delivery includes diagnostic testing and pharmaceutical services.Recognizing that early detection and preventive care drive better health outcomes,UnitedHealthcares Medicare business brings members in-home testing for hepatitis C and prediabetes,two diseases that lead to poorer outcomes if not detected and treated early.Real-time results from in-home testing allow our nurses to immediately connect members to the appropriate resources or follow-up care,with approximately three-quarters of those with a positive test visiting their primary care provider within 180 days.Our pharmacy services strategy extends the most common health care touch point into the home.Through pharmacy home delivery,were providing seamless prescription refills and personalized multidose packaging solutions that help consumers manage complex regimens of medications,supporting medication adherence and better health outcomes.Introduction352021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance Data25% reduction in costs.60M members eligible for home delivery pharmacy benefits.1Mmembers offered in-home tests for prediabetes and hepatitis C.28%screened in the prediabetic range.90%member satisfaction.330K home infusion visits per year.75 consumer NPS score for multidose packaging.Post-acute care planning impactIn-home testing impactPharmacy services impactIntroduction362021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance Data15Mvirtual visits to address behavioral health needs in 2021.94%of virtual visits provided by local providers.Connecting people to care Our commitment85%of our members will receive preventive care services annually by 2030In 2021,69%of our members received preventive care services.Consistent with national trends,preventive care declined from 2019 as the COVID-19 pandemic disrupted care patterns.We took many steps during the pandemic to ensure people were able to access the care they needed,such as expanding telehealth access,increasing provider incentives to complete preventive care and increasing access to in-home care.We continue to enhance our digital tools and navigation support to help people identify the screenings and care providers they need.We are accelerating the shift to value-based care arrangements with providers where there is strong alignment to coordinate and prioritize preventive care services.We expect the level of preventive care services to rise in 2022,2023 and beyond.Our progress69%UnitedHealth Group is developing and advancing technology to help connect people to care where and when they need it.Our integration of virtual and in-person services provides a more accessible,personalized and seamless care experience.Our Optum virtual care platform enables patients to connect with their own care provider from anywhere.It facilitates telehealth capabilities and broad access to Optums physicians,community-based clinics,pharmacies and home health services in all 50 states.UnitedHealthcares virtual-first health plan empowers members to connect with Optums virtual-based care team for help with everything from urgent care to primary and behavioral health care services.Care team support is provided 24/7 via message,chat,phone or video.Fully integrated,connected care must address behavioral health,and today we deliver nearly two-thirds of our behavioral services in a virtual setting.We support individuals with structured,measurement-based mental health care through a suite of virtual solutions supported by licensed clinical social workers and coaches to help members with mild to complex behavioral health needs.Similarly,our self-guided app offers on-demand digital treatment support for stress,anxiety and depression,providing clinically validated techniques and tools to more than 150,000 monthly active users.Introduction372021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataUnitedHealth Group is committed to helping reduce health care costs at an individual and system level.With health expenditures expected to reach$6.8 trillion by 2030,we are collaborating across the health system to make health care more affordable for everyone.We are improving health care affordability by:Advancing value-based care models designed to improve care coordination,drive better outcomes and lower the total cost of care.Optimizing site of service with transparent tools that help consumers access the right care at the right time and place.Lowering drug costs particularly high-cost specialty drugs with comprehensive and transparent pricing and by building a better,more affordable experience across medical and pharmacy benefits.Improving health care affordability382021 Sustainability ReportWe have the opportunity to address todays challenges through the impact of our work across UnitedHealth Group and our mission to help people live healthier lives and help make the health system work better for everyone not just for the 147 million people our company serves,but for anyone who interacts with the health care system.IntroductionOur People and CultureEnvironmental HealthA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataIntroduction392021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataAdvancing value-based care delivery Our work to improve health care affordability begins with advancing a value-based system that incentivizes providers to deliver high-quality,coordinated care improving outcomes and experiences and lowering costs.UnitedHealth Groups care delivery business is focused on advancing an aligned,reliable organization that puts clinical quality and patient safety at the center of everything we do.It starts with a commitment to a sustainable,engaged,high-performing workforce that is continuously learning and improving.We are also working to leverage new insights,best practices and innovation to help improve value and total cost of care,and to achieve our goal of a best-in-class quality care model for our members and patients.Through the combined capabilities of UnitedHealthcare and Optum,were helping care providers move toward a truly value-based system of care so they can focus on whats most important:their patients health.Optum Health is at the center of accelerating that transformation from a fee-for-service to a value-based system of care delivery.Optum Health serves more than 2.2 million people through value-based care arrangements,where providers are paid based on the quality of care they deliver rather than the volume of services.By integrating primary,specialty,urgent,post-acute,behavioral and ambulatory care,Optum physicians care for the whole person,leading to 25wer hospital readmissions.Our work to lower the cost of care is particularly impactful in the Medicare Advantage program,which serves an increasingly diverse and clinically complex population,where more than half of older adults live on less than$24,500 per year.Studies show that older adults in Medicare Advantage save 40%in out-of-pocket costs compared to fee-for-service Medicare,with better health outcomes.Additionally,Medicare Advantage provides comparable benefits to fee-for-service Medicare at over 20%lower medical costs.In our highest performing Medicare Advantage markets,medical costs are more than 30%lower than fee-for-service Medicare.35%lower costs.33wer days in the hospital.40%less emergency department use.111%growth among diverse populations in Medicare Advantage enrollment since 2013.Compared to fee-for-service,Medicare Advantage members served by Optum Health physicians in value-based arrangements sawIntroduction402021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataOur work to accelerate the shift to a value-based system of care extends beyond UnitedHealthcare and Optum.By partnering with more than 119,000 providers and nearly 900 hospitals in our accountable care organizations(ACOs),UnitedHealthcare is lowering costs for Medicare,Medicaid and commercial members,while putting the consumer at the center of the health care experience.Those partnerships seek to incentivize behaviors that will drive better outcomes and reduce the total cost of care,supported by technology that provides member-specific recommendations and refers patients to high-quality,cost-effective care providers.Overall,more than 14.4 million UnitedHealthcare members access care from physicians in value-based arrangements designed to manage health care costs and improve the patient experience.16%more preventive breast,cervical and colorectal cancer screenings among commercial ACO members.70%higher rates of annual primary care visits among Medicare ACO members.15wer emergency room visits among Medicaid ACO members.ACO member outcomes(compared to those not served in an ACO)Introduction412021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataOptimizing site of service Part of our work to advance a value-based system of care is rooted in the meaningful opportunity to drive better outcomes and greater affordability for consumers and the health system by helping people access high-quality care in a low-cost setting.Our research shows that shifting routine outpatient procedures from a hospital outpatient department to a lower-cost ambulatory surgery center(ASC)would reduce costs by 59%on average and save consumers$684 per procedure.Simply shifting appropriate care from hospital outpatient departments to ASCs could save the health system$75 billion over the next decade.Optum Healths integrated direct care delivery platform is focused on optimizing site of service at more than 2,000 primary,specialty,urgent and surgical sites.More than 60,000 physicians provide care through an integrated national care delivery network that includes 24/7 virtual care as an extension of our physical care delivery locations.Integrating real-time patient information into the physician workflow is one way to help patients access lower-cost care options and identify potential care opportunities.More than 637,000 health care professionals use UnitedHealthcares Point of Care Assist,which integrates site of service cost data into existing electronic medical records.Clinicians can instantly see member-specific price estimates for specialty,lab and radiology services,giving patients more insight into decisions that can affect their out-of-pocket costs.637K providers use Point of Care Assist.120M transactions in 2021.Point of Care Assist impactIntroduction422021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataLowering drug costs Nearly two-thirds of U.S.adults take at least one prescription medicine,making the pharmacy the most frequently used touch point in all of health care.Three in 10 Americans say they havent taken their medicine due to costs.We understand drug costs matter to everyone from those taking a generic medication to manage a chronic condition,to individuals accessing a novel therapy.We are actively working to reduce those costs across the system for consumers,employers and governments.Specialty drugs used to treat patients with complex conditions make up more than half of all drug costs and are projected to reach$505 billion in annual spending by 2023.Optum Rx is helping providers identify the best treatment regimen,weighing clinical and financial information to help customers have a better,more affordable experience across their medical and pharmacy benefits.Our commitment55% of outpatient surgeries and radiology services among our members will be delivered at high-quality,cost-efficient sites of care by 2030In 2021,close to 50%of outpatient surgeries and radiology services among all domestic people served were delivered at high-quality,cost-efficient sites of care.The percentage of care delivered at these sites for our commercial fully insured and self-funded members increased,while the percentage for members served through government programs remained relatively stable.We continue to increase the penetration and capabilities of our physician point-of-care tools to help guide patients to the most appropriate high-quality,low-cost care setting.We are also enhancing our consumer transparency digital tools to help members identify these settings and understand the relative cost impacts.Our progress50U%Introduction432021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataOptum Specialty Fusion offers a first-of-its-kind specialty medication management solution to simplify care for patients with complex conditions and lower the cost of expensive specialty drugs by allowing care providers to compare dozens of clinically appropriate,lower-cost options.Selecting a lower-cost,therapeutically equivalent immunosuppressive drug,for example,could save an average of$700 per prescription.A growing pipeline of new therapies has the potential to change medical care for individuals with rare diseases and few or no treatment options.We seek to organize and develop solutions to help patients access life-changing medications using capabilities such as outcomes-based contracting,utilization management,networks,distribution solutions and risk management.Beyond specialty medications,we are investing in solutions that provide consumers with simpler,more transparent information at the pharmacy counter.Actionable,real-time health information makes it easier for patients and their physicians to make the best possible care decisions.Transparency tools at the point of care provide patients and prescribing physicians with access to information about which drugs are covered by a patients health plan,how much it will cost at the pharmacy counter,or if a lower-cost alternative is available.Members benefit from better drug pricing transparency through Optums PreCheck MyScript tool,which delivers real-time,personalized prescription information to lower costs for consumers.Nine in 10 prescribing providers have access to PreCheck MyScript,which instantly shows providers how much a drug will cost and recommends equally effective,lower-cost alternatives,leading to better medication adherence rates for those with diabetes,high cholesterol and hypertension.MyScript Finder puts similar information into the hands of consumers through the Optum Rx mobile app,providing clinically appropriate,less expensive options with exact cost information.Members can also see different pricing options for home delivery and individual retail locations.We provide the same transparency and affordability to those without health benefits via a cash card that provides prescription drug discounts at more than 64,000 pharmacies.17%medical and pharmacy savings through Optum Specialty Fusion.$700average drug savings per prescription on immunosuppressive drugs.Optum Specialty Fusion impactIntroduction442021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance Data$38average savings per prescription among members.PreCheck MyScript impactMyScript Finder impact$10Mmember savings when switching to a lower-cost alternative.$19Min plan savings when members switch to a lower-cost alternative.90%of prescribing providers have access.70%year-over-year increase in provider usage.Introduction452021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataUnitedHealth Group is working to build a simpler,less stressful health care experience that is more accessible,more affordable and easier to navigate,enabling people to live healthier lives.Enhancing the health care experienceWe are dedicated to creating a seamless system for those who experience,provide and pay for care by offering distinctive tools and services to help people navigate and interact with a complex health system.We are enhancing the health care experience by:Designing a system that is easier to navigate,with seamlessly integrated direct-to-consumer offerings and personalized support for those with complex health conditions.Partnering with health systems to improve community health,creating greater efficiencies and allowing providers to focus on high-quality patient care.Simplifying health care payments for consumers and providers with modern technology that seeks to transform how people and organizations save,spend,invest and pay for health care.Introduction462021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataAdvocate4Me impact91%member satisfaction.50% of members accepted social services support.Designing a system thats easier to navigate We strive to offer a consumer-focused,seamless experience for those accessing care,whether through an annual well-visit or complex surgery.In 2021,we launched a centralized,direct-to-consumer marketplace,available to all Americans,that combines a cash pharmacy,virtual visits,diagnostics and more,to address pharmaceutical,behavioral and clinical care needs.Through our online marketplace,people can access a same-day visit with an Optum virtual care provider for as little as$55,or bundle mental health subscriptions to manage depression and anxiety for as little as$9 per month.Users can find upfront,consistent pricing for more than 900 prescription medications,receive free shipping and save up to 78%on the most commonly used medications.Once people have accessed care,they often need support to navigate the system,access health care information and make decisions.More than 15 million people nationwide are supported by UnitedHealthcares Advocate4Me model,which leverages data and technology to provide a simpler,personalized health care experience.Members are matched with an advocate equipped with real-time data that provides a 360-degree view of the persons health.Artificial intelligence tools quickly review individual plan documents and provide more accurate and comprehensive information.Predictive analytics proactively identify members with social needs,allowing advocates to connect them to low-or no-cost community resources.Introduction472021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataTrustworthy care families can depend on People with complex or specialized health care needs require even more support in navigating the health system and coordinating care.UnitedHealthcares Special Needs Initiative and Complex Care Concierge were created for children and adults who need the most support,including those with Down syndrome or rare genetic diseases such as cystic fibrosis,muscular dystrophy and inherited types of cancer.More than 163,000 families have been paired with a trusted care advisor who coordinates care to create a seamless experience.Rachel(center),a member with cystic fibrosis,with her family and Jodie(left),their UnitedHealthcare family advisor,Special Needs InitiativeOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataIntroductionOur People and CultureEnvironmental HealthA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataImproving clinician wellness and reducing burnoutNearly half of U.S.physicians reported feeling burned out last year across all specialties.High rates of emotional exhaustion,depression and anxiety have been reported among health care workers after more than two years of responding to the COVID-19 pandemic.UnitedHealth Group is focused on improving the provider experience by supporting the mental well-being of clinicians.Optum is working to reduce burnout and improve the provider experience by automating processes,investing in clinical platforms that remove administrative barriers,and simplifying workflows at the point of care.As a result,Optum clinicians experience a 12%lower burnout rate than national averages.Through a partnership with the American Nurses Foundation,the United Health Foundation has helped build a virtual support system to recognize nurses contributions to fighting the pandemic.Grant funding has also helped support mental health programming for more than 154,000 nurses.482021 Sustainability ReportIntroduction492021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance Data Simplifying health care payments Improving the health financial services sector by streamlining payments for providers,payers and consumers is fundamental to reducing friction in the health system.By focusing on health financial services,we are working to improve health and financial well-being,transforming how people and organizations save,spend,invest and pay for health care.Optum Financial supports consumers with more than 8 million health savings accounts and has relationships with more than 2 million care providers.With out-of-pocket health care expenses expected to reach nearly$480 billion by 2024,our capabilities are designed to help consumers pay for care with health savings and spending accounts,advanced financial education tools and consumer engagement and payment services,and self-service tools that make it easier to manage and save money.UnitedHealthcares Care Cash,a reloadable debit card,helps guide consumers to eligible care,including virtual visits,physicians that meet quality and cost-efficiency standards,and primary and urgent care.Introduction502021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataOptum Pay impact on providers83%reported improved cash flow.79%reported improved administrative and office efficiencies.For UnitedHealthcare members,the newly released UCard combines the health plan ID,over-the-counter benefits,healthy food benefits and rewards into an all-in-one member card that can be used to check into the doctor,shop for healthy food and spend reward dollars.More than 6 million Medicare Advantage members are expected to have the UCard by 2023.The same bias for simplicity extends to providers.We believe integrating the end-to-end health banking and payments experience will help providers be paid accurately more often,faster and with less administrative burden,making payments simpler,more convenient and more affordable for consumers.Optum Financial is building a frictionless health payment system to give providers more time and resources to care for their patients.Optum Pay accelerates claims payments,improves accuracy and reduces administrative work.Introduction512021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataAt UnitedHealth Group,we combine our knowledge,experience and compassion as a company and as individuals to support the communities where we live and work.To help ensure every person,regardless of race,gender,sexuality,age,location or income,can receive the care they need when they need it,we partner with like-minded organizations on efforts to transform our health system and remove barriers to good health.Building healthier communitiesIntroduction522021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataThrough our business and foundations,we have provided over$1.2 billion in charitable donations since 2000.We do this through philanthropic grants,in-kind contributions and disaster relief efforts,and by supporting our employees who contribute their resources and volunteer their time to important causes around the world.Our philanthropic giving and charitable commitments span UnitedHealth Group,Optum and UnitedHealthcare,as well as our charitable organizations,the United Health Foundation and the UnitedHealthcare Childrens Foundation.Hurricane Florence Aid,Wilmington,North CarolinaIntroduction532021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance Data$122Mcontributed in 2021.3.7MUnited for Giving employee volunteer hours in 2021.$47MUnited for Giving contributions employee match and giving rewards in 2021.$1.2Bcontributed since 2000.Polar Plunge,Special OlympicsUnited for Each OtherYMCA DistributionIntroduction542021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataOur impact on communitiesOur social responsibility strategy is guided by core areas of focus,including expanding access to care,building and shaping the health workforce,and using data to provide health disparities insights and deliver better health outcomes.Expanding Access to Community-Based Care We believe health care happens locally,and improving the health of any community means partnering with and supporting the local organizations that know their communities best.We also know much of what influences care happens outside the doctors office and medical clinic,contributing to health disparities we see today.In 2021,UnitedHealthcare supported local programs in 18 states and the District of Columbia with Empowering Health grants to help people access healthy food,improve health knowledge and connect to behavioral health care.Our partnerships also extend into communities that require targeted population health interventions,often for those who have historically faced challenges accessing high-quality care.In underserved areas of Washington,D.C.,facing high rates of child poverty,asthma and obesity,the United Health Foundation and Childrens National Hospital Foundation are collaborating on a new,innovative approach to reducing barriers to care and advancing health equity.We are connecting more than 3,000 children and their families to services,bringing together school nurses,behavioral health specialists and mobile medical capabilities to provide well-child visits,vaccinations,and behavioral health and developmental screenings.Improving Access to Maternal Health Care The realities of the COVID-19 pandemic have underscored the need for greater attention to the health of women of reproductive age and children,especially women and children of color.Since 2017,UnitedHealth Group has invested$14 million in ongoing partnerships in 12 states and Washington,D.C.,including nearly$9 million in new grants in 2021 to address maternal and infant health issues across the country.These philanthropic programs are designed to target at-risk populations and improve access to care with a focus on prenatal and perinatal health,infant health,workforce development,and mental and behavioral health.Annually,an estimated 500 underserved perinatal women in Brooklyn are receiving screenings,breastfeeding support and newborn care services through our partnership with CAMBA Inc.,which deploys community health workers to family shelters and public housing developments.In Louisiana,UnitedHealthcare is partnering with community organizations to expand access to prenatal and postpartum education,as well as access to transportation,healthy food and housing.Empowering Health impact$40Mgrants since 2018.6Mpeople reached in 28 states plus Washington,D.C.,since 2018.53Mmeals in 2021.Introduction552021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataUnitedHealth Group is building and shaping the health workforce with initiatives to advance diversity and cultural competency,develop the health care talent pipeline,improve existing workforce capacity and support skills development for the health workforce of the future.Building and shaping the health workforcePromoting Equity and Diversity in the Workforce We are building a 21st century health workforce equipped to provide culturally competent care to underserved populations.Since the inception of the Diverse Scholars Initiative in 2007,the United Health Foundation has provided more than$25 million in funding to support over 3,300 scholarships for students of color pursuing careers as primary care health professionals,particularly in underserved communities.Our work to build a diverse health workforce includes the growing field of health informatics and bioinformatics,where Black,Hispanic and Native American people account for only 7.1%of the workforce.To improve the pipeline for students of color pursuing careers in this field,the United Health Foundation is partnering with Harris-Stowe State University to create a bioinformatics program for undergraduate students at the historically Black university located in St.Louis,Missouri.Since launching in 2018,Project ENABLE has created an online masters degree program in health informatics with over 50 students currently enrolled,and engaged more than 200 undergraduate students from local Historically Black Colleges and Universities(HBCUs)in in-person and virtual summer training programs.Improving Existing Workforce Capacity Research shows that increased access to primary care is associated with better health outcomes,a higher likelihood of receiving preventive care such as immunizations and screenings,early disease detection and treatment,and better chronic disease management.However,more than 25%of Americans do not have a primary care physician,and projected physician shortages underscore the ongoing need to identify new and innovative ways for people to access primary care at a location convenient for them.Through the United Health Foundations partnership with the University of Nevada Las Vegas(UNLV)School of Medicine,we have established an integrated training program for medical students to meet the health care demands of a growing and aging population in southern Nevada.Recognizing the shortage of mental health workers,we are partnering with organizations to grow a diverse pipeline of new clinicians.Our partnership with the Colorado Center for Nursing Excellence is helping 43 currently employed rural Advanced Practice Registered Nurse Behavioral Health Fellows earn a Psychiatric Mental Health Nurse Practitioner(PMHNP)certificate.The partnership will support an estimated 3,000 to 12,000 rural Colorado patients annually,increasing rural clinics behavioral health care services capacity by approximately 25%.Our People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataIntroductionOur People and CultureEnvironmental Health2021 Sustainability ReportA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataMeet a UNLV scholarAs a first-generation college student who grew up in an immigrant family,Mayras goal is to increase access to care for the Hispanic/Latino community,and she is interested in family medicine,pediatrics,or OB/GYN.For Mayra,its personal:“I intend to improve community health by breaking down the same barriers my parents and I faced.”Mayra Repetto Providing relief to communities around the worldRecognizing the impact that natural disasters,COVID-19 and geopolitical crises can have on the health of a community,UnitedHealth Group is dedicated to supporting communities around the world during times of need.Following the devastating impact of Hurricane Ida in September 2021,the United Health Foundation provided$1 million to help Louisiana residents recover and rebuild.The funds were distributed among four community-based organizations to help local residents with immediate needs like access to food and water,and to support longer-term recovery and rebuilding efforts.To address the ongoing global impact from the COVID-19 pandemic,the United Health Foundation provided$1 million in response to the coronavirus crisis in India,which was experiencing an unprecedented public health emergency with record-breaking surges in cases and deaths in May 2021.This donation builds upon the companys global commitment to fighting COVID-19,including a previous donation of$1.5 million to India.The contribution helped fund the procurement of 2,500 oxygen concentrators,as well as other critical medical equipment essential for treating severe COVID-19 infections.To support relief efforts in Ukraine,the United Health Foundation provided$1 million in March 2022,helping children and families access food,water,hygiene kits and psychosocial support,and supporting the Ukrainian Ministry of Health with emergency medical supplies and equipment.56Introduction572021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataWe leverage data that provides valuable insights on the nations health to drive advancements in the health system.Americas Health Rankings,produced by the United Health Foundation,is the longest-running state-by-state analysis of the nations health.The data provides an objective measurement of each states strengths,areas of opportunity,and important insights into health differences among populations,including adults 65 and over,women of reproductive age,infants and children,and those who have served in the U.S.armed forces.This distinctive platform has garnered support from the American Public Health Association and the CDC Foundation,among others,and has been used by policymakers,community leaders and health officials to better understand the specific health concerns in their own communities.In 2021,AHR released its inaugural Health Disparities Report to document the breadth,depth and persistence of health disparities across the nation,and to provide objective national and state data to inform action for advancing health equity.Building on 31 years of data and reporting,the report highlights the constant and changing contours of disparities across educational attainment,gender,geography,race and ethnicity.Insights to improve our nations health“The Americas Health Rankings Health Disparities Report provides a unique,data-driven analysis that identifies disparities not only according to race and ethnicity,but also gender,geography and education level.Through new analyses,this report provides public health officials and lawmakers with state-specific findings on their states largest disparities so they can plan better strategies to address them.”Judy Monroe,MD,president and CEO,CDC FoundationIntroduction582021 Sustainability ReportA Modern,High-Performing Health SystemOur People and CultureEnvironmental HealthResponsible Business PracticesPerformance DataThe people of UnitedHealth Group are passionate about supporting their communities.We support that passion by providing dedicated opportunities for team members to give back and make a tangible impact,either through charitable giving or volunteering.Employee giving is enabled through our year-round United for Giving program.We support our employees and the causes they are most passionate about by matching their contributions dollar for dollar to the community organization of their choice.In 2021,the United for Giving program expanded to include nearly 36,000 eligible employees of companies recently acquired by UnitedHealth Group.Employee volunteering is another important feature of our United for Giving program.We encourage,support and reward employee community volunteer service by awarding employees who volunteer 30 hours per year with a$500 grant to the community organizations of their choice.Helping our employees impact their communities$47Mdonated in 2021.18K community organizations globally received support in 2021.3.7Mhours volunteered in 2021.40% employee volunteerism rate.Photo TBDYouth Farm Grant,Minneapolis,MinnesotaEnvironmental Health592021 Sustainability ReportA Modern,High-Performing Health SystemIntroductionOur People and CultureResponsible Business PracticesPerformance DataEnvironmental HealthIntroductionOur People and CultureEnvironmental HealthA Modern,High-Performing Health SystemResponsible Business PracticesPerformance DataEnvironmental Health602021 Sustainability ReportA Modern,High-Performing Health SystemIntroductionOur People and CultureResponsible Business PracticesPerformance DataAt UnitedHealth Group,we understand the important role the environment plays in the health of every community.We believe the environment is a key part of what makes the communities in which we live and work sustainable,viable and healthy.352Ksquare-foot WELL-certified campus in San Antonio,Texas,phase one scheduled to open in 2022.A growing body of research shows how closely climate change is tied to human health.Air pollution increases the risk of respiratory infections,heart disease and lung cancer.Extreme heat is linked to increased hospital admissions for cardiovascular,kidney and respiratory disorders.Intensifying wildfires can lead to an increase in emergency department visits for respiratory conditions like asthma or bronchitis.A healthy planet is the foundation for a healthy society,down to the water we drink and the air we breathe.While every person is impacted by the health of our environment,the impacts of climate change are distributed unequally among disadvantaged populations in the U.S.and around the globe.Communities of color,low-income populations and older adults are among those most likely to feel the impact of climate change,further exacerbating existing health inequities.Our businesses touch nearly every facet of health care as we work to build a modern,high-performing health system.We have the opportunity to contribute to a stable climate and improve planetary health while building a better health care system for future generations.What were focused on Committing to the Science Based Targets initiative(SBTi)Net-Zero Standard.Leading a coordinated effort to reduce the carbon footprint of the U.S.health system.Reducing our paper usage and advocating for the reduction of paper across the health system to the greatest extent possible over the coming years.Diverting waste from landfills.Ensuring efficient use of water.Environmental Health612021 Sustainability ReportA Modern,High-Performing Health SystemIntroductionOur People and CultureResponsible Business PracticesPerformance DataRecognizing the risks climate change poses to human health,we are committed to setting net-zero science-based emission reduction targets through the SBTi to ensure our actions are based on current climate science.Our commitmentsWe believe the environment is a key part of what makes the communities in which we live and work sustainable,viable and healthy.We are minimizing our impact on the environment through long-term commitments that reduce our carbon footprint.Our path to net-zero operations Commit to the SBTis Net-Zero Standard.Reach operational net-zero emissions by 2035.Achieve a 60%reduction in scope 1 and scope 2 emissions by 2030.Invest in and source 100%of our global electricity demand with renewable sources by 2030.Over the next 24 months,we will be working with the SBTi to validate near-term and long-term targets.In parallel,we will pursue near-term targets consistent with reductions required to limit global warming to 1.5C.Our approach to achieving net-zero operations will rely on direct mitigation of global emissions with minimal reliance on carbon offsets.Specifically,we are focused on:Completing an assessment and measurement of our entire footprint.Improving energy efficiency in our buildings.Investing in the transition to renewable energy.Environmental Health622021 Sustainability ReportA Modern,High-Performing Health SystemIntroductionOur People and CultureResponsible Business PracticesPerformance DataMeasuring our footprint For 22 years,UnitedHealth Group has measured its greenhouse gas footprint,and since 2011 we have set emissions reduction goals.We are further advancing our emissions measurement and we are proud to release our first-ever comprehensive scope 1 and 2 inventory,located in the data tables of this report.Our reported emissions have increased in 2021 due to the following drivers:Change in boundary:We reported all our global businesses and fleet data within our operational control for the first time.Change in methodology:Sites that were previously reported as scope 3 moved to scope 1 and 2.Portfolio growth:Through business combinations.We are currently assessing our scope 3 footprint,which we intend to complete in 2022.We plan to share our most significant categories of scope 3 data in our 2022 Sustainability Report.In previous years,we disclosed scope 3 categories of waste generated in operations,business travel and employee commuting.Our deeper assessment in 2021 identified our most significant categories as:Purchased goods and services Capital goods Upstream transportation and distribution Waste InvestmentsThe calculation of our scope 3 footprint combined with the updated scope 1 and 2 greenhouse gas(GHG)footprint will give us a comprehensive baseline,allowing us to commit to setting a net-zero science-based target and make meaningful GHG reductions in the years to come.Environmental Health632021 Sustainability ReportA Modern,High-Performing Health SystemIntroductionOur People and CultureResponsible Business PracticesPerformance DataImproving energy efficiency in our buildingsSupporting the transition to renewable energyA significant part of our commitment to operational net-zero includes identifying and scaling our reliance on renewable energy sources,which will directly decrease greenhouse gas emissions and improve the health of the communities where we operate.We are currently evaluating the sourcing of renewable energy across our operations,including on-site and off-site renewable energy production,virtual power purchase agreements and other renewable purchasing options.Examples of renewable energy sourcing could include deploying on-site solar systems on parking garages and rooftops at targeted core facilities,investing in off-site renewable solar and wind development,and other renewable purchasing options available through our utility partners.Our approach provides an opportunity to shift the broader demand for renewable energy in the communities where we operate.To meet our operational net-zero commitment,we are scaling solutions that reduce energy consumption in our entire real estate footprint ranging from data centers and pharmaceutical distribution centers,to clinical care facilities.This approach includes new construction projects,renovations,collaboration with landlords and simple employee behavior programs.For example,we are finalizing the construction of phase 1 of a two-building,352,000-square-foot administrative campus in San Antonio,Texas.Phase 1 is scheduled to open in 2022.It represents what will be the first WELL-certified campus in our portfolio,an industry-recognized attestation measuring a facilitys health and human experience attributes through building design and operations.We plan to leverage this experience to inform future construction.Additionally,we continue to invest in energy efficiency projects,including LED fixture upgrades,HVAC system replacements and Building Management Systems installation.Environmental Health642021 Sustainability ReportA Modern,High-Performing Health SystemIntroductionOur People and CultureResponsible Business PracticesPerformance DataLeading systemic change across the health system1.Health care supply chain and infrastructureThe U.S.health care system is responsible for 8.5%of U.S.carbon emissions stemming from health care facility operations,energy consumption,and the supply chain of goods and services.Recognizing the critical need to reduce the carbon footprint of the U.S.health care system,UnitedHealth Group is proud to be part of the National Academy of Medicines Action Collaborative on Decarbonizing the U.S.Health Sector,co-chaired by our CEO.This public-private collaborative with leaders from the federal government,pharmaceutical and hospital industries,and health professionals,seeks to address the health sectors environmental impact by focusing on four key areas.The collaborative seeks to mobilize the health care sector by establishing shared decarbonization goals and evidence-based solutions to protect human health globally and build a more equitable health system.2.Health care delivery3.Health professional education and communication 4.Policy,financing and metricsEnvironmental Health652021 Sustainability ReportA Modern,High-Performing Health SystemIntroductionOur People and CultureResponsible Business PracticesPerformance DataIn an increasingly digital world,the average consumers health care experience too often involves paper.UnitedHealth Group uses 2.8 billion sheets of paper annually to communicate with members.Beyond the environmental impact,the paper-based experience is often more time-consuming and cumbersome for members.Members are asked to review and return documents by mail or fax,or by scanning and emailing.Paper creates inefficiencies that slow down decision-making for members who expect timely answers about their health.We are working with a diverse set of stakeholders,including employers,consumers,providers,health equity advocates and the health care industry,as well as regulators and government partners.Of all the paper we generate,we estimate roughly 40%is related in some way to regulatory direction and requirement.Collaboration with government,regulators and others will be critical to reduce or eliminate as much of this usage as possible and create digital solutions and alternatives for paper-based processes.We are committed to reducing our paper usage and advocating for the reduction of paper across the health system to the greatest extent possible over the coming years.We are working toward providing paperless experiences for consumers and providers a dual-purpose goal designed to minimize use of energy,water and raw materials while creating a better consumer experience.Reducing paper usage would also improve the speed and simplicity of our member communications by replacing paper-based communications with digital tools.Minimizing the use of paper in the consumer and provider experienceDr.Orr,Optum,NevadaEnvironmental Health662021 Sustainability ReportA Modern,High-Performing Health SystemIntroductionOur People and CultureResponsible Business PracticesPerformance DataWe are dedicated to finding innovative ways to manage waste through prevention,reuse,recycling and disposal.Diverting waste from landfillsOur multidimensional approach to minimizing our environmental impact includes ongoing management of our various waste streams,including municipal,construction,electronic,hazardous and regulated medical and pharmaceutical waste.With our scope 3 enterprisewide waste-associated carbon emissions inventory underway in 2022,our focus on waste reduction remains an important part of our sustainability strategy.Additionally,we are considering an enterprise diversion rate goal for 2023,to be informed by our ongoing comprehensive inventory assessment and several pilots.In the Asia-Pacific region,we removed all single-use plastic and paper products in 2021,preventing over 68,000 pounds of waste in a landfill annually.Our Optum Technology team manages a successful electronic waste recycle/reuse program that avoided 600,000 kilograms of waste in 2021 by repurposing or recycling electronics,including over 100,000 notebooks and PCs.In 2022,we plan to implement new solutions to improve efficiency and reduce waste,including:Increasing the medication pack sizes carried by Optum Rx home delivery pharmacies,which could lead to the disposal of 546,000 fewer plastic bottles and caps
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01ZTO Express(Cayman)Inc.2020 ESG ReportBringing Happiness to More People through Our ServicesZTO Express(Cayman)Inc.ESG Report0203About the ReportIntroductionThis annual Environmental,Social and Governance(ESG)report is published by ZTO Express(Cayman)Inc.,and it covers ZTO Express(Cayman)Inc.and its subsidiaries.For readers convenience,ZTO Express,ZTO,the Company,and We are also used.Time frameThe time frame of this report is consistent with that of the Annual Report of ZTO Express(Cayman)Inc.,which is from January 1,2020 to December 31,2020,unless otherwise specified.ReferencesThe report was prepared with reference to the Environmental,Social and Governance Reporting Guide(ESG Guide)of Main Board Listing Rules of Hong Kong Stock Exchange(HKEX),China CSR Reporting Guidelines(CASS-CSR4.0)by the Chinese Academy of Social Sciences(CASS),SDG Compass-the guide for business action on the SDGs,and Sustainability Reporting Guidelines(GRI Standards)by the Global Reporting Initiative.Preparation processThe report was prepared with reference to the above-mentioned standards and followed the steps of peer comparison,information collection,information review,report writing,data review,management approval and report release,to ensure the completeness,materiality,authenticity,and balance of the report.DataAll data in the report were obtained from public data and ZTO Expresss statistics,which have been reviewed by relevant parties.Unless otherwise stated,the financial data in the report are in RMB.Quality commitmentThe Company promises that the report does not contain any false records,misleading statements,or material omissions.Access to the reportThe report is available in an electronic format,which can be accessed in the Financial Reports section under the Companys Investor Relations website.Information The Company Website:HQ address:1685 Huazhi Road,Huaxin Town,Qingpu District,Shanghai 201708Tel.:95311Email:Bringing Happiness to More People through Our Services0405About the ReportChairmans Letter:2057,Lets Set off Again!ABOUT ZTOLooking into FutureAppendixCONTENTS2687576121415161718192044722225303234465258636772727374FEATURECHAPTER 1CHAPTER 2Social Responsibility ManagementSTAYING UNITED TO COMBAT COVID-19 AND WORKING TOGETHER TO OVERCOME DIFFICULTIESStaying True to Our Original Aspirations,Enhancing Confidence,Empowering Employees and Solidifying the Foundation for DevelopmentMOVING FORWARD WITH PERSEVERANCE AND UNITY AND WINNING TRUST BY HELPING AND BENEFITING OTHERS Rushing to the Rescue to Facilitate the Transportation of MaterialsWatching out for Each Other to Serve Millions of HouseholdsAdopting Multiple Measures to Protect the Health and Safety of Frontline CouriersStabilizing Employment and Improving Peoples Livelihood and Well-beingSaluting to Our Heroes Amidst the Fight Against the PandemicWinning Nationwide Recognition and Highlighting Our Commitments to Take ResponsibilitiesPutting Customers FirstLogistics Empowered by Smart and Innovative TechnologyAccelerating the“Going Global”ProcessImplementing Safe Delivery RequirementsProtecting the Green EnvironmentConsolidating Business Management and GovernanceCaring for the Career Development of EmployeesJoining Hands with Partners for Win-Win ResultsServing the Development of Agriculture,Rural Areas and FarmersGiving Back to the Society and Serving Peoples Well-BeingsResponsibility StrategyResponsibility GovernanceResponsibility CommunicationTopic Analysis0607Chairmans LetterZTO Express(Cayman)Inc.2020 ESG ReportChairmans LetterOn Sep.29,2020,10 representatives,including members of our ZTO family and our network partners jointly sounded the gong to celebrate the listing of ZTO Express on the Hong Kong Stock Exchange(HKEX),marking a new milestone in our development journey.Our stock code is 2057 on the HKEX,with 20 representing the year of 2020,and 57 representing the business volume of ZTO on the first day of incorporation.The collision of these two figures starts a new journey for ZTO Express.On this new journey,we have responsibilities ahead of us.Today we take this step forward.This is not only a recognition of our past achievements,but also a challenge for us in the future.It means that we need to take greater responsibility.The express delivery industry connects cities and industries and serves tens of millions of users.It is a link between production and consumption and a bridge between products and users,and is considered a basic,strategic and leading industry that supports the development of the national economy.It is featured by a huge market,promising prospects and tremendous potentials.It not only helps more people start their own career and businesses and live a better new life,but also helps customers reduce costs,improve efficiency,create value and enhance competitiveness.Moreover,it can help address social problems,reduce logistics costs for the whole society,and make the chain“from factory to user,from farm to table shorter and flatter.The secondary listing of ZTO in Hong Kong is to better fulfill the above-mentioned responsibilities and better adapt ZTO to the future.On this new journey,we are in front of change and unchanged.Along the way,the Company has grown from a small company into an large enterprise,our performance keeps improving,and our family keeps expanding.However,what remains unchanged is our core values of“shared success,trust and accountability,innovation and entrepreneurship”,our management philosophy of“fair,efficient,and result-oriented”,and our corporate culture of“integrity,simplicity,efficiency and trust”.These have enabled ZTO Express to build on its past and achieve rapid development.We have taken solid steps on the road of implementing the mission of“bringing happiness to more people through our services and become a key player in Chinas express delivery industry.In the future,we will stay true to our original aspirations,stick to our mission and take our listing on HKEX as a starting point to explore and win a better future in the digital economy with our trust,simplicity,diligence,technology and wisdom.On this new journey,we are not afraid of challenges ahead of us.We are fully aware that the road ahead will be tougher and more challenging,but we firmly believe that as long as we stick to the right direction,make solid and substantial efforts,leverage the advantages of Chinas mega-market and the huge potentials of domestic demands,keep abreast of the dual circulation trend with domestic circulation as the mainstay and with domestic and international circulation reinforcing each other and form competitive edges in fully-integrated comprehensive logistics,ZTO Express will definitely march into a bright future with more solid steps.2057,Lets Set off Again!0809ABOUT ZTOZTO Express(Cayman)Inc.2020 ESG ReportABOUT ZTOCompany OverviewCore PhilosophyFounded on May 8,2002,ZTO Express(Cayman)Inc.is a logistics conglomerate integrating multiple services including domestic and international express delivery,express freight,commerce,warehousing,cold chain,finance,aviation,intelligent technologies,and media.On Oct.27,2016,ZTO Express(Cayman)Inc.was listed on the New York Stock Exchange(NYSE),creating unprecedented global visibility for the Chinese express delivery industry.On Sep.29,2020,the Company was listed on the main board of the HKEX,becoming the first Chinese express delivery company listed in both the United States and Hong Kong,and the first stock of innovative logistics on the HKEX.ZTO has grown into the largest express delivery enterprise in the world in terms of parcel volume.In 2020,the business of ZTO Express maintained high-speed growth,with the parcel volume reaching 17 billion,up 40.3%year-on-year,growing faster than the industry average.The Company ranked No.1 in the industry for five consecutive years and captured 20.4%market share.On Sep.1,2020,ZTO Express processed its 10 billionth parcel for the year,and this took only eight months and one day,setting the record again.ZTO Express has the largest network with the most extensive,the deepest and the most intensive coverage among the private operators in China.By the end of 2020,ZTO Express had nearly 30,000 service outlets and over 68,000 last-mile delivery posts,which covered over 99%of cities and counties in China.ZTO Express possesses the worlds leading express delivery capabilities,including 94 domestic sorting hubs equipped with more than 339 sets of automation equipment.For instance,the sorting hub in Guangzhou became the worlds first sorting hub with a daily parcel volume exceeding 10 million during the June 18 promotion campaign in 2020.The Company vigorously promote the usage of trailer trucks,owning more than 10,450 line-haul vehicles,of which about 7,900 are high-capacity vehicles over 15 meters.During its development and growth,ZTO Express has been actively fulfilling corporate social responsibilities with a full range of practical actions.The Company made unremitting efforts in green development,safety assurance,targeted poverty alleviation and rural revitalization,and actively repaid the society and spread positive energy of the industry through a wide range of public welfare activities such as disaster relief,poverty alleviation,education aid,free delivery of epidemic prevention and control materials.While growing and expanding our main business of express delivery,ZTO Express actively expands into the upstream and downstream of the industry chain and into the ecosystem,and established a number of industry-leading specialized logistics companies in express freight,warehousing,cold chain,aviation,and international business.By integrating various network and social resources,the Company has developed a diversity of business segments into an integrated and comprehensive logistics ecosystem and provides a package of logistics solutions for customers such as e-commerce,agriculture,manufacturing,and high-tech enterprises to help them save costs,enhance efficiency,improve experience,and create value.In addition,ZTO Express also relies on our own parcel flow and last-mile presence to actively explore new business opportunities.Operation philosophyService philosophySafety philosophyTalent philosophyDevelopment philosophyDiversified EcosystemOne Body,Multiple WingsDevelopment Engine,Blood Transfusion and Blood MakingResources Monetization,Unlocking Power of TrafficActivating Strength,Enabling and AdditionDifferentiated Offering,LTL and FTL TransportIntegrated Warehouse and Distribution,Serving IndustryResource Support,Business ConversionImprove QoS,Speed up Business DevelopmentTechnology Empowers Faster and Better DeliveryCold Chain Connecting China and the WorldBecoming a respected enterprise with dignity,sustainability and longevity for centuries to comeBringing happiness to more people through our servicesPersistence,focus,and perseveranceAll for outlets,and all for customersTalents are the hard powerStable,strong,ambitious and change-seekingFair,efficient,and result-orientedIntegrity,transparency and win-win resultsSafety is benefitShared success,trust and accountability,innovation and entrepreneurshipVisionCore valuesMissionCorporate spiritManagement philosophy1011ABOUT ZTOZTO Express(Cayman)Inc.2020 ESG Report2020 Top 50 Chinese Logistics CompaniesCFLP2020 Outstanding Talent Team in Innovation and Entrepreneurship of Qingpu DistrictLeading Group for Talent Work in Qingpu District,ShanghaiCaring EnterpriseZhejiang Provincial Disabled Persons FederationZhejiang Foundation for Disabled Persons2020 Top 100 Excellent Enterprises of Qingpu District Peoples Government of Qingpu District,Shanghai2020 Special Anti-Epidemic Contribution Award of Express Delivery IndustryChina Post and Express News2020 Social Responsibility Award of Express Delivery IndustryChina Post and Express News2020 International Development Award of Express Delivery Industry China Post and Express News2020 Quality Development Award of Express Delivery Industry China Post and Express News2020 Express Freight Development Award China Post and Express NewsNational Advanced Transportation Unit in Response to COVID-19CCTA2020 Annual Best Employers in Chinas Logistics FieldLogistics BusinessDec.Jan.Mar.May.Jun.Software EnterpriseShanghai Software Industry Association(SSIA)Enterprise with AAA-Level Credit Rating Zhiyunxin Credit Rating Jiangsu Co.,Ltd.2020 BrandZ Top 100 Most Valuable Chinese BrandsWPP,KantarJul.Nov.2020 Golden Wing Award(Outstanding Contribution)of Unmanned System Industry Organizing Committee for 2020 Global Unmanned System Conference;Association for Unmanned Vehicle Systems New Technology of China;National UAV Association Cooperation and Mutual Aid Alliance;YouUAV.com2020 Top 50 China Concept Stocks with the Best Investment ValueCaijing MagazineTiger SecuritiesThe Most-Anticipated IPO of 2020GelonghuiNational Civilized Unit of Transportation IndustryMinistry of Transport of ChinaSep.AAAAA Logistics CompanyChina Federation of Logistics and Purchasing(CFLP)Third Prize of Science and Technology ProgressCFLP2020 National Leading Logistics EnterpriseChina Communications and Transportation Association(CCTA)2020 National Leading Logistics Enterprise CSR AwardCCTATop 500 Chinese Private EnterprisesAll-China Federation of Industry and Commerce(ACFIC)2020 Top 100 Private Enterprises in Chinas Service IndustryACFICHeadquarters of Private CompaniesShanghai Municipal Commission of Commerce;Shanghai Development and Reform Commission;Shanghai Municipal Commission of Economy and Information Technology;Shanghai Federation of Industry and CommerceMost Honored CompanyBest ESGInstitutional InvestorAug.2020 Shanghai Top 100 EnterprisesShanghai Enterprise Confederation;Shanghai Entrepreneurs Association;Shanghai Federation of Economic Organizations;Jiefang DailyHonors&Awards20202021FEATUREZTO Express(Cayman)Inc.2020 ESG Report1213At the beginning of 2020,the COVID-19 pandemic swept across the country,affecting hundreds of millions of people throughout China.After the outbreak of the pandemic,the CPC Central Committee and the State Council attached great importance to the epidemic prevention and control work and made arrangements for prevention and control in a timely manner.The relevant departments and regional governments fulfilled their responsibilities,and all sectors of society gave their full support to the efforts to fight against the pandemic and effectively protect the safety and health of people.Despite the sudden outbreak of the pandemic,actions speak louder than words.With the trust and expectations of the society,the Company responded quickly,pooled the forces of different players in the logistics ecosystem,and fully supported the transportation of anti-epidemic materials;the Company made financial and in-kind donations,and contributed to the fight against the pandemic with actions;played an anchoring role in protecting peoples livelihood by delivering daily necessities to thousands of households through unobstructed delivery channels;the Company set up multiple task forces to coordinate operations,assess the epidemic situation,purchase and distribute protective materials,investigate hidden risks,and implement prevention and control measures,and made every effort to ensure the health of employees,and safe operation of the entire network.On Feb.26,2020,All-China Federation of Industry and Commerce(ACFIC)and CCTV-6 Movie Channel jointly launched the Entrepreneurs Series with the theme of Moving Forward Through Thick and Thin-a series of social welfare videos,inviting outstanding entrepreneurs to speak out for their efforts in response to the pandemic.Lai Meisong,Chairman of ZTO Express,was invited to participate in the program as the only representative of the logistics industry.On the evening of March 22,2020,reporters from Peoples Daily and CCTV News visited ZTO Wuhan Sorting Hub in Hubei Province to broadcast live the epidemic prevention and control work and the resumption of work and production at Wuhan Sorting Hub.The entire company must be keenly aware of the importance and urgency of the epidemic prevention and control work.Firstly,we must ensure the health and safety of all our family members;secondly,we must ensure the safe operation of our network during this extraordinary period of the pandemic;and thirdly,we must ensure that we can better fulfill our social responsibilities to serve people and benefit society during this major public health emergency.-Lai Meisong,Chairman of ZTO ExpressScan the QR code to watch the video of social welfareScan the QR code to watch the video titled Wuhan Transit Center resumed work and ZTO Wuhan came backSTAYING UNITED TO COMBAT COVID-19 AND WORKING TOGETHER TO OVERCOME DIFFICULTIESFEATURES c a n a n d w a t c h the Fighting the Pandemic MV“”FEATUREZTO Express(Cayman)Inc.2020 ESG Report1415Rushing to the Rescue to Facilitate the Transportation of MaterialsWatching out for Each Other to Serve Millions of HouseholdsAt the beginning of the outbreak,ZTO Express immediately established an emergency leading group and a front-line command team to coordinate transportation and human resources to provide enabling services and support for the nationwide efforts on epidemic prevention and control.On Jan.25,2020,the Company opened a free green channel for the transportation of anti-epidemic materials from the whole country to the key epidemic areas in Hubei.After the epidemic situation in Hubei improved,the Company provided free delivery of luggage for medical teams coming from around the country to the aid of Hubei,upon their return home.In the two months when the epidemic was the most serious,the Company,together with caring people both at home and abroad,delivered more than 700 tons of masks,protective clothing,disinfectant,medical gloves,and basic livelihood materials to Hubei on many occasions for free.In addition,the eco-system business segments of ZTO have also joined the fight against the epidemic.They leveraged their respective advantages in resources and worked together with all sectors of society to combat the epidemic and overcome the difficulties.Specifically,ZTO International transported medical supplies and materials raised by overseas Chinese in Japan,Indonesia,UAE,Cambodia,Russia,Germany,etc.,directly to the front line of the fight against the epidemic for free;ZTO Freight urgently coordinated vehicles to offer public welfare transportation services;ZTO Cloud Warehouse opened the warehouse and distribution centers for hospitals,governments,enterprises,institutions,and charity organizations to provide the facilities as well as free services such as warehousing,distribution,and delivery.The postal system is one of the important strategic infrastructure and social organization systems,which connects thousands of cities and industries and serves hundreds of millions of households.It is essential to the nation,the peoples livelihood and their development.In the early stage of the epidemic,economic activities across the country almost stagnated,and express delivery became an important channel for ordinary people to access daily necessities.The express delivery industry played an anchoring role in protecting peoples livelihood.Since the start of the fight against the pandemic,the entire network stayed united and promoted the fixed-point pickup and delivery,appointment delivery,and non door to door delivery to ensure unimpeded delivery channels.The Company also distributed living necessities for community residents and learning materials to students free of charge,ensuring that residents could have vegetables in the basket and students could keep learning during class suspension.On Jan.24,2020In Feb.2020On April 12,2020On March 12,2020ZTO Express Jiangyin,Jiangsu Province,organized personnel to transport two trucks of relief supplies to Wuhan for free.ZTO Express carries RMB400,000 worth of epidemic prevention materials donated by Hubei Yingcheng City and sends them to Suifenhe City,Heilongjiang Province,to support medical w o r k e r s a n d e p i d e m i c prevention and control staff.Shandong Radio and TV Stations Integrated Media Information Center,together with Qilu Grain and Oil,launched a lightning-speed public-good campaign to transport medical supplies and food such as flour,noodles,steamed buns,apples,etc.,to the frontline of Hubei.Shandong Management Center of ZTO Express took the initiative to undertake the delivery of 20 tons of apples.ZTOs outlet in Xingwen County,Yibin City,Sichuan Province collaborated with local schools to deliver more than 15,000 teaching and learning materials for more than 1,500 students free of charge,helping them learn better during the epidemic.FEATUREZTO Express(Cayman)Inc.2020 ESG Report1617Adopting Multiple Measures to Protect the Health and Safety of Frontline CouriersThe front-line couriers come from the society and serve the society.They are hard-working bees,creators and guardians of good life,and the fighters working on the frontline against the epidemic.They played an indispensable role in ensuring unimpeded economic circulation,facilitating production and life,and promoting social harmony.ZTO Express actively responded to the requirements of the CPC Central Committee and the State Post Bureau(SPB).The Company focused on effective prevention and control of the epidemic on one hand,and the scientific and orderly resumption of production on the other hand.The Company also made significant efforts on epidemic prevention and control throughout the entire network to protect the safety and health of front-line employees to the maximum extent.Disinfecting every incoming and outgoing vehicleKeeping masks on during sorting operationsDisinfect every expressBanners for epidemic prevention and educationComprehensive and strict disinfectionThe Company proactively responded to and implemented the requirements of the governments at all levels on epidemic prevention and control,and conducted comprehensive disinfection of operation sites,facilities and equipment at management centers and outlets at all levels nationwide.Setting up a special fundThe Company set up a special fund of RMB100 million for COVID-19 prevention and control,with a focus on protection for frontline staff upon their return to work.Providing safety subsidiesA return-to-work safety subsidy of RMB100 was provided to each frontline staff.Boosting the confidence of outletsThe Company introduced discounted and interest-free loan policies for the outlets to enhance their ability to recover and develop.Providing protective gearsThe Company provided a full set of protective gears for frontline staff,and required couriers to wear masks,gloves and goggles before going out.Daily health checkAll outlets were equipped with infrared thermometers to conduct daily temperature checks on the staff and customers entering the outlets.Dynamic notification of epidemic situationThe heads of the outlets gathered the epidemic dynamics in the surrounding communities,informed the staff before work every day,and reminded them of the relevant precautions in a timely manner.Strengthening awareness and education on epidemic prevention and controlThrough posters,audio broadcasts,video programs and other diversified forms,the Company made continuous efforts to enhance the staffs awareness of the risks of epidemic and their knowledge of disease prevention and control,and made efforts to relieve their psychological stress.Stabilizing Employment and Improving Peoples Livelihood and Well-beingEmployment is pivotal to peoples livelihood,and stable employment is in a paramount position in China policy of ensuring stability on the six fronts(employment,finance,foreign trade,foreign investment,domestic investment,and market expectations).Following the important instructions of General Secretary Xi Jinping and the arrangements of the CPC Central Committee and the State Council to combat the pandemic and stabilize employment,ZTO Express made solid and efficient efforts to stabilize and expand employment,increased production capacity in various regions,and created more than 53,000 jobs across the network.In addition to direct recruitment,the Company also made positive contributions to stabilizing employment and protecting peoples livelihood by creating employment opportunities for more people by strengthening network construction and driving the development of related industries,and creating new opportunities for entrepreneurship and employment in the post-epidemic era.In the meantime,ZTO Express also adhered to the core philosophy shared success and upgraded a traditional franchise-based express delivery enterprise into a modern entrepreneurship&innovation platform,which features the sharing of the income generated by express delivery services with our network partners and consumers to the maximum extent.On March 5,2020,ZTO Freight and ZTO Finance launched a support program to provide financial support to outlets facing practical difficulties,help them further enhance their risk-resisting abilities,boost their development,and truly achieve stable employment and the protection of peoples livelihood.ZTO Express created more than 53,000 jobs across the network in 2020(including outsourced staff)couriers 28,000 operators(including outsourced staff)14,000 drivers(including outsourced staff)7,800 FEATUREZTO Express(Cayman)Inc.2020 ESG Report1819Saluting to Our Frontline Heroes Amidst the Fight Against the PandemicSince the outbreak of the epidemic,the ZTOers have been actively involved in the front line of the battle against the virus.We stayed true to our original aspirations and fulfilled our responsibilities.There emerged a number of anti-epidemic pioneers,who have the courage to take on responsibilities,dare to act,and are willing to contribute.In order to reward role models,encourage fighting will,and enhance the determination and confidence of all the staff to combat the pandemic,ZTO Express selected and commended 350 individuals and collectives as anti-epidemic pioneers in three batches,and allocated funds from ZTO Special Fund to award 5,000 to 10,000 yuan to the drivers who helped Wuhan during the pandemic.Despite of all the difficulties and dangers,ZTOers feared no hardships,took the lead and showed great courage in the fight against the epidemic.Our couriers were brave to be pioneers and are willing to make sacrifices to ensure the epidemic prevention and control.Their remarkable behaviors were highly recognized by different communities.In late October 2020,five employees of ZTO Express were awarded the title of Outstanding Individuals to Combat COVID-19 at the meeting held by the Ministry of Transport.Wei JianbinGeneral Manager of Tibet Center of ZTO Express Cui FushanGeneral Manager of Jinan Center of ZTO ExpressWang HaojieBusiness Manager of Shanghai Center of ZTO Express Xiong Chuyingdriver of Ningguo Center of ZTO ExpressScan the QR code for the full list of anti-epidemic pioneers of ZTOLiu Zhazhen(Manchu)safety supervisor of Shenyang Center of ZTO Express Winning Nationwide Recognition and Highlighting Our Commitments to Take Social ResponsibilitiesEven the shortest journey cant be finished without taking the first step.With determination,ZTO Express took on our responsibility and made every effort to ensure the delivery of anti-epidemic materials and basic living supplies for residents and made scientifical planning for the resumption of work and production.The Company became an indispensable and important force in the national economic operation system and played an important supporting role in the epidemic prevention and control battle,which was highly acclaimed by the government,media and industry.On Jan.18,2021,the third session of the seventh Council and the 2021 annual working conference of China Communications and Transportation Association(CCTA)was held in Beijing.With its excellent performance in ensuring the transportation of anti-epidemic materials during the epidemic,ZTO Express was awarded the honorary title of National Advanced Transportation Unit in Response to COVID-19.We are touched,warmed,encouraged and inspired by what you have done,and now we do not worry anymore.-From the entire medical team dispatched in the first batch from Shandong Province to HubeiYour company actively responded to the governments call,strictly implemented the epidemic prevention and control requirements and arrangements of our citys epidemic prevention and control center,bravely assumed your responsibility,rushed to the rescue day and night,and continuously distributed all kinds of emergency medical rescue materials to the frontline.You have contributed industry strength to winning the fight against the epidemic.-Yichang City Postal AdministrationIn the critical stage of epidemic prevention and control,your company stepped forward,regardless of gains and losses,overcame numerous difficulties,and rushed to the rescue day and night,which effectively resolved the shortage of anti-epidemic materials in our district,and provided strong support for our work,including ensuring supplies for the production,mobilization of materials,and ensuring stability in supply and price.”-Economic Commission of Qingpu District,Shanghai Let us work together,overcome difficulties together,unite as one,to win this battle.-Guangdong Charity FederationZTO is my lifelong comrades in arms,and my lifelong good friends.We have come to serve the society and contribute to the country together.We will do more positive energy things that are beneficial to the society and the people together in the future.Beijing Hanhong Charity Foundation Hanhong“”2021Chairmans LetterZTO Express(Cayman)Inc.2020 ESG ReportIt was proposed in the 2020 National Postal Management Conference that the whole industry should adhere to the general principle of seeking progress while maintaining stability,insist on the new development concept,adhere to the supply side structural reform as the main line,and persist in the reform and opening up as the driving force to promote high-quality development.ZTO Express adheres to its original aspirations and takes the“bringing express delivery services to villages and factories and going global”project as the entry point;enhances confidence,synergy,and execution,further improves our advantages,and shores up our weak spots;pursues a path of high-quality development,empowering employees and solidifying the foundation based on high requirements,effectively improves quality and efficiency,pursues ecosystem synergy at high levels,and follows high standard for green development;the Company will promote the transformation of our leadership advantages into absolute advantages and ecosystem advantages via the adoption of digital and smart technologies,and strive to become a respected enterprise with dignity,sustainability and longevity for centuries to come.Putting Customers FirstAccelerating the“Going Global”ProcessImplementing Safe Delivery RequirementsProtecting the Green EnvironmentLogistics Empowered by Smart and Innovative Technology2225303234STAYING TRUE TO OUR ORIGINAL ASPIRATIONS,ENHANCING CONFIDENCE,EMPOWERING EMPLOYEES AND SOLIDIFYING THE FOUNDATION FOR DEVELOPMENTCHAPTER 12223ZTO Express(Cayman)Inc.2020 ESG ReportChapter 1 Staying True to Our Original Aspirations,Enhancing Confidence,Empowering Employees and Solidifying the Foundation for DevelopmentPutting Customers FirstImproving Service SystemOptimizing Customer ServiceFollowing the service philosophy of“all for network partners and customers”,ZTO Express has always dedicated to providing efficient,safe and convenient services.We have been building a sound customer service system,optimizing customer service experience,and improving after-sales services to promote the steady improvement in the quality of services(QoS).As a result,we have won the trust and support of more and more customers.In the public satisfaction of express service released by the state post office from 2014 to 2020,ZTO Express has ranked No.1 throughout the years among“Tongda”operators(ZTO Express,YTO Express,STO Express and Yunda Express).ZTO Express attaches importance to strengthening the building of the QoS system.We established the QoS Center and four functional supervisory departments,namely the Customer Service Department,the Arbitration Department,the Quality Management Department,and the Value-Added Service(VAS)Department,to oversee the QoS of the entire network.We adopted centralized management and distributed operation for nearly 20,000 customer service agents across the network,formed a set of sound HQ-Center-Outlet service supervision mechanism to protect customer rights and interests.Following the service philosophy of“all for network partners and customers”,ZTO Express puts customer experience in the first place,explores innovations on smart service models,and strengthens after-sales service guarantee.ZTO Express makes every effort to protect the rights and interests of customers,continues to promote steady improvement in QoS,and continues to meet consumers needs that shift from basic services to high-end and premium services.Organizational Structure of QoS CenterCustomer Service Process QoS CenterAssistant DepartmentCustomer Service DepartmentArbitration DepartmentQuality Management DepartmentVAS DepartmentConduct service data analysis,discover problems in service process and customer experience,and make corrections,improvements,and optimizations.responsible for developing customer service supervision system and service process system,analyzing customer attributes,optimizing and improving service mechanism,improving and implementing service measures,and enhancing customer experience.responsible for arbitrating disputes between network outlets and transit centers,and concerning the responsibility in all links of express delivery to maintain the harmonious and healthy development of the network.responsible for analyzing network problems based on data from the Arbitration Department and Customer Service Department,carrying out targeted and special rectification campaigns,carrying out quality inspection on call services and internal training,and effectively promoting the improvement of QoS across the network.responsible for integrating value-added products from the receiving end,the processing end and within the internal network,achieving efficient linkage and providing in-depth services,effectively realizing process warning and result guarantee,and creating a differentiated value-added after-sales service system across the chain with better services and experience.Customer callsAnswered by 95311/online robotsAnswered by 95311/online operatorsBackstage customer service Customer feedbackExternal processing(customer)Internal rights protection(outlets)SatisfiedUnsatisfiedfollow up 201820192020Customer satisfaction.183.484.92425ZTO Express(Cayman)Inc.2020 ESG ReportChapter 1 Staying True to Our Original Aspirations,Enhancing Confidence,Empowering Employees and Solidifying the Foundation for DevelopmentListening to the voice of CustomersZTO Express cares about customers opinions and feedbacks.Based on its situation,the Company continuously optimizes the management on customer service,and strives to build a more attractive corporate brand image.The Company opened a customer service column on its official website to publish customer service information;set up online customer service to answer customers queries;opened WeChat and Weibo accounts to extend communication channels;organized offline face-to-face communication activities to expand communication coverage;published annual reports,social responsibility reports,magazines,etc.to disclose corporate information.Improving Customer ExperienceEnhancing Service Awareness Improving After-Sales ServiceZTO Express is fully committed to building a professional service team.The Company regularly conducts training on quality improvement,standardized services and attitude improvement for customer service agents and couriers across the network,promotes and spreads customer service knowledge and service standards across the network,and continuously improves the service capabilities of customer service agents and couriers.In order to ensure the quality of after-sales service,ZTO Express launched the“Shou Hou Bao”after-sales service system to improve the efficiency and capability of comprehensive services by digital means,while establishing a sound customer complaint handling mechanism to ensure that customers problems are resolved in a timely and effective manner.The Companys Customer Service Center launched a CRM system to optimize the complaint handling process and shorten the processing time.The Company established both internal and external channels,including 95311 hotline,online customer service on the official website,Cainiao channel,and WeChat applet,to ensure the instant acceptance of customer complaints.The Company also established an online customer service system covering the entire network to enable customers to directly contact the corresponding outlets and guarantee the speed of complaint handling.The Company also set up a customer follow-up mechanism,with the HQ tracking feedback results,to ensure that complaints are resolved once for all.In September 2019,ZTO Express launched smart voice-based customer service system supporting a whole range of scenarios,which enables interactions with users through open voice prompts and assists customers in completing complex business processes such as placing orders,sending reminders and submitting complaints.In 2020,this system was further upgraded to support speech recognition and enable customers to inquire various express parcels issues such as checking the status and sending reminders by dictating order numbers.At the same time,it enables customized responses based on different scenarios,significantly improving the flow of interactions and user experience.The courses of ZTO Express KEY Program are based on real cases of our transit centers,network managers,customer service agents and couriers,and summarize practical experience to help all staff improve QoS,increase efficiency,shore up weak spots in business development and enhance capacity.Direct Chain-Openness-Coexistence 2020 ZTO Express Customer Open DayWith the adoption of new technologies such as cloud computing,big data,mobile Internet and AI,the logistics industry has moved from the traditional model of manual work to a new era driven by technology.ZTO Express has fully implemented the Guiding Opinions of the State Post Bureau on Promoting Scientific and Technological Innovations in the Postal Industry,seizes the important opportunities presented by the development of AI,5G and IoT,continues to increase R&D investment,and enhances application of new technologies.The Company continues to enhance the effectiveness and efficiency of digital management of big data and cloud computing to provide a strong guarantee for cost reduction and efficiency improvement in every link.Strengthening Innovation ManagementZTO Express has closely integrated technological innovations with the Companys strategy and business and has established a comprehensive Internet product R&D system.The Company set up a R&D team and promoted the implementation of many advanced technologies.The Company has built up eight digital product lines:marketing,customer service,last-mile network,transit center,transportation,finance,smart equipment,and collaborative office.The IT,digital and smart tools have been widely used in all aspects of express delivery.In 2020,the Company focused on five major aspects:experience,efficiency,data,innovation and ecosystem to accelerate breakthroughs and achieve innovative development.Logistics Empowered by Smart and Innovative TechnologyAt the experience level:digitization will deepen c o n n e c t i o n s w i t h customers,improve their digital experience and pursue user satisfaction.At the efficiency levelcore operational capabilities will deepen product coverage based on business scenarios and flexibly and quickly support business operations.At the data levelbreak data barriers across the entire network and move business operations and business indicators online.At the innovation levelpromote intelligent routing projects,reduce transportation costs of centers and outlets,and stimulate resource vitality.At the ecosystem levelcollaborate with ecosystem partners to focus on building a one-stop integrated supply chain platform to support the rapid development of integrated supply chain business.2627ZTO Express(Cayman)Inc.2020 ESG ReportChapter 1 Staying True to Our Original Aspirations,Enhancing Confidence,Empowering Employees and Solidifying the Foundation for DevelopmentEmpowering Smart Express DeliveryScientific and technological innovations play important roles in deepening the supply-side structural reform of the express delivery industry and offer key support for promoting the transformation and upgrading of the industry and improving quality and efficiency.ZTO Express continued to increase the R&D and investment in automated and intelligent equipment and empowered the entire network through new technology with the aim to improve logistics efficiency.The Company kept upgrading its strategic planning of“small front office and large middle office”and built up a business middle office that covers the whole ecosystem and multiple scenarios,to gather a variety of data flows,such as“transaction flow”,“logistics flow”,“capital flow”and“message flow”,and achieve online and standardized services.In response to the needs of different customers,such as vendors on e-commerce platforms and WeChat,individual customers,and corporate customers,ZTO Express has developed more than 50 channels for order placing,including WeChat public official account,applet,APP,call center,express housekeeper,self-service touch-screen cloud-based printer,and smart mail desks.ZTO Express is committed to developing high-quality and convenient“one-stop”order placing service.ZTO Express uses the route traffic flow model to dynamically predict the transportation capacity demand based on the cargo volume,seamlessly dispatch transportation capacity,accurately allocate personnel,reduce the flow links of express items,greatly improve the vehicle loading rate,and achieve the optimal transportation efficiency and cost.The Company also uses the GIS system for real-time monitoring,uses video cloud and the Galaxy system for visualized dynamic tracking as well as monitoring and analysis of the real-time location of the vehicles and the traffic conditions,to ensure the safety and controllability of the parcels during transportation.In 2020,the Company engaged in deep cooperation with Datang Telecom and other enterprises in BRT and tried to use autonomous driving to transport express shipments during nighttime.The automated sorting system independently developed by ZTO can sort about 24,000 parcels per hour in one layer and about 48,000 parcels per hour in two layers,with the sorting accuracy reaching 99.99%.The intelligent sorting cabinet provides a comprehensive sorting solution for the centers distribution and the outlets delivery sorting，and helps the transit center advance the sorting process and directly distribute the sorted items to the dispatchers at the outlets through the combined use of software and hardware.By the end of 2020,ZTO had put into operation 339 sets of automated sorting equipment in the whole network.ZTO Express has introduced intelligent equipment such as UAVs,driverless logistics vehicles and driverless delivery vehicles to adapt to different delivery scenarios and improve timeliness and efficiency.Unmanned self-pickup cabinets have been set up in communities,schools and office buildings to provide users with services such as pick-up,posting and temporary storage,reducing the delivery pressure on couriers.ConvenientEffi cientIntelligent DeliveryOrder Placing TransportationAutomated SortingZTO smart delivery bucket is a terminal delivery device that can reduce the cost of outlets and improve customer experience.It combines intelligent hardware with intelligent system to reduce the security risk of delivery,reduce the waiting time of users,and optimize the high cost of random pickup of outlets.ZTO Express launched the operation of Tuxi Express Post in 2017,aiming at offering diversified last-mile services to communities and campuses,reducing the cost of dispatch operations,and solving the headache of nobody signing for the receipt of express items when users are not at home.Haiyan EL-61 is a pure electric logistics drone launched by ZTO Express,which can meet the needs of various application scenarios such as last-mile delivery,rural areas,e-commerce,medical emergency response and emergency rescue.The unmanned logistics vehicle introduced by ZTO Express is used for low-speed unmanned distribution for last mile,and different intelligent devices can be built based on demands and applied to diverse new retail scenarios to accelerate the construction of a new comprehensive smart logistics network.2928ZTO Express(Cayman)Inc.2020 ESG ReportChapter 1 Staying True to Our Original Aspirations,Enhancing Confidence,Empowering Employees and Solidifying the Foundation for DevelopmentZTO Express Is Developing Full-link Digital Smart LogisticsExpress HousekeeperExpress SupermarketOnline CustomerExpress LockersOnline Business HallZTO Treasure BoxData CockpitOfficialWebsitePrivacyNumberCloud PrintingWMSOA/HRCloudCallSmart ArbitrationShip with QRTicketing SystemZhangzhongtong AppCustomer CRMScan/Dynamic Weighing MachineVideo CloudShenzhou SystemMaterial SalesXingluo SystemZTO Premium DeliveryEco-friendly BagsTruck Transportation SystemAutomated SortingIntelligent Sorting CabinetStarair Union AviationPDA DevicesQimen SystemZTO InternationalOperational ControlZTO FinanceZhongkuai MediaZTO BusinessPangu SystemGIS3031ZTO Express(Cayman)Inc.2020 ESG ReportChapter 1 Staying True to Our Original Aspirations,Enhancing Confidence,Empowering Employees and Solidifying the Foundation for DevelopmentZTO InternationalZTO International handles the international business.Since its establishment in 2014,ZTO International has been committed to providing global customers with more convenient and efficient one-stop logistics supply chain solutions,with a goal of becoming a global first-class comprehensive logistics service provider.As of the end of 2020,ZTO International have built up our presence in Southeast Asia,the Middle East,Europe and the United States,Japan and the Republic of Korea,Australia and other countries and regions,and operated diversified,multi-category cross-border logistics businesses such as bonded services,direct mail,integrated warehousing&distribution,and special line service.The Company has built up overseas networks in Cambodia,Vietnam,Laos,Myanmar and other countries to directly serve the local markets and people with localized management.In addition,in order to further promote the deployment of overseas networks,ZTO International has achieved initial results in business diversification,product internationalization and service globalization,as well as established a“multi-channel,diversified and all-round”service model based on the multi-level market demands of B2B,B2C,C2C,and BBC.The express delivery industry carries the functions of politics,trade and personnel communication.It is a bridge that facilitates the interconnection among countries along the“One Belt and One Road”and plays an important role in promoting international exchanges and serving economic and trade development.ZTO Express actively responds to the national call to participate in the“One Belt and One Road”Initiative and the call of the State Post Bureau for“bringing express delivery services to villages and factories and going global”.ZTO Express relies on ZTO International to accelerate the expansion into the international logistics.In line with the strategic policies and development needs of the countries along the“One Belt and One Road”,the Company set up overseas transit warehouses,opened special international business lines,and connected with overseas logistics systems.The Company aims to build a convenient,unimpeded,inclusive cross-border delivery network based on the neighboring countries,covering the One Belt and One Road and providing global consumers with a full range of express delivery and logistics solutions.At the same time,the Company aims to enhance the development of express delivery and logistics in those countries and improve the well-being of the people in those countries to achieve common prosperity.Network coverage of ZTO InternationalOn Nov.20,2020,the China-Myanmar international express air cargo route successfully made its maiden voyage,marking a new journey for ZTO Express Myanmar to offer the dual-mode(land air)delivery services.On Feb.19,2020,ZTO Express Thailand held an inauguration for the trial operation at its transit center in Bangkok,marking the official launch of its nationwide express delivery services in Thailand.Accelerating the“Going Global”ProcessAt 21:03,Nov.12,2020,Chhuon Sokong,who lives in Phnom Penh,capital of Cambodia,received the clothes he bought on the Chinese e-commerce platform on the Double 11 day.This was the first cross-border order that completed by ZTO International and signed for by the customer at that day.The parcel was delivered from China to Cambodia by ZTO International in 34 hours.New speed!ZTO International completed the delivery of the first cross-border order of Double 11 in 34 hours.Case3233ZTO Express(Cayman)Inc.2020 ESG ReportChapter 1 Staying True to Our Original Aspirations,Enhancing Confidence,Empowering Employees and Solidifying the Foundation for DevelopmentImplementing Safe Delivery RequirementsDelivery safety is closely related to the good life of people.ZTO Express earnestly implements the work safety policies that emphasize“putting safety first,focusing on prevention,and exercising comprehensive controls”.The Company has established a sound work safety management system,and continuously strengthens the whole networks safety awareness and skills.The Company implements work safety requirements in every aspect of the operations and strictly implements the three systems(Real-name System,Open-box Inspection System,and Machine Inspection System)to defuse hidden risks,prevent and curb serious accidents,mass incidents,and other occurrences,and contribute to public safety and the long-term stability of the country,and the creation of a safe and stable environment for delivery services.Enhancing Safety ManagementZTO Express continues to improve the safety management system and optimize the management and control framework,system procedures and system tools;the Company established a three-tiered organization and management mechanism for safety management with safety officers at the front end,safety work leadership group at the middle end and the safety management committee at the headquarter.Vertically,the safety responsibilities of every post and every employee are clearly identified;horizontally,the management work covers every aspect of the operations so as to receive feedback,execute plans and respond immediately;The Company developed a series of work safety rules and regulations and safe operation requirements,such as Safety Supervision and Punishment Regulations,Postal Route Safety Management Regulations,and Regulations on Accountability for Safety Accidents and made constant improvements;the Company strengthened the construction of safety emergency response management mechanism,formulated emergency response plans such as the Public Health Emergency Response Plan,and standardized emergency management and response procedures for safety accidents.The Company regularly investigates potential safety hazards to strictly prevent safety accidents.In 2020,the Companys Lost Time Injury Rate(LTIR)was 0.68.Implementing the Three SystemsThe Company strictly implements the“Postal Law of the Peoples Republic of China”,“Postal Industry Safety Supervision and Management Measures”,“Express Delivery Safety Operational Regulations”and other laws and regulations and strictly implements the three systems:Real-name System,Open-box Inspection System,and Machine Inspection System to improve the safety and security of delivery.Real-name posting and deliveryInspection for acceptanceMachine inspectionThe Company strictly implements the real-name registration system and has built up systems such as Real-name Registration for Express Delivery Services,Notice to Customers Regarding the Implementation of the Real-Name System for Express Delivery,Regulations on Real-name System for Express Delivery to standardize the express delivery process;the Company also organized trainings on real-name system for front-line staff to ensure its implementation;the Company conducted monthly special supervision on the implementation of real-name system in each outlet,and established punishment and supervision and reporting mechanisms to strengthen outlet management.In 2020,the real-name online registration rate is 99.9%for ZTO Express.Outlets are required to post a list of prohibited items and safe delivery requirements in the business hall and educate the customers about the concept of safe delivery;in the inspection process,all couriers are required to implement the open-box inspection system and strictly abide by the principle of not accepting prohibited items for delivery and limiting the scope of restricted items to guarantee the safety and compliance of the delivery.The Company constantly u p g ra d e s t h e s e c u r i t y inspection equipment,and jointly developed security inspection machines with independent IPs,advanced technology,faster speed and better effectiveness with Nuctech and other institutions to ensure the effectiveness of security inspection;the Company introduced a new cross-belt security inspection machine to improve work efficiency and save manpower.100%of the items are checked through the security inspection machines to ensure the safety of parcels.Carrying out Safety Awareness and Education CampaignsZTO Express actively carries out safety education and emergency drills to build and raise the safety awareness of employees;conducts pre-job training,safety training for operators,safety training during peak seasons,etc.,to strengthen employees knowledge and skills on work safety;supervises the execution of emergency drills at management centers at the provincial branch levels,transit centers and outlets,and when necessary,designates staff to witness and guide the drills;regularly sorts out typical cases,notifies the entire network,and improves the safety protection awareness of all employees;makes full use of the ZTO Magazine,WeChat subscription account,Intranet and other channels,to disseminate office,operation,and postal safety knowledge.In 2020,the entire network conducted 14,469 safety trainings with a total of 1,638,763 participants,and conducted 237 emergency drills with a total of 30,569 participants.ZTO Dongguan Management Center conducts a fire drill201820192020LTIR(per 200,000 working hours)1.280.910.683435ZTO Express(Cayman)Inc.2020 ESG ReportChapter 1 Staying True to Our Original Aspirations,Enhancing Confidence,Empowering Employees and Solidifying the Foundation for DevelopmentZTO Express actively implements Xi Jinpings thought on ecological civilization construction and the decisions and arrangements of the State Post Bureau,adheres to the concept of green development,and continuously establishes and improves the green management system and mechanism;the Company strengthens the identification of environmental impact factors,strives to develop a green,low-carbon,and circular business model,and continues to explore a green development path for the whole life cycle of express delivery so as to lead the sustainable development of the industry and even the society.ZTO Express strictly abides by the Environmental Protection Law of the Peoples Republic of China,the Energy Conservation Law of the Peoples Republic of China and other relevant environmental protection laws,and formulated framework documents such as the Guiding Plan for Green Development of ZTO Express(Draft),and ZTO Express Green Procurement System;the Company established a project team on energy conservation,environmental protection and green development at the headquarter level,with the executive vice president as the team leader,and with management centers to carry out green and environmental protection work based on their respective responsibilities;at the county and district level,the Company established environmental protection teams which would report directly to the headquarter in accordance with the requirements of the local postal administrations;the Company established and improved environmental protection systems and mechanisms such as green standards,green publicity,green training,green systems,green inspections,and green technologies,formulated and implemented a road map,identified the list of tasks and the way forward for the collection,sorting,transportation,and distribution and other operational links,decomposed and implemented various green development tasks to promote the Companys green development step by step.In 2020,the State Post Bureau proposed the 9792 project,that is,the packaging ratio of slim tape below 45 mm reaches 90%,70%of e-commerce express items will no longer be repackaged,90%of recycling transfer bags will be used,and 20,000 newly added postal delivery outlets will provide packaging waste recycling facilities.ZTO Express actively responded to the call,developed annual green development objectives,and took concrete actions to promote the green development of the express delivery industry.As of the end of 2020,the Companys packaging ratio of slim tape below 45 mm reached around 90%,over 70%of e-commerce express items were not repackaged,the use of recyclable transfer bags in the entire network reached 95.22%,and approximately 21,000 packaging wastes recycling devices were added.Strengthening Green ManagementGreen Management SystemEnvironmental Protection Objectives and OutcomesProtecting the Green EnvironmentTraining and AssessmentTechnical Innovation and Technical SupportHuman Resource Management CenterTechnology and Information Center Development&Research CenterPublic Affairs Management CenterAssets Management Center Operation Management CenterOther Partners,etc.Packaging Management,Energy Saving and Emission Reduction of Production OperationsCooperation with Industry,Academia and Research Institutes,Revisions to Relevant StandardsPublicity,GuidanceGreen Site Construction and Green OfficeDivision of laborTeam Leader Executive Vice PresidentOrganizational Structure of the Project Team on Energy Conservation,Environmental Protection and Green Development Project Team on Energy Conservation,Environmental Protection and Green DevelopmentIndicators201820192020energy consumptionPower consumption(MWh)105,655 143,510 180,284 Diesel oil consumption(t)190,949 219,164 243,569 Water consumption(kt)2,8552,5713,404Packaging consumption cellulose tape(kg)84,482 117,891 161,901 express sheet(kg)19,207,010 26,099,456 21,521,319 Waterproof bag(kg)1,022,880 1,359,364 1,854,855 Envelope(kg)9,589,500 12,864,269 17,548,803 the Companys packaging ratio of slim tape below 45 mm reached arounde-commerce express items were not repackagedthe use of recyclable transfer bags in the entire network reachedpackaging wastes recycling devices were added9095.227021,000As of the end of 2020637ZTO Express(Cayman)Inc.2020 ESG ReportChapter 1 Staying True to Our Original Aspirations,Enhancing Confidence,Empowering Employees and Solidifying the Foundation for Development010203Carbon Emission Measurement of ZTO Express(Excluding Franchisees)ZTO Express investigates the environmental impacts of each link in the express delivery process,confirming that the Companys possible environmental impacts were mainly concentrated in the packaging,transportation,and production&operation links.In the production and operation process,the Company has relatively limited negative impact on the environment,and there isnt material amount of hazardous waste or non-hazardous waste discharge,and the fuel pollution is slight.Therefore,no corresponding statistics have been formed in this regard,but the Company clearly stipulates that the waste generated in the production and operation link shall not be discarded at random and must be handed over to dedicated organizations for disposal.At the same time,the Company strives to reduce the possible negative impact of packaging and transportation on the environment by purchasing environment-friendly raw materials,increasing R&D investment on energy saving,upgrading outdated equipment,and promoting energy-saving transportation vehicles.ZTO Express takes the initiative to track the consumption of various energy resources and CO2 emissions related to the express delivery industry in real time while improving the existing energy-saving and environment-friendly technologies and equipment.The Company is committed to contributing ZTOs wisdom to the industrys low-carbon development.According to the carbon emission conversion formula provided in the Measurement of Greenhouse Gas Emissions by Express Delivery Industry issued by the SPB in 2014,ZTO Express has reasonably estimated carbon emissions based on the Companys business model,and the results showed that the Companys carbon emissions have been on a downward trend for four consecutive years.ZTO Express continues to promote low-carbon development.In January 2021,the Company officially joined the Science-Based Targets initiative(SBTi),which was launched by World Wide Fund for Nature(WWF),CDP,the World Resources Institute(WRI)and the United Nations Global Compact(UNGC),and submitted a commitment letter on science-based carbon targets in response to the carbon peak and carbon neutrality targets.Environmental Impact InvestigationCarbon Intensity ManagementIndicators201820192020Direct greenhouse gas(GHG)emissionsCo2emissions(tCo2)612,947 703,515 769,921 Indirect GHG emissionsCo2emissions(tCo2)101,429 137,770 173,072 Other Indirect GHG emissions-Tape(tCo2)234 469 1146-Waybill(tCo2)35,956 65,959 40,288-Others(tCo2)27,556 39,185 54,967Subtotal:CO2 emissions(tCO2)63,746 105,613 96,401 Total carbon emissions(tCo2)778,122 946,898 1,039,394 CO2 emissions/10,000-yuan revenue(KgCo2)442 428 412 Year-on-year(YoY)growth-12%-3%-4%CO2 emissions/express item(KgCo2)0.091 0.078 0.061 YoY growth-13%-14%-22%Packagingw a s t e s f r o m packaging boxes,packaging paper,etc.Transportationexhaust gases emitted during transportation,etc.e x h a u s t g a s e s,wastewater and solid waste generated in production and life.Waste from production processThe potential impact on the environment of ZTO Express3839ZTO Express(Cayman)Inc.2020 ESG ReportChapter 1 Staying True to Our Original Aspirations,Enhancing Confidence,Empowering Employees and Solidifying the Foundation for DevelopmentDeveloping Green Express DeliveryAs a listed express delivery company,ZTO Express has been fulfilling the social responsibility for years and has practiced green development and environmental protection in daily operations.The Company has made a lot of efforts in promoting the green,reduced,and recyclable packaging for express items,reducing vehicle emissions and energy consumption of service and production.Practicing Green ProcurementPromoting Green Packaging E-waybillsZTO Express continues to implement the strategic arrangements of the SPBs Party Leadership Group on the industrys ecological and environmental protection work,establishes and practices the concept of green and low-carbon development,and improves the green procurement framework.The low-carbon,environmental protection,energy saving,emission reduction,use of degradable and recyclable materials,supplier requirements,and other restrictive conditions were incorporated into the procurement system,and a green procurement system was established to guide the green procurement work.The Company updated the ZTO Express Green Procurement System in August 2019,identifying 15 types of green and environmental protection categories,and according to the green environmental protection standards,different categories that purchased need to correspond to different standards.A list-based management approach was introduced.The Company strictly follows the requirements of the State Post Bureau to purchase packaging products that comply with or exceed national and industry standards.When purchasing and using packaging products from suppliers,suppliers are required to provide a compliance test report issued by a qualified third-party testing agency.In 2020,the Company met the environmental protection standards in envelope printing and packaging consumables procurement,further promoting the creation of a green supply chain.ZTO Express continues to promote green,reduced,and recyclable packaging,and promotes the use of e-waybills,green bags,environment-friendly fillers,etc.;the Company actively recycles packaging materials,and guides consumers to re-use idle packaging to reduce resource waste;the Company has developed environment-friendly bag systems to intelligently monitor the real-time dynamics and distribution of recyclable transfer bags,and has implemented the concept of green development in distribution,packaging,allocation,operation,and billing.In 2019,with the advancement of the construction of last-mile facilities,the acceptance of express delivery posts and express delivery cabinets has gradually increased,and the habits of users receiving and sending express delivery items have also changed.The single-sheet e-waybills emerged.Compared with the traditional 5-sheet waybills,80%paper can be saved.As of the end of 2020,the utilization of e-waybills reached 99.93%in the Company,of which the utilization of single-sheet e-waybills reached 91.4%,equivalent to saving about 520,000 fast-growing eucalyptus trees.Green Recyclable Transit BagsZTO Express upgraded the original eco-friendly bags to green recyclable transit bags in 2019,and independently developed a full-lifecycle management system for eco-bags to realize the systematic tracking and management of the eco-bags during its entire lifecycle.Compared with the traditional disposable woven bag,the green recyclable transit bag is stronger and more durable,can be reused more than 100 times,and saves more than 50%of the single use cost.As of the end of 2020,ZTO Express put in use nearly 9 million green recyclable transit bags on the entire network,replacing the use of about 900 million disposable woven bags and reducing the generation of about 81,000 tons of garbage.With green packaging,we need to adhere to the use of standardized,reduced and recyclable packaging,strengthen collaboration with upstream and downstream,pay attention to resource conservation,eliminate excessive packaging,and avoid waste and environmental pollution.Objectives of Green Express DeliverySlim TapeZTO Express actively responds to the Tape Slimming plan,gives priority to purchasing slim tape below 45 mm that meets national standards,industry standards and relevant national regulations,and gradually promotes its use throughout the network to reduce the use of tape during production and operation.As of the end of 2020,the packaging ratio of slim tape below 45 mm reached nearly 90%,and all the newly purchased tapes in 2020 were 100%of slim tape.Recyclable transit bagsZTO Express put into use the degradable waterproof bags in October 2020.The bag is featured by reliable quality,strong sealing,tear resistance and load-bearing strength,and it is non-toxic,odorless,and harmless to humans.After use,they can be degraded into carbon dioxide,water and organic fertilizer in the composting state.Degradable Waterproof BagsDegradable waterproof bagsGreen Dispatch Transit BagsZTO Express has put into use green bio-degradable packing bags made of polypropylene in some regions.The product is green,environment-friendly,and reusable and provides huge space.Under the set conditions,such bags can be oxidized and biodegraded through the synergistic effects of light,heat,oxygen,microorganism,and water,until they are completely degraded,causing no harm to the environment.4041ZTO Express(Cayman)Inc.2020 ESG ReportChapter 1 Staying True to Our Original Aspirations,Enhancing Confidence,Empowering Employees and Solidifying the Foundation for DevelopmentRecycling box for express packaging wasteDeveloping Circular EconomyThe mixing of wastes from express packaging materials with domestic waste increases not only the pressure on the environment but also the cost of social management.Proceeding from the perspective of developing the circular economy,ZTO Express promotes the development of green and circular economy through package recycling and other methods.Recycling of Packaging WasteI n 2 0 2 0,Z T O E x p r e s s continued to promote the“Recycling Program”and placed over 21,000 package recycling boxes throughout the network,covering 20,943 agent points,to promote the sorting,recycling,and reuse of express packaging.Reduced Use of Consumables and Secondary RecoveryZTO Express actively promotes the use of recyclable packaging and filling materials such as newspapers,inflatable plastic bags,and air bubble bags to improve resource recycling;the Company advocates the separate billing for express delivery and packaging,and consumers can choose whether to require the packaging for express delivery.The Company encourages the secondary use of idle packaging,and gradually guides outlets and consumers to increase environmental awareness;some outlets support the use of secondary express packaging to deduct part of the express delivery fees when customers send parcels or support express carton recycling in the form of matching donations.Optimizing Green TransportationOptimizing Line-Haul TransportationPromoting High-Capacity VehiclesGreen Last-Mile DeliveryZTO Express is committed to reducing the impact of transportation on the environment and incorporates energy-saving and emission reduction targets into the overall supervision on the express transportation.As of the end of 2020,over 86%self-owned line-haul vehicles met the National IV/V Emission Standards,and OBD(on-board diagnostic system)were installed on newly purchased vehicles to detect the emission of exhaust gases.ZTO Express equips each shuttle truck with the BeiDou Navigation Satellite System(BDS)equipment and the Galaxy system,combined with GIS(Geographic Information System),to monitor abnormalities during transportation,optimize the driving routes and shifts of conventional trunk and branch lines,reduce the average mileage of congested routes,and reduce additional energy consumption generated due to unreasonable transportation routes;the Company adopts advanced algorithms to increase the loading rate,and reduce the departure frequency in a bid to effectively reduce the pollution emissions.As of the end of 2020,there were more than 3,600 line-haul routes across the whole network.In the line-haul transportation,ZTO Express promotes high-capacity trucks to improve energy efficiency and reduce pollutant emissions.Compared with the 9.6-meter traditional vans,the high-capacity truck has more than doubled carrying capacity;each vehicle can save 2 liters of diesel fuel per 100 kilometers，and reduce the diesel consumption by 55%and the pollutant emissions by over 70%per parcel.As of the end of 2020,the Company had approximately 7,900 high-capacity trucks.ZTO Express continues to increase the scale of its green fleet,using electric,hybrid electric,and fuel cell-powered green delivery vehicles;the Company introduces drones in remote areas to reduce the burden on ground transportation and reduce unit energy consumption;the Company increases the use of self-pickup equipment and last-mile posts to shorten the frequency and distance of delivery.4243ZTO Express(Cayman)Inc.2020 ESG ReportChapter 1 Staying True to Our Original Aspirations,Enhancing Confidence,Empowering Employees and Solidifying the Foundation for DevelopmentUsing Urea for Cleaner EmissionsZTO Express continues to increase the amount of urea used in vehicles,conducts training on the performance of new vehicles and standard driving for all fleets,and regulates the use of urea in vehicles.The urea solution can produce nitrogen,oxygen and water through reduction reaction with NOx,thereby reducing NOx emissions and purifying exhaust gases;at the same time,it can optimize engine performance and fuel consumption,and reduce diesel consumption by 5-7%.NEVs for pickup and deliveryIn Sep 2020,ZTO Express and Cummins jointly released an efficient clean energy power solution for the logistics industry.Using New Energy Vehicles(NEVs)At the pickup and delivery ends,ZTO Express mainly uses electric vans with a volume of 12-14 cubic meters,which can accommodate more than 3,000 parcels,and can endure 70 kilometers when fully charged.Compared with traditional fuel-powered vans,electric vans have no exhaust emission or air pollution.In the line-haul transportation,the Company tries to use NEVs fueled by liquefied natural gases(LNGs).Compared with traditional fuel vehicles,the CO2 emissions in the exhaust of NEVs are reduced by about 20%,CO emissions reduced by about 97%,and NOx emissions reduced by about 90%and basically contain no harmful substances such as PM2.5(fine particles),lead,sulfide,and benzene with better safety.NEVs for line-haul transportationSmart Sorting EquipmentZTO Express uses a large number of large/small automated sorting equipments in the sorting hubs,which saves sorting time and labor costs,while reducing the wear and tear of express items during the loading and unloading process,reducing the rate of damage to express items,and reducing the amount of consumables such as buffers and packaging tape.This provides facilitations for the recycling and reuse of packaging materials.As of the end of 2020,the Company put into use 339 sets of large/small automated sorting equipment in 94 sorting hubs across the network.Using Green EquipmentZTO Express vigorously promotes the use of energy-saving and environment-friendly equipment in operation and production.In the sorting,the Company actively promotes low-energy,low-noise,and low-pollution green facilities;in the transportation and distribution,the Company increases the use of zero emission,zero noise green vehicles.Automated sorting equipmentAluminum alloy arc bodyAluminum Alloy Arc BodyZTO Express has gradually replaced iron truck bodies with aluminum alloy arc bodies.While upgrading capacity,aluminum alloy arc bodies also reduce weight and fuel consumption;aluminum alloy bodies are more corrosion-resistant,have a longer service life,and a higher recycling value.Green OfficeIn the office,the Company clearly requires all employees to strictly implement the systems and regulations on saving water and electricity so as to cultivate low-carbon habits in the office;through digital and intelligent system management such as e-magazines and online approvals,the Company aims to reduce comprehensive energy consumption in the office and production;actively constructs green industrial parks and promotes the use of solar energy in transit centers such as the ones in Hangzhou and Taizhou.Promoting Green DevelopmentZTO Express earnestly implements the spirit of the important documents of the State Post Bureau on green development and ecological and environmental protection,conducts benchmarking exercises,and strives to gain a deep understanding of the spirits.The Company strives to promote green development across the entire network through internal promotion meetings,intranet notifications,ZTO Cloud Class,Zhangzhongtong App,ZTOs official website,ZTO official WeChat accounts and other channels.In 2020,the Company organized 10 training programs on ecological and environmental protection.In addition,the Company conducts the Green Pioneer Award every year to make comprehensive evaluations and encourage all outlets to actively promote green development.Advocating a Green CultureZTO Express starts from small and insignificant points and integrates a green culture into all aspects of business operations.Solar panels in the sorting hub 4445Chairmans LetterZTO Express(Cayman)Inc.2020 ESG ReportUpholding the mission and original aspiration of“Bringing Happiness to More People through Our Services”,ZTO Express firmly believes that only by benefiting the society and others can we better achieve self-development,and only companies that benefit the society and the people can grow,prosper,and achieve the sustainable growth.ZTO Express aims to meet the urgent needs of the government and help people in need and in hardship,practice its social responsibility with actions,and become a respected century-old company.MOVING FORWARD WITH PERSEVERANCE AND UNITY AND WINNING TRUST BY HELPING AND BENEFITING OTHERSCHAPTER 24652586367Consolidating Business Management and GovernanceCaring for the Career Development of EmployeesJoining Hands with Partners for Win-Win ResultsServing the Development of Agriculture,Rural Areas and FarmersGiving Back to the Society and Serving Peoples Well-Beings4647ZTO Express(Cayman)Inc.2020 ESG ReportCHAPTER 2 MOVING FORWARD WITH PERSEVERANCE AND UNITY AND WINNING TRUST BY HELPING AND BENEFITING OTHERSStandardizing Corporate OperationsZTO Express strictly complies with the requirements of the Company Law of the Peoples Republic of China,Securities Law of the Peoples Republic of China,Code of Corporate Governance for Listed Companies,Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited(Hong Kong Listing Rules)and other requirements.In light of the actual situation of the Company and from the perspective of achieving the Companys strategic goals and the interests of all shareholders,the Company continues to strengthen internal management,improve corporate governance structure,and standardize corporate operations.The General Meeting of Shareholders(GMS),the Board of Directors(BoD),the Board of Supervisors and the management have well-defined powers and responsibilities.The management of the Company faithfully perform their duties,make scientific decisions,coordinate operations,and jointly ensure the realization of the overall strategic goals of the Company.General Meeting of ShareholdersBoDRemuneration CommitteeAudit CommitteeCorporate Governance and Nomination CommitteeEnvironmental,Social and Governance CommitteeManagementCorporate Governance and Nomination CommitteeAudit CommitteeRemuneration CommitteeAssisting the BoD in selecting candidates who meet the qualifications as directors of the Company;advising the BoD on the composition of the BoD,rules of procedure,committee composition,and other related matters;and supervising and evaluating the work of the BoD.Responsible for the selection,evaluation and supervision of the Companys independent audit;supervising the Companys annual audit and disclosure of quar terly performance results;supervising the accounting and financial reporting procedures,and managing the Companys internal risk control system,to ensure the authenticity of the financial statements used by the BoD and published by the Company.Assisting the BoD in supervising the Companys remuneration system and employees benefit plans,assessing and approving the remuneration structure,including all forms of remuneration related to directors and senior executives.Environmental,Social and Governance CommitteeAssisting the BoD to formulate and review the Companys ESG policies and making recommendations on the ESG issues during the Companys development;Linking the executive compensation with ESG indicators.Board of Directors(BoD)The BoD of ZTO Express ensures the efficiency and effectiveness of the Companys operations by developing appropriate risk control policies and procedures;continuously improves the operational system of the BoD,strengthens the functions and responsibilities of directors,and improves the efficiency of the BoD.The BoD has set up three committees:the Audit Committee,the Remuneration Committee,and the Corporate Governance and Nomination Committee,which are responsible for regularly formulating and reviewing the corporate governance principles adopted by the BoD,as well as advising the BoD on all matters related to corporate governance and the corrective measures to be taken,so as to ensure that the management and operation meet the compliance requirements and match the Companys development plan.Consolidating Business Management and Governance4849ZTO Express(Cayman)Inc.2020 ESG ReportCHAPTER 2 MOVING FORWARD WITH PERSEVERANCE AND UNITY AND WINNING TRUST BY HELPING AND BENEFITING OTHERSSafeguarding Shareholders Rights and InterestsControlling Business RisksZTO Express continues to improve the corporate governance structure,execute strict internal control(IC)system,standardize information disclosure,and maintain an active relationship with investors,and strives to maximize the long-term interests for shareholders.ZTO Express has developed a sound internal control and risk management system,integrating the risk management process into all aspects of management and operation.The Company strengthens compliance execution throughout the process,and strictly follows regulatory and compliance requirements.The Company has obtained the certifications of ISO9001 quality management system,ISO27001 information security management system,ISO27701 international privacy information management system,and certification for intellectual property standard compliance.ZTO Express attaches great importance to the maintenance and management of investor relations,strictly abides by the information disclosure obligations under the securities trading rules of the United States,Hong Kong Listing Rules and NYSE Listing Rules and other applicable laws and regulations.The Company has set up a dedicated Investor Relations Department,which is responsible for holding regular roadshows and reverse roadshows,receiving investors visits,and responding to investors concerns.At the same time,we disclose the Companys major events,development and operation information,and other information to the public in an active,complete and accurate manner.We also release announcements through official channels such as the investor relations website and press conferences,to strengthen communication with investors and effectively protect their legitimate rights and interests.Compliance with laws and regulations is a basic requirement for a companys stable operation.ZTO Express abides by the principles of honest and law-abiding business operations.In accordance with Chinas national conditions and laws and regulations,the Company has established a sound law-abiding and compliance system in the fields of fair competition,labor security,intellectual property(IP)protection,environmental protection,consumer protection,and clean operation to ensure the Companys business activities are legal,compliant and standardized.The Company also carried out a series of campaigns,such as publicity and awareness-raising,to promote the concept of the rule of law and the awareness of law-abiding and compliant operation in all aspects,through multiple channels with priorities.The rule of law culture of the Company was further promoted.ZTO Express continues to optimize the construction of the Companys internal control and risk management system,promotes the further integration of risk management with business development,and provides a strong guarantee for the realization of strategic goals.The Companys internal audit department and compliance department hire professional consultants to form project teams to conduct continuous and independent assessment of the Companys risks and internal controls and summarize and rectify the deficiencies identified.In 2020,the Companys management and control of major risks was good,no significant or material internal control defects were found,and no major controllable risk loss events occurred.ZTO Express answers questions and queries from investors through a diversity of channels,including IR hotline,IR mailbox,General Meeting of Shareholders,communication with the management,investment summits,and teleconferences,effectively maintains sound relations with investors and helps investors gain a deeper understanding of the operation,business,development strategy and investment value of the Company.In 2020,ZTO Express published more than 80 press releases,announcements and related documents,received visits of over 1,000 domestic and foreign investment institutions,and participated in more than 40 roadshows.Our stock was covered by over 40 major domestic and foreign securities firms and investment banks.Standardizing Information DisclosureAdhering to Operational ComplianceStrengthening Risk SupervisionCommunication with InvestorsIndicators Unit20192020Percentage of legal staff covered by compliance trainings0100Economic contract review rate0100Economic contract performance rate0100On Sep.29,2020,ZTO Express announced the successful secondary listing in Hong Kong,which further strengthened the connections with the Asian capital market,and also received more investors attention and support.In the future,ZTO Express will continue to maintain open,transparent and timely communication with the capital market and provide support for its development into a world-class comprehensive logistics service provider.Secondary Listing of ZTO Express in Hong KongCase5051ZTO Express(Cayman)Inc.2020 ESG ReportCHAPTER 2 MOVING FORWARD WITH PERSEVERANCE AND UNITY AND WINNING TRUST BY HELPING AND BENEFITING OTHERSInformation Security Protection SystemZTO Express strictly implements the requirements of Multi-level Protection Scheme(MLPS)for information security,and regularly evaluates user information security management.The Companys information system has obtained the national MLPS record-keeping certificate.In accordance with the national MLPS requirements,the certification review is carried out every year to ensure the security of the information system.The Company also strictly manages the registration,entry,collection and archiving of customer files,and implements security technologies such as real-person authentication,password-free login,and real-time risk control of data leakage on the entire network,and comprehensively promotes privacy waybill to protect user information security from end-to end.Enhancing Employees Awareness of Information ProtectionIn order to increase the employees awareness of information security,the Company issued the Notice on Further Strengthening Information Security Protection through multiple channels on the intranet to disseminate the relevant legal knowledge,such as knowledge about the Constitution of the Peoples Republic of China,and the Criminal Law of the Peoples Republic of Law”;establishes the information security training system,and organizes monthly information security awareness training and assessment.In 2020,the Company conducted 6 information security-related training sessions,with a total of 1,600 participants.Emergency HandlingZTO Express develops emergency response plans to deal with information leakage.Once an information leakage incident occurs,the Companys information security experts will respond in the first place.At the same time,an emergency response team,composed of multiple departments including the security supervision center,network management center,technology and information center,was established.Based on the division of responsibilities stipulated in the emergency plan,they would quickly handle incidents and implement remedial measures to ensure the effective handling and control of the incidents and improve incident handling efficiency.Protecting Intellectual Property(IP)Prioritizing Information SecurityBuilding a Strong Line of Defense against CorruptionZTO Express attaches great importance to the protection of IP.According to the Patent Law of the Peoples Republic of China and other laws and regulations,the Company has developed an internal patent management system,and pays attention to respecting and protecting the IPs of others in its business activities,including IT system development,production and operation,preparation of internal publications,official websites,public account operation,and corporate publicity.At the same time,ZTO Express also set up the monitoring of IP declarations in the security portal to promote the construction of management systems,greatly improving efficiency and standardization of management.In Sep.2018,ZTO Technology formulated the IP development strategy phase I,completed the construction of the IP management system from scratch,and introduced the supporting IP management system.As of the end of 2020,ZTO Technology applied for 389 patents and 195 software copyrights and spent about RMB333,000 in rewards.ZTO Express attaches great importance to the internal information security management and control within the Company.The Company formulated the ZTO Express Data Security Management System to strengthen the information risk awareness of internal personnel,and developed emergency response plans in advance for handling information security-related emergencies.The Company aims to build up a comprehensive information security protection system featuring strong defense,strong awareness,and quick response.ZTO Express attaches great importance to building up a clean and honest company,unswervingly promotes the related work,and adopts a zero-tolerance attitude towards bribery,extortion,fraud and money laundering.ZTO Express passed BSI ISO/IEC 27701 privacy information management system certificationFormulated and published the Code of Business Conduct and Ethics,the Provisions of ZTO Express on the Code of Conduct for Honest Practice”,the Implementation Regulations of ZTO Express on Integrity Supervision,ZTO Express Regulations on Integrity Review Work and strictly implements supervision and discipline enforcement accountability and strengthen warning&education;With each management center as a unit,each management center hires 1-3 integrity supervisors,responsible for reporting violations of ZTOs internal disciplines to the safety supervision department,commenting or criticizing the performance of duties and the handling of disciplinary cases by the safety supervision department,and putting forward suggestions,opinions and requirements on the integrity and ethics building of ZTO Express;Developed and issued the Code of Conduct for Honest Practice to clarify the relevant provisions on whistleblowing and penalties for violations and published them on the OA platform.The Company defines the basic code of conduct with the ten prohibitions as the core of the honest practice,and requires new employees to sign a Letter of Commitment to Honest Practices while signing the labor contract;Strengthening anti-corruption training,strictly observing the bottom line of the profession,a n d c r e a t i n g a g o o d environment of diligence,integrity,and honesty.Established the Disciplinary Supervision Committee as the supreme body for integrity supervision,with the chairman of ZTO Express serving as the Chairman of the Committee,responsible for advocating,promoting and implementing honest practices;5253ZTO Express(Cayman)Inc.2020 ESG ReportCHAPTER 2 MOVING FORWARD WITH PERSEVERANCE AND UNITY AND WINNING TRUST BY HELPING AND BENEFITING OTHERSProtecting Basic Rights and InterestsZTO Express strictly abides by the Labor Law of the Peoples Republic of China and Labor Contract Law of the Peoples Republic of China and other applicable laws and regulations,and signs labor contracts with employees in accordance with the law.The Company strictly implements the statutory paid annual leave system and provides employees with a complete salary and benefits system to fully protect the basic rights and interests of employees.As of the end of 2020,the total number of employees in the HQ and directly-operated companies of ZTO Express reached 22,536,with the labor contract signing rate reaching 100%,and the five insurance and one housing fund payment coverage rate reaching 100%.While achieving our own steady development,ZTO Express has not forgotten to take on the responsibility of the industry and our social responsibility.The Company strives to create an army of workers with both ability and integrity by strengthening the protection of employees rights and building a multi-level talent training system so as to help develop a modern and competitive postal industry.Following a people-centric value proposition,ZTO Express continues to establish a sound employees rights protection system,and cares for every employee in terms of growth,life,emotions and other aspects.Starting from little things,the Company tries to create a warmer and more harmonious working environment for employees and build a broader value realization platform to share the results of corporate development with employees and make the Company a happy workplace and every ZTOer a happy employee.ZTO Express strictly abides by the equal employment guidelines,opposes all forms of discrimination due to differences in gender,age,place,education,religious belief,nationality,race,sexual orientation,disability,etc.,and opposes the use of child labor,forced labor,overtime work,harassment and abuse.The Company has taken effective measures to safeguard the legitimate rights and interests of employees,and ensures that employees enjoy fair treatment in recruitment,labor,salary,training,promotion,compensation,vacations,etc.;the Company fully respects employees personal privacy rights and strictly keeps their personal information confidential.Protecting Human RightsNumber of employees by gender and age groupCaring for the Career Development of EmployeesZTO Express implements the principle of setting salary according to post and builds a remuneration system of monthly basic salary monthly post salary monthly performance salary year-end performance bonus,supplemented by corresponding performance appraisal system,which highlights post value,performance contribution,and individuals ability.On the basis of paying social insurance in strict accordance with the regulations,the Company also offers supplementary group accident insurance for employees.We carry out family 1 1 activities to provide benefits for family members of our employees,grant the employees the leave for accompanying their children taking college entrance exams,and provide employees with telephone fee subsidies,high temperature subsidies,accommodation subsidies,professional skills subsidies and other benefits.ZTO Express issued and continues to improve the ZTO Express Trade Union Constitution to clarify the specific responsibilities of the trade union and its subordinate committees;strengthens the organization of trade union and carries out various theme activities around the protection of employees rights and interests;strictly complies with the relevant regulations of the labor departments and implements a collective consultation system;actively encourages employees to participate in the Companys development and provide a basis for the decision-making of management of the Company;supervises the implementation of labor management,employee rewards and punishments,salary and benefits,safety and health,social insurance and other laws,regulations,and rules.As of the end of 2020,the Companys trade union has a total of 1,098 members.In addition,the Company continues to improve the timely and effective negotiation and communication mechanism and ensures unblocked channels for collecting employees feedbacks.Employees can provide real-time feedbacks and suggestions through internal communication platforms,face-to-face feedback and other channels;the Company fully protects employees right to freedom of association,and employees can organize or participate in social groups in accordance with applicable legal procedures.Salary and BenefitsDemocratic Management Trade Union Member for Labor Relations Trade Union Member for Recreation&SportsTrade Union Member for Expenditure AuditTrade Union Member for Women Workers Trade Union Committee of ZTO Express Chairman of the Trade UnionIndicatorUnit201820192020Number of employees Person15,70019,00922,536Number of minority employees%4.95.76.6By genderNumber of male employeesh.867.665Number of female employees1.232.435By age group(to be adjusted based the actual conditions)Number of employees aged 29 and under(including 29).525.030.3Number of employees aged 30-50(including 30 and 50)i.365.562.5Number of employees aged over 50(excluding 50).29.57.25455ZTO Express(Cayman)Inc.2020 ESG ReportCHAPTER 2 MOVING FORWARD WITH PERSEVERANCE AND UNITY AND WINNING TRUST BY HELPING AND BENEFITING OTHERSZTO Express strictly abides by the relevant provisions of the“Occupational Disease Prevention and Control Law of the Peoples Republic of China.The Company has passed the certification of the occupational health and safety management system and formulated various occupational health management measures.The Company provides employees with free physical examinations and various healthcare consultations and services.The Company conducts occupational safety and health education to improve employees understanding of occupational health-related knowledge and the importance of occupational health;the Company also focuses on spreading positive energy in the workplace,puts employees mental health in an important position,organizes and carries out mental health activities to help employees release mental pressure and face work and life in a positive tone.Occupational HealthSpecial Event on Mental Health Service organized by ZTO ExpressContributing to Employees Personal GrowthZTO Express actively responds to the strategy of“strengthening the Postal Industry with Talents”.The Company formulated the“ZTO Express Talent Cultivation System”,and keeps promoting the policy of“one profession,two innovations and three methodologies”based on ZTO College.The Company has established a sound talent cultivation mechanism,created an online-offline combined training platform,and organized a series of talent pipeline training and business support training,such as such as new employee training,young eagle training,flying eagle training,eagle training,centurion training,night class,TTT training,sound shaping training,to discover,develop and cultivate talent teams in a fair,just and open manner and provide human capital support for ZTOs sustainable development.In addition,the Company has also set up Management Trainee Program(a mentorship program)and established a mentor system to provide guidance for career planning of management trainees and address their work headaches;the Company also organizes and carries out vocational skills competition and other activities for employees to create a good atmosphere for learning professional skills and improve employees professional skills.In 2020,each employee took over 40 hours of various training on average.In order to further strengthen the building of the talent teams,ZTO Express introduced the“Eagle Training Program”in accordance with the“Talent Pipeline”HR strategy and the requirements of the“ZTOs Baiyou Plan for Talent Cultivation”.The program is divided into five levels:Young Eagle,Flying Eagle,Eagle,Elite Eagle,and Leading Eagle”and each level is launched for different target audience.The Company aims to develop and cultivate the strategic reserve tal
2022-05-16
41页
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