云南白药:2023年度社会责任报告暨ESG（环境、社会及管治）报告（英文版）

Contents
001 ABOUT THIS REPORT 005 ABOUT US 015 Topic | Leadership in Party Building
002 BOARD ESG STATEMENT Company Profile
003 MESSAGE FROM THE CHAIRMAN Performance Highlights in 2023
Impression of Yunnan Baiyao
01 Sound Operation for 02 Inheritance & Innovation Wilderness Guardians Talent EmpowermentHigh-Quality Development for Energizing New TCM 03 for Harmonious Ecosystem 04 for Employee Growth
021 ESG Management 033 Product Quality 061 Biodiversity Protection 079 Protecting Employees’ Rights
and Interests
025 Compliance Management 039 R&D and Innovation 063 Addressing Climate Change
083 Empowering Talent
029 Business Ethics 047 Customer Services 067 Environmental Management Development
053 Supply Chain Management 071 Resource Utilization 089 Improving the Well-being
of Employees
095 Protecting Health and Safety
05 Responsibility Fulfillmentfor Enhanced Welfare 109 Key Performance Statement
113 GRI Index
101 Rural Revitalization
116 List of Laws and Regulations
105 Community Care and Internal Policies
107 Social Welfare 120 Feedback Form2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
001 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. ABOUT THIS REPORT & BOARD ESG STATEMENT 002
ABOUT THIS REPORT BOARD ESG STATEMENT
This report marks Yunnan Baiyao Group Co. Ltd’s 18th consecutive release of a Corporate Social Responsibility (CSR) report. It Yunnan Baiyao highly recognizes the importance of its social responsibility and environmental social and governance
gives stakeholders information on Yunnan Baiyao’s social responsibility practices and performance in the areas of management (ESG) for its long-term and stable operation. The Company and the Board of Directors follow the requirements of the China
environment society and public welfare in accordance with the principles of standardization transparency objectivity and Securities Regulatory Commission’s Guidelines for Corporate Governance of Listed Companies and establishes a three-layer
comprehensiveness. ESG governance structure “decision-making supervisory and execution layers” with clear powers and responsibilities. We
continuously strengthen the Board’s supervision efforts and participation in our ESG affairs actively integrate ESG-related
matters into our development strategy major decisions and production and operation establishing effective ESG management
Reference Standards and governance mechanisms to offer organizational support for our smooth implementation of ESG-related initiatives.Yunnan Baiyao places a high value on opinions and suggestions of stakeholders and continues to identify and evaluate material
This report adheres to the Shenzhen Stock Exchange’s Guidelines for Listed Companies’ Social Responsibility and is in ESG issues. We communicate and exchange ideas with major stakeholders through various channels. By taking into account
accordance with the Global Reporting Initiative (GRI) Core Option standard of the Global Sustainability Standards Board (GSSB) the regulatory disclosure requirements industry policies and development trends and in combination with the focus of rating
as well as the Chinese Academy of Social Sciences’ China Enterprise CSR Reporting Guidelines (CASS-CSR4.0). agencies we rank material ESG-related issues and the ranking results are used as important references for ESG information
disclosure.This report provides a detailed disclosure of the progress and effectiveness of the Company’s ESG efforts in 2023 and the
Report Scope report was considered and adopted by the third session of the Company’s 10th Board of Directors on March 28 2024.The report covers Yunnan Baiyao Group Co. Ltd as well as its subsidiaries and branches.Report Period
The report covers the period from January 1 2023 to December 31 2023 and serves as the annual report.Data Sources
Unless otherwise specified the financial data in this report comes from the annual financial data of Yunnan Baiyao Group Co.Ltd and its subsidiaries. Other data is sourced from internal statistics and manual compilation. Unless otherwise specified the
currency type and amount mentioned in this report are denominated in RMB.Report Reliability Assurance
This report was put together by Yunnan Baiyao Group Co. Ltd’s Social Responsibility Management Team and was reviewed
and approved by the Company’s Board of Directors (the “Board”) and the Supervisory Committee. The Board of Directors and
all the directors guarantee that this report contains no false records misleading statements or significant omissions and they
accept individual and joint responsibility for its truthfulness accuracy and completeness.Statement Explanation
For the sake of simplicity and readability “Yunnan Baiyao Group Co. Ltd.” is referred to as “Yunnan Baiyao” “Baiyao” “theCompany” or “we” in this report.Report Format
This report is available in both printed and online versions. The online version is available for viewing and can be downloaded at
www.yunnanbaiyao.com.cn and the Juchao Information website (www.cninfo.com.cn).2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
003 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. MESSAGE FROM THE CHAIRMAN 004
MESSAGE FROM THE CHAIRMAN Lucid waters and lush mountains are development back into society. Embracing the principles of “co-invaluable assets creation shared responsibility mutual benefit and symbiosis”
in our business practices we deeply respect the interests of
We understand that nature serves as the fundamental source all stakeholders fostering a culture of mutual success and
for all existence and forms the bedrock for sustainable corporate ongoing growth.development. Yunnan renowned for its rich biodiversity and hailed
as the “treasure trove of biological genes” and “home to medicinalherbs” boasts unique environmental resources conducive to the Standardized operation is the
growth of the biopharmaceutical industry. For 120 years Yunnan cornerstone of our enterprise
Baiyao has been deeply rooted in the region steadfastly embracing
the ethos of green development. On the one hand we leverage We believe that good corporate governance serves as the
our natural resource endowments to propel long-term high-quality cornerstone and guarantee for the sustainable and robust
development. On the other hand we uphold our environmental development of enterprises. We always adhere to standardized
responsibility by prioritizing biodiversity protection. We are dedicated operations in accordance with laws regulations and the requirements
to fostering a harmonious and symbiotic relationship with nature of our corporate governance system continuously improving our
thereby contributing to the healthy and sustainable development of governance capabilities and management efficiency. We consistently
the entire TCM industry chain. We place utmost importance on the deepen the development of modern enterprise systems tailored to
conservation and cultivation of key medicinal materials harnessing Chinese characteristics by integrating Party leadership into variousdigital technologies to enhance cultivation production and aspects of corporate governance. We emphasize “integration andevaluation management processes. The outcomes of these efforts inclusion” identify entry points and focuses for Party building and
are shared across the value chain. Additionally we have adopted drive reform and development through high-quality Party building
modern environmental protection technologies to facilitate the green initiatives. Our efforts also focus on continuously enhancing our
transformation of our production processes. We actively promote corporate governance structure ensuring the effective functioning
environmental awareness among our employees empowering each of key decision-making bodies such as the General Meeting Board
individual to become a proactive participant and steadfast advocate of Directors Supervisory Committee and senior management. We
for environmental protection. We firmly believe that safeguarding implement a robust internal control system and risk management
the environment is tantamount to safeguarding productivity mechanism to ensure operational compliance and resilience. We Zhang Wenxue and enhancing the environment is synonymous with advancing always prioritize the information disclosure of the listed company
productivity. adhering to the principles of truthfulness accuracy completeness
timeliness and fairness in disclosing corporate information. We
Secretary of the Company ’ s Party emphasize smooth communication with investors through multiple
Committee and Board Chairman channels and platforms to facilitate constructive interaction thereby
Yunnan Baiyao We demonstrate social responsibility by enhancing the transparency of corporate management and bolstering
offering assistance wherever possible the Company’s reputation and brand image.We believe a company’s success is not only measured by its In the three decades since its listing Yunnan Baiyao has
growth but also by its contributions to society and humanity. consistently pursued innovative development continually
Corporate responsibility encompasses both economic and deepened reforms and forged numerous classic business
social aspects. Yunnan Baiyao as a time-honored company successes. We will remain committed to the principles of TCM
In 2023 Yunnan Baiyao witnessed a significant shift in the external landscape. During this period we fortified our growth upholds a strong reputation for responsibility. We prioritize development uphold our mission “to guard life and health”
fundamentals enhanced quality and efficiency and propelled innovation to new heights. Under the leadership of the Party people ensuring product quality and emphasizing innovation to and actively promote the integration of TCM into modern living.Central Committee and the guidance of Comrade Xi Jinping and bolstered by the unwavering support of the Communist Party integrate TCM into modern living. Customer-centricity drives us Upholding inheritance and innovation we will inject fresh vitality
of China (the “Party”) and the people of all ethnic groups China demonstrated remarkable resilience in the face of external to continually enhance service capabilities actively contributing into national brands and TCM products ensuring the enduring
pressures and internal challenges during its extensive reform and opening-up journey. China’s economy thus rebounded and to the development of inclusive healthcare. Through growth of our century-old brand. As a national pharmaceutical
advanced embracing a robust trajectory of high-quality development. Additionally 2023 marked the 30th anniversary of Yunnan collaborative efforts with suppliers we establish sustainable enterprise we will embrace our mission and responsibility
Baiyao’s public listing. Over the three decades we have navigated market cycles and achieved high-quality growth by anchoring supply chains supporting the Company’s healthy and fostering development alongside stakeholders empowering
ourselves deeply and soaring ambitiously delivering profound value to stakeholders. As a venerable Chinese brand we remain sustainable development. We strive to foster a fair just and employees delivering returns to shareholders and contributing
steadfast in our commitment to upholding General Secretary Xi Jinping’s crucial directives on “Inheritance & Innovation” within dynamic working environment valuing employee development to society.the traditional Chinese medicine (TCM) industry. Driven by our corporate mission to “guard life and health” we persistently and growth aiming for mutual growth for both the Company Yunnan Baiyao carries forward its legacy while forging ahead
innovate and progress steadily in response to the dynamic changes within the healthcare industry. Drawing on our corporate and its employees. In 2023 we were honored with awards like into the future never wavering in its journey. Despite market
ethos of heritage and innovation quality excellence technological empowerment collaborative partnership social responsibility the Best Employer - Most Socially Responsible Award. We care competition pressures Yunnan Baiyao will remain committed
and sustainable development we consistently refine our governance framework and standards elevate our industrial footprint for the well-being of disadvantaged and vulnerable groups to aligning with national policies and implementing strategic
embrace eco-friendly practices and champion the integration of TCM into modern living. Furthermore we continuously unearth viewing endeavors such as rural revitalization as an enduring deployments at the national level. With its spirit of hard work
the intrinsic potential of traditional medical products infuse fresh vigor into heritage brands and TCM offerings while fostering historical commitment. Through compassionate impactful refusal to settle for mediocrity grounded and pragmatic approach
enduring and sustainable value for society the environment and all stakeholders involved. and targeted charitable initiatives and projects we consistently and determination to lead and succeed Yunnan Baiyao will
channel the positive energy generated by our high-quality persistently strive to achieve new heights as a century-old brand.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
005 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. ABOUT US 006
ABOUT US 企业文化
Company Profile
Formulated in 1902 Yunnan Baiyao is widely recognized as
the most innovative representative of time-honored Chinese
brands combining brand product and company name in one.It has been shortlisted among the Kantar BrandZ Top 100 Most
Valuable Chinese Brands for 13 consecutive years. In 2023 it
ranked first in the pharmaceutical industry for its brand value.In 1971 Yunnan Baiyao Factory was established following
instructions from Premier Zhou Enlai. In 1993 Yunnan Baiyao
became the first listed company in Yunnan on the Shenzhen
Stock Exchange. It started “Five Unifications”1 in 1996 and suc-
cessfully implemented corporate reformulation in 1999. In 2005the Company launched the “Center Stabilization and WingHighlighting” product strategy and began implementing the “NewBaiyao Big Health” industry strategy in 2010. It has gradually
developed from a TCM company into one of the leading enter- cal logistics operations). Each business group assumes its own
prises in China’s Big Health industry. Since its listing in 1993 responsibilities and collaborates with one another and their Corporate Culture
the Company has continuously paid dividends to shareholders main businesses have reached a leading level in the industry.for 30 consecutive years. From 2016 to 2019 the Company With production bases in Kunming Dali Wenshan Lijiang
completed mixed-ownership reform in two steps further stimu- Wuding and Wuxi in Jiangsu and Hefei in Anhui the Company
lating its development momentum through innovations in sys- has deployed sales channels that cover the entire country. Values
tem and mechanism. Yunnan Baiyao regards guarding life and health as its corpo- Value
As a time-honored Chinese brand with a 121-year history by rate mission and is committed to becoming a leading provider Inheriting and innovating seeking creation
virtue of taking Yunnan Baiyao brand as its core we have pro- of comprehensive pharmaceutical and healthcare solutions. Vision truth and pragmatism fulfilling elements
gressively expanded our brand portfolio from pharmaceuticals Innovation-driven and digitization-oriented Yunnan Baiyao social responsibility taking due
to include personal healthcare products original herbal medi- strategically forges ahead towards a high-quality development To be a leading provider responsibilities collaborating with Human capital
cine brands and Big Health product brands creating a rich and future. R&D marketing management and talents are the four of comprehensive integrity and pursuing excellence financial capital
diverse family of brands. Thanks to these brands the Company key capabilities that form the foundation for our systematic en- pharmaceutical and and public Strategic
is able to continually broaden its customer base and enhance hancement of scientific management. These capabilities sup- healthcare solutions resources driving
long-term brand value. port our Group in completing a comprehensive strategic trans- forces
formation. As a national pharmaceutical enterprise we embrace Mission
The Company insists on upholding inheritance and innovation our mission and responsibility fostering development alongside Technological
and strives to integrate TCM into modern living. Product inno- To guard life stakeholders empowering employees and contributing to so- and health innovation and vation has covered medicine health products active pharma- ciety with our achievements. Additionally we have established organizational
ceutical ingredients (APIs) and other fields. As of the end of the a new user-centered service model through digitalization and transformation
reporting period it has 36 product categories and 390 varieties platforms positioning ourselves as a trusted partner for users
with 12 products generating more than RMB100 million in sales seeking a healthy and fulfilling life.revenue each. Notably its aerosol woundplast Yunnan Baiyao
powder and capsule and toothpaste are stably all top-selling Looking ahead the Company will remain steadfast in its com-
products across the country in their respective segments. mitment to the long-term development principle. With an entre-
preneurial spirit at its core the Company will prioritize product
The Company has established a business group system to excellence innovation and R&D as the driving forces behind its
drive the expansion of its existing businesses. These groups in- operations. By promoting the integration of internal and external
clude the Pharmaceutical Business Group the Health Products resources and values the Company aims to gradually trans-Business Group the TCM Resources Business Group and form into “a provider of comprehensive pharmaceutical andYunnan Pharmaceutical Co. Ltd (responsible for pharmaceuti- healthcare solutions.”
1：“Five Unifications” refer to unified production plan unified trademark unified approval number unified quality management and unified sales.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
007 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. ABOUT US 008
Business Structure Historical Transformations
Committees under the Board 1902 1955 1971 1993
of Directors
Board of Directors Management Committee at Mr. Qu Huanzhang a famous Miao Lanying Mr. Qu Premier Zhou Yunnan Baiyao
Operation Level Yi doctor gathered the Huanzhang’s wife Enlai approved was listed on the
essence of traditional ethnic donated the secret the establishment Shenzhen Stock
Strategy Committee medicine and formulated formula of Yunnan- of Yunnan Baiyao Exchange.Yunnan Baiyao also known as Baiyao to the country. Factory.Product Portfolio and Investment the “Wanying Baibao Dan.”Reform Management
Management Committee Committee
Nomination Committee 2010 2006R&D Management 1999
Committee
Audit Committee (with Audit Office) The operation The Company’s performance The Company was restructured
Safety Management revenue exceeded indicators surged to the top of to allocate resources based on
Remuneration and Appraisal Committee RMB10 billion. the industry which enabled the market demands and build a
Committee Company to evolve from an systemic foundation to support
Chief Executive Officer industry follower to an industry sustained development.Office of Board of Directors leader.
201120152016-2017
The first phase of the The operation The mixed-ownership
Company’s relocation revenue exceeded reform of controlling
was completed and the RMB20 billion. shareholders was
headquarters was relocated completed.to Chenggong New District.
202120202018-2019
Under the leadership of the Board the Merger and overall
Industrial Platform Incubation Platform Innovation and The operation revenue Company initiated an iterative upgrade exceeded RMB30 billion listing was completed.R&D Platform and innovative transformation driven
by the three pillars of products innova-
Functional System Finance System Compliance Operation System tion and R&D following its corporate
System mission of “To Guard Life and Health.”
20222023
Yunnan Baiyao established a strategic goal of Yunnan Baiyao strategically forged ahead towards a high-qual-
“1+4+1”. It expanded its presence in Beijing ity development future driven by innovation and digitization.Shanghai Hong Kong Hainan and Korea. R&D marketing management and talents were the four
These branches serve as crucial strategic pillars key capabilities that formed the foundation for our systematic
for the Company to leverage global resources enhancement of scientific management. These capabilities
and serve the needs of the Chinese market. supported our Group in completing a comprehensive strategic
transformation. As a national pharmaceutical enterprise we
embraced our mission and responsibility fostering development
alongside stakeholders empowering employees and contribut-
Functional Support and Sharing Platform ing to society with our achievements.Smart Technology BU Hea l th & Tour i sm
Development Center
Central Research Institute
Engineering Construction
and Development Center
International Business BU
Supply Chain Operation Center
Special Channel BU
Process Management Center
Teayield BU
Law Affairs and Compliance
Center
Precision Aesthetic
Medicine BU
Risk Control Center
Smart Oral Care BU
Capital Operation Center
Zhiyun Health BU
Accounting Center
Skin Care BU
Finance and Tax Center
Medical Equipment BU
Human Resources Center
Yunnan Pharmaceutical Public Affairs Center
Co. Ltd.Comprehensive Management
Center
TCM Resources BG
Brand and User Operation Center
Health Products BG
Investment Department
Pharmaceutical BG Strategic Development Center2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
000099 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. ABOUT US 001100
Performance Highlights in 2023
Sound Operation for High-Quality Development Wilderness Guardians for Harmonious Ecosystem
* In* 2023* Yunnan* Baiyao* recorded* an* operating* revenue* of* RMB* 39 .111 * billion* an* increase*of* * 7.19%.* Its* net* profit* attributable* to* the* shareholders* of* the* listed* company* was* RMB* 4.094 * The Company established a“germplasm resource The* Company* recorded* an* annual* comprehen-billion* an* increase* of* * 36.41%.* Its* weighted* average* return* on* equity* was* 10.51%* * up* 2.64* nursery for Paris polyphylla” and “Northwest Yun- sive* energy* consumption* of 25586.54*percentage* points.* Its* basic* earnings* per* share* was* RMB* 2.29per* share nan TCM Resource Nursery for Yunnan Provincial tons* of* standard* coalMedicinal Plants.”
Up to 2022 Yunnan Baiyao has achieved growth in operating revenue for 30 consecutive years and also distributed
dividends to shareholders for 30 consecutive years with a cumulative cash dividend of over RMB 20.7 billion. In the
Profit Distribution Plan 2023 the Company proposed to base on 1784262603 shares to distribute to all share-
holders a cash dividend of RMB 20.77(including tax) per every 10 shares and 0 bonus shares (including tax) with Talent Empowerment for Employee Growth
0 shares to be issued to all shareholders from the capital reserve as a bonus for every 10 shares held
The* Company* employs* 1315* ethnic* minority* The* Company* invested* a* total* of* RMB 5.68
We conducted 9 compliance training sessions achieving a 100% participation rate among all employees individuals* constituting* 14.89%* of* its* total* million* in* safety* measures
workforce
Inheritance & Innovation for Energizing New TCM The* Company* conducted 112 safety* education* The* Company* achieved* a* 100%* rectification*
and* training* sessions* with* a* total* of* 18660 rate* for* hidden* safety* hazards* in* the* working* en-
participants vironment
We allocated an annual R&D investment of up No pharmaceutical recall incidents
to RMB 344.4415 million
due to quality issues
A quality management system was established All employees accounting for 100% Responsibility Fulfillment for Enhanced Welfare
in all production-oriented business groups received product quality and safety training
achieving a coverage rate of 100% across 137 training sessions
* Yunnan* Baiyao* donated* materials* worth* RMB* Employees* of* Yunnan* Baiyao* volunteered* for* a*
4.4604* million total* of* 15372 hours2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
011 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. ABOUT US 012
Impression of Yunnan Baiyao
Honors and Awards
Fortune’s top 500 Chinese Top 500 Chinese Listed Awarded Best ESG Practice Awarded the Excellent Practice Selected into the 2023 Awarded the Best Practice Case
companies for 14 consecu- Company Brands in 2022 Case among Listed Compa- Case in Annual Report Perfor- Investor Relations Manage- of Board Office among Listed
tive years nies for the first time mance Presentation among ment White Paper jointly Companies for the first time
Listed Companies in 2022 released by the Exchange
Top 25 Global Pharma- Awarded as Huaxia Big Awarded as a National Tech-
Hurun China’s Most Historical Awarded the Capital Market Continuously awarded MSCI-ESG
ceutical Companies in Health Outstanding ESG nology Innovation Demon-
and Cultural Brand List 2022 Excellent Listed Company in A rating from 2021 to 2023
Brand Values for 3 con- Enterprise in 2023 2023 stration Enterprise
secutive years
Awarded the Best Rual Revital-
ization Practice Case among List-
China’s Best ESG Employer Kantar BrandZ Top 100 ed Companies for the first time
Award in 2022 Awarded the Golden Bull Award Most Valuable Chinese for Listed Companies - Golden
Brands in 2022 Information Disclosure Award
2022 for the second time013 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. ABOUT US 001144
The leadership team of People’s Procuratorate of Yunnan Prov- Vietnamese Communist Party Dele-
Important Visits ince visited Yunnan Baiyao for research and exchange gation visited Yunnan Baiyao
On October 10 2023 Wang Guanghui Secretary of the Party Leadership Group and Prose-
cutor General of the People’s Procuratorate of Yunnan Province and his delegation including On November 9 2023 the Vietnamese Com-
Liu Zonggen Deputy Secretary of the Party Leadership Group and Deputy Prosecutor Gener- munist Party Delegation who came to Yunnan
al in charge of daily work YangYonghua Member of theParty Leadership Group and Deputy for attending the political Party dialogues
Wang Chen Vice President of the between the CPC and Southeast and South Prosecutor General in charge of daily work Yang Yonghua Member of the Party Leadership
Chinese Academy of Engineer- Mayor Li Gang of Lijiang Mu- Asian countries visited Yunnan Baiyao and CAE academicians and experts Group and Deputy Prosecutor General Li Shiqing Member of the Party Leadership Group ing and his delegation visited nicipal People’s Government they were received by Zhang Wenxue Secre-
Yunnan Baiyao paid a visit to Yunnan Baiyao and Deputy Prosecutor General Miao Qian Leader of the Discipline Inspection and Supervi-and his delegation visited Yun- tary of the Party Committee of the Company.On September 3 2023 the CAE aca- sion Group of Yunnan Provincial Commission for Discipline Inspection and Yunnan Provincial
On February 24 2023 Wang Chen nan Baiyao
Vice President of the Chinese Academy On August 16 2023 Li Gang Mayor of demicians and experts of the Research Supervision Commission stationed at People’s Procuratorate of Yunnan Province and Member
of Engineering (CAE) Academician of Lijiang Municipal People’s Government Tour Project at Yunnan Border paid a visit of the Party Leadership Group of the People’s Procuratorate of Yunnan Province Zhu Chunli
CAE President of the Chinese Academy and his delegation paid a visit to Yunnan to Yunnan Baiyao accompanied by Li Member of the Party Leadership Group and Director of the Political Department and Wang
of Medical Sciences President of Peking Baiyao and they were received by Dong Malin Vice Chairman of the CPPCC Yun- Xianghong Member of the Party Leadership Group of the People’s Procuratorate of Yunnan
Union Medical College and his delegation Ming director of the Board CEO and nan Provincial Committee Zhu Zhaoyun
including Yang Ting Deputy Director of the CAE academician and TCM Strategic Province Secretary of the Party Leadership Group and Prosecutor General of People’s Proc-President of the Company etc.National Center for Respiratory Medicine of Scientist of Yunnan Baiyao Group and uratorate of Yunnan Province Kunming Railway Branch paid a visit to Yunnan Baiyao. They
China-Japan Friendship Hospital visited the Dong Ming director CEO and president were accompanied by Zhang Wenxue the secretary of the Company’s Party Committee and
Company and they were received by some of the Company. some directors and executives and they had exchanges.directors and executives of the Company.Secretary Yang Jun and Mayor Chen Rui with the
Baoshan City Party and Government Delegation
visited Yunnan Baiyao for cooperation negotiations
On November 5 2023 Yang Jun Secretary of Baoshan Munic-
ipal Party Committee and his delegation visited Yunnan Baiyao
Leaders of Xinjiang Production and Construction Corps for cooperation negotiations accompanied by Chen Rui Deputy
Sun Haiyan Vice Minister of the Inter- accompanied by provincial and municipal leaders paid a Secretary of Baoshan Municipal Party Committee and Mayor of
national Department Central Commit- visit to Yunnan BaiyaoDelegation of Fujian Provincial Government paid a visit Baoshan City Du Chunqiang Member of Standing Sub-com-
tee of CPC and her delegation visited to Yunnan Baiyao On September 12 2023 Comrade Li Zhenguo Deputy Secretary of the Party mittee of Baoshan Municipal Party Committee and Executive
Yunnan Baiyao Committee and Deputy Political Commissar of Xinjiang Production and Con- Deputy Mayor of Baoshan City Ma Zixing Secretary of Tengc-
On September 2 2023 the Fujian delegation attending the 2023 China In-
On August 16 2023 Sun Haiyan Vice Minister of struction Corps along with other 11 leaders and staff members paid a visit to hong Municipal Party Committee Xiong Zhengjie Deputy Sec-
dustrial Transfer and Development Matchmaking Event (Yunnan) included
Yunnan Baiyao Group accompanied by Comrade Wang Hao Deputy Gover- retary General of People’s Government of Baoshan City Yang the International Department Central Committee of
Kang Tao a member of the Fujian Provincial Government Party Leadership
nor of Yunnan Province Comrade Lu Xiaolong Deputy Secretary of the Party Minliang Deputy Secretary General of People’s Government of CPC and her delegation visited the headquarters of
Group and Chen Fang Deputy Director General of the Fujian Provincial Baoshan City. They were received by Zhang Wenxue Secretary
the Yunnan Baiyao Group and they were received Leadership Group and Deputy Director of Yunnan Provincial Development and
Department of Industry and Information Technology paid a visit to Yunnan of the Party Committee of the Company and some directors and
by Lu Hongdong Deputy Secretary of the Compa- Reform Commission and Comrade Qu Congwen Deputy Mayor of Kunming
Baiyao accompanied by Zuo Guang Director General of Yunnan Provincial executives.ny’s Party Committee etc. City. They were received by Lu Hongdong Deputy Secretary of the Company’s
Local Financial Supervision and Administration Bureau and other leaders
Party Committee etc.from Yunnan Province.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
015 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. ABOUT THIS REPTOoRpiTc &| L BeOadAeRrsDh iEpS inG P SaTrAtyT BEuMilEdiNnTg 016
Topic This witnessed Yunnan Baiyao’s endeavors to pioneer a new This year marked Yunnan Baiyao’s steadfast strides towards fortifying its foundations and defenses.year chapter in leading Party building.Yunnan Baiyao took comprehensive steps to enhance grassroots Party building focusing on bolstering the political and organizational
We have significantly reinforced our ideological construction steadfastly adhering to the functions of grassroots Party units while reinforcing their construction across various domains. In 2023 the Company optimized its
Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. Our primary organizational structure combined with the distribution of grassroots Party members and actual Party building needs adjusted thepolitical focus has been on learning propagating and implementing the principles outlined organizational structure of the Company’s Party and mass organization system and adhered firmly to the principle of “The Partyin the 20th CPC National Congress. Throughout the year the Party Committee of the branches are established wherever our departments are located.” This involved clarifying the affiliation of Party organizations in
Company distributed over 10000 relevant books to all Party members in multiple batches. business sectors such as the Innovative Drug Center Zhengwu Technology Peking University- Yunnan Baiyao International Medical
Guided by the Quarterly Work Guidance Manual for Grassroots Party Organizations of Research Center (PKU-YBIMRC) Special Channel Business BU and Beijing Limited Company. Additionally new Party branches
Yunnan Baiyao we delineated key learning points and objectives for grassroots Party including the Yunnan Baiyao Pharmacy Party Branch and Zhiyun Health BU Party Branch were established.organizations to ensure comprehensive understanding and implementation among all
members. We rigorously enforced the “first issue” system with active responses from
Party committees at all levels. A total of more than 20 times of centralized learning in the Following these adjustments
central group. For Party cadres we conducted demonstration training courses and cadre the Yunnan Baiyao Group’s Party Committee included
management ability improvement training courses focused on the implementation of the
20th CPC National Congress’ principles and enhancing the managerial skills of Party of grassroots Party
cadres thereby improving their theoretical knowledge and professional capabilities. 6Party subcommittees 7Party general branches 52Party branches 100% organizations
In 2023 Moreover the Company implemented a leadership system of two-way entry and cross-appointment recruiting top talents to reinforce
grassroots Party organization teams and augment their organizational and competitive capacities.
2023 marked the first year we hosted over200Party classes and lectures To further strengthen Party member management and development efforts the Party Committee of Yunnan Baiyao devised a guiding
of full implementation of the plan based on the principle of merit-based selection scientifically decomposing indicator tasks and clarifying the main responsibilities
spirit of the 20th CPC National engaging more than3000participants from Party organizations of Party organizations at all levels to facilitate the development of Party members.Congress. It was a crucial
year for Yunnan Baiyao as departments and business units across all levels of the Company tailored to their
we maintained our strategic specific operational requirements In 2023
determination and worked
together to create a new pattern
of high-quality development. The Party Committee of Yunnan Baiyao being one of the pioneering units in conducting
we aimed to recruit80new Party members Currently the Company boasts1922full Party membersWe firmly adhere to the “two educational activities centered around “learning and implementing Xi Jinping Thought on successfully achieving this targetsafeguards” and are guided Socialism with Chinese Characteristics for a New Era” is dedicated to following the directives 165potential Party members
by Xi Jinping Thought on of the Chinese Central Committee the Yunnan Provincial Party Committee and the Yunnan
Soc ia l i sm w i th Ch inese Provincial Committee of the CPC Working Committee for Non-public Economic and Social 140 Party activists
Characteristics for a New Era. Organizations. It adopts an issue-oriented and task-focused approach to comprehensively
We comprehensively study deploy its efforts. In terms of theoretical learning we have implemented a list-based learning 241Party membership applicants.and grasp the spirits of the 20th system. Leveraging our own online learning platform the “Baiyao Academy” we have
CPC National Congress fully established a dedicated education column and a learning platform systematically. We also
practicing our responsibility curated a multi-dimensional Party course system including a wide range of topics from We standardized the process of transferring organizational relationships for Party members implemented work responsibilities
of serving the country with “Mao Zedong’s Military Thought and Enterprise Management” to “Party’s Self-Revolution” and enhanced tracking management. Moreover Yunnan Baiyao conducted a comprehensive discussion on Party member
TCM and achieving new from “Upholding Public Interests Strict Discipline and Leading by Example” to “Exploring behavior norms involving all full Party members probationary Party members potential Party members Party activists and otheraccomplishments in support of the History and Culture of Yunnan Province” from “Forever Being in Adversity” to “Taking employees. The discussion primarily focused on delineating “dos and don’ts” for Party members in alignment with the Company’sthe national strategy. on Full Responsibility” and from corporate strategy implementation to project research reform development production and operational reality. Yunnan Baiyao’s grassroots Party organizations Party members and
and product R&D. We integrated comprehensive thematic education into our Party course other employees actively participated submitting over 2000 suggestions totaling over 40000 words. Through this process we aim
system facilitating active learning and fostering a cohesive thematic Party-day framework. to foster a deeper understanding of Party-member behavior norms and encourage every Party member to embrace their role as
Moreover we have organized more than 80 small-scale linked and lightweight themed pioneers and exemplars within the Company.Party Day activities fostering the joint Party building among industry-university-research
(IUR) units and upstream and downstream enterprises. This approach effectively leverages In September 2023 the Yunnan Provincial Committee of the CPC Working Committee for non-Public Economic and Social
organizational and institutional strengths across various fields to achieve tangible results in task Organizations appointed Comrade Zhang Wenxue as the Secretary of the Party Committee of Yunnan Baiyao injecting new energy
implementation. Throughout the implementation process leaders of Party organizations at all into the Company’s high-quality corporate development and the enhancement of the Party building work’s quality and efficiency.levels of the Company have assumed primary responsibility for themed education initiatives
integrating them into the quarterly work guidance manual. The outcomes of these initiatives
are incorporated into the quarterly and annual evaluations of branch secretaries and mass
organizations underscoring the leading role of high-quality Party building efforts.Leadership in
Party Building2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
017 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. ABOUT THIS REPTOoRpiTc &| L BeOadAeRrsDh iEpS inG P SaTrAtyT BEuMilEdiNnTg 018
This year saw Yunnan Baiyao’s unwavering commitment to nurturing an honest This underscored Yunnan Baiyao’s mission and determination to overcome difficulties and seek
year upright and integrity-driven corporate culture. year development.Yunnan Baiyao remains steadfast in implementing the “two responsibilities” actively explored and promoted the establishment In 2023 Yunnan Baiyao concentrated on strategy management and execution reform implementation and work style construction
of a comprehensive supervision system integrating Party conduct and integrity governance disciplinary inspection and through investigation and research with a focus on fostering the development of Party cadres. The Party Committee of the Companysupervision integrity risk prevention and control internal audit internal control and business compliance. took the initiative to set an example with its leaders leading research under the theme of “Exploration and Innovation of GrassrootsParty Building in Mixed-ownership Enterprises.” Through these research efforts various dimensions of the Company’s Party building
In 2023 were comprehensively understood enabling a thorough reflection on its current status and characteristics and providing clarity on the
Party building in mixed-ownership enterprises. Different members of the Party Committee leadership team led research on different
The Company Formulated internal supervision-related systems such as the Comprehensive Risk Management topics while each department delved into their respective business areas addressing bottlenecks and challenges in corporate
System and the Accountability Management Measures. development. Special research was conducted on topics such as Party building rural revitalization talent team construction and
Initiated the construction of a comprehensive risk management system and compiled a comprehensive risk quality management.diagnosis report based on industry realities and the Company’s own situation. Grassroots Party teams conducted in-depth investigations to understand the Company’s needs and development strategies. The
Following the risk information classification framework the Company identified compliance supervision risks Joint Branch of Strategic Development Center in collaboration with the Pharmaceutical BG facing pressure for performance
including the risks related to integrity and disciplinary inspection mechanisms integrity supervision petition growth conducted research on marketing strategies for key products design research for grassroots business and design research
work and violation investigation. and interviews for provincial-level business. The aim is to propose systematic solutions to ensure future steady growth of the
Continually improved its internal control system updating the Internal Control Management Manual annually and Pharmaceutical BG. The Aesthetic Medicine R&D Department was dedicated to business development initiatives. It conducted
enhancing content related to internal supervision and anti-fraud measures. extensive research and analysis on both domestic and international medical aesthetics industries trends in therapeutic skincare
products and other pertinent fields. Based on these findings the Department formulated the Company’s upstream product pipeline
Internal control measures were developed and responsibilities were consolidated for identifying integrity risks leading to plan for the medical aesthetics sector. Drawing from the entirety of the Panax notoginseng industry chain the TCM Resources BG
effective implementation of such measures. facilitated visits for all Party members to Panax notoginseng cultivation fields and processing workshops. This initiative aimed to bolster
research effectiveness and enable the intuitive identification of issues. Yunnan Baiyao conducted research on 7 major projects over
By releasing the Strict Disciplines for Yunnan Baiyao’s Management Yunnan Baiyao’s management solemnly committed 30 sub-projects and hundreds of micro-projects. The focus was on leveraging research outcomes to drive significant advancements
to uphold integrity and dedication to the public take responsibility prioritize user satisfaction pursue excellence embrace of the business.continuous learning and innovation and foster cooperation and win-win outcomes. Throughout the year Yunnan Over the three decades the Company has remained aligned with China’s development evolving alongside the changing times and
Baiyao organized 210 pre-employment integrity talks with key employees in crucial positions requiring them to sign reforms. We have actively supported participated in and promoted China’s reform and opening up continuously advancing in the
the Commitment to Integrity Practice. We issued 7 holiday integrity reminders and conducted confidentiality warning Big Health sector. This path we have chosen is the right one offering numerous development opportunities in this field. In this new
education courses across the Company. The disciplinary inspection work meeting was convened during which the era Yunnan Baiyao is committed to fulfilling its mission and embracing the call of the times. We will wholeheartedly promote Party
Company’s Disciplinary Committee outlined specific requirements for comprehensive and stringent Party governance. building work leading our high-quality corporate development through the strength of exemplary Party building. Furthermore we will
All grassroots Party organizations conducted a total of 48 theoretical studies on Party conduct and integrity governance strive to elevate our corporate development to new heights firmly supporting China’s path to modernization and making significant
construction as well as integrity employment warning education sessions with nearly a thousand participants. contributions to the great endeavor of building a prosperous nation and achieving national rejuvenation.This reflected Yunnan Baiyao’s commitment to serving the people and addressing
year their challenges.Yunnan Baiyao prioritized high-quality development this year. In its efforts to implement rural revitalization strategies the Considering the actual needs of its employees Yunnan Baiyao consistently seeks to provide proactive services. Using mass
Company embraced responsibility and took proactive steps to enhance the well-being and sense of accomplishment of the organizations as a platform we actively explore more heartfelt initiatives to address the needs and concerns of our people and engage
people. Throughout the year Yunnan Baiyao convened the special meeting to advance rural revitalization initiatives aligning in beneficial and meaningful endeavors for the community. In terms of network and telecommunications security the Company
with directives from China’s central government and the Party Committee of Yunnan province. The Company also rotated organized a special lecture on “Preventing Telecom Network Fraud” inviting experts from the Criminal Investigation Brigade of
the first secretary and work team leader stationed in villages and deployed six team members to Xinle Village and Chazhiluo Chenggong Branch Kunming Public Security Bureau to educate employees on fraud prevention and network security. For employees
Village Pantiange Township Weixi County. The Company diligently pursued the following five approaches: increasing income commuting long distances between home and work the Yunnan Baiyao Labor Union collaborated with Yunnan Jingjian Rail Transit
through industry support strengthening foundations through grassroots building promoting demonstration projects through Investment Co. Ltd to offer exclusive discounted subway gift cards. Recognizing the challenges such as remote location and harsh
exemplary cases fostering harmony through public education and driving development through achievements. environment faced by employees at the Qidian Branch of Yunnan Baiyao Raw Material Extraction Plant particularly in transportation
accommodation social connections and children’s education the Company’s labor union advocated for subway shuttle buses and
Yunnan Baiyao’s contributions to rural revitalization garnered external recognition. secured public rental housing and suitable schools for employees’ children effectively addressing their living difficulties.Yunnan Baiyao was awarded the 14th“ N a t i o n a l 1 0 0 E x c e l l e n t C a s e s ” by China Management Case Sharing Center for the case
of Health Initiatives in Hengduan Mountains: Yunnan Baiyao Promoted Rural Revitalization with Charity Responsibility which was officially
added to its case library.Yunnan Baiyao’s rural revitalization efforts were recognized by Xinhuanet as an excellent case and were included among the“ BestPractice Cases”by China Association for Public Companies.Topic Leadership in Party Building019 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Sound Operation for High-Quality Development 020
Sound Operation for High
Quality Development
YUNNANBAIYAO
Adhering to a robust development philosophy Yunnan Baiyao has
consistently enhanced its corporate governance and fortified its risk
control capabilities. The Company has established a comprehensive
ESG governance framework reinforced ethical business practices
and communicated proactively with diverse stakeholders to enhance
operational transparency thereby ensuring its robust and sustainable
development.021 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Sound Operation for High-Quality Development 022
ESG Yunnan Baiyao places significant emphasis on its environmental social and governance commitments and responsibilities. Integrating the ESG principles into its overall management Communication with Stakeholders
and operation the Company has established and gradually improved a robust ESG management
Management mechanism and vigorously expanded communication channels with stakeholders thus enhancing its
sustainable development practices comprehensively. Yunnan Baiyao consistently prioritizes and attentively listens to the needs of both internal and external stakeholders.We proactively engage with stakeholders through various communication channels ensuring thorough collection and
responsiveness to their expectations for Yunnan Baiyao’s sustainable development. Throughout 2023 we fostered
ESG Governance Structure communication and exchange with stakeholders via social platforms WeChat Official Account emails and other mediums
facilitating a two-way flow of information and prompt response to stakeholder feedback and requirements. These efforts
contribute to mutually beneficial outcomes for all involved parties.To bolster its ESG management capabilities Yunnan Baiyao has established a top-down ESG
management structure with clear delineation of authority and responsibilities in accordance with
regulatory mandates and relevant industry standards while considering the Company’s evolving
needs. The structure is anchored by the ESG Working Leadership Group as the main body of Stakeholder Communication Mechanism
leadership supported by the ESG Promotion Office as the core management and complemented by
specific ESG working groups tasked with execution and implementation.Stakeholders Expectations and Demands Communication Mechanism
ESG Working Leadership Group
Compliant information disclosure
Standardized operation
Comprehensive reports at shareholders’ meetings
ESG Promotion Office Information disclosure
On-site phone email interactive platform and other forms of
Shareholders and investor Risk control research
institutions Reasonable return on investment
Steadily increasing performance and stable dividends
Consumer rights protection Customer satisfaction survey
Guarantee of product quality and safety Product recall system
Customer privacy protection Integrated customer service system
Clients and consumers
Intellectual property protection Product service and quality assurance
Standardized management and implementation of contracts and
Integrity in business agreements
ESG Governance Structure Supply chain sustainability Regular conferences and networking events
Business partners Timely communication Strict implementation of the bidding system
Collaboration in social responsibility
ESG Working Leadership Group
The ESG Working Leadership Group chaired by the Director Chief Executive Officer and President Worker’s Congress
and comprising Vice Leaders such as the Chief Financial Officer Chief Quality and Process Officer Good working environment Training lectures salons and other communication activities
Secretary of the Board of Directors and Chief Human Resources Officer alongside top managers Welfare and benefits Themed networking activities
from each functional department and Business Group spearheads and oversees the Company’s Employees Career development
ESG governance. This group is tasked with defining the ESG management structure evaluating Employee feedback from work summary
ESG strategies policies and objectives and ensuring the effectiveness of the Company’s ESG risk
management and internal control system etc.Information disclosure
Compliance with laws and regulations
ESG Promotion Office Fulfilling all obligations in accordance with laws and regulationsCompliant operation Undertaking government projects
Governmental Paying taxes in accordance with the law Reporting the Company’s business performance on a regular basis
The ESG Promotion Office comprising personnel from ESG-related departments functions as the departments/regulators Joint development
core management entity carrying out the Company’s ESG initiatives. It is entrusted with the planning Association activities and communications
guidance organization coordination promotion and assurance of ESG-related issues.ESG Working Groups Financial performance Press release and publications
Corporate governance
Media and community Media interviews
The ESG Promotion Office comprises several ESG working groups each dedicated to specific public Information disclosure
areas of responsibility. These include the External Coordination and Information Disclosure
Group Coordination and Promotion Group Financial Security Group Legal Work and Patent
Group Risk Control Management Group Brand Promotion Group Quality Control Group Volunteer serviceCommunity relations
Employee Care Group Supply Chain Ecosystem Construction Group Environmental Protection Community activities
Coordination Group and Strategy Planning and Decoding Group. Those groups are tasked with Promoting health knowledgeCommunities and NGOs Exchanges and interviews
executing and promoting various ESG initiatives and projects.Coordination and
Promotion Group
External Coordination and
Information Disclosure Group
Strategy Planning and
Decoding Group
Green Environmental
Protection Coordination Group
Supply Chain Ecosystem
Construction Group
Employee Care Group
Quality Control Group
Brand Promotion Group
Risk Control Group
Legal Work and Patent Group
Financial Support Group023 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Sound Operation for High-Quality Development 024
Materiality Assessments 2023 ESG Materiality Matrix of Yunnan Baiyao
In alignment with the ESG Reporting Guidelines capital market rating criterions and standards from reputable domestic
and international organizations as well as the practices of peer companies Yunnan Baiyao has updated its list of ESG Moderate materiality High materiality
issues and conducted materiality assessments. Throughout 2023 we reviewed and adjusted our ESG material issues 6 1
through a process of “Identification - Research - Analysis.” This approach yielded 27 ESG issues culminating in the 2
development of a materiality matrix for 2023. The matrix serves as the cornerstone of our sustainable management goals. 3
4
5
7
Materiality Assessment Process
108
11129
18
15
1913
14
Identification Research Analysis 17 16
22
Based on the Environmental So- We collected responses from our We assessed and ranked the ESG
cial and Governance Reporting stakeholders including directors materiality matrix of Yunnan Bai- 20Guide of the Hong Kong Stock and management employees in- yao in 2023 in terms of “ImportanceExchange and the Sustainability vestment organizations customers to Yunnan Baiyao’s sustainable
23Reporting Standards of the Glob- and consumers through online development” and “Importance to
24
al Reporting Initiative (GRI) we questionnaires. stakeholders’ sustainable develop- 25 21identified 27 ESG material issues ment.” 27 26
by comprehensively reviewing Low materiality
the Company’s ESG priorities
and stakeholders’ concerns and Importance to Yunnan Baiyao
benchmarking with domestic and
international peers.Environment Social Governance
Materiality of ESG Issues
1 Product quality and safety 10 Information security and privacy protection 19 Diversity and inclusion
Scope Topics Materiality ranking Scope Topics
Materiality
ranking 2 Innovation and R&D 11 Employee rights and benefits 20 Responsible marketing
Emission management Product quality and safety 3 Compliant operation 12 Corporate governance 21 Medical accessibility
High materiality Innovation and R&D
Environmental management High materiality 4 Emission management 13 Economic performance 22 Energy consumption
Health and safety
Resources utilization Recruitment 5 Business ethics 14 Intellectual property protection 23 Driving progress in the industry
Moderate materiality Information security and priva-
Water resources management 6 Health and safety 15 Supply chain management 24 Biodiversity protectioncy protection
Environment
Energy consumption Employee rights and benefits 7 Environmental management 16 Resources utilization 25 Philanthropy
Supply chain management 8
Biodiversity protection Low materiality Recruitment 17 Water resources management 26 Addressing climate change
Intellectual property protection Moderate materiality
91827
Addressing climate change Risk management Employee training and development Rural revitalizationSocial Employee training and devel-
opment
Compliant operation
Diversity and inclusion
Business ethics High materiality Responsible marketing
Medical accessibility
Risk management
Governance Driving progress in the indus-
Corporate governance try Low materiality
Moderate materiality Philanthropy
Economic performance Rural revitalization
Importance to Stakeholders025 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Sound Operation for High-Quality Development 026
Compliance Yunnan Baiyao is committed to enhancing corporate governance practices by refining the governance structure enhancing risk management and bolstering internal control
Management mechanisms. Through these efforts we continuously promote standardized and compli-ant management thereby fortifying the robust foundation for the Company’s sustainable
operation and development.Corporate Governance
In strict accordance with the Company Law of the People’s Republic of China the
Securities Law of the People’s Republic of China the Guidelines for Corporate
Governance of Listed Companies and other laws and regulations and regulatory
requirements and considering the actual situation of the Company’s development
Yunnan Baiyao has continuously improves the governance structure with clear
delineation of powers and responsibilities and scientific and efficient management
structure and formed a decision-making and management organization with the Board of Directors
shareholders’ general meeting the Board of Directors the Supervisory Committee and
the management as the main structure to fully protect the interests of the Company and Yunnan Baiyao actively promotes the standardized and efficient operation of the Board of Directors in strict accordance with the relevant
all shareholders. provisions of the Articles of Association the Rules of Procedure for Board of Directors and the Work System for Independent Directors.The Board of Directors consists of a Strategy Committee an Audit Committee a Remuneration and Evaluation Committee and a Nomi-
Corporate Governance Structure of Yunnan Baiyao nation Committee which implement the principles of corporate governance from top to bottom to ensure compliance and efficient opera-
tion of the business.Yunnan Baiyao holds regular meetings of its Board of Directors to facilitate the formation of consensus and decision-making plans by its
directors on key issues such as corporate governance and strategic direction. Yunnan Baiyao held a total of 7 board meetings in 2023.General Meeting Yunnan Baiyao has always believed that the independence of the Board of Directors is a key factor in safeguarding the interests of
shareholders and maintaining the stable development of the Company. In nominating and appointing members of the Board we give
due consideration to factors such as gender age industry experience professional skills and other factors of the members of the Board
Supervisory Committee and review and evaluate the implementation of the independence of the Board on a regular basis. During the reporting period Yunnan
Baiyao had a total of 10 directors including 6 non-independent directors and 4 independent directors. In February 2024 one non-inde-
pendent director was elected at the Company’s first extraordinary general meeting and there are currently 7 non-independent directors
and 4 independent directors. The members of the Company’s Board of Directors have experience in various fields such as law finance
Board of Directors auditing management risk control investment and M&A and healthcare reform bringing diversified experience and professional knowl-
edge to the Company which is beneficial to safeguard the scientific nature of the Board’s decision-making.Strategy Audit Nomination Remuneration In 2023
Committee Committe Committee and Evaluation Committee
held a total of
Management
7board meetings
General Meeting Supervisory Committee 4 current supervisors
In strict accordance with the provisions and require- Yunnan Baiyao elects supervisors in strict accordance with the Company Law the Articles of Asso-
ments of the Articles of Association and the Rules of In 2023 ciation the Rules of Procedure for Supervisory Committee and other relevant provisions. The Su-
Procedure for General Meetings Yunnan Baiyao has pervisory Committee consists of 4 current supervisors including 2 representatives from employees
standardized the convening and voting procedures of held and 2 representatives from shareholders. Supervisors of the Company independently and effectively
general meetings treating all shareholders on an equal perform their supervisory functions urge the Board of Directors and the Operation Team to stan-
footing and safeguarding the shareholders’ rights of 2 general dardize their operations and make scientific decisions and effectively safeguard the legitimate rights being informed participation and supervision. In 2023 meetings and interests of the Company and its shareholders. 2 representatives 2 representatives
the Company held two general meetings. from employees from shareholders027 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Sound Operation for High-Quality Development 028
Risk Control Rights and Interests of Shareholders and Investors
Yunnan Baiyao has continually improved its risk management system conducting comprehensive assessments across all business Based on the principle of open communication Yunnan Baiyao has established a regular communication mechanism maintains
sectors to ensure that the Company’s risks remain controllable. effective communication with shareholders and investors and takes effective measures to protect the legitimate rights and interests
of shareholders and investors.The Board of Directors serves as the principal decision-making body for comprehensive risk management bearing ultimate responsi-
bility in this regard. The Audit Committee of the Board oversees and reviews internal controls and risk management activities. It dele- In strict compliance with the listing regulatory requirements we have constantly optimized online and offline communication chan-
gates specific internal control tasks to the Risk Control Center and provides specialized reports to the Board of Directors. Emphasizing nels and built a comprehensive investor communication platform. We regularly organize investor interviews and exchanges to dis-
the control of sustainability-related risks we integrate ESG risks such as R&D management information security and brand reputation close the Company’s operating conditions and business progress to investors in a timely manner maintain a smooth flow of informa-
into our overarching risk management system enabling unified management and effectively enhancing our response capabilities. tion between the Company and investors and enhance the communication efficiency between the Company and the capital market.In addition we attach great importance to the protection of small or medium-sized investors actively respond to inquiries and main-
Yunnan Baiyao has established and continuously refined its risk management and internal control systems bolstering the system con- tain close contact with small and medium-sized investors through a variety of channels such as email telephone and the Internet.struction such as the Internal Control Manual and the Comprehensive Risk Management System and comprehensively strengthening
the foundation of internal control. We conduct regular identification analysis and assessment of internal risks to compile a risk inven-
tory and prioritize key risks for the year based on the risk inventory and the impact of the risks. Through the analysis and monitoring of In 2023
key risks the risk response plan is formulated to form a closed loop of risk management. Additionally routine audits or investigations
are conducted to evaluate and enhance the effectiveness and adaptability of our risk management mechanisms which can effectively organized received more responded with a response than ratio of
elevate our overall risk management proficiency.
30150254100%
The Company places significant emphasis on fostering a risk-control culture and cultivating a supportive internal control environment.Yunnan Baiyao encourages active employee participation in risk identification offering a feedback platform for employees to contribute online and offline investor visits from institutional questions on the interac-communication activities investors and analysts tive platform
opinions and suggestions. We conduct practical risk management exercises and enhance employees’ risk awareness through training throughout the year
sessions on risk management and the regular dissemination of relevant risk prevention knowledge such as internal control and risk
management via the “Risk Control Online” platform. These efforts contribute to a risk management corporate culture engaging the
entire company in risk management endeavors.Risk Management Training of Yunnan Baiyao
Senior Middle
management management
Participating in risk re- Receiving risk manage-
porting and discussion ment training including the
to determine the Com- significance cases and
pany’s overall risk pref- practices of risk manage-
erence and major risk ment to deepen the man-
profiles for the year. agers’ risk awareness.Staff in key risk
control departments All employees
Receiv ing business Receiving risk management
training in risk manage- open courses learning risk
ment and strengthening management courses on the
the business skills of risk Company’s training platform
control personnel from and forming a risk manage-
the aspects of risk identi- ment culture with full partici-
fication and assessment. pation.029 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Sound Operation for High-Quality Development 030
Business Yunnan Baiyao firmly believes that integrity equality and transparency are the corner-stones of the Company’s long-term and stable development. By prioritizing business case
Ethics ethics and integrity we continuously enhance our reporting management mechanisms to
Special Training on Business Ethics
foster a culture of integrity management in our business practices.In 2023 Yunnan Baiyao carried out the training sessions
Governance System of Business Ethics titled Enhancing Enterprise Sustainability and Opera-tional Capacity for all the employees. In this training weinvited external experts to teach the course of “SpecialTraining on Business Ethics” to clarify business ethics
In strict accordance with the Company Law of the People’s Republic of China the Law of
the People’s Republic of China Against Unfair Competition the Anti-Monopoly Law of the standards strengthen the awareness of compliance per-
People’s Republic of China and other national laws and regulations we have studied and formance and build a compliance culture.formulated the Opinions on Strengthening and Improving Discipline Inspection of Yunnan
Baiyao Group Co. Ltd (for Trial Implementation) (the “Opinions”). This initiative aims to
comprehensively advance the rigorous governance of the Party reinforcing supervision
discipline and accountability. By elevating the standardization legal compliance and nor-
malization of the Company’s discipline inspection practices we provide robust disciplinary Special training on business ethics
assurance for the high-quality stable and sustainable development of Yunnan Baiyao.Guided by the Opinions and anchored in systematic construction Yunnan Baiyao has
leveraged discipline inspection as a catalyst for practical progress contributing to the
development of a suite of new system documents. These documents structured around case Special Party Lesson on Thematic Education and Discipline
six key areas including responsibility implementation supervision and inspection integrity Inspection Working Meeting
education complaint reporting style construction and risk prevention and control em-
body the Company’s commitment to fostering a culture of compliance. Examples include In 2023 Yunnan Baiyao organized a special Party lesson
the Implementation Opinions for Party Committee and Discipline Inspection Commission on thematic education and discipline inspection working
Work Coordination Promotion Mechanism of Yunnan Baiyao and the Rules of Procedure meeting. More than 160 members of the Party Committee
for Discipline Inspection Commission of Yunnan Baiyao. Additionally the Company has and the Discipline Inspection Commission attended the
released the Discipline Inspection and Supervision Work System Compendium of Yunnan
Baiyao encompassing various integrity and anti-corruption related documents such as the meeting watched a series of educational warning films
Work System of Discipline Inspection Commission the Work System of Letters and Visits and comprehensively enhanced the awareness of integrity
the Measures for Integrity Risk Control and the Responsibility System for the Work of and self-discipline.Clean and Honest Party Building. These systemic frameworks guarantee Yunnan Baiyao’s
compliant operations In 2023 Yunnan Baiyao continued to adhere to the Code of Conduct
for Business Ethics2 which clarified the Company’s management requirements for all em-
ployees (including non-regular employees) on business ethics and strictly prohibited im-
As of the end of the proper acts such as corruption and bribery improper competition and conflict of interest.reporting period Yunnan Baiyao has integrated the requirements of integrity practice into the manage- Special Party lesson on thematic education and discipline inspection working meeting
ment and assessment of key positions and organizes the management and key position
Yunnan Baiyao had employees to sign the Commitment to Integrity Practice to ensure that the employees
organized employees to sign nearly know and understand the laws and regulations of business ethics. We have clarified the
2000 principal scope and content of responsibility of the clean governance of the Party to the persons in charge at all levels. Reporting Management
copies of the Commitment to
Integrity Practice We take a “zero tolerance” approach to any violation of business ethics and have formulat-
ed t integrity and anti-corruption systems such as the Code of Conduct for Business Ethic. Yunnan Baiyao keeps strengthening its business ethics monitoring and reporting efforts. We have further standardized the reporting
channels and procedures in accordance with relevant laws and regulations to ensure that complaints and reports are handled in a timely
and effective manner. We encourage employees users and other stakeholders to monitor and report any violations of the law and pro-
In 2023 vide smooth internal and external reporting channels including telephone email website face-to-face reports. After receiving reported
Integrity Awareness Cultivation cases we will promptly carry out investigations seriously deal with complaints and reported incidents take effective corrective mea-
carried out a total of sures and impose punishment for the cases that cause lawsuits.
9 sessions of compliance In terms of building an integrity culture Yunnan Baiyao organizes training for all employ-training To protect the rights and interests of the whistleblower we have specified according to the whistleblower protection provisions of the ees (including non-regular employees) several times a year. The training included the Work System of Discipline Inspection Commission that the personal information and report content of the whistleblower shall not be dis-
(including anti-corruptionand business
ethics training) collective watching of integrity warning education films visits to integrity warning education closed in any way without the consent of the whistleblower and the whistleblower shall be fully protected from any form of retaliation.bases knowledge competitions related to integrity education and integrity thematic train-
ing by experts.with a coverage Business Ethics Reporting Channels of Yunnan Baiyao
rate of
100 2：Link to the Code of Conduct for Business Ethics: Yunnan Baiyao Group Co. Ltd. - Code of Conduct for https://www.yunnanbaiyao.com.cn/subsiteIndex/ynbyEn.html Email: byxfjb@ynby.cn Tel: 0871-66203975% of the employees Business Ethics | Portal of Yunnan Baiyao (https://www.yunnanbaiyao.com.cn/view/ynbyPc/1/46/view/5897.html)2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
031 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation for Energizing New TCM 032
Inheritance & Innovation
for Energizing New TCM
YUNNANBAIYAO
Fully embracing and advancing the rich heritage of TCM culture
Yunnan Baiyao is dedicated to deeply understanding the evolving
landscape of the pharmaceutical industry. We focus on the enhance-
ment of product quality across all fronts and drive innovation to invig-
orate our product offerings. In alignment with customer demands we
continuously enhance our customer service capabilities and actively
advocate for inclusive healthcare development. Collaborating with 02
our suppliers we cultivate a sustainable supply chain that fosters the
healthy and sustainable growth of the Company.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
033 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation for Energizing New TCM 034
Product Yunnan Baiyao recognizes that product quality and safety are fundamental to the Company’s long-term operation. case Yunnan Baiyao Built the “Pan-Panax notoginseng” Product Matrix
Quality
In 2023 the Pharmaceutical Business Group of Yunnan Baiyao had proactively adjusted its strategic lay-
outand focused on creating the development of a “Pan-Panax notoginseng” product matrix with strong market
Continually improve our quality Stringently control end-to-end competitiveness to meet the diverse health needs of consumers.management system quality management
PRODICT
QUALITY Nourishing Series
Nourishing products such as Qixuekang Oral Liquid and Sanqi
Shenfeng Oral Liquid meet the needs of users for replenishing
Conduct internal quality cul- Instill company-wide Qi & blood and improving immunity. Thanks to comprehensive
ture initiatives quality and safety product publicity and promotion program nourishing series
awareness at every stage products achieved steady growth in sales volume.Nourishing series
Branding Xuesaitong Series
In the cardiovascular and cerebrovascular market Xue-
saitong products including dispersible tablets and capsules
Yunnan Baiyao with a heritage spanning a century enjoys a stellar reputation as a lead- harness the medicinal properties of Panax notoginseng to
ing enterprise in China’s Big Health industry. Renowned as a pioneer in both TCM and deliver notable therapeutic benefits. These products offer
orthopedics we uphold a historical tradition of merging TCM with modern scientific ad- patients a safe and efficacious treatment option.Traditional Xuesaitong series
Chinese medicine vancements. By deeply understanding society’s health needs we proactively develop and
combination diversify our product offerings aiming to address contemporary medical and lifestyle chal-
lenges. Throughout the year Yunnan Baiyao has demonstrated proactive exploration and Other Series
innovation pushing boundaries beyond our traditional domains. Through comprehensive Other Panax notoginseng products such as Panax noto-
product management and synchronized efforts across various sectors we have achieved ginseng Dysmenorrhea Capsules and Compound Danshen
stable and increased revenue in multiple business lines. Tablets leverage the benefits of genuine medicinal ingredi-
In 2023 Yunnan Baiyao devised the Brand Structure Management Manual of Yunnan Bai- ents covering gynecology cardiovascular and cerebrovas- Other series
Modern medicine yao Group to govern publicity management and branding activities. Additionally we refined
cular areas.our brand strategy and conducted in-depth exploration of Yunnan Baiyao’s unique brand
value. With a focus on enhancing brand reputation and fostering business connections we
innovatively propelled Yunnan Baiyao into a new era.case Domestic Brand Yangyuanqing Defended the Championship in the Anti-Hair Loss
Shampoo Market
Yunnan Baiyao’s hair care brand Yangyuanqing clinched the top spot in the hair care and anti-loss category maintaining its high-quality products while cham-
dominance for two consecutive years. With a keen focus on market trends in hair care and anti-hair loss products the Com- pioning the charm and vitality of
pany instilled a strong sense of confidence in users through the use of natural ingredients contributing to an exceptional Chinese brands amidst the growing
user experience and heightened brand presence. trend of national product promi-
nence.In terms of quality control Yangyuanqing products have been recognized with certifications such as the “National SuperBrand for Cosmetics” and “Anti-Hair Loss Patent” a testament to the Company’s stringent management mechanism.In brand communication efforts Yangyuanqing deeply integrates content marketing with brand culture. By featuring celebri-
ties and showcasing Yunnan’s natural beauty through live broadcasts and short videos set in scenic locales the brand offers
users a glimpse into the cultural charm of Yunnan Province the plant kingdom. Yangyuanqing won the champion of the hair Live event for Yunnan animal star tracing
Yangyuanqing remains committed to maintaining its brand prowess in the care products market promising consumers care and anti-loss category Yunnan plant’s anti-hair loss ingredients
series2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
035 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation for Energizing New TCM 036
Product Quality and Safety
Aligned with the quality guidelines of “Quality and Customer First” the quality mission of
“Honoring Quality and Integrity Inheriting and Innovating and Striving for Excellence”
and the vision of “Making Quality a Part of Yunnan Baiyao Employees’ DNA” Yunnan
Baiyao places paramount importance on the quality and safety of its products.Quality Risk Management Quality Audit
Quality Control
Yunnan Baiyao has established a systematic quality risk man- To ensure the safety and effectiveness of its products
In strict accordance with the Drug Administration Law of the People’s Republic of agement process for assessing controlling communicating and and the continuous and effective operation of its quality
China the Regulations on the Supervision and Administration of Medical Devices reviewing product quality risks integrating quality risk manage- management system Yunnan Baiyao has established
the Measures for the Administration of Drug Registration the Measures for the ment throughout the lifecycle of its products. The Company for- and continuously improved its quality audit mechanism.Supervision and Administration of Drug Manufacturing the Measures for the Su- mulates corresponding product quality risk management plans In terms of internal audit Yunnan Baiyao organizes the
pervision and Administration of the Quality of Drug Operation and Use the Code carries out risk identification assessment and control in an business groups to conduct quality-specific internal au-
of Practice for the Quality Management of Pharmaceutical Operations the Good orderly manner conducts regular internal testing and preventive dits on different topics. For the problems found in the
Agricultural Practice (GAP) for Traditional Chinese Medicinal Materials the Regu- testing for potential risk problems and develops risk mitigation internal audit the rectification report will be created and
lation on the Supervision and Administration of Medical Devices the Measures for measures suitable for business development as needed with the Technical Quality Management Committee and the
the Supervision and Management of Medical Device Manufacturing the Measures an aim to fully guarantee product safety and effectiveness. In relevant quality management departments will supervise
for the Supervision and Management of Medical Device Business the Measures for addition we track the rectification of risk issues and prepare risk the completion of the rectification and the formation of the
the Administration of Registration and Filing of Medical Devices the Regulation on identification and rectification reports. The Company has estab- rectification report. In addition Yunnan Baiyao actively
the Supervision and Administration of Cosmetics the Measures for Administration of lished a pharmacovigilance system to monitor and control drug cooperates with quality special audits and annual on-site
Cosmetics Production and Operation the Code of Practice for Quality Management safety risks throughout the drug lifecycle thus effectively guar- inspections conducted by local regulatory authorities.in the Production of Cosmetics the Measures for the Supervision and Management anteeing drug quality and safety. Furthermore each business
of Toothpaste and other relevant laws and regulations Yunnan Baiyao has revised group has established a quality risk emergency mechanism
and improved a series of system documents such as the Quality Culture Outline suitable for its own business model formulated corresponding
of Yunnan Baiyao Group the Quality Code of Conduct for Baiyao People and the emergency plans and optimized the quality risk response and
Quality Management Manual covering drug traceability quality control manage- disposal process to improve quality risk response.ment inspection management and other procedures thus further systematizing and
standardizing the quality management of pharmaceuticals TCM resources medical Quality Audit Process
devices cosmetics and other products.Yunnan Baiyao has established an industry-wide quality management system (GMP
GSP GLP GVP) in line with the industry’s quality management system covering all Drugs TCM resources
stages of R&D production and sales to ensure that the quality and safety of prod-
ucts are under control throughout their lifecycle. All of our production-oriented busi- We accept the annual on-site inspection of In 2023 Yunnan Baiyao’s TCM Resources Com-the quality management system by the drug
ness groups have established quality management systems strongly related to their pany of TCM Resources Business Group Wen-supervision and administration authorities con- shan Qihua Company Sanqi Industry Company
business in strict accordance with the requirements of GMP GVP ISO 9001 or ISO tinuously improve the quality system enhance and Lijiang Tai’an Company successfully passed
13485 with 100% coverage and multiple certifications. the management efficiency and guarantee the the GMP compliance inspection organized by
product quality. the Yunnan Provincial Drug Administration.In pursuit of enhancing the quality management system Yunnan Baiyao has estab-
lished a Technical Quality Management Committee comprising the senior leaders In 2023 we accepted a total of 10 audits of In 2023 Yunnan Baiyao’s TCM Resources GMP GSP GVP and other quality system certifi-
from each business group’s quality department. This initiative aims to reinforce the Company of TCM Resources Business Group cations of the Company by the drug supervision and Sanqi Industry Company passed the special
quality and safety responsibilities of each business group facilitate the systematic and administration authorities and achieved GSP inspection organized by the Yunnan Pro-
development of technical quality initiatives within each group and ensure the seam- 100% passing rate after rectification. vincial Drug Administration.less implementation of the quality management system across the entire industrial
chain. Each business group has established tailored quality and safety assurance
systems and management protocols aligned with its respective developmental tra-
jectories thereby elevating the overall quality management standards of both the Health products Other categories
Company and business groups. In 2023 third-party certification experts carried We fully carry out internal audit and cooperate
out comprehensive certification inspections with supervision and review work to ensure the
covering many aspects such as quality manage- quality of products.ment equipment and facilities.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
037 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation for Energizing New TCM 038
Transportation Security Product Recall Management
Yunnan Baiyao continuously enhances its emergency response In 2023 Yunnan Baiyao continued to improve the system of phar-
Yunnan Baiyao has built a quality integration and sharing plat- previous year. In 2023 the Company identified a total of 11 capability to deal with drug emergencies prevents drug safety risks macovigilance documents and formulated a total of 33 pharma-
form for logistics and transportation and established a shared quality risks graded and categorized the identified risks and and carries out the work related to pharmacovigilance management covigilance-related documents. The management system document
database and varieties sharing review process with an aim took control measures to effectively reduce the impact level in strict accordance with the Code of Practice for the Quality Manage- clarified the responsibilities of the pharmacovigilance department
to transform to digitalization with quality specialization and of the risks. In addition the Company has formulated corre- ment of Pharmacovigilance the Measures for the Reporting and Mon- and other related departments the operation procedure document
achieve quality integration. In 2023 to guarantee the quality sponding quality risk emergency response mechanism for itoring of Adverse Drug Reactions and other laws and regulations. involved the monitoring and reporting of adverse drug reactions risk
of product transportation Yunnan Baiyao taking into account logistics and transportation organized emergency simulation identification and control and the vigilance activity document de-
the actual management situation in the field of logistics and drills to continuously optimize the risk response and disposal Yunnan Baiyao has established a sound pharmacovigilance quality scribed the specific requirements of each pharmacovigilance activity
transportation formulated the Transportation Management process and enhance the risk response capability and trans- management system and set up an independent pharmacovigilance to ensure the smooth implementation of pharmacovigilance activities.System the Management Measures for Carriers and other portation guarantee capability. department which is responsible for the operation of the pharma- Yunnan Baiyao also organizes internal audits of the current pharma-
product transportation management systems and revised 84 covigilance quality management system and the monitoring identifi-Yunnan Baiyao conducts regular audits and on-site quality covigilance management system every year to ensure the effective
quality management system documents so as to ensure in cation assessment and control of adverse drug reactions and other assessment on transportation equipment transportation qual- operation of the pharmacovigilance management system and com-
an all-round way that the carriers possess the qualifications harmful reactions related to the use of drugs.ifications product quality assurance capability etc. and com- prehensively improve our pharmacovigilance management capability.for transportation and maintain the integrity of the transporta- piles the Quality Assessment Report. In 2023 Yunnan Baiyao
tion equipment facilities and the monitoring system. carried out a total of 4 internal audits in the field of logistics Quality Culture Construction In 2023
Yunnan Baiyao has effectively reduced the quality risks by and transportation including 1 comprehensive internal audit Yunnan Baiyao has continuously strengthened the construction of quality culture to enhance
constantly carrying out quality risk prevention and control of and 3 special internal audits and achieved 100% passing the quality risk awareness and quality management ability of all the employees. In accor- Conducted a total of
the whole process of warehousing and logistics and organiz- rate after comprehensive rectification. dance with the relevant laws and regulations of quality management as well as the require- product quality
ing control measures for the three high risks identified in the ments of product regulatory agencies we actively carry out cultural activities on the theme 137 training sessions
of quality aiming to create a positive atmosphere that prioritizes and values quality. Yunnan
Baiyao and its business groups develop annual quality training plans and regularly provide
quality control and product safety training for all employees every year. 100%
Product Quality Training System of employees trained
Pharmacovigilance Management
Drugs
In strict compliance with the Drug Administration Law of the People’s Republic According to the Quality Culture Outline of Yun-
nan Baiyao Group a special group was set up
of China the Measures for the Administration of Drug Recall and other relevant to promote and implement the construction of
laws and regulations Yunnan Baiyao has formulated its product recall man- quality culture and organize a number of quali-
agement systems such as the Drug Recall Management Procedure and the ty-related activities.Disposal Management of Drug Safety Incidents to clarify the scope of product On the Company’s platform of Baiyao Academy we
recall strengthen the capacity of emergency management of product emergen- organized the quality culture training and testing for
cies and further safeguard the product quality and safety. all members of the business groups. The official staff training passing rate reached 99.3%.We continuously improve the product recall management process set up a TCM resourcesIn September 2023 we organized the Quality Month
product recall management system organize a product recall team according to program and carried out a series of activities such as the We developed the annual quality training plan
the actual needs of the situation and stipulate the responsibilities and authori- explanation of quality month regulations and on-site pro- and carried out regular training on new laws and
ties of the recall to ensure that the product recall mechanism can be activated paganda poster publicity of quality slogans and quality regulations product knowledge etc.thematic discussion of “I have a date with quality.”
at any time and implemented quickly. In addition we classify the products and A total of 11 special training sessions on the
develop recall plans according to the reasons for recall and take appropriate In November 2023 we organized and carried out knowledge of Chinese herbal medicine varieties fun QA games on quality knowledge created an at- were organized to deeply understand the qualitymeasures to deal with the recalled products. Yunnan Baiyao regularly conducts mosphere of “Everyone prioritizes quality everyone levels of key varieties of Chinese herbal medicineproduct recall simulation drills requiring employees to familiarize themselves focuses on quality” and promoted the comprehen- and strengthen the awareness of Chinese herbal
with the recall process and assess the effectiveness of the product recall pro- sive improvement of the quality of the Company’s medicine quality and safety control.products and services.cess to ensure that product recalls are completed in a timely and orderly man-
ner in the event of a recall. During the reporting period Yunnan Baiyao did not
experience any drug recall due to quality issues. Health products Other categories
We created the annual quality training plan and We organized and carried out a number of qual-
implement tailored pre-employment training ity culture implementation training projects to
based on specific job roles. achieve the joint construction sharing integration
and inclusion of quality culture from upstream to
In 2023 we organized a total of 27 special quality downstream of the whole industry chain.training covering many aspects such as quality
awareness and quality culture.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
039 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation for Energizing New TCM 040
R&D and Yunnan Baiyao considers R&D and innovation as fundamentals to sustainable R&D Talent Cultivationgrowth paying continuous attention to experiments and cutting-edge technologies
Innovation in the global pharmaceutical R&D sector. We have developed a robust product R&D pipeline continuously advancing to guard life and health while safeguarding Innovation and R&D talents in the pharmaceutical field are Yunnan Baiyao vigorously carries out the work of introduc-
our intellectual property rights. crucial to the development of Yunnan Baiyao and are the key ing and reserving talents. We constantly broaden our talent
drivers of its innovation and R&D. Therefore Yunnan Baiyao recruitment channels adopting internal recommendation of
will continue to recruit and cultivate innovation and R&D tal- special incentive channels and external high-quality talent
R&D and Innovation Management ents in the pharmaceutical field over time so as to ensure introduction to accumulate high-level talents for our innova-that it can have an excellent team of R&D talents in the future tion and R&D pipeline. Furthermore we attract and retain
and lay a solid foundation for the Company’s long-term R&D. outstanding pharmaceutical R&D talents by optimizing our
internal promotion compensation and benefit systems.As an R&D and innovation-focused company Yunnan Baiyao has consistently
increased investment in R&D and cultivated R&D talents. By utilizing various pro-
found models such as independent R&D and collaborative development we’ve As of the end of the reporting period
established a robust and innovative R&D system. This has led to the constant
enhancement of our R&D pipeline value and facilitated the development and com- Yunnan Baiyao’s R&D R&D personnel
mercialization of multiple products. team totaled 527 members accounted for 5.97%
R&D Management System 71 belowundergraduates 287undergrates 157 masters 12 above masters
Yunnan Baiyao has been committed to the integration of R&D management
system and R&D project management. In 2023 Yunnan Baiyao established an 135 under 30 years old 300 between 30 and 40 years old 92 above40 years old
R&D management system and an R&D project management system with Yun-
nan Baiyao R&D Management Committee as the core and formulated six R&D
project management measures including the Management Measures of R&D
Management Committee of Yunnan Baiyao Group Co. Ltd the Specification
on the Management of Entrusted Scientific Research Project Funds the Man- Yunnan Baiyao constantly enhances the training and devel- innovate and make progress in the field of medicine. More-
agement Measures for Internal Entrusted Research in Yunnan Baiyao Group’s opment of its existing staff. Through the establishment of a over the Company keeps strengthening its cooperation with
R&D Projects and the Measures for Management of R&D-type Governmental sound training system we provide employees with various other enterprises professional organizations and medical
Projects in Yunnan Baiyao Group’s Central Research Institute to effectively kinds of R&D skills training and academic exchange oppor- universities in the industry to expand the channels and scope
promote the integration of R&D project management. To further improve the tunities encourage the employees to continue to learn and of exploring talent resources and jointly promote the cultiva-
R&D management system Yunnan Baiyao has comprehensively sorted out and improve their professional abilities and encourage them to tion of medical talents.optimized various R&D management systems.In view of the characteristics of drug R&D such as long cycle and high uncer-
tainty Yunnan Baiyao has established an incentive mechanism for R&D and in- R&D Investment
novation in line with the law of drug R&D and formulated internal performance Yunnan Baiyao continues to escalate its R&D investment fostering pharmaceutical research and
management systems such as the Measures for Performance Evaluation of innovation to bolster its core competitiveness. We’ve amplified our commitment to basic research col-
R&D Projects of the Central Research Institute of Yunnan Baiyao Group with laborating with universities research institutes and other organizations to fortify our foundational sci-
an bid to fully mobilize the R&D enthusiasm and creativity of project team mem- entific research and explore new avenues in drug R&D and technological innovation. This endeavor
bers accelerate the process of R&D projects and promote the rapid transfor- lays a robust scientific groundwork for the Company’s future product development. Furthermore Yun-
mation of R&D project results. nan Baiyao has augmented its investment in new drug R&D encompassing drug design clinical tri-
als and drug safety evaluation aiming to expedite new drug development and enhance R&D success
rates. In 2023 Yunnan Baiyao had 45 ongoing R&D projects focusing primarily on various disease
areas including gynecology orthopedics respiratory system oncology urology and cardiovascular. 45 research projects2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
041 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation for Energizing New TCM 042
R&D and Innovation Planning
Progress and Planning of Mid-term Projects
Leveraging its strengths in pharmaceutical R&D Yunnan Baiyao has formulated short-term medium-term and long-term R&D and
innovation strategies. Project name Project progress during the reporting period Next step
Pan-Panax notoginseng Tablets Phase II clinical studies are underway with a total of 237 enrolled It is expected to receive the clinical sum-
(PSQ Project) cases and 211 excluded cases mary report by 2025
Progress and Planning of Short-term Projects
Fuqi Guben Ointment Phase II clinical studies were completed with clinical summary re- Clinical phase III clinical design and port obtained and Phase II clinical project accepted preparation is underway
Project name Project progress during the reporting period Next step We completed stud ies on quality standards for pilot processes in-
Development of Two Classic termediate products and finished products preparation and testing It is expected to apply for a listing permit
Clinical observation and research projects on the treat- TCM Preparations (PZ-018 PZ- of three batches of pilot samples transfer of relevant GMP docu- in 2024 (registered and listed according
Secondary Development of It is expected to receive the clinical
ment of uterine bleeding with Gongxuening Capsule were 019) ments for production transition batches and preparation and testing to Class 3.1)
Gongxuen ning Capsule trial report by the end of 2024 of three production transition batches
completed with 1791 cases enrolled
Approval Documents for Xian- The required supplementary pharmaceutical studies outlined in Studies on improving various discomfort symptoms such as ghuo Spray Preparation for the approval documents have been conducted. In accordance Clinical studies on COVID-19 during the
Qi and blood stasis in patients were completed Medical Institutions of Yunnan with the requirements clinical studies on COVID-19 during the recovery period will be conducted including the initiation of a recovery period will be conductedProvince kick-off meeting and ongoing patient enrollment
Secondary Development of Clinical research projects aimed at improving heart and vas- It is expected to receive clinical trial
Qixuekang cular health were completed with 70% of patients enrolled. report by the end of 2024 Two generic drug plasters have completed pilot studies and sam-
The results of some trials completed were statistically ana- ple testing with product quality standards established as well For the gel ointment project we plan to Development of 3 Plasters as stability studies packaging compatibility studies and safety conduct pilot tests and quality studies and
lyzed indicating a preliminary effect on improving vascular evaluations conducted. One of them has received a clinical trial apply for clinical trials
health application acceptance notice
Active advancement of clinical studies on promoting bone We will collect evidence-based med-
healing icine clinical evidence of Yunnan
Baiyao Capsule in the fields of den-
Secondary Development of Active advancement of Yunnan Baiyao’s clinical studies on Progress and Planning of Long-term Projects
tistry gastroenterology etc and ex-
Yunnan Baiyao Capsule wound healing treatment
plore the safety and effectiveness of
Active advancement of Yunnan Baiyao’s studies on the Yunnan Baiyao’s Capsule in general Yunnan Baiyao has been actively promoting the transformation of innovative drug R&D achievements in the long run. On one hand the Com-
mechanism in promoting bone healing practice pany emphasizes the development of exclusive TCM varieties that possess advantages cater to social needs leverage technological empow-
erment and create highly sought-after TCM products. On the other hand the Company formulates strategies to develop multiple innovative
Alternative Studies on Phase I propellant screening studies were completed with In-depth studies on the proposed drugs with a focus on radiopharmaceuticals to enhance the driving force for sustainable development. During the reporting period the Com-
Aerosol Propellant the proposed propellant preliminarily determined propellant will be carried out pany made comprehensive advancements in its radiopharmaceutical pipeline and achieved significant milestones.It is expected to determine the par-
A multi-center open-label randomized placebo-controlled Progress and Planning of Long-term Projects
ticipating study centers complete
Secondary Development of clinical trial is actively underway to treat patients with Type
institutional project approval and We completed precursor pilot studies GMP production labeling process confirmation quality studies
Shu Lie An Capsule III chronic prostatitis with various pharmacodynamic studies
ethical review and initiate the clinical analytical method validation and stability studies and received the notification issued by the National
steadily progressed INR101 Project Medical Products Administration in February 2024 indicating its acceptance of registered clinical trials for
trial enrollment domestically produced drugs for INR01 injection.Studies on pharmacodynamic evaluation and tissue distribution on model animals were completed and
pharmaceutical studies were initiated
INR102 Project
Both the production of precursor non-GMP and the process pilot study on radioactive preparations were
completed and pharmaceutical studies were initiated.INR202/203 Project We initiated studies on candidate molecules for nanoantibodies.In 2023 the Company continued to increase its investment in R&D with investment in R&D reaching
344million.In the field of R&D the Company focuses on optimizing its R&D platform with the Central
Research Institute at its core. It has established multiple cross-regional collaborative technology inno-
vation platforms effectively utilizing the central coordination function of the Central Research Institute
to integrate and coordinate R&D resources across different regions. By leveraging the unique charac-
teristics of Yunnan Baiyao national policies and economic conditions and adopting market-oriented Investment
approaches the Company enhances technology empowerment comprehensively and strengthens in R&D reaching
the development of evidence-based medicine and clinical trial-driven drugs. Based on this the Com-
pany scientifically plans short medium and long-term R&D projects. 344 million2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
043 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation for Energizing New TCM 044
Intellectual Property Protection
Yunnan Baiyao has always believed that intellectual property protection is the foundation of In 2023 Yunnan Baiyao
enterprise competitiveness. In strict accordance with the leading international standards and
Patent Applications
domestic laws and regulations such as the Patent Law of the People’s Republic of China and Total 44
the Trademark Law of the People’s Republic of China Yunnan Baiyao continuously improves
its intellectual property management system and actively carries out patent application and
maintenance while making further exploration into the innovative skills of its products. 18 17
invention utility model
In 2023 Yunnan Baiyao formulated the Patent Management Measures of Yunnan Baiyao patents patents
Group Co. Ltd to guide its patent work and formulated the Patent Application Process
of Yunnan Baiyao Group Co. Ltd which details the process of patent proposal and the
process of patent application to standardize and streamline the management of patent 9
acquisition and maintenance. In addition we have also issued the Patent Management design
Measures of Central Research Institute which covers four dimensions including patent ap- patents
plication patent quality patent risk control and patent value assessment. These measures
regulate patent-related activities at the specific implementation level. Collaborative Development of Industry
Yunnan Baiyao is dedicated to safeguarding its intellectual property rights while also re- Patent Granted Total 78
specting and avoiding infringement upon the intellectual property rights of others. We
maintain a “zero-tolerance” stance towards any infringement of intellectual property rights. Yunnan Baiyao collaborates closely with scientific research institutions and industry associations engaging in IUR (Industry-Uni-
To avoid the risk of patent infringement Yunnan Baiyao conducts timely patent risk assess- 25 39invention utility model versity-Research) cooperation and technical exchanges. We actively participate in research projects industry conferences and
ments and implements relevant measures based on the assessment results to effectively patents patents forums disseminate academic reports and contribute to the formulation of industry standards. These efforts aim to enhance
mitigate patent-related risks. Throughout the year thanks to diligent patent monitoring industry standards and facilitate the transformation and industrialization of scientific and technological achievements.efforts Yunnan Baiyao identified and appropriately addressed two risky patents thereby
effectively mitigating the risk of patent infringement. 14
In addition Yunnan Baiyao attaches great importance to improve employees’ awareness of in- design case
tellectual property protection and regularly conducts intellectual property training and exchange patents Yunnan Baiyao Participated in the Standards Research of Chinese
activities to enhance their intellectual property management capabilities. Pharmacopoeia
In 2023 Yunnan Baiyao joined hands with Yunnan Provincial Drug Administration Yunnan Food and Drug
Inspection and Research Institute Kunming University of Science and Technology Yunnan University of TCM
Patent Category Classification Unit 2023 and other universities scientific research institutions and regulatory bodies to carry out research and enhance-
Invention patent / 18 ment of the standards for Panax notoginseng in the Chinese Pharmacopoeia (2025 Edition) in response to the
Number of patent applications during pain points of the Panax notoginseng industry and the needs of industrial development.Utility model patent / 17
the year
Design patent / 9
Invention patent / 25
Number of patents granted during the
Utility model patent / 39
year
Design patent / 14 case Yunnan Baiyao Participated in Research on National and Industry
Standards for Oral Products
case In 2023 Yunnan Baiyao participated in the study and formulation of national and industry standards for oral Yunnan Baiyao Organized Training on Patent Application and Strategy for products. At present a total of four standards have been issued and implemented including the Safety Evalua-
R&D Centers tion Guidelines for Oral Cleaning and Care Products (GB/T 42763-2023) the Evaluation Methods for Potential
Corrosiveness of Oral Cleaning and Care Liquids on Tooth Hard Tissues (GB/T 42761-2023) the Laboratory
On April 18 2023 the Company conducted a training session on patent application and strategy for R&D Centers. The Test Methods for Removal of Exogenous Discoloration of Dentifrice in Dental Cleaning and Care Products (GB/
aim was to raise employees’ awareness of intellectual property rights and enhance their ability to protect those rights. Ex- T 43576-2023) and the Laboratory Test Methods for Inhibition of Dental Calculus in Dental Cleaning and Care
ternal legal experts were invited to discuss patent deployment issues in the drug R&D process guiding R&D personnel to Products (GB/T 43544-2023).leverage intellectual property rights to create economic value and enhance the Company’s competitiveness.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
045 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation for Energizing New TCM 046
In 2023 Yunnan Baiyao actively teamed up with universities and research institutes to carry out wider and deeper multi-disci-case Yunnan Baiyao Hosted “2023 Pharmaceutical Innovation and Technology plinary IUR cooperation fully integrating the technologies and talents of the universities with Yunnan Baiyao’s experience in theindustry and products and jointly exploring cutting-edge technologies in line with the market demand.Frontier Forum”From August 8 to 9 2023 Yunnan Baiyao partnered with Peking University to host the “2023 Pharmaceutical case Yunnan Baiyao and Yunnan University of TCM jointly established theInnovation and Technology Frontier Forum.” Academician Hao Xishan Academician Qiao Jie Academician
Zhan Qimin Academician Li Zhaoshen and Academician Tian Jinzhou of the Chinese Academy of Engineering “Collaborative Innovation Platform for Drug R&D”
and Academician Zhu Zhaoyun of Yunnan Baiyao attended the forum and made high-level academic reports to
promote the innovation and development of the pharmaceutical industry. Yunnan Baiyao and Yunnan University of TCM jointly built a “Collaborative Innovation Platform for Drug R&D” to
further strengthen the integration of advantageous resources enhance the synergy of collaborative innovation and
carry out wider and deeper exchanges and cooperation in scientific and technological fields such as declaration of
national key laboratories academician workstations and construction of scientific research platforms.case Yunnan Baiyao and Peking University Health Science Center Had In-
depth Cooperation in Multiple Fields
2023 Pharmaceutical Innovation and Technology Frontier Forum Yunnan Baiyao and Peking University Health Science Center jointly explored the platform of university-enterprise
cooperation in R&D and innovation model and carried out in-depth cooperation in multiple fields to achieve the
connection of the academic innovation chain and the industrial innovation chain. This R&D cooperation platform has
been making deployment in the fields of
oncology reproductive
traumatology
case medicine
and stomatology
orthopedics to promote the transfommation of technological achievements.Tengchong Scientists Forum
From December 1 to 3 2023 Yunnan Baiyao as a strategic partner helped hold the 2023 Tengchong Scien-
tists Forum with the theme of “Science - Green Development.” In this forum the award “Tengchong ScientistAward” was set up for the first time to reward scientists who have made major breakthroughs in the frontiers case Yunnan Baiyao and Peking University First Hospital Collaborated to
of science and technology and promoted the progress of science and technology in the world. The forum was
attended by more than 2000 leading scientists entrepreneurs and educators in the field of science and tech- Develop Innovative Radiopharmaceuticals
nology as well as representatives and guests of the financial sector.Yunnan Baiyao and Peking University First Hospital cooperated to form a world-class innovative radiopharmaceuti-
cals R&D team. The two parties synergized the resources of the nuclide production platform conducted pioneering
research on radiopharmaceuticals overcame prevalent obstacles in radiopharmaceutical R&D achieved the accu-
mulation of distinctive core technologies and facilitated the industrial development of radiopharmaceuticals.Tengchong Scientists Forum2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
047 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation for Energizing New TCM 048
Customer Adhering to a customer-centric philosophy Yunnan Baiyao respects and safeguards the legitimate rights and interests of customers. We are dedicated to delivering a Responsible Marketing
Services high-quality service experience employing diligent efforts and implementing various measures in customer service management responsible marketing and safeguarding
customer privacy and security. These endeavors aim to continuously enhance the
quality of our services.Customer Services Management Yunnan Baiyao has always promot- To ensure the legal compliance To enhance the marketing capability
ed and marketed its products in a of its marketing efforts Yunnan and service level of its employees
responsible manner and has strictly Baiyao has formulated a strict Yunnan Baiyao has launched a re-
Attaching great importance to communication and feedback with customers Yun- complied with marketing-related laws compliance review system and sponsible marketing training program
nan Baiyao has established and continuously improved its customer relationship and regulations including the Adver- approval process for market- covering all employees to ensure that
management mechanism and service response system. In 2023 Yunnan Baiyao tising Law of the People’s Republic of ing stipulating that the public- it provides customers with a high-qual-
revised its Customer Response Management System to further standardize the China the Administrative Measures ity content is strictly prohibited ity service experience. We require that
specific processes for responding to customer claims to follow up on customer for Medical Advertisements and the from containing exaggerations employees responsible for promoting
complaint processes and outcomes. We have also issued the Internal Communi- Measures for the Examination of deceptions and falsehoods so pharmaceutical products shall be
cation and Handling Mechanism for New Product Complaints of Yunnan Baiyao to Pharmaceutical Advertisements. as to ensure the authenticity and familiar with standardized marketing
speed up the efficiency of handling customer complaint issues actively follow up on We have formulated various system compliance of the content in all terms and receive regular training
customer feedback and improve the quality of customer service thereby enhancing documents such as the Marketing aspects. We conduct internal in ethical marketing. In addition the
customer satisfaction. Standardized Phraseology within the self-inspections of responsible Company carries out special train-
Company to ensure the accuracy of marketing to identify compliance ing sessions on product quality and
Yunnan Baiyao provides customers with smooth and diversified customer commu-
the phrases used during the market- risks in a timely manner and en- marketing compliance for marketing
nication channels including telephone official website and WeChat Subscription
ing process build a transparent and sure that the marketing process personnel and organizes lectures
Account. This year we established the national 12315 Internet platform ODR
honest business environment and is compliant and effective. on the topic of responsible marketing
enterprise processing channels to promote customer communication and exchange
provide customers with high-quality to strengthen marketing personnel’s
in an all-round and multi-channel manner. We also follow up and handle customer
products and services. awareness of compliance.complaints in a timely manner. Upon receipt of customer complaints we will provide
timely feedback to the relevant departments conduct multi-faceted investigations in
conjunction with various departments analyze and identify the causes of the prob-
lems and define improvement measures. As of the end of 2023 all the customer
complaints had been effectively resolved.case Organizing Special Training on Responsible Marketing
In 2023 Yunnan Baiyao conducted a training initiative titled Enhancing Enterprise Sustainability and Operational Capacity
for all employees. As part of this program experts were invited to conduct a training session on Responsible Marketing.The aim was to instill the concept of responsible marketing among employees reinforce the standardization of work prac-
tices and enhance the awareness of marketing compliance among marketers. The training ensured that all marketing
processes adhere to compliance requirements in terms of content and methodologies.Special Training on Responsible Marketing2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
049 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation for Energizing New TCM 050
Improving Health Accessibility Information Security and Privacy Protection
Yunnan Baiyao has consistently prioritized safeguarding patients’ health as a core responsibility and views enhancing health accessibility and Yunnan Baiyao believes that ensuring information security and safeguarding customer privacy are primary prerequisites for de-
advocating universal healthcare as integral parts of its corporate social responsibility. We diligently address patients’ health needs continually livering a high-quality user experience. To this end we have implemented a comprehensive internal system and information se-
expand marketing channels and strive to establish and enhance a modernized warehousing and logistics system. Furthermore we actively curity management structure enhanced the management of information security and effectively mitigated the risk of information
explore intelligent healthcare solutions to ensure the availability of medical resources in urban rural and remote areas nationwide. and privacy breaches.Yunnan Baiyao is actively expanding its marketing channels and acquiring additional business Information Security
qualifications to enhance health accessibility. In response to the “dual-channel” policy promot-
ed by the National Healthcare Security Administration we have investigated viable models for
prescription circulation and deeply explored the prescription circulation and sales market by Information Security Governance Structure
studying the needs of hospitals medical insurance manufacturers pharmacies patients and
other related parties. During the reporting period a total of 27 pharmacies successfully applied
for “dual-channel” qualifications and were approved. Additionally 22 pharmacies’ prescription To safeguard the Company’s information security and delineate organizational responsibilities for information security
flows were smoothly billed and settled ensuring the seamless operation of the entire pro- management Yunnan Baiyao has established a robust organizational structure for information security management.cess. Yunnan Baiyao has improved the accessibility and convenience of medical services by Under the Security Committee the Digital Technology and Security Committee were formed tasked with developing in-
Expa expanding marketing channels. formation security plans aligned with strategic guidelines and policies and reviewing the Company’s information security nding Ma management system. Additionally the Information Security Management Office operates under the Digital Technology rketin and Security Committee taking charge of the arrangement implementation and coordination of information security g Ch Yunnan Baiyao is dedicated to constructing an efficient logistics platform efforts. It supervises and audits relevant activities across departments and authorizes the activation of emergency plans anne centered around a modern supply chain. We focus on enhancing digita-
and the formation of information security response teams as needed. At the operational level the Information Security
ls lization informatization and systematization. Through active exploration Executive Team evaluates information security risks monitors security events and ensures the stable operation of Yun-
of multi-warehouse coordination models we achieve linkage and coor- nan Baiyao’s business systems.dination between central and branch warehouses effectively integrating
warehousing and transportation resources. This improves distribution
service efficiency and ensures the stable supply of products.Institutional System
Improving Yunnan Baiyao places significant emphasis on innovating its business Yunnan Baiyao strictly complies with the laws and regulations related to information security and personal privacy pro-
Health model actively exploring the “Internet + Medicine” approach. Through tection in the places where it operates including the Cybersecurity Law of the People’s Republic of China the Personal
Accessibility continuous optimization of our pharmacy management mechanism Information Protection Law the Data Security Law and the Law of the People’s Republic of China on the Protection of we have developed an integrated and modernized healthcare ser- Consumers’ Rights and Interests. We have formulated and implemented an information security planning strategy for
vice platform both online and offline. This platform encompasses the 2023-2025 with Yunnan Baiyao’s characteristics to establish and continuously improve the information security system
entire spectrum of medical services including appointment scheduling required for our digital transformation.payment processing home drug delivery mobile health insurance
payments and more. By enhancing the medication pathway we aim to To strengthen the operation and management of Yunnan Baiyao’s information security Yunnan Baiyao has established
meet public demand for medication and improve medical accessibility. an information security system with the Information Security Management System as the first-level management system
and the Information Security Organization and Management Measures the Management Measures for User Behavior
With continuous and in-depth exploration into grassroots medical care and Information Security Training the Management Measures for Information Security Incident and the Management
needs Yunnan Baiyao has independently developed a smart man-
g Measures for Information Security Supervision and Compliance as the second-level management measures. The i
ell agement platform for grassroots medical care. This platform aids in the t system applies to all the employees involved in the data security and personal information compliance in Yunnan Baiyao
g In information construction of medical communities and enhances grass- and all of its branches and subsidiaries. In addition to further strengthen the security control capability of data we have
atine roots medical and health service capabilities. In 2023 we further en-r formulated the Data Security Management Measures to manage data security in terms of data collection storage trans-C hanced the platform’s functionality to provide a comprehensive solution mission and access so as to prevent the occurrence of various types of data security incidents.for medicine management in medical communities integrating features
such as circulation supervision medical insurance payment and health
management.ent Healthcare
Logistics Supply
urin
g
Ens2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
051 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation for Energizing New TCM 052
case
Risk Control Yunnan Baiyao Organized Information Security Awareness Training
In order to prevent potential information security risks Yunnan Baiyao has formulated the Management Measures for In 2023 Yunnan Baiyao in conjunction with the Network and Information Security Defense Detachment of Kunming City
Information Security Risk which specifies the management requirements for the whole lifecycle covering information and the Network Security Brigade of the Chenggong Public Security Bureau conducted various forms of information se-
security-related risk identification risk analysis and assessment risk response risk control and risk monitoring. In 2023 curity awareness training to help employees understand how to protect personal information and how to understand and
the Company integrated the risk identification and management of information security incidents into the its overall risk apply the Cybersecurity Law to enhance the awareness of information security. The training program was widely recog-
management measures. In terms of information security risk response the Company has formulated corresponding nized by employees with a total of 1287 employees participating in the program.security incident emergency treatment plans and measures and defined the emergency response communication and
reporting process so as to respond to information security emergencies in a timely and effective manner. In addition
the Company encourages all the employees and users to provide timely feedback on information security vulnerabilities
data compliance incidents and other security incidents through official channels. In 2023 Yunnan Baiyao had no
incidents of user information security complaints.Security Inspection
Yunnan Baiyao consistently conducts information security testing and inspections along with monitoring of data security
systems. These efforts aim to proactively identify issues and implement management and technical measures to mitigate
information security risks. In 2023 Yunnan Baiyao conducted a total of seven information security tests encompassing
protection level assessments and penetration testing.Awareness Promotion
To comprehensively enhance employees’ knowledge of information security Yunnan Baiyao provides all employees with
a rich variety of online and offline training courses on information security. In 2023 Yunnan Baiyao conducted a total of 7
employee information security training sessions with a total of 1937 trainees and a total training duration of 15 hours. Information Security Awareness Training Activity Site
Privacy Protection
Yunnan Baiyao understands that the protection of personal privacy In 2023 Yunnan Baiyao received no complaints related to personal information and privacy.data is the basic premise for the Company to build trust with its users.In strict accordance with the Law of the People’s Republic of China
on the Protection of Personal Information and other relevant laws Yunnan Baiyao has established a management mechanism for the protection of users’ personal information and continuously
and regulations and industry standards in the place of operation optimized its technology in the entire process of collecting storing and using users’ information so as to enhance its personal
Yunnan Baiyao has formulated the Explanation on the Protection information protection management capability.Yunnan Baiyao has established a process for handling complaints about
of Privacy of User Data making every effort to respect and protect personal information and conducts appropriate investigations with the process in response to complaints about users’ personal
the rights of users with respect to their personal information such information.as accessing correcting deleting sharing transferring personal In additionwe have constantly enhanced employee education on privacy and security and developed a training mechanism
information as well as altering the status of authorization so that the covering all employees to help them enhance their data protection awareness and professional skills.users can truly feel that their information is being protected and their
wishes are being respected.053 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation forEnergizing New TCM 054
Supply Chain Yunnan Baiyao believes that a sound supply chain management system is a strong Supplier Evaluationsupport for the sustainable development of the enterprise. We continuously focus on the
Management ESG performance of our suppliers enhancing our response to supplier risks and col- Yunnan Baiyao regularly organizes supplier assessment and evaluation conducting comprehensive performance evaluation laborating with them in diverse forms to establish a transparent and mutually beneficial through multiple dimensions including quality cost service after-sales technology and innovation. For suppliers with poor as-
sustainable supply chain. sessment results we urge them to carry out rectification and follow up on the effectiveness of their rectification until it is complet-
ed. In addition we have set up a sound and efficient complaint mechanism. Suppliers who disagree with the assessment results
As of the end of 2023 can give feedback on their problems through the complaint channel. Upon receipt of the complaint we shall promptly process
and give feedback on the outcome of the supplier’s complaint.Yunnan Baiyao Suppliers located in Supplier in
had suppliers Mainland China overseas regions
294 293 1 (including Hong Kong Supplier AuditMacao and Taiwan)
Yunnan Baiyao regularly carries out supplier audits and formulates supplier on-site audit plans. Based on the audit results we
will work with suppliers to summarize and compile the Supplier On-site Audit Assessment Report analyze their major issues
Number of Suppliers in 2023 propose corrective actions and ensure that suppliers take steps to resolve issues within a reasonable period of time to meet
compliance requirements.Overseas Domestic
suppliers suppliers
(including Hong Kong
1 91 Suppliers in the local provinceMacao and Taiwan) Supplier Audit
Total number
of suppliers
294
Domestic In 2023 a total of 71 suppliers were audited and 36 on-site audits were carried out
Key suppliers
suppliers 147 202 including suppliers of raw materials auxiliary materials internal packaging materials Domestic suppliers Drugs external packaging materials consumables etc.(other provinces and regions
in Mainland China except the
local province)
To develop annual supplier audit plan;
Supply Chain Management System In 2023 on-site audits were carried out on a total of 31 suppliers and rectification
Health requirements were proposed. The suppliers completed the rectification according to
products
In strict accordance with the Tendering and Bidding Law of the People’s Republic of the requirements.China the Drug Administration Law the Measures for the Supervision and Administra-
tion of Drug Manufacturing the Good Manufacturing Practice of Drugs the Regulation
on the Supervision and Administration of Cosmetics the Code of Practice for Quality
Management in the Production of Cosmetics the Measures for the Supervision and To develop annual supplier audit plan;
Management of Toothpaste and other relevant laws and regulations Yunnan Baiyao has
continuously optimized and improved 9 internal management measures including the In 2023 a total of 59 audits were conducted on 23 suppliers including suppliers of
Supplier Management Measures and the Procurement Management Manual continu- TCM
ously enhanced the supply chain management process system set up strict manage- TCM materials TCM decoction pieces auxiliary materials packaging materials etc. resources
ment processes in the supplier sourcing access and elimination audit and evaluation Except for one supplier which needed to be reviewed after the rectification all the
performance assessment communication and exchange of information to ensure that other suppliers passed the audit.closed-loop management is achieved in the whole process of supply chain.Supplier Access and Classification To carry out carrier evaluation regularly;
Yunnan Baiyao implements a rigorous and standardized supplier admission process In 2023 a total of 17 carriers were evaluated and all the carriers passed the
emphasizing equal consideration for quality cost delivery and service when selecting Transportation evaluation.suppliers. This involves reviewing supplier qualifications and evaluating their capabil- security
ities. After completing the access process we will screen and categorize our existing
suppliers including strategic suppliers core potential suppliers and regular suppliers in
accordance with our internal system such as the Supplier Grading and Categorization
Management Rules.055 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation forEnergizing New TCM 056
Supply Chain ESG Management case Yunnan Pharmaceutical Actively Responded to ESG
Principles in Cold Chain Management
On the basis of safeguarding the quality and business of its suppliers Yunnan Baiyao has integrated ESG factors into its sup- The carrier of the Yunnan Pharmaceutical adopted in-
plier access and management processes built a supplier ESG assessment system and carried out assessments of suppliers telligent scheduling and distribution combined with theacross various criteria including labor practices business ethics quality standards safety measures and environmental impact. insulation strategy of “refrigerated truck as the mainmeans room temperature truck + incubator as the aux-iliary means” for transportation to reduce the impact
Requirement of cold chain transportation on the environment. The
Company made great efforts to improve transportation
To comply with national labor laws efficiency and reduce energy consumption and carbon
To ensure legal recruitment and no child labor or forced Labor emissions by optimizing time and equipment usage
during cold chain transportation.Cold Chain Management of Yunnan Pharma-
Labor ceutical
practices Requirement
To sign documents with the Integrity Procurement Agree-
ment and the Integrity Agreement
To strictly restrain employees from violating the principle of
good faith by embezzlement deception and bribery unfair
Business competition or other corruption and other violations of the law Yunnan Baiyao implements ESG principles in its supply chain management
ethics and selects partners that meet the requirements through ESG reviews of
potential suppliers. We consider the impact of ESG factors such as quality
safety environmental certification business ethics and labor rights and
Requirement carry out regular inspections and supervision to ensure that they meet the
appropriate standards. We continuously monitor and promote our suppliers Environment
To establish effective quality management system in terms of environment and safety and develop synergies with our suppli-
To be certified to IATF 16949 ISO 9001 ISO 13458 ers to achieve win-win cooperation. In addition we conduct ESG (including
Supply Chain ESG Access or the equivalent for quality quality safety environmental protection etc) training activities for suppliers
and focus on reviewing and analyzing the quality of annual deliveries by
Audit and Assessment To review product quality and issue relevant reports 3 Quality Safety
Quality major suppliers at the annual supplier meeting to help suppliers effectively
To carry out quality improvement activities improve their ESG performance.Requirement
To meet the safety requirements for production storage
and transportation of the products
To be certified to ISO 45001 or the equivalent for occupa-
tional health management system
Safety To meet information security requirements
Requirement
Environment To comply with national and regional environmental laws and regulations
To obtain ISO14001 or equivalent environmental management system certification
green product certification mark ESG rating certification for packaging materials etc.To assess the environmental impact of production processes and products
To promote energy-saving and emission-reduction production methods
To use recyclable and green packaging materials 3: Major supplier means the supplier from whom the purchases account for more than 80% of total purchases.057 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Inheritance & Innovation forEnergizing New TCM 058
Supplier Empowerment case Yunnan Baiyao Organized a Packaging Optimization Seminar
for Package-related Suppliers
Yunnan Baiyao attaches great importance to the cultivation and improvement of supplier capabilities. We carry out diversified In 2023 we held a packaging optimization seminar. In response to the leakage issue with mouthwash bottles
supplier training and exchange activities and cooperate and interact with upstream and downstream supply chains to jointly we convened discussions with the quality department the suppliers of mouthwash bottles and other relevant
solve problems related to product quality and safety and build a stable and high-quality industrial supply chain. personnel to devise an improvement plan and successfully solved the problem of leakage.case
Annual Supplier Training of Yunnan Baiyao
On December 20 2023 Yunnan Baiyao held a supplier training event at Baiyao Park in the head office. In the
event the Company invited the quality departments of the Pharmaceutical Business Group and the Health Prod-
ucts Business Group to educate quality experience covering the promotion of Yunnan Baiyao’s quality culture the
requirements for the revision of pharmaceutical packaging materials the requirements for supplier-related review of
regulatory requirements for toothpaste and cosmetics-related regulatory changes and material management and
other supplier-related content.A total of 599 quality and production personnel participated in this training through offline or online channels cov-
ering more than 200 suppliers i.e. more than 80% of the Company’s important supplier base. The training was
launched based on the Company’s focus and changing trends in quality management last year aiming to help un-
derstand the dynamics of Yunnan Baiyao’s quality management improve the quality management capability of sup-
pliers promote quality cooperation between suppliers and Yunnan Baiyao and promote the development of quality
management in the direction of sustainability and high quality.Packaging Optimization Seminar for Suppliers
case
Supplier Training on Standardized Planting Techniques
In May 2023 Yunnan Baiyao organized on-site training for suppliers on standardized planting techniques
and management of Angelica sinensis with an aim to effectively improve the planting yield and quality by
standardizing suppliers’ planting technology. A total of 52 suppliers participated in the training.Supplier Training Event The Site of Supplier Training on Standardized Planting Techniques2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
059 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Wilderness Guardians for Harmonious Ecosystem 060
Wilderness Guardians
for Harmonious Ecosystem
YUNNANBAIYAO
Yunnan Baiyao adheres to green operations continuously enhancing
our environmental management system. We comprehensively
strengthen energy resource and waste management improving
resource utilization efficiency. We explore avenues for low-carbon
transformation to achieve synergistic and sustainable development of
our business and the ecosystem. 032023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
061 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Wilderness Guardians for Harmonious Ecosystem 062
Yunnan Baiyao recognizes that TCM materials are the cornerstone of the Company’s sustainable
Biodiversity development. In strict accordance with the Regulations of the People’s Republic of China on Empowering Conservation of TCM Materials through Digitalization
the Protection of Endangered Wild Plants the Regulations for the Implementation of the Drug
Protection Administration Law the Law of the People’s Republic of China on TCM and the Qinghai-TibetPlateau Ecological Protection Law of the People’s Republic of China and other relevant laws and In 2023 embracing the principles of “market-driven initiatives domestication and artificial cultivation of wild plants providingregulations the Company conducts operational practices grounded in authenticity and production high-quality traceability distinguished character and sustainable corporate customers with sustainable and high-quality rawarea distribution characteristics. These include establishing and operating bases for TCM materials health” Yunnan Baiyao renowned for its inheritance and medicinal resources at reasonable costs. The platform extended
actively enhancing the protection and protection management of authentic herb resources and innovation embarked on a mission towards high-quality technological and market resources to farmers delivered
taking proactive measures to conserve endangered herbs. These efforts aim to steadily elevate the development. Its sub-brand Qiancaotang established the Lijiang high-quality health products and services to consumers and
quality of TCM materials and enhance supply capabilities. Digital TCM Materials Industry Platform. This platform serves established a traceable closed loop within the industry chain.as a Big Health service system deeply integrating the primary This initiative propels the coordinated development of upstream
In recent years we have carried out seed preservation and cultivation of key medicinal secondary and tertiary industries i.e. seed breeding cultivation and downstream sectors fostering a mutually beneficial TCM
materials introduced digital means to empower the evaluation and management of TCM industrial production educational tourism and wellness ecosystem anchored on core resources.materials and shared our achievements throughout the value chain so as to promote the experience. Its primary focus lies in researching the introduction
coordinated and healthy development of the TCM industry and the ecological environment.As at the end of the reporting period all the varieties utilized by Yunnan Baiyao are legally
cultivated artificial cultivars fully compliant with the regulations outlined in various international
conventions4. Artificial Cultivation of Resource Varieties
The development of TCM materials faces many challenges In addition we’ve fostered a collaborative ecosystem for
Building Resource Nurseries for TCM Materials such as the slow progress in the selection and breeding of good TCM resources centered around medicinal herb bases and
seeds of medicinal herbs fewer strains of good varieties serious varieties involving growers industrial enterprises governmental
Leveraging its extensive experience and resources in the TCM industry Yunnan Baiyao degradation lagging behind in the purification and restoration of departments and scientific research institutions for mutual benefit
has made great efforts to reduce the risk of biological endangerment by utilizing its existing varieties poor varietal uniformity the lack of breeding bases of and sharing. Focusing on base construction and taking technical
technology and foundation to build a number of species resource nurseries for TCM materials TCM materials with specialized and standardized management support as the starting point long-term mutually beneficial
of local specialty while carrying out the production and operation of traditional TCM materials. the lack of quality standards for seeds of TCM materials and so development as the principle and sustainable resource security
Germplasm resource nursery for Paris polyphylla on. In view of these problems Yunnan Baiyao after more than as the goal the Company is committed to cultivating superior 20 years of continuous research on the authentic TCM materials varieties strengthening the construction of authentic medicinal
Initiated by Tai’an Company at the planting end of TCM materials 21 species (30 publicly of Yunnan area has actively carried out basic research related to materials base establishing technical specifications and
published) have been collected up to now containing 53 variants or populations of the the selection and breeding of new varieties of TCM materials. We improving quality standards. Establishing a strategic framework of
Paris polyphylla making it the germplasm resource nursery with the largest number of have declared 12 new varieties of TCM materials and 3 excellent “warehousing cultivation and technological preservation” we’ve
species and the largest number of living plants preserved in the world at present. The clones and promoted the cultivation of nearly 150000 mu of fortified a robust and sustainable resource system for our branded
resource nursery covers most of the Paris polyphylla species distributed in China and has authentic TCM materials in Yunnan. herbal medicines securing a steady supply.in place a comprehensive seed preservation mechanism integrating live species gene
preservation and propagation which provides a good platform for resource preservation
scientific research popularization of science and industrial development of Paris polyphylla. Promoting Rural Revitalization through TCM Development
By combining the driving effect of TCM materials industry with
the development of its own biopharmaceutical industry the
Company is committed to promoting the cultivation of TCM
materials in poor areas with the development of biomedicine
The Paris polyphylla of Tai’an Company industry. In the past three years by offering technical services
in the whole process in the “company + base + farmers”
model we launched TCM materials planting industry support
Northwest Yunnan TCM Resource Nursery for Yunnan activities in Weixi Fugong Chuxiong Huize and other areas
Provincial Medicinal Plants for poverty alleviation and promoted the cultivation of nearly
150000 mu of authentic TCM materials covering nearly 20With reference to the national medicine monograph Yulong Materia Medica the “Lijiangvarieties of TCM materials such as Paris polyphylla PanaxHerb Garden” has been built covering an area of 180 acres which includes the medicinal
notoginseng safflower Poria Angelica sinensis Radix aco-
220 kinds plant field display area rare varieties planting area and greenhouse area. The collection of niti agrestis and Fructus amomi and creating nearly 20000 species has already amounted to 220 kinds.
jobs in rural areas. We not only helped farmers obtain stable
income and achieve industrial wealth but also made TCM
4:The Scientific Committee on Endangered Species of the People’s Republic of China (“SCES”) The Scientific Committee on Endangered Species of the People’s materials planting a new revenue growth driver for farmers in
Republic of China consists of a committee and office. The office is attached to the Institute of Zoology Chinese Academy of Sciences. Convention on International Trade in
Endangered Species Wild Fauna and Flora (“CITSES”) an international convention was signed in 1973 in Washington the capital of the United States so it is also called remote mountainous areas.the “Washington Convention.” Figure: Yunnan Baiyao Drove Farmers to Plant TCM Materials2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
063 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Wilderness Guardians for Harmonious Ecosystem 064
Addressing Climate change presents a common challenge for humanity demanding urgent ac-tion to mitigate its effects. Yunnan Baiyao supports global climate action and disclos- Risk Management
Climate Change es its climate change governance system identification of risks and opportunities management and objectives according to the framework and recommendations
of International Financial Reporting Sustainability Disclosure Standard No. 2 - Cli- Yunnan Baiyao will consider the implications of climate change on the TCM industry national policies and industry trends. We
mate-Related Disclosures issued by the Task Force on Climate-Related Financial will analyze climate-related risks and opportunities in alignment with our business strategies evaluating their potential econom-
Disclosures (TCFD) and the International Sustainability Standards Board (ISSB). ic regulatory reputational and operational impacts on the Company.Climate Change Risk Identification and Response
Governance and Strategy
Type
of risks Risk description Countermeasures
Yunnan Baiyao attaches importance to the topic of addressing climate change Frequent occurrence of extreme weather such as floods high tem-
within its ESG initiatives endorsing its green and low-carbon transformation and peratures and typhoons which will lead to:
1.Power supply and water supply risks increasing the uncertainty To pay close attention to weather forecasts and contributing significantly to achieving carbon neutrality.
Acute of stable production and operation of Yunnan Baiyao; get extreme weather information in time.Yunnan Baiyao is actively exploring methods to decrease greenhouse gas emis- risks 2.The supply risk of TCM materials which may lead to the difficult To make a comprehensive consideration of retail
sions in its construction and operations while also promoting energy conserva- harvest of raw materials on schedule and the rise of drug prices;
and large suppliers in the selection of suppliers
so as to ensure supply stability.tion and emission reduction awareness. The Company encourages engagement Employee health and safety risks which may pose a threat to the
normal operation of production sites and factory employees.from its employees suppliers consumers and partners in global climate actionfostering collaboration to achieve the objectives of “carbon peaking and carbon Physical To stay tuned for reports on warming trends.neutrality.” risks To gradually implement climate change response The gradual global warming and rising sea levels which will cause: actions to enhance the Company’s ability to with-
Chronic 1.The change of the growing environment of TCM materials which stand global warming.may affect the quality and efficacy of TCM materials;
risks To conduct conservation research on the import-
Global water quality changes and the emergence of new pollutants ant medicinal materials involved in the Compa-
case affecting normal production and operations. ny’s business understand their suitable growth
Yunnan Baiyao Aerosol Changed to Environmentally Friendly conditions and carry out artificial cultivation base
experiments.Dispensing Agent To carry out the substitution research of medicinal
The increasingly tight regulatory requirements for wild animals and materials to reduce the probability of drugs being
plants at home and abroad will lead to restrictions on the use of affected.Yunnan Baiyao has taken the initiative to fulfill by the five ministries of UNDP UNEP UNIDO WB and TCM materials and the normal production of products. To plan for reservation and processing of key
the environmental responsibility and is committed FECO. Building on our research into substituting HFC TCM materials in advance.to reducing the impact of product production on hydrofluorocarbons Yunnan Baiyao is actively devel- To develop green electricity applications such as
greenhouse gas emission. The Company has oping the next generation of environmentally friendly photovoltaic power generation.Policy and Carbon trading carbon tax environmental protection tax and other
been committed to the selection of a more envi- dispensing agents and enhancing green low-carbon policies are gradually implemented green low-carbon transforma- To use low-energy consumption equipment when legal risks
ronmentally friendly aerosol dispensing agent. and eco-friendly packaging. These efforts aim to foster tion is imperative and higher requirements are put forward for Yun- purchasing new equipment.nan Baiyao’s energy conservation and emission reduction practice.Based on the concept of environmental protec- industry-wide green development and contribute to eco- To conduct energy saving renovation of the exist-ing equipment.tion we replaced Yunnan Baiyao Aerosol with logical environmental protection.Regulators have higher requirements for the accuracy of environ- To make information disclosure in strict accor-
more environmentally friendly raw materials in mental data declared by enterprises increasing the pressure of en- dance with compliance requirements.accordance with the requirements of environmen- vironmental information statistics and compliance risks of Yunnan To monitor important environmental indicators in
tal protection policies and pharmacovigilance reg- Baiyao. the process of production and operation.ulations completing the industrialized substitution To continuously promote the transformation to
of environmentally friendly dispensing agents for Transfor- low-carbon and energy-saving technologies.Technical As the government pays more attention to low-carbon matters HFC hydrofluorocarbons. The change to environ- mation Yunnan Baiyao needs to invest more costs in low-carbon produc- To reduce low-carbon input costs through re-
risks risk tion and operation. source recycling.mentally friendly dispensing agents involved a To select more energy efficient raw materials and
number of challenges such as process improve- suppliers.ment quality research registration and declara- To study and judge the market trend timely adjust
tion. The research was mostly groundbreaking
Market The market has presented more preference for low-carbon and the business deployment.first-of-its-kind approaches and also leading energy-saving companies and products increasing the pressure on Risk To carry out lightweight transformation of pack-
the way in pharmacological and toxicological Yunnan Baiyao’s low-carbon production and operation. aging materials to show the Company’s green
research in the pharmaceutical aerosol industry. awareness to consumers.This project has been recognized with a Certifi- Yunnan Baiyao was recognized with a Certificate of Merit To strengthen communication with stakeholderscate of Merit for “Valuable Contributions and Ef- for “Valuable Contributions and Efforts in Protecting the and fully understand their demands.Reputational If the efforts to address climate change do not meet the expecta-forts in Protecting the Ozone Layer” issued jointly Ozone Layer” tions of stakeholders it may result in a negative impact on Yunnan To actively promote the Company’s progress in Risk Baiyao’s reputation. green and low-carbon aspects such as green
packaging sustainable procurement and circular
economy.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
065 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Wilderness Guardians for Harmonious Ecosystem 066
We recognize that while climate change poses these risks to businesses it also creates unprecedented opportunities.Indicators and Objectives
Climate Change Opportunities
In response to the national goal of “carbon peaking and carbon neutrality” Yunnan
Baiyao is exploring the possibility of achieving carbon neutrality in operation. In
2023 according to the actual situation the Company took relevant measures to
reduce carbon emissions in terms of energy conservation lightweight packaging Energy
materials and emission management improvement. We constantly reviewed the conservationResource Efficiency practical activities and made timely adjustments. Looking ahead we will further im-
prove strategy formulation risk management indicator and target identification and
Opportunities to improve energy efficiency management and work together with the upstream and downstream of the value Emission management
chain to address climate change and achieve green development. improvement
Description of opportunities
With the continuous introduction of lower carbon technol- Lightweight packaging
ogies Yunnan Baiyao can use emerging technologies to materials
optimize energy consumption in its own operation process
improve resources and energy efficiency in production and
operation process and reduce operating costs.Greenhouse Gas Emissions of Yunnan Baiyao in 20235
Opportunities
Indicators Unit 2023
Direct greenhouse gas emission
Products and Services Ton(s) of CO2 equivalent 28983.10(Scope I)
Industry development opportunities Indirect greenhouse gas emission Ton(s) of CO equivalent 365.45
(Scope II) 2
Description of opportunities
The growing concern and preference for green products and Total greenhouse gas emissions Ton(s) of CO2 equivalent 29349.71
eco-friendly factories by both the government and consum-
ers present an opportunity for Yunnan Baiyao to enhance
its market competitiveness by promoting its commitment to Intensity of greenhouse gas Ton(s) of CO2 equivalent/Oper- 0.0075
sustainability. emissions ating revenue of RMB10000
5:The calculation of greenhouse gas emissions was based on the IPCC Greenhouse Gas Emissions Accounting Methods and Reporting
Guidelines for IPCC Green Gas Emission in which the electricity consumption was converted by referring to the national power grid
average emission factor of 0.5703tCO2/MWh issued by the Ministry of Ecology and Environment in 2022.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
067 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Wilderness Guardians for Harmonious Ecosystem 068
Environmental Yunnan Baiyao remains vigilant towards the evolving trends in national policies and regulations staying informed about key policies and strategies. The Company adheres strictly to the laws Exhaust Gas Management
Management and regulations such as the Environmental Protection Law of the People’s Republic of China the Air Pollution Prevention and Control Law of the People’s Republic of China the Water Pollution
Prevention and Control Law of the People’s Republic of China and the Noise Pollution Preven- The exhaust gas of Yunnan Baiyao mainly consists of sulfur dioxide nitrogen oxide and particulate matter produced in the pro-
tion Law of the People’s Republic of China. We have established a comprehensive system for duction process. The Company requires each business group to fully equip the corresponding environmental protection facilities
the Environmental Protection Management System which includes the Environmental Protec- for each exhaust gas emission link and regularly check the tail gas discharge port install end-of-pipe treatment facilities in the
tion Responsibility System the Environmental Facilities Management System the Environment location of large emissions and entrust a professional third-party company to carry out regular testing ensuring that all types of
Protection Approval and Management System and other systems. We assign the environmental exhaust gas emission is stable and meets the standards to eliminate unorganized emissions. In 2023 the VOCs emission rate
8 protection responsibilities to each business group sign environmental protection target respon- and emission concentration of Yunnan Baiyao’s affiliated factories met the corresponding limit requirements in the Comprehen-
sibility letters require each production unit to carry out environmental protection work in accor- sive Emission Standard for Air Pollutants (GB16297-1996) and the Emission Control Standard for Volatile Organic Compounds
subsidiaries have completed dance with the law formulate an Emergency Response Plan for Environmental Emergencies
of Industrial Enterprises (DB12/524-2020).the discharge permit and report it to the local environmental protection department for the record so as to assess and
procedures prevent major environmental impacts. We compile the Ecological Environment Information Re-
port on a quarterly basis analyze the national provincial and municipal environmental protection case Renovation of Treatment Facilities at the End of Breathing Port of
policies and directions in combination with our business propose reasonable response strate-
gies measures and plans and share key content to the branches and subsidiaries every month. N-hexane Storage Tank in Qidian Industrial Zone
As of the end of the reporting period Yunnan Baiyao had not experienced any significant inci-
dents resulting in litigation or corresponding penalties due to environmental violations. The Com- Pharmaceutical Business Group of Yunnan Baiyao optimized the treatment facilities at the end of the breathing
pany and its eight subsidiaries involved in environmental protection administrative licenses have port of n-hexane storage tank in Qidian Industrial Zone and added activated carbon treatment devices at the
completed the discharge permit procedures and employed third-party testing units with CMA end to reduce the direct discharge of n-hexane and other volatile gases through adsorption treatment. Com-
certification to conduct regular testing of wastewater exhaust gas and noise in accordance with parison of monitoring data before and after treatment shows that this effectively reduces the concentration of
the requirements of the sewage license so as to ensure that the indicators are within the limit n-hexane tank exhaust emissions to 10ppm well below the regulatory limit of 200ppm.value requirements.Achievement of Environmental Goals by Yunnan
Baiyao in 2023
Environmental
goals
Achievement in 2023
100% compliance with pol- Achieved
lutant discharge standards
0 occurrence of environ-
mental pollution incident Achieved
Renovation at the End of Breathing Port of N-hexane Storage Tank in Qidian Industrial Zone
Exhaust Gas Emission of Yunnan Baiyao in 2023
Indicators Unit 2023
Total exhaust gas emission 10000m3 4330.4
Particulate Matter Ton(s) 0.14
NOx Ton(s) 3.1822023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
069 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Wilderness Guardians for Harmonious Ecosystem 070
Wastewater Management Waste Management
Yunnan Baiyao’s wastewater mainly comes from discharges generated from the production of pharmaceuticals and health Yunnan Baiyao’s solid waste includes hazardous waste and non-hazardous waste. Hazardous waste includes waste drugs
products and domestic sewage. In accordance with the national and regional management requirements the Company strictly medicines and experimental waste liquids etc; non-hazardous waste mainly consists of medicine residue and sludge generated
implements the sewage permit management system strengthens the internal management of environmental protection sets up in the production process.a dedicated team for sewage management standardizes the environmental protection accounts and improves the utilization The Company classifies and manages all solid wastes and strictly distinguishes between hazardous and non-hazardous wastes.rate of water recycling through the upgrading and transformation of equipment and the recycling of wastewater. In the produc- For the non-hazardous waste in the process of production and operation we uniformly hand over the general waste and domes-
tion process we use circulating water to cool the equipment and reduce the use of tap water. Special sewage treatment tanks tic garbage to the sanitation station for removal and incineration disposal and entrust the professional third party to dispose of
are set the end of the production which can reduce the concentration of pollutants by precipitation filtration and adsorption and the sludge and medicine residue which is used for soil improvement of landscape after fermentation and the medicine residue
then discharge the sewage according to the regulations. In addition we actively carry out environmental protection technology is used for the manufacture of organic fertilizer after fermentation.learning and exchange with related enterprises and units on the optimization of sewage treatment process and reduction of pol-
lutant emission concentration so as to improve our own wastewater management performance. For the hazardous waste in the production workshop we assign special personnel for management establish a ledger improve
the identification through marking and label centrally store it in the designated area and uniformly hand over to the third par-
In 2023 the Company monitored and uploaded key water quality indicators in accordance with the requirements of the various ty for processing after sorting and collection. For laboratory hazardous waste we have formulated the Laboratory Hazardous
environmental protection units at the higher level to ensure compliant discharges and avoid impacts on the river and soil.Waste Prevention and Control Responsibility System and the Laboratory Environmental Control Procedures to clarify and strict-ly implement the laboratory waste treatment standards. Following the principle of “Unified Collection Classified Disposal andElimination of Hidden Dangers” hazardous waste is managed exclusively accounts are established and disposal is carried out
case by third-party professional disposal companies so as to achieve the goal of “minimization reuse and harmlessness.”
Emission Reduction of VOCs in the Open Liquid Surface of Wastewater
Treatment System of Qidian Industrial Zone and Improvement of Effluent Water In 2023 the Company further refined the types of waste discharge statistics with a view to finely controlling the discharge of each waste.Quality
Waste Discharge of Yunnan Baiyao in 2023
To optimize the efficiency of wastewater discharge and further reduce the impact of wastewater discharge on
the environment in 2023 Yunnan Baiyao replaced 6 sets of impulse tanks in the wastewater treatment system
of the Qidian Industrial Zone with corrosion-resistant FRP materials and kept exploring experiments on the an- Indicators Unit 2023
aerobic open liquid surface of the wastewater treatment system of the Qidian Industrial Zone. We added pow- Hazardous waste discharge
dered activated carbon adsorption to reduce emissions and sprayed powdered activated carbon on the open
7
liquid level of the anaerobic system to improve the sewage treatment efficiency thus effectively reducing the Waste drugs drugs HW03 Ton(s) 2.88
escape of VOCs and improving the sewage chroma and emission indicators. Experimental liquid waste HW49 Ton(s) 17.32
Used oil Ton(s) 1.04
Intensity of hazardous waste Ton(s)/Operating revenue of RMB10000 0.0000054
Non-hazardous waste discharge
Drug residue sludge8 Ton(s) 25786.5
Intensity of non-hazardous waste Ton(s) / Operating revenue of RMB10000 0.0066
Total
Total amount of solid waste Ton(s) 25807.74
Solid waste discharge intensity Ton(s)/ Operating revenue of RMB10000 0.0066
Pulse Tank for Sewage Treatment System in Qidian Industrial Zone
Wastewater Discharge of Yunnan Baiyao in 20236
Indicators Unit 2023
Total wastewater discharge Ton(s) 297045.01
COD Ton(s) 11.78
Ammonia nitrogen Ton(s) 0.689 7:The data of waste drugs drugs HW03 covers Yuhua Industrial Zone.Reclaimed water Ton(s) 29610 8:The data of Drug residue sludge covers Yuhua Industrial Zone and Qidian
6：In 2023 the statistical basis of COD and ammonia nitrogen was clarified and expanded so the data changed greatly in the two years. Industrial Zone.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
071 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Wilderness Guardians for Harmonious Ecosystem 072
Resource Resource conservation is a critical endeavor for ensuring national resource security advanc-ing the construction of ecological civilization and fostering high-quality development. Yunnan case
Baiyao is committed to conserving resources across all aspects of its operations and devel- Steam Energy-saving Transformation in Yuhua Industrial Zone
Utilization opment. The Company actively promotes the scientific allocation comprehensive saving and recycling of various resources.In 2023 the Yuhua Industrial Zone under the Pharmaceutical Business Group investigated and sorted out the problems
existing in the use of 142 traps and bypass valves and completed the repair and replacement work one by one. The con-
Energy Management sumption of natural gas was reduced by more than 5% which improved the steam utilization efficiency and effectively re-
59 duced the production cost of the workshop. In addition the Company cut off the steam pipelines that were idle for long term to reduce the loss of steam in the pipeline and reduce the consumption of natural gas from the source.
Yunnan Baiyao gives full consideration to energy utilization efficiency in all aspects of production
and operation. In strict accordance with the Energy Conservation Law of the People’s Republic
investigated and rectifiedcommon
of China and other laws and regulations the Company has established the Energy Management
points of energy waste
Measures internally. The manufacturing operation center of the Pharmaceutical Business Group
and multiple leakage points
of the Company has set up an energy conservation supervision working group to inspect and
guide the energy use unit every month implement energy conservation project transformation
correct and implement on-site guidance training for energy use points with room for energy sav-
ing promptly eliminate irregular energy use in order to form a long-term mechanism for energy
conservation which will gradually improve the Company’s energy use efficiency and reduce
production costs and energy waste. In addition the Company links energy saving indicators with
the performance of management personnel and requires all production and business groups
to strengthen the management of electricity natural gas and other consumption materials and
build resource-saving enterprises based on the principles of legal management technological Before modification After modification
progress consumption reduction and efficiency improvement effective supervision and sustain-
able development and according to their own production characteristics. In 2023 a total of 59
common points of energy waste and multiple leakage points were investigated and rectified and
multiple energy waste phenomena were eliminated.case Rooftop Photovoltaic Power Generation
Renovation
Distributed photovoltaic power stations were built on the standard facto-
ry roofs in Wenshan Sanqi Industrial Park of Yunnan Baiyao in 2023. At
present the project has passed the acceptance and is officially put into Before modification After modification
operation with the average annual power generation being more than 3.5 Steam Energy-saving Transformation Site
million KWH reducing the use of fossil fuels and minimizing CO2 SO2
NOx emissions.Energy Consumption of Yunnan Baiyao in 2023
Indicators Unit 2023
Diesel consumption Ton(s) 0.87
Gasoline consumption Ton(s) 25.77
Natural gas consumption m3 13221027
Purchased electricity MWh 640.8
Comprehensive energy consumption9 Ton(s) of standard coal 25586.54
Rooftop PV Installation in Wenshan Sanqi Industrial Park Comprehensive energy density Ton(s) of standard coal/Operating reve-nue of RMB10000 0.0065
9:The comprehensive energy consumption was derived based on data from the National Bureau of Statistics2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL Wilderness Guardians for
073 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Wilderness Guardians foHra Hrmaromnoionuios uEsc Eoscyosstyesmtem 074
Water Resource Management Packaging Material Consumption of Yunnan Baiyao in 2023
Indicators Unit 2023
In strict accordance with the Water Law of the People’s Republic of China and other laws and regulations Yunnan Baiyao has Paper Ton(s) 14700
internally developed the Non-pharmaceutical Water System Management Procedures and the Safety Standards and Operating
Procedures for Secondary Water Supply System Posts and other institutional documents. These initiatives call on all produc- Plastic Ton(s) 3600
tion and operation departments to conserve water resources. Additionally the Company actively carries out various technical Glass Ton(s) 899
reforms aimed at reducing losses and improving water efficiency. In 2023 we surveyed the aged pipe network of the Yunnan
Pharmaceutical’s campus proactively inspected the underground pipe wells in the campus repaired the seepage joints that had Aluminum Ton(s) 1660
been identified replaced the aged pipe network and engaged a professional leak detection company to detect leaks in the un- Composite soft package Ton(s) 2038
derground pipes in the park and repair the detected leak points. In addition we conducted water balance tests on multiple cam-
Packaging material consumption Ton(s) 22897
puses. At present Yuhua Industrial Zone and Qidian Industrial Zone have completed the test and obtained the qualification.Density of packaging material consumption Ton(s)/Operating revenue of RMB10000 0.0059
case
Water in Landscape Pool Used for Greening of the Company
Wenshan Company of Yunnan Baiyao utilized water from the bottom of the landscape pool after simple filtra- case The Pharmaceutical Business Group Implemented the Transformation of
tion for greening purposes. Fresh water was then replenished into the top of the landscape pool facilitating the
rational use of water resources recycling of water storage and achieving water conservation while enhancing Aluminum-plastic Composite Film for Eliminating Waste Edges
the aesthetic appeal of the landscape pool.To improve packaging efficiency and reduce packaging material consumption the Pharmaceutical Business
Group used granular equipment to transform the aluminum-plastic composite film for eliminating the waste edg-
es which can save the composite film consumption by 2%. In addition according to the market demand the
packaging of some square packaging products was reformed into strip packaging which can save more than
Energy and Water Consumption of Yunnan Baiyao in 2023 15% of packaging materials per product unit. After the rigorous testing the number of carton packing tapes
was reduced from 4 to 2 saving the consumption of packing tape by 50%.Indicators Unit 2023
Water consumption Ton(s) 1366035
Water consumption density Tons/Operating revenue of RMB10000 0.35
Material and Package Management
Yunnan Baiyao encourages all business segments to explore the lightweighting of packaging materials and other production
materials according to their own business characteristics advocates the extensive application of recyclable and renewable
materials recycles the residual margins and packaging materials in the production process and restructures and adjusts the Before modification After modification
shape of the products and packaging materials without lowering the effectiveness of the products so as to reduce the demand
for raw materials and the waste of material loss. We vigorously promote paperless packaging and use large size specifications Modification of Some Drug Packages
for packaging as much as possible. In 2023 the Company worked with suppliers to carry out a number of attempts in package
lightweighting.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL Wilderness Guardians for
075 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Wilderness Guardians for HHaarrmmoonniioouuss EEccoossyysstteemm 076
case
Reuse of Toothpaste Packaging Box Green Office
Yunnan Baiyao and its subordinate business groups actively carry out publicity and education on energy conservation and
The Health Products BG conducted a study on the use tolerance of the toothpaste packaging box and found emission reduction and place signs in offices and other workplaces to advocate the concept of green office enhance the
that the toothpaste promotion box could be reused for 3-6 times. Based on product specifications and packag- awareness of energy conservation of all employees and help employees cultivate green living habits.ing box characteristics we classified promotional boxes into 3 categories to meet production needs while mini-
mizing costs. After the use of finely classified cartons in manufacturing only 349800 cartons were purchased
reducing the purchase of 1.05 million cartons reducing the amount of paper used by about 735 tons which is
equivalent to an effective reduction of carbon dioxide emissions of about 18750kg. Green office
only 349800
cartons were purchased
reducing the purchase of 1 To promote paper reuse and paperless office
1.05million cartons
reducing the amount
735 To remind employees to of paper used by about tons turn off the lights and turn 2
off the water
which is equivalent to an
effective reduction of carbon
dioxide emissions of about To set the temperature of
the air conditioner rea-
Recycled Containers for Storage and Reuse 18750Kg 3 sonably and turn off it in
time when not in use
case
Toothpaste Tube Recycling
The Health Products Department adopted the toothpaste recycling technology in the pipeline and the Pigging
System to recycle the toothpaste in the finished toothpaste conveying pipeline. Through the transformation of
6 production lines 3.4 tons can be saved at one time and the sewage treatment problem caused by cleaning
the toothpaste pipeline can be avoided which has reduced the difficulty of sewage treatment significantly. This
saves 122.4 tons of paste in the whole year and save RMB2.448 million annually. ESG
can be saved tons of paste
at one time 3.4 tons saves122.4 in the whole year save RMB2.448million annually2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
077 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Talent Empowerment for Employee Growth 078
Talent Empowerment for
Employee Growth
YUNNANBAIYAO
Embracing the ethos of “People-first Talent-integrated” Yunnan
Baiyao is dedicated to fostering an equal and diverse workplace
environment where employees’ career advancement aligns with
the Company’s objectives. Through an inclusive talent strategy
competitive compensation packages and comprehensive training
initiatives we aim to facilitate the professional development of our
workforce fostering a mutually beneficial relationship between the 04
Company and its employees.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
079 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Talent Empowerment for Employee Growth 080
Protecting Insisting on compliant recruitment and employment Yunnan Baiyao actively creates a In 2023 Yunnan Baiyao had 12307 employees as detailed below:
diverse and equal working environment provides fair career opportunities for employees
Employees’ and ensures that every employee can show his or her talent and value. During the reporting Employment Details of Yunnan Baiyao period Yunnan Baiyao won the awards of Best Employer 2023 - Most Socially Responsible
Rights and Award Top 100 Extraordinary Employers 2023 Exemplary Employer 2023 and China Human Resources Venus Awards 2023 - Exemplary Employer Brand Management Award.Employee category Unit 2023 2022 2021
Interests
Total number of employees10 Person 12307 12193 12310
Labor contract employees Person 8834 8781 8464
Labor dispatch employees Person 1136 1175 1185
Compliant Recruitment
Coverage Intern Person 718 205 289
Subcontracting staff Person 1619 2032 2372
Senior management11 Person 187 167 232
Number of Middle management Person 884 853 715
employees
by rank Junior employees Person 7763 5729 5145
In strict accordance with the Labor Law of the People’s Republic of China Sales staff Person 5099 5117 5006
the Labor Contract Law of the People’s Republic of China the Employment
Promotion Law of the People’s Republic of China the Law of the People’s Technical staff Person 1265 1291 1106
Republic of China on the Protection of Minors and other laws and regulations Number of Production staff Person 1676 1611 1608
and relevant policy requirements. Yunnan Baiyao keeps revising and employees by
improving the Recruitment Management Measures of Yunnan Baiyao Group Financial staff Person 308 260 245type of work
Co. Ltd the Labor Contract Management System the Basic Norms of Administrative staff Person 486 502 499
Enterprise Internal Control the Qualification Management Measures the Job
Rotation Management Measures and other relevant policies and systems so Male employees Person 4781 4715 4672
as to ensure the Company’s recruitment and employment compliance and
effectively protect the rights and interests of employees. Number of
employees by Female employees Person 4053 4066 3792
gender
30 and below Person 2670 2838 2786
31 to 40 (exclusive) Person 4256 4184 4014
Number of
employees by 41 to 50 (exclusive) Person 1567 1433 1345
age 51 (inclusive) and above Person 341 326 319
Yunnan Baiyao firmly prohibits any form of child labor and forced labor
practices and has taken specific measures to avoid the occurrence of such Han Person 7518 7476 7041
violations. During the recruitment process the Company strictly reviews Ethnic minorities Person 1315 1317 1423
candidates’ identity information to prevent child labor at its roots. Furthermore Number of
it establishes direct agreements with employees on matters such as labor employees by Overseas employees Person 1 0 0
nationality
compensation working hours labor discipline and labor quota management
systems safeguarding employees’ rights and interests and preventing forced Yunnan Province Person 4838 4822 4422
labor occurrences. In 2023 Yunnan Baiyao did not have any illegal cases of Mainland China
child labor and forced labor. Number of (excluding Yunnan) Person 3992 3955 4041
employees by Hong Kong Macao
region Taiwan and overseas Person 4 4 1
10：The total number of employees is counted as labor contract employees labor dispatch employees interns and subcontracting staff.
11：Employees of subsidiaries and business units of Yunnan Baiyao included.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
081 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Talent Empowerment for Employee Growth 082
Talent Attraction
Yunnan Baiyao has formulated the Internal Recommendation Management Measures for Talent Introduction of Yunnan Baiyao Group and
established a sound talent introduction management process and a dynamic position management system. With diversified talent acqui-
sition methods such as social recruiting campus recruiting internal recommendation and internal recruiting focusing on the areas of drug
innovation lean manufacturing quality management marketing and internationalization we constantly expand our employee development
channels to attract composite high-quality talents and continuously strengthen our staffing and talent reserves.Besides in the introduction of talents the Company adopts a precise and efficient “job placement assignment and staffing” approach and
determines the responsibilities the required talent characteristics and the number of personnel of each post based on our strategic objec-
tives and development planning. Adhering strictly to talent selection criteria we ensure optimal alignment between individuals and positions
matching work content with employee capabilities thereby realizing the objective of “maximizing talent potential and utilization.”
In 2023 Yunnan Baiyao continued to strengthen the construction of high-level R&D team through the Central Research Institute. During the
reporting period the Central Research Institute recruited more than 30 employees including more than 10 PhDs and more than 20 masters.It introduced one expert enjoying the State Council’s Special Allowance one technological innovation talent cultivation object in Yunnan Prov-
ince and three talents who passed the audit of Yunnan Province’s talent program. As of the end of 2023 Yunnan Baiyao Central Research
Institute had more than 300 employees on board including more than 140 masters and 20 PhDs more than 70 intermediate title and senior
title holders and more than 20 high-level experts and talents at national provincial and overseas levels.Equality Inclusion and Diversity
Adhering to the principles of fairness impartiality and diversity and the market-orient- 45.88%
ed employment mechanism Yunnan Baiyao promotes the talent selection method
of open recruitment and merit-based posting comprehensively considering the sit-
uation of the candidates and selecting employees according to the requirements of 4053 female
the positions. We never differentiate between employees on the basis of their educa- employees
tional backgrounds beliefs nationalities marital statuses genders health statuses
or racial differences.The Company expressly prohibits any form of harassing behavior including but
not limited to verbal written graphic and physical behavior. The Company has 14.89%
established a clear complaint and reporting mechanism. When employees are ha-
rassed they can immediately complain and report to the Company. After receiving
complaints and reports the Company will accept investigate and deal with them in
a timely manner in strict accordance with relevant regulations and protect the per- 1315 ethnic
sonal privacy of employees according to law. Where the relevant organizations and minority
individuals file a report to the public security organ or file a lawsuit with the people’s employees
court the Company will provide support.Total number of employees signing
the labor contract in 20232023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
083 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Talent Empowerment for Employee Growth 084
Empowering Yunnan Baiyao is committed to establishing a sound talent training Employee Training Performance of Yunnan Baiyao in 2023system and providing diversified development paths for employees.Talent We attach importance to the career development of our employees help them continuously improve their skills and capabilities and
achieve their personal career goals through systematic training Training performance Unit Data in 2023
Development programs and clear promotion paths.Total person-times in employee training Person-time 218019
Talent Development
Male employees Person-time 5422
Yunnan Baiyao understands that talents are the cornerstone of its Person-time of trained employees
development and has created a dual-wheel driven talent supply by gender Female employees Person-time 4548
chain of “internal training + external talent introduction.” The Com-
pany has not only established a hierarchical talent training system Senior Management Person-time
based on job qualifications to provide diversified training opportuni- 187
ties but also implemented special training programs for manage-
ment and professional talents. Apart from that through the capability Person-time of trained employees Middle management Person-time 884
model and talent assessment we conduct a dynamic talent inven- by rank
tory focusing on the identification and training of key talents so as Junior employees Person-time 8899
to ensure that their capabilities are matched to the future needs of
the Company. Through effective cadre management mechanism Total training time Hour 217125.15
and talent pool management tools we can cultivate high-quality
management talents that meet the future development needs of the Per capita training time Hour
Company. 21.78
Male employees Hour 118080
Total training hours of
employees by gender Female employees Hour 99045
Senior management Hour 4072
Total training hours of Middle management
employees by rank Hour 19252
Internal
training Junior employees Hour 193801
Per capita training investment for employees RMB 849.53
External talent
introduction
Following the principle of “Putting the best tools to the task” we have implemented comprehensive management throughout
the training cycle from budget allocation to training execution and outcome assessment ensuring optimal utilization of
Dual-wheel driven talent supply chain resources and desired outcomes. Moreover we are committed to achieve “knowledge retention” viewing training as not only
skill enhancement but also knowledge dissemination. Through digital transformation we have digitized and streamlined the
entire training process providing digital support to the entire talent development lifecycle from business strategy to talent
planning training program and talent growth.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
085 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Talent Empowerment for Employee Growth 086
“Blossoming Flowers” In 2023 the Company continued to explore the “Blossoming Flowers” talent cultivation
Talent Cultivation System system providing customized training programs for the needs and development potential Construction of Learning Platform Internal Trainer Team Buildingof different ranks of employees.In 2023 Yunnan Baiyao officially launched the online learning plat- Yunnan Baiyao actively promotes the construction and training of
form of Baiyao Academy empowering the talent training system an internal trainer team. Based on its own talent planning strategy
through its innovative and interesting learning model. The learning the Company has carried out effective classification and hierarchi-
“Blossoming Flowers” Talent Cultivation System of Yunnan Baiyao platform covers many aspects such as course live broadcasting cal management of internal trainers forming a training team with
online learning project management and resource sharing which internal lecturers as the core and supplemented by external lectur-
not only promotes the intelligent dissemination of knowledge ers. Aside from that the Company has continuously improved the
supports business development but also strengthens the multi-di- qualification system of internal trainers drawn a detailed learning
To enhance senior management’s in-depth un- mensional visualization of enterprise management. Moreover the path based on job requirements and developed corresponding
derstanding of the Company’s overall strategy Senior online learning platform of Baiyao Academy relies on advanced courses.and business deployment through professional management technical means to better cultivate and stimulate the potential of
training the management will: In 2023 Yunnan Baiyao successfully trained 149 new internal employees offering the online functions of talent management in-
B trainers bringing the total number of internal trainers to 289. It or-Have a clearer understanding of the Com- aoxi cluding the construction of competency model talent assessment pany’s long-term development plan Flo ang ganized two internal trainer training sessions with 150 participants wer talent inventory training project operation and data collection and
Enhance their awareness of the Company’s Prog To promote the strategic thinking and lead-
and developed 312 courses with a cumulative course duration of
ra analysis thus comprehensively promoting the digital upgrade of
vision and mission m Middle ership skills of the middle management 5968 minutes.management talent management of the Group.Lead the Company more effectively toward through a range of training and practical
its intended goals activities they will: 01 02
Deepen their understanding of the 03 04
ris lla Company’s businessPa hy Skills Master Studio New Apprenticeship Program
olyp r Exercise their decision-making and P
low
e team management skills
Dual-model teaching integrating online and of- Back-up F gra
m “Fan Zhiwei Skills Master Studio” (the “Studio”) continues to Yunnan Baiyao in partnership with Yunnan Technician College
Pro Become an effective backup force for fline approaches is adopted. Combining action promote technological innovation and continuous learning and introduces the innovative “New Apprenticeship Program.” This management the Company’s senior managementlearning with mentorship it is designed to culti- exploration. In recent years the Studio has carried out intelligent program adopts the training model of “enterprise-school dualvate reserve talents for middle management to Pan transformation and upgrading of several production lines of the system integrated work and learning” sufficiently leveraging the ax
cope with future management challenges and noto g Company effectively improving the production efficiency and strengths of government enterprises and schools to facilitate in
leadership tasks. Flow se er ng product quality of the Company. In 2023 the Studio introduced
the in-depth integration of industry and education. The program
Prog ram a new chief technician with the title of Talents for Revitalization of is designed to cultivate high-quality skilled personnel to meet the
Yunnan. The customized weighing table it developed was elected needs of the Company through the combination of professional
To help the new employees: as an employee innovation subsidy project in Yunnan Province. standards and course content as well as the organic connection
New Get quickly integrated into the corpo- The Studio actively carried out equipment technical training within between the production process and the teaching process.employees rate culture the Company for a total of 15 times and effectively solved and
Understand the human resources and In 2023 this program focused on two major areas of specialization troubleshooted 5 equipment issues. Throughout the year it de-
financial system of the Company – pharmaceutical formulation and TCM preparation. It took on a
ame livered 26 training sessions to the provincial and municipal trade
Ses er Master workplace etiquette and com-
total of 120 apprentices 39 in pharmaceutical formulation and 81
w union systems other enterprises and Yunnan Vocational College Flo ram munication skills
in TCM preparation with the goal of completing the training in two
rog of Mechanical and Electrical Technology with over 4000 partici-P Deepen their understanding of the years to enable the apprentices to reach the advanced worker skill
Company’s core business pants trained. level and grow into independent and efficient skilled workers. The
Enhance their sense of identity with the apprenticeship program has assisted Yunnan Baiyao in improving its
corporate culture talent training system strengthening school-enterprise cooperation
Achieve overall development of quality enriching teachers and curriculum resources and thus improving the
at the beginning of the career Company’s human efficiency and production level.case
“Panax notoginseng Flower” Project Manager Talent Cultivation Program
In 2023 Yunnan Baiyao launched the talent cultivation program for “Panax notoginseng Flower” project managers aiming to produced 5 sets of innovative project management meth-
cultivate excellent project management talents so as to promote the project-based management and the rapid development of odology and carried out promotion practice. These project
business. The program lasted for 8 months during which 173 times of effective communication with stakeholders were conduct- results not only improve the efficiency and quality of project
ed and 40 times of guidance and feedback from professional tutors were accepted. Through team collaboration and multi-level management but also lay a solid foundation for the Com-
linkage across departments 79 business problems were successfully sorted out and 89 work processes were established. pany’s future project management practice and organiza-
Furthermore the project team extracted 122 templates and forms produced 44 project cases with practical value successfully tional development. "Panax notoginseng Flower" Project Manager Talent Cultiva-
tion Program Site2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
087 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Talent Empowerment for Employee Growth 088
case National Senior Workshop of “Lean Manufacturing of case “Xuanjia Action”Pharmaceutical Enterprises”
In 2023 Yunnan Baiyao launched the “Xuanjia Action”: an internal selection mechanism set up for the open competition
From September 19 to 22 2023 Yunnan Baiyao successfully held the national senior workshop of “Lean Manufactur- for the provincial marketing general manager of the business group. The “Xuanjia Action” not only provided young cadresing of Pharmaceutical Enterprises.” The workshop attracted professionals from more than 40 companies across China within the Company with the opportunity to show their talents but also attracted outstanding talents from outside to join.including online participants and on-site attendees totaling more than 400 people. The content of the seminar focused on The “Xuanjia Action” was rolled out under the principle of “strict selection open selection and merit-based selection” to en-
the core issues of “Lean Manufacturing” and covered a wide range of important areas such as technological innovation sure the fairness and transparency of the selection process. Clear standards and requirements were set to ensure that the
management innovation quality management team management and talent training. selection process was “fair in terms of qualifications competitiveness assessment and matching.” More than 200 people
By adopting diversified blended teaching methods such as experiential learning expert lectures case studies and interac- participated in the “Xuanjia Action” and 52 people were selected.tive seminars the workshop imparted the key concepts and practical skills of implementing Lean Manufacturing in phar-
maceutical enterprises and ensured that the participants were able to have a comprehensive and in-depth understanding
of the core contents and implementation strategies of Lean Manufacturing. The workshop was highly recognized in terms
of teacher quality teaching effect and service management with the excellent rate of teachers reaching 98.25% the
excellent rate of teaching evaluation reaching 99.47% and the satisfaction rate of service management reaching 100%.National Senior Workshop of “Lean Manufacturing of Pharmaceutical Enterprises”
Employee Promotion
Yunnan Baiyao has implemented a dynamic and ef-
fective position management system ensuring equal
Management promotion opportunities for all employees and facil-
sequence
Professional itating the optimal allocation of human resources to
sequence meet strategic talent development goals. In 2023 the
Company established two career development paths:
the “management sequence” and the “professionalRecognizing the significance of employ- sequence” each comprising six levels from “under-ees’ career growth and advancement standing” to “leading.” These paths focus on enhanc-
Yunnan Baiyao has established a robust ing management leadership and refining professional
and efficient personnel training and pro- skills respectively. Clear qualification standards have
motion system. Continuously refining and been formulated for each sequence and position to
enhancing internal protocols such as the serve as the evaluation basis for employee promotion.Qualification Management Measures of The Company guides employee growth in alignment
Yunnan Baiyao Group the Position Man- with organizational objectives. Furthermore employ-
agement System and the Job Rotation ees can propose job rotations and upon approval
Management Measures the Company from the human resources department adjust their
has instituted a comprehensive promotion "Xuanjia Action" Siteinternal positions to cultivate diverse skills and achieve
mechanism and internal transfer system. multifaceted career development.These efforts aim to sustain organization-
al dynamism and foster talent mobility.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
089 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Talent Empowerment for Employee Growth 090
Improving the Yunnan Baiyao actively enhances employee well-being through com- In 2023 Yunnan Baiyao carried out a comprehensive system construction and prehensive compensation incentives performance management and optimization of the performance evaluation mechanism including the following aspects:
Well-being of diverse non-compensation benefits. The Company values comprehen-sive care for its employees particularly addressing the needs of female
staff. The Company continually fosters employee satisfaction and team
Employees cohesion through various cultural sports and union activities. Clarifying the Purpose of Evaluationaspects Sound Feedback Mechanism
To provide objective and fair employee performance eval- To conduct regular performance
uation promote the overall performance improvement of evaluation and provide timely feed-
Welfare and Care employees and the Company and provide the basis for back establish a performance ap-福利与关怀 employee promotion and salary adjustment peal channel and file online records
Effective Result Application
Centered on the needs and values of its employees Yunnan Baiyao Est建ab立lis有h效in目g E标ff及ec评ti估ve标 O准bjectives and Evaluation
consistently refines its salary incentives and performance manage- Criteria To closely link the employee perfor-
ment system. While safeguarding employees’ basic rights and in- To establish measurable evaluation criteria following the mance with incentives rewards and
terests the Company pays attention to the needs and expectations SMART principle and on the basis of business attributes punishments promotion or demotion.of female employees. Moreover the Company actively engages in and job responsibilities
recreational and sports activities to bolster employees’ well-being Combining Plans of Continu-
and sense of belonging across all facets of work life. Rea建so立n有ab效le目 E标va及lu评at估io标n C准ycle ous Improvement
To set up differentiated appraisal cycles for employees at
different levels To provide training and development
Compensation Incentives and opportunities based on performance 建立有效目标及评估标准
Performance Management Full Range of Evaluation Dimensions appraisals and adjust individual goals
To integrate comprehensive evaluations from different to improve performance levels
In strict accordance with the Social Insurance Law of the People’s dimensions of the employee’s supervisors synergistic de-
Republic of China the Company Law of the People’s Republic of partments and supervisory authorities
China the Securities Law of the People’s Republic of China the
Management Measures for Share Incentives of Listed Compa-
nies the Rules for the Listing of Stocks on the Shenzhen Stock
Exchange the Guiding Opinions on the Implementation of the Pilot On top of that to ensure the implementation of the Company’s sustainable development strategy Yun-
Employee Stock Ownership Plan for Listed Companies and other nan Baiyao has adopted a balanced scorecard assessment methodology setting assessment indicators in a
laws and regulations Yunnan Baiyao has formulated the Salary several dimensions such as operational indicators strategic indicators organizational development and
Management System of Yunnan Baiyao Group Co. Ltd and other risk management and control. These indicators have been incorporated into the Company’s performance
internal management systems. During the process of constantly en- appraisal system and are closely linked to the compensation management system to ensure that the Compa-
riching and maintaining high-quality talents we have built a fair and ny’s activities are aligned with the strategic objectives of sustainable development and that employees are
impartial salary and welfare system and incentive mechanism with effectively motivated to work together to achieve these objectives.market competitiveness. The Company provides employees with
pension medical unemployment work-related injury and maternity
insurance as well as housing provident fund and enterprise annuity
to ensure the basic welfare needs of employees. Furthermore Yun-
nan Baiyao has also implemented measures such as the Employee
Stock Ownership Plan to enhance the sense of belonging and par- Non-compensation Benefits and Employee Care
ticipation of employees which in turn promotes the Company’s long-
term stable development. Yunnan Baiyao provides all employees with a variety of bene- The Company also provides diversified benefits to employees
fits in addition to salary and pays attention to the physical and through the Baiyao Living welfare platform. The Company not only
To ensure the objectivity and fairness of employee performance mental health of employees. On the basis of full payment of provides employees with carefully selected gifts during traditional
evaluation Yunnan Baiyao has formulated the Performance Man- all social insurance for all employees additional commercial festivals such as the Mid-Autumn Festival and Chinese New Year
agement System and established a comprehensive performance insurance is provided for all employees. In 2023 the Compa- but also furnishes employees with a welfare platform points so
management system. The Company has formulated a special ny adjusted the frequency of employee physical examination that they can freely choose and redeem their favorite goods. To
performance appraisal plan based on the functions and business from biennial to annual and provided employees with a choice further enrich the life experience of employees the Company also
priorities of each department and the job responsibilities of employ- of multiple physical examination agencies to meet the needs regularly organizes various shopping discount activities to render
ees. The plan includes setting differentiated appraisal weights clear and preferences of different employees. We also offered em- cost-effective shopping services for employees.appraisal criteria and reasonable appraisal cycles to implement ployees’ families with discounts on physical examination as
effective performance appraisals. The appraisal results are directly benefits so as to ensure that the health of employees and their
related to key matters such as salary adjustments and promotion family members is protected.opportunities for employees thus guaranteeing the fairness and ef-
fectiveness of the appraisal.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
091 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Talent Empowerment for Employee Growth 092
Organizing Recreational and Sports Activities Care for Female
To ensure that employees get proper relaxation and rest after busy work the Company provides a series of colorful recreational Yunnan Baiyao attaches great importance to the rights and well-being of female employees. The Company has set up the
and sports activities. Women Workers’ Committee under the Labor Union of Yunnan Baiyao Group and signed the Special Collective Contract for
the Protection of Special Rights and Interests of Female Workers with female employees an initiative that comprehensively
safeguards the legitimate rights and interests of female employees in the areas of politics economy culture education labor
case social life and so on. To further care for female employees the Company has organized a variety of activities and projects such
Family Day as increasing the types of redemption packages for female-specific points on the welfare platform to provide more diversified
redemption choices and organizing March 8 Women’s Day themed activities. The Company has become a pilot enterprise for
On August 17 2023 Yunnan HPV vaccination and promoted the “Cervical Health Promotion Program for Working Women” to encourage female employeesBaiyao held the “Baiyao Family to participate in the program and take care of their health. In addition Yunnan Baiyao provides comprehensive maternity protec-Day” inviting employees’ family tion for female employees including maternity leave parental leave and maternity insurance so as to ensure that the legitimate
members to visit Baiyao’s working rights and interests of female employees are fully protected during pregnancy and childcare.environment learn about Bai-
yao’s historical background enjoy case
delicious foods and participate Series Activities for Female Workers on “March 8 Women’s Day”
in fun and interactive parent-child
activities. Through these activities
the family members of the em- Family Day 亲子日活动 On March 8 2023 Yunnan
ployees were able to experience Baiyao organized a series of
and perceive the significance and activities for female workersvalue of working in Baiyao which with the theme of “Meetingin turn enhanced their sense of Women for Healthy Life.”
identification and belonging to the These activities focused on
Company and strengthened the promoting healthy lifestyles
understanding and support of the featured a lively tug-of-war
family members of the employees competition that drew partici-
to the Company contributing to pation from 49 teams totaling
the construction of a harmonious around 1000 individuals with
and positive corporate culture. Family Day female employees comprising
two-thirds of the participants.The event enhanced team
cohesion and demonstrated
the vitality and healthy attitude
case of female workers.Staff Running Group
The Company’s employees
have spontaneously orga-
nized and actively participat-
ed in the staff running group
activities to promote healthy
work and healthy life. The
employees engage in weekly
campus runs at the headquar-
ters fostering not only physi-
cal fitness but also enhancing
communication and camara-
derie among colleagues. Be-
sides the staff running group
also actively participates in
major marathons in China and
win a number of honors. Staff Running Group of Yunnan Baiyao Lively Tug-of-War Competition on “March 8 Women’s Day”2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
093 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Talent Empowerment for Employee Growth 094
Trade Union Activities
case
Organizing a Symposium on Women’s Health
Yunnan Baiyao has established trade unions to actively ex-
ercise democratic management and protect the rights and
On March 4 2023 Yunnan Baiyao hosted the “Symposium on the Protection of Female Fertility by TCM” in Tian- interests of employees. In August 2023 Yunnan Baiyao and
jin. With the theme of caring for women’s health and protecting female fertility with TCM the conference gathered representatives of the labor union signed the Special Contract
experts and professors from Tianjin Yunnan and other places in the field of TCM and integrated Chinese and on Collective Bargaining of Yunnan Baiyao Group Co. Ltd. The
Western medicine for in-depth interdisciplinary exchanges and discussions and jointly explored the treatment contract covers a wide range of aspects such as employee re-
and health application of TCM in the protection of female fertility to promote the innovative development in the cruitment rest and vacation labor compensation and insurance
field of women’s health. benefits labor safety and health special protection for female
employees employee education and training etc providing
comprehensive rights and interests protection for employees.case
Holding Special Meeting of Trade Unions
On September 14 2023 in active response to the spirit of the 13th Congress of Trade Unions of Yunnan
Province the trade union of Yunnan Baiyao held an expanded internal meeting to convey the spirit of the 13th
Congress of Trade Unions and discuss the annual tasks. The expanded internal meeting interpreted the Imple-
menting Rules for Trade Union Funds Income and Expenditure of Yunnan Baiyao Group and conveyed opin-
ions and suggestions on employee welfare and canteen services emphasizing the importance of protecting
the legitimate rights and interests of employees. The meeting also delved into the reform of industrial workers’
team building and extensively advanced initiatives for workers’ universal benefits paving the way for a new
chapter in Yunnan Baiyao’s labor union efforts.Symposium on Women’s Health
人 民D才e主培m养o沟c通ratic Communication
Employee Communication
Yunnan Baiyao focuses on employee communication through a
diverse multi-channel mechanism ensuring seamless commu-
nication and efficient decision-making. The Company has setup two columns in the office automation (OA) system “Corpo-rate Culture” and “Growth and Dream Building Society.” The
employees can interact freely in the article comment area of
the two columns express their views and suggestions and get
timely responses from the Company. Moreover the Company
has set up a suggestion box and a reporting hotline 12 to collect
feedback from employees. The Company has also set up a
reporting mailbox13 to allow employees to become a part of the
Company’s compliance monitoring system and enhance the
transparency and effectiveness of supervision.
12：Reporting hotline: 0871-66203975 Yunnan Baiyao Trade Union Held a Special Meeting
13：Reporting mailbox: byxfjb@ynby.cn2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
095 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Talent Empowerment for Employee Growth 096Protecting Health Yunnan Baiyao always prioritizes the health and safety of its employees Apart from that we have set up four committees namely the Funds Management Committee the Confidentiality Committee the Work above all else. Adhering to the work policy of “safety first prevention Safety Management Committee and the Digital Technology and Security Committee to comprehensively promote the management of theand Safety first comprehensive management” we have established a robust safe- Group’s safety-related work and to ensure that the main responsibility for work safety is fulfilled.ty management system implemented stringent safety protocols and
fostered a comprehensive safety culture to create a safe and healthy Occupational Health and Safety Performance of Yunnan Baiyao15
working environment for all employees with the utmost effort. Our
commitment to safety is reflected in our investment of RMB5.68 Occupational Health and Safety indicators Unit 2023
million during the reporting period.职业Nu健m康be安r o全f 指wo标rk-related injuries Person 7员工培训总人次
Safety Management System Number of work-related deaths Person 0
Lost working hours due to work-related injuries Hour 3152
福利与关怀 Nu因mb工e伤r o损f i失nju工ri作es日 p数er million hours worked % 35.11
Safety investment In strict accordance with the Work Safety Law of the People’s Number o职f p业er病so体ns检 h人av数ing physical examinations for
16 Person 1488
Republic of China the Law of the People’s Republic of China on occupational disease
Prevention and Control of Occupational Diseases and other laws
and regulations and based on the actual operation of the enter-
prise Yunnan Baiyao has revised and improved a series of internal
Safety investment safety management systems such as the Production Safety Target Safety Risk Control
totalled RMB 5.68 million Management System the Production Safety Responsibility System
and the Safety Training and Education Management System to
continuously standardize and strengthen its safety management. Yunnan Baiyao is well aware of the importance of production safety. We have made our best efforts to implement safety precautions reduce
For specific scenarios in production we have formulated targeted safety risks minimize hidden safety hazards and strictly abide by the safety bottom line by identifying and investigating safety risks carrying
systems such as the Safety Management System for Warehouses out regular internal and external inspections and configuring safety protection equipment.and Tank Areas the Fire Prevention Explosion Prevention and
Fire Prohibition Management System the Management System for Safety Risk Prevention and Control Measures of Yunnan Baiyao
Hazardous Chemicals and Significant Hazardous Sources and the
Management System for Precursor Chemicals to meticulously man- We carry out in-depth safety inspection
age high-risk areas and raw materials used in production so as to We organize employees to identify and hidden trouble investigation on im-
more effectively identify prevent and control potential safety risks. hazard sources identify possible portant risk points;
safety risks in production links and
To ensure the safety of the Company and the campus Yunnan production positions and formulate We actively identify and resolve potential safe-
Baiyao has built a top-down safety management system with clear preventive measures; ty hazards through safety inspections to en-
delineation of authority and responsibility. This includes the establish- Safety Risk Work Safety sure the safety of the production environment;
ment of a Safety Management Committee comprising the director We set all kinds of safety signs and Identification Supervision and
chief executive officer and president as directors along with the se- warning lines in the production site In 2023 the Company carried out a total and Analysis
nior management14as members. The committee serves as the high- to remind the site risks
Inspection of 117 safety inspections and identified
est responsible body for the safety efforts of the Company and takes 1873 safety hazards.charge of all the duties of the overall safety management of the
Group. It also considers the major production safety concerns of the
Company planning and integration management and coordination In response to the hidden safety haz-
checking and supervising of the comprehensive safety affairs. The We track and manage each safe- ards the front-line production employ-Equipping
Safety Management Committee has a Safety Management Office ty hazard formulate rectification Safety Risk ees are equipped with safety protection
headed by the General Manager of the General Management Cen- plans establish a hidden danger Safety Protection devices such as dust masks protective Rectification
ter with the General Manager of the relevant functional departments rectification ledger and implement Devices masks safety helmets safety belts
the Quality Director of the Pharmaceutical Business Group and the rectification after the identification labor protection shoes positive-pressure
Executive Director & General Manager of Wisdom Technology BU and investigation of safety hazards; air respirators portable gas detectors
as members which is responsible for the overall management of air blowers emergency medication kits In 2023 the completion rate of Yun-
production safety fire safety occupational health and emergency firefighting sandbags and other safety nan Baiyao’s rectification of safety
management organizing the emergency response investigation protection items so as to maximize the hazards was 100%.coordination and follow-up of major and sudden security incidents avoidance of occupational diseases and
punishing the departments and individuals who violate the relevant ensure the safety of their occupational
safety management rules and regulations of the Company and health.ensuring the effective implementation of the Company’s safety man-
agement measures.
14：Including Chief Innovation Officer & Senior Vice President Chief Compliance Officer & Senior Vice President Chief Commercial Officer & Senior Vice President Chief 15：The statistic data of the occupational health and safety related performance (excluding the number of persons having physical examinations for occupational disease)
Scientist Chief Financial Officer and Chief Quality & Process Officer. were sourced from full-time/part-time employees who have directly signed labor contracts with the Company as well as the labor dispatch employees to the Company.
16：The statistic data of the number of persons having physical examinations for occupational disease was sourced from Yunnan Pharmaceutical Co. Ltd Pharmaceutical
Business Group Health Products Business Group Traditional Chinese Medicine (TCM) Resources Business Group etc.2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTAL
097 SOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Talent Empowerment for Employee Growth 098
case Training content Total number of training sessions Number of participants
Safety Improvement in Flammable and Explosive Areas
Fire safety knowledge 2 5995
To further improve the safety of flammable and explosive areas Yunnan Baiyao carried out effective linkage
of the accident fan and combustible gas detector in Yuhua Industrial Zone and Qidian Industrial Zone in 2023. Hazardous chemical knowledge 1 1941
When the detector monitors that the combustible gas concentration reaches 25% of the lower limit of the explo-
sion limit the accident fan will automatically start to reduce the combustible gas concentration in the environ- Confined space knowledge 1 992
ment effectively preventing fire and explosion accidents. In particular in the dangerous goods warehouse two
new accident fans and five new combustible gas detectors have been installed to ensure continuous monitoring
and rapid response to the dangerous goods warehouse. Furthermore when the detector generates a continuous case
alarm the personnel in the fire control room will notify the storekeeper to check and take appropriate measures Organizing a “Big Competition” in Fire Skills to Build a Robust
promptly to ensure that everything is in order. Security “Firewall”
On August 24 2023 the fire rescue brigade in Yangzonghai Scenic and Historic Interest Area cooperated with
the enterprises communities and fire stations in the area to carry out the fire team skills competition. Yunnan Bai-
yao Qidian Industrial Park sent 5 employees to participate in the competition and won the first place in the total
case
Modification of Electrical Fire Monitoring System points of the competition the first place in the comprehensive fire extinguishing drills during the initial stage of the
team competition the first place in the “fire escape” 4X100 relay run the second place in the push-up (individual
competition) the third place in the return run (individual competition) and the third place in the indoor fire hydrant
In 2023 Yunnan Baiyao carried out a comprehensive modifi- and guide maintenance promptly reducing fire extinguishing exercise.cation and upgrading of the electrical fire monitoring system the risk of electrical fire significantly. The competition bolstered employees’
in the Yuhua Industrial Zone and the headquarters to ensure fire safety knowledge fortified their
that the system could operate properly. We carried out de- awareness regarding fire safety and
tailed investigation and troubleshooting of the old electrical augmented their practical emergency
fire monitoring mainframe communication lines detectors response capabilities in fire scenarios.residual current transformers and replaced or repaired the Fire Brigade Skills Competition Site
old equipment. All the upgrading installation and commis-
sioning work was conducted in strict accordance with the
national standards the Electrical Fire Monitoring System
(GB 14287-2005) to ensure that the system was upgraded During the year we won several awards related to occupational health and safety recognizing our steadfast
to meet the legal and regulatory requirements. Through this commitment to safety and our dedication to the well-being of our employees.upgrade the electrical fire monitoring system can identify ab- Upgrade and Modification of Electrical
normalities in electrical equipment and lines promptly alarm Fire Monitoring System
Occupational Health and Safety Awards of Yunnan BaiyaoConstruction of Safety Culture Awarded the Title of “Advanced Collective of Emergency Management inYunnan Province”
Yunnan Baiyao places great emphasis on developing and enhancing its safety education and training On November 18 2023 the Yunnan Emergency Management Advanced
system. We ensure that employees receive systematic training on safety management and opera- Collectives and Individuals Commendation Conference was held in Kunming
tional skills annually along with regular safety emergency drills. Our detailed annual safety education to commend the collectives and individuals who had made positive contribu-
Conducted 44 safety
emergency drills and training program aims to strengthen employees’ safety awareness through comprehensive
tions in the field of emergency management in the past five years. Over the
training enhancing their safety management abilities and skills. past five years Yunnan Baiyao had prioritized and strictly managed various
risk prevention and emergency response efforts constructing a comprehen-
Following the safety education principle of “Safety First Prevention First and Accident Elimination” sive safety emergency management system. After the review and approval Yunnan Baiyao Won the Title of
we provide employees with safety education that covers “all staff all aspects and the entire process.” of the commendation leading group Yunnan Baiyao finally won the title of “Advanced Collective of Emergency
112 safety education and We actively enforce relevant production safety regulations and rules fostering a comprehensive safe- “Advanced Collective of Emergency Management in Yunnan Province.” Management in Yunnan Province”
training sessions ty culture among employees to ensure compliance with regulations labor discipline and the impera-
tive of “not harming oneself others or being harmed by others and protecting others from harm.” Awarded the Title of “Healthy Enterprise”
In 2023 the Company conducted 44 safety emergency drills and 112 safety education and training Yunnan Baiyao earnestly implements the “Healthy China 2030” Plan Outline proposed by the CPC Central Commit-
sessions for all employees as well as contractors suppliers and other third parties with a total of tee and The State Council and actively promotes the construction of occupational health and safety culture based on
18660 people participating 18660 people participating in safety training. its strategy. It was awarded the title of Kunming “Healthy Enterprise.”
in safety training099 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Sound Operation for High-Quality Development 100
Responsibility Fulfillment
for Enhanced Welfare
YUNNANBAIYAO
Yunnan Baiyao fulfills its social responsibility through various initia-
tives including rural revitalization community outreach and social wel-
fare programs. As a responsible corporate citizen the Company con-
tinually explores innovative approaches to rural revitalization actively
engages in community building and support and channels the energy
of a responsible enterprise into multiple public welfare projects. 05101 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Responsibility Fulfillment for Enhanced Welfare 102
Rural Yunnan Baiyao vigorously promotes rural revitalization leveraging its industry advantages. Through diversified strategies and targeted innovation projects the case Yunnan Baiyao Solved Difficulties in Mountains Providing
Revitalization Company promotes comprehensive rural revitalization by virtue of industrial and Assistance to Students in Autumntalent revitalization.Embracing the belief that rural revitalization hinges on educational support and that education can alter destinies
Yunnan Baiyao enthusiastically engages in rural education support initiatives. We empower rural students to har-
case Rural Revitalization Centered on ness the power of knowledge to uplift their hometown and foster hometown development and revitalization.Nujiang’s Characteristics
After the conclusion of the 2023 college entrance examinations Yunnan Baiyao surveyed of college admis-
sions in Pantiange Township. Following visits to and interviews with 83 students who have been successfully
Actively responding to the rural revitalization initiative Yunnan Bai- admitted to pursue a bachelor’s degree or an associate degree at the college in the township the Company
yao engages in comprehensive and continuous strategic collabora- disbursed over RMB150000 in scholarships through the “Golden Autumn Scholarship Program” enabling
tion with the Nujiang Prefecture government. Leveraging its expertise these students to take confident strides in their academic pursuits. Moreover for students facing exceptional
in the Big Health sector the Company extensively investigated the financial hardships the Company provided additional funds to address transportation and accommodation
Amomum tsao-ko industry resources in Nujiang driving innovation challenges ensuring that “no freshmen were left behind.”
and advancement within the sector. Through industrial revitalization
we facilitated rural revitalization efforts.On June 21 2023 Yunnan Baiyao established Yunnan Yunyao Nux-
iang Co. Ltd. in Lushui Green Spice Industrial Park Nujiang Prefec-
ture focusing on the front-end development and marketing of food
and other products derived from characteristic resources of Nujiang
to promote the high-quality development of Amomum tsao-ko help
local people consolidate their achievements in poverty alleviation
and contribute to rural revitalization.Yunnan Yunyao Nuxiang Co. Ltd. Rural Revitalization and Autumn Education Support Activities
case Innovating Rural Revitalization
Pioneering “Baiyao Model”
Harnessing its Big Health industry expertise Yunnan Baiyao provides Aplotaxis auriculata planting base. Prioritizing
comprehensive support for the development of the TCM materials industry the purchase of medicinal materials from local
in Weixi County. The Company not only allocates resources to facilitate collective economic cooperatives at guaran-
investment breeding cultivation procurement and promotion of TCM ma- teed prices effectively boosted the income of
terials but also offers expert guidance on planting techniques and quality local farmers. In 2023 Yunnan Baiyao helped
standards to ensure the industry’s sustainable growth. increase the per capita income of 270 growers
by RMB1000 making a significant contribution
The working team of Yunnan Baiyao in Chazhiluo Village working along- to local economic development and farmers’
side local villagers managed and developed approximately 400 mu of income increase. Yunnan Baiyao Experts Providing Guidance on the Planting of Aplo-
taxis auriculata in Chazhiluo Village103 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Responsibility Fulfillment for Enhanced Welfare 104
As a socially responsible enterprise Yunnan Baiyao considers rural revitalization as a fundamental aspect of its core values.case “Rural Revitalization and Healthcare Support” Activities In 2023 leveraging its strengths Yunnan Baiyao delved deeper into rural revitalization supporting rural industry development
through the “Baiyao Model” and earning widespread acclaim externally.Yunnan Baiyao places significant emphasis on and actively supports rural revitalization and healthcare initia-
tives. In the autumn of 2023 the Company conducted a series of “Rural Revitalization and Healthcare Support” List of Social Welfare Awards Won by Yunnan Baiyao in 2023
activities in Weixi and Fugong County. These efforts included drug donations and grassroots medical capacity
improvement training sessions aimed at bolstering local healthcare development. Throughout the reporting The 14th “National 100 Excellent Cases” of China Man-
period Yunnan Baiyao donated drugs valued at RMB1.0816 million. agement Case Sharing Center
Furthermore Yunnan Baiyao arranged for experts to conduct specialized training sessions on orthopedic di-agnosis and treatment maternal and child healthcare and the application of Yunnan Baiyao series products. In September 2023 Yunnan Baiyao was awarded the 14th “National 100 Ex-These were aimed at enhancing the professional capabilities of local medical personnel. Additionally repre- cellent Cases” by China Management Case Sharing Center for the case of
sentatives from Yunnan Baiyao visited the Fugong County Maternal and Child Healthcare Center for in-depth Health Initiatives in Hengduan Mountains: Yunnan Baiyao Promoted Rural
discussions and exchanges with local government and health bureau officials. Revitalization with Charity Responsibility.Award Notification of Nation-
al 100 Excellent Cases
List of Social Welfare Awards Won by Yunnan Baiyao in 2023
“Best Practice Case for Rural Revitalization” of Chi-
na Association for Public Companies in 2023
Yunnan Baiyao actively responds to the state’s call and courageously as-
sumes social responsibility leveraging its solid foundation and experience
in the field of medicine and Big Health to help Weixi eradicate poverty
and achieve rural revitalization. In October 2023 Yunnan Baiyao won the
2023 “Best Practice Case for Rural Revitalization” award issued by Chi-
na Association for Public Companies with the rural revitalization case of
Weixi County.Honorary Certificate of Best Practice for
Rural Revitalization
List of Social Welfare Awards Won by Yunnan Baiyao in 2023
Xinhuanet and the National Poverty Alleviation Pub-licity and Education Center Co-sponsored “2023 Na-tional Excellent Cases of Rural Revitalization”On November 3 2023 the “2023 Summary Conference on ExcellentCases in National Rural Revitalization” jointly organized by Xinhuanet
and the National Poverty Alleviation Publicity and Education Center was
held in Beijing. Yunnan Baiyao’s poverty alleviation and rural revitaliza-tion practice cases were awarded “National Excellent Cases of RuralRevitalization” where we assisted Weixi County through initiatives suchas “leaders residing in impoverished rural areas relevant departmentsDrug Donation Activities for “Rural Revitalization and Healthcare Support” tasked with poverty alleviation in villages and cadres responsible foraiding impoverished families” as well as “adopting a new work approach Honorary Certificate of 2023 National Ex-engaging at the grassroots level and visiting impoverished communities.” cellent Cases of Rural Revitalization105 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Responsibility Fulfillment for Enhanced Welfare 106
Community Yunnan Baiyao actively fulfills its social responsibility by engaging deeply with local communities and collaborating closely to conduct a diverse range of com- case
Care munity care activities and thus foster community development and enhance the
Being Aware of Telecom Fraud Building a Harmonious Community
quality of life for residents.Yunnan Baiyao collaborated with the criminal
investigation brigade of the Public Security Bu-reau to host a special lecture on “PreventingTelecom Network Fraud” on July 7 2023. The
aim was to enhance public awareness of net-
work security and anti-fraud capabilities. During
the lecture the criminal investigation brigade
provided detailed insights into the methods
types and prevention techniques of telecom
network fraud through analysis of real fraud cas-
es. Special emphasis was placed on frequently
occurring fraud types educating participants on
effective identification and prevention strategies.This initiative effectively bolstered public securi-
ty awareness and improved their ability to detect
and counter telecom network fraud.Special Lecture on “Preventing Telecom Network Fraud”
case
““S小m修al小l R补ep”a暖ir”人 W心a志rm愿-h服e务ar活ted动 Volunteer Service
On January 13 2023 Yunnan Baiyao Yuhua Branch initiated a volunteer
s2e0r2v3ice年 p1ro月gra1m3 日for， ho云m南e 白ap药pli雨an花ce一 m支ain部te开na展nc了e 家aim电e维d 修at 志pr愿ov服idin务gp活ra动ct，ica为l a雨ss花ist街an道ce的 to下 re庄sid村en和ts颐 o明f X园iaz社hu区an居g 民Vi提llag供e实 an际d 帮Yim助in。gy由ua公nCommunity in Yuhua Sub-district. A dedicated maintenance team com-
p司ris志ed愿 o者f o组ur 成vo的lun维te修ers队 d伍eliv提er供ed了 a 包ra括ng家e o电f s维er修vic、es更 in换clu水di龙ng头 re、pa处irin理g
h用om电e故 a障pp在lia内nce的s服 re务pl。ac活ing动 fa中uc，et志s 愿an者d t团rou队b共les计ho维ot修ing家 p电owe6r6 fa件ilu，re其s.Throughout the event the volunteer team repaired 66 home appliances
a中nd上 p门ro维vid修ed、 1更4 换ad水di管tio龙na头l s、erv处ic理es用 s电uc问h 题as等 on服-s务ite共 m1a4in件ten。ance re-placing faucets and addressing electrical issues.自2014年成立以来，这个志愿者队伍从最初的40多人壮大至今的Since its inception in 2014 the volunteer team has expanded from over
4100 0m多em人be。rs累 to计 m服or务e 人tha次n 超10过0 8s0er0vi人ng， o维ve修r 8各00类 in家div用id电ua器ls 达and2 0re0p0a多ir-i件ng。 o这ve不r 2仅0是00一 ho次u赠seh人o玫ld 瑰ap、pl手ian有ce余s. 香Th的is行 in动itia，tiv更e 是no将t o微nl光y e汇xe聚m成pli炬fie、sthe principle of leaving a lasting impact but also demonstrates our com-
m以it志me愿n之t to心 s温pre暖ad人in心g w的a具rm体th 体an现d 。compassion through volunteerism.Served over Repaired over
800 household in人dividuals 2000 ap多pli件ances
“Small Repair” Warm-hearted Volunteer Service107 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Responsibility Fulfillment for Enhanced Welfare 108Social Welfare Adhering to the principle of “serving overall interests reflecting responsibility be-ing value-oriented presenting culture focusing on the main business highlightingcharacteristics being realistic and sustainable” Yunnan Baiyao actively fulfills its
social responsibilities by leveraging its own advantages to conduct distinctive social
In 2023 welfare activities.The total value of donated In 2023 the Company established the Public Welfare Donation Management Mea-
materials reached sures of Yunnan Baiyao Group Co. Ltd to standardize its public welfare initiatives
and donations. During the reporting period the Company not only participated in
RMB4.4604million various social welfare projects but also encouraged and organized its employees
to engage in volunteer activities vigorously. The total value of donated materials
reached RMB4.4604 million.case Volunteer Service Activities Themed“Inheriting Lei Feng’s Spirit NurturingYouth’s Resilience”
In April 2023 Yunnan Baiyao responded actively to the initiative
of “Empowering the Spirit of Lei Feng in the Modern Era” by or-ganizing a series of volunteer service activities themed “InheritingLei Feng’s Spirit Nurturing Youth’s Resilience.” During weekends case Disaster Relief Support for Gansu Province
youth league members were divided into groups to learn about
the essence of Lei Feng’s spirit. They visited various locations
such as the community Yunnan Baiyao Experience Center and
Yunnan Baiyao Pharmacy to educate people on basic medical On December 18 2023 Jishishan County in Linxia Gansu Province was struck by a 6.2-magnitude earth-
insurance knowledge and provide voluntary services like health quake. Yunnan Baiyao responded swiftly with all departments collaborating closely to rapidly deploy urgently
dance exercises and chronic physiotherapy. needed medical supplies including trauma medicine and cold medicine. By December 21 the aid and supplies
were successfully transported to the disaster area via the Red Cross Society of China Yunnan Branch. Yunnan
These series of volunteer activities not only integrated seam- Baiyao’s contribution to this disaster relief effort amounted to approximately RMB1.5 million worth of medical
lessly with our ongoing work but also empowered the volunteers supplies donated to the affected areas in Gansu Province and RMB500000 worth of medical supplies donated
to serve as exemplary role models. It expanded the platform for to the affected areas in Qinghai Province.learning about Lei Feng’s spirit and made such activities more
contemporary appealing regularized and sustainable. These ef-
forts aimed to embed the spirit of Lei Feng into daily life making it
a natural part of our culture.Volunteer Service Activities Themed “Inheriting Lei Feng’s Spirit Disaster Relief Support for Gansu ProvinceNurturing Youth’s Resilience”109 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Key Performance Statement 110
Key Performance Statement
Performance Name Unit 2023
Performance Name Unit 2023 Environmental Dimension
Environmental Dimension Water re- Water consumption Ton(s) 1366035
Addressing Climate Change sources man-agement Water consumption density Ton(s)/Operating revenue of RMB10000 0.35
Direct greenhouse gas emissions (Scope I) Ton(s) of CO2 equivalent 28983.10 Paper Ton(s) 14700
Indirect greenhouse gas emissions (Scope
GHG emis- II) Ton(s) of CO2 equivalent 365.45 Plastic Ton(s) 3600
sions17 Total greenhouse gas emissions Ton(s) of CO2 equivalent 29349.71 Glass Ton(s) 899Packaging
Intensity of greenhouse gas emissions Ton(s) of CO2 equivalent/Operating 0.0075 material us- Aluminum Ton(s) 1660revenue of RMB10000 age
Composite soft package Ton(s) 2038
Environmental Management
Packaging material usage Ton(s) 22897
Total exhaust gas emissions 10000m3 4330.4
Waste gas Fume (dust) Ton(s) 0.14 Density of packaging material consumption Ton(s)/Operating revenue of RMB10000 0.0059management
NOx Ton(s) 3.182 Social Dimension
Total wastewater discharge Ton(s) 297045.01 Compliant Recruitment
Wastewater COD Ton(s) 11.78 Total number of employees
20 Person 12307
management Ammonia nitrogen Ton(s) 0.689 Labor contract employee Person 8834
Reclaimed water Ton(s) 29610 Labor dispatch employee Person 1136
Waste drugs drugs HW0318 Ton(s) 2.88 Coverage Intern Person 718
Experimental liquid waste HW49 Ton(s) 17.32 Subcontracting staff Person 1619
Used oil Ton(s) 1.04
Senior management21 Person 187
Intensity of hazardous waste Ton(s)/Operating revenue of 0.0000054 Number of
Waste man- RMB10000 employees by Middle management Person 884
agement rankDrug residue sludge Ton(s) 25786.5 Junior employees Person 7763
Intensity of non-hazardous waste Ton(s)/Operating revenue of Sales Staff Person 5099RMB10000 0.0066
Total amount of solid waste Ton(s) 25807.74 Technical personnel Person 1265
Solid waste discharge intensity Ton(s)/Operating revenue of
Number of
0.0066 employees by Production staff Person 1676RMB10000 type of work
Resources Utilization Financial personnel Person 308
Diesel consumption Ton(s) 0.87 Administrative personnel Person 486
Gasoline consumption Ton(s) 25.77 Number of Male employees Person 4781
Natural gas consumption m3 13221027 employees by
Energy man- gender Female employees Person 4053
agement Purchased electricity MWh 640.8
Comprehensive energy consumption19 Ton(s) of standard coal 25586.54 30 and below Person 2670
Density of comprehensive energy consump- Ton(s) of standard coal/Operating Number of 31 to 40 (exclusive) Person 4256
tion revenue of RMB10000 0.0065 employees by
age 41 to 50 (exclusive) Person 1567
17:The calculation of greenhouse gas emissions was based on the IPCC Greenhouse Gas Emissions Accounting Methods and Reporting Guidelines for IPCC Green 51 (inclusive) and above Person 341
Gas Emission in which the electricity consumption was converted by referring to the national power grid average emission factor of 0.5703tCO2/MWh issued by the
Ministry of Ecology and Environment in 2022.
18:The data of waste drugs drugs HW03 covers Yuhua Industrial Zone. 20：The total number of employees was counted as labor contract employees labor dispatch employees interns and subcontracting staff.
19:The comprehensive energy consumption was derived based on data from the National Bureau of Statistics. 21：Employees of subsidiaries and business units of Yunnan Baiyao included.111 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Key Performance Statement 112
Performance Name Unit 2023 Performance Name Unit 2023
Social Dimension Social Dimension
Han Person 7518
Number of R&D and Innovation
employees by Ethnic minorities Person 1315 R&D Investment RMB 0’000 34444.15
nationality
Overseas employees Person 1
Invention patent / 18
Yunnan Person 4838
Number of Number of patent appli- Patent for utility models / 17
employees by Mainland China (excluding Yunnan) Person 3992 cations
region
Hong Kong Macao Taiwan and overseas Person 4 Design patent / 9
Employee Training Invention patent / 25
Total person-times in employee training Person-time 218019 Number
of patents Patent for utility models / 39
Person-time of Male employees Person-time 5422 granted
trained employees by
gender Female employees Person-time 4548 Design patent / 14
Senior management Person-time 187
Person-time of Customer Services
trained employees by Middle management Person-time 884
rank
Junior employees Person-time 8899 Customer complaint resolution rate % 100
Employee training Total training time Hour 217125.15 Supply Chain Management
Per capita training time Hour 21.78
Total training hours of Male employees Hour 118080 Total number of suppliers / 294
employees by gender Female employees Hour 99045
Key suppliers / 147
Senior management Hour 4072
Total training hours
of employees by rank Middle management Hour 19252 Suppliers in the local province / 91
Junior employees Hour 193801 Domestic suppliers Domestic suppliers (other provinces and regions in Mainland China except
Per capita training investment for employees RMB 849.53 the local province) / 202
Health and Safety
Overseas suppliers (including Hong Kong Macao and Taiwan) / 1
Number of work-related injuries Person 7
Number of work-related deaths Person 0 Governance Dimension
Employee
work-related inju- Lost working hours due to work-related injuries Hour 3152
ries and deaths22 Business Ethics
Number of injuries per million hours worked % 35.11
Number of medical examinations for occupational diseases23 Person 1488 Compliance training sessions Time 9Compliance
Product Quality and Safety training Compliance training coverage % 100
Quality and safety Quality and safety training coverage % 100
training Quality and safety training sessions Time 137
22:The statistic data of the occupational health and safety related performance (excluding the number of persons having physical examinations for occupational
disease) were sourced from full-time/part-time employees who have directly signed labor contracts with the Company as well as the labor dispatch employees to the
Company.
23:The statistic data of the number of persons having physical examinations for occupational disease was sourced from Yunnan Pharmaceutical Co. Ltd
Pharmaceutical Business Group Health Products Business Group Traditional Chinese Medicine (TCM) Resources Business Group etc.113 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. Key Performance Statement 114
GRI Index GRI Standards Disclosures Section Index Page Number
GRI 201-1 Economic Value Directly Produced and Allocated / /
Standards Disclosures Section Index
Page
Number GRI 201: Eco-
nomic Perfor- 201-2 Financial Impact of Climate Change and Other Risks and Opportunities 3.2 Addressing Climate Change P63-66
GRI 1: Basics 2021 mance 2016
4.3 Improving the Well-being of
2-1 Organization Details Company Profile P5 201-3 Mandatory Defined Benefit Plans and Other Retirement Plans Employees P89-94
2-2 Entities Included in Organizational Sustainability Report About This Report P1 GRI 203: 203-1 Infrastructure Investment and Support Services / /
Indirect Eco-
2-3 Reporting Period Reporting Frequency and Contacts About This Report P1 nomic Impact
203-2 Significant Indirect Economic Impact / /
2-4 Information Restatement About This Report P1 2016
GRI 204:
2-6 Activities Value Chains and Other Business Relationships Company Profile P5 Procurement
4.1 Protecting Employees’ Practices
204-1 Proportion of Expenditure on Procurement from Local Suppliers 2.4 Supply Chain Management P53-58
2-7 Employees
Rights and Interests P79-82 2016
1.2 Compliance 205-1 Operating Sites Where Corruption Risk Assessments Have Been
2-9 Governance Structure and Composition P25-28 1.3 Business EthicsManagement Conducted
P29-30
1.2 Compliance GRI 205: An-
2-10 Nomination and Selection of the Highest Governing Body
Management P25-28 ti-Corruption 205-2 Communication and Training of Anti-corruption Policies and Procedures 1.3 Business Ethics P29-30
1.2 Compliance 2016
2-11 Chairman of the Highest Governing Body
Management P25-28 205-3 Confirmed Incidents of Corruption and Actions Taken 1.3 Business Ethics P29-30
1.2 Compliance
2-12 The Oversight Role of the Highest Governing Body in Managing Impact
Management P25-28 GRI 206:
1.2 Compliance Improper 206-1 Legal Action against Improper Competitive Conduct Antitrust and Anti-
2-13 Delegating Responsibility for Managing Impact P25-28 Competitive 1.3 Business EthicsGRI 2: Gener- Management monopoly Practices
P29-30
al Disclosure 2-14 The Role of the Highest Governing Body in Sustainability Reporting 1.1 ESG Management P25-28 Conduct 2016
2021 GRI 301: Ma-
2-16 Communication on Issues of Major Concern 1.1 ESG Management P21-24 terials 2016 301-1 The Weight or Volume of the Material Used 3.4 Resource Utilization P71-76
1.2 Compliance
2-17 Common Knowledge of the Highest Governing Body
Management P25-28 302-1 Energy Consumption within an Organization 3.4 Resource Utilization P71-76
1.2 Compliance P25-28 GRI 302: En- 302-3 Energy Intensity 3.4 Resource Utilization2-18 Performance Evaluation of the Highest Governing Body P71-76Management ergy 2016 302-4 Reducing Energy Consumption 3.4 Resource Utilization P71-76
1.2 Compliance
2-19 Remuneration Policy
Management P25-28 302-5 Reducing Energy Requirements for Products and Services 3.4 Resource Utilization P71-76
ESG Statement of the
2-22 Statement on Sustainability Strategy
Board of Directors P2 GRI 303: Wa- 303-1 Interactions Between Organization and Water as a Common Resource 3.4 Resource Utilization P71-76
2-23 Policy Commitment / / ter Resources
and Sewage 303-2 Managing Drainage-related Impacts 3.3 Environmental Management P67-70
2-24 Integration Policy Commitment / / 2018 303-3 Water Intaking 3.4 Resource Utilization P71-76
2-25 Procedures to Remedy Negative Effects / / 305-1 Direct GHG Emissions (Scope 1) 3.2 Addressing Climate Change P63-66
2-26 Mechanisms for Seeking Advice and Raising Concerns / / GRI 305: 305-2 Direct GHG Emissions from Energy (Scope 2) 3.2 Addressing Climate Change P63-66
Emission
2-27 Compliance with Laws and Regulations / / 2016 305-4 Greenhouse Gas Emissions Intensity 3.2 Addressing Climate Change P63-66
2-28 Association Membership 2.2 R&D and Innovation P39-46 305-5 Reduction of Greenhouse Gas Emissions / /
2-29 Stakeholder Engagement Approach 1.1 ESG Management P21-24 306-1 Waste Generation and Significant Waste-related Impacts 3.3 Environmental Management P67-70
3-1 Process of Identifying Substantive Issues 1.1 ESG Management P21-24
GRI 3: Sub- GRI 306: 306-2 Management of Significant Waste-related Impacts 3.3 Environmental Management P67-70
stantive Is- 3-2 List of Substantive Issues 1.1 ESG Management P21-24 Waste 2020 306-3 Waste Generated 3.3 Environmental Management P67-70
sues 2021
3-3 Management of Substantive Issues 1.1 ESG Management P21-24 306-5 Waste for Disposal 3.3 Environmental Management P67-70115 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. GRI Index 116
GRI
Standards Disclosures Section Index
Page List of Laws and Regulations and Internal Policies
Number
GRI 308: 308-1 New Suppliers Screened Using the Environmen-
Supplier En- tal Assessment Dimension 2.4 Supply Chain Management P53-58 Scope Policy Name
vironmental
Assessment 308-2 Negative Environmental Impacts of Supply
2016 Chains and Actions Taken
2.4 Supply Chain Management P53-58 Regulations of the People’s Republic of China on the Protection of Endangered Wild Plants
4.1 Protecting Employees’ Rights and Regulations for the Implementation of the Drug Administration Law401-1 New Hire Rate and Employee Turnover Rate
GRI 401: Interests
P79-82
Law of the People’s Republic of China on TCM
Employment
2016 401-2 Benefits Provided to Full-time Employees (Ex- 4.3 Improving the Well-being of Em- P89-94 Qinghai-Tibet Plateau Ecological Protection Law of the People’s Republic of Chinacluding Temporary or Part-time Employees) ployees
Environmental Protection Law of the People’s Republic of China
403-2 Hazard Identification Risk Assessment and
Accident Investigation 4.4 Protecting Health and Safety P95-98 Air Pollution Prevention and Control Law of the People’s Republic of China
Water Pollution Prevention and Control Law of the People’s Republic of China
403-3 Occupational Health Services 4.4 Protecting Health and Safety P95-98
Noise Pollution Prevention Law of the People’s Republic of China
403-4 Occupational Health and Safety Matters: Worker
Participation Consultation and Communication 4.4 Protecting Health and Safety P95-98
Environmental Protection Management System
Environmental Facilities Management System
GRI 403: Environment403-5 Occupational Health and Safety Training for
Occupational Workers 4.4 Protecting Health and Safety P95-98
Environment Protection Approval and Management System
Health and Integrated Emission Standards for Air Pollutants (GB16297-1996)
Safety 2018 403-6 Promotion Workers’ Health 4.4 Protecting Health and Safety P95-98 Emission Control Standards for Volatile Organic Compounds in Industrial Enterprises (DB12/524-
2020)
403-7 Prevention and Mitigation of Occupational Health
and Safety Impacts Directly Related to the Business 4.4 Protecting Health and Safety P95-98 Laboratory Hazardous Waste Pollution Prevention and Control Responsibility System
Laboratory Environment Control Procedure
403-9 Work-related Injury 4.4 Protecting Health and Safety P95-98 Law of the People’s Republic of China on Energy Conservation
Energy Management Measures
403-10 Work-related Health Problems 4.4 Protecting Health and Safety P95-98
Water Law of the People’s Republic of China
GRI 404: 404-1 Average Number of Training Hours Per Employ- 4.2 Empowering Talent Development P81-88
Training and ee Per Year Non-pharmaceutical Water System Management Procedures
Education 404-2 Employee Skills Upgrading Program and Transi-
2016 tion Assistance Program 4.2 Empowering Talent Development P81-88 Safety Standards and Operating Procedures for Secondary Water Supply System Posts
GRI 405: Drug Administration Law of the People’s Republic of China
Diversity and 4.1 Protecting Employees’ Rights and
Equal Oppor- 405-1 Diversity of Governance Bodies and Staff P79-82 Regulations on the Supervision and Administration of Medical DevicesInterests
tunity 2016 Measures for the Administration of Drug Registration
GRI 406: An-
ti-discrimina- 406-1 Incidents of Discrimination and Correct Actions 4.1 Protecting Employees’ Rights and
Measures for the Supervision and Administration of Drug Manufacturing
P79-82
tion 2016 Taken Interests Measures for the Supervision and Administration of the Quality of Drug Operation and Use
GRI 408: 408-1 Operating Sites and Suppliers with A Significant Code of Practice for the Quality Management of Pharmaceutical OperationsChild Labor Risk of Child Labor Incidents / /2016 Good Agricultural Practice (GAP) for Traditional Chinese Medicinal Materials
GRI 409: Society Measures for the Administration of Drug Recall
Forced or 409-1 Operating Sites and Suppliers with A Significant
Compulsory Risk of Forced or Compulsory Labor Incidents / / Code of Practice for the Quality Management of Pharmacovigilance
Labor 2016
Measures for the Reporting and Monitoring of Adverse Drug Reactions
GRI 413: Lo-
cal Communi- 413-1 Operating Sites with Local Community Engage- Patent Law of the People’s Republic of China
ties 2016 ment Impact Assessment and Development Plans
//
Trademark Law of the People’s Republic of China
GRI 418: Cus-
tomer Privacy 418-1 Substantiated Complaints Relating to Violations of Customer Privacy and Loss of Customer Data 2.3 Customer Services P47-52
Advertising Law of the People’s Republic of China
2016 Administrative Measures for Medical Advertisements117 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. GRI Index 118
Scope Policy Name Scope Policy Name
Measures for the Examination of Pharmaceutical Advertisements Management Measures for Information Security Supervision and Compliance
Cybersecurity Law of the People’s Republic of China Management Measures for Information Security Risk
Personal Information Protection Law of the People’s Republic of China Society Explanation on the Protection of Privacy of User Data
Data Security Law Supplier Management Measures
Law of the People’s Republic of China on the Protection of Consumers’ Rights and Interests Procurement Management Manual
Tendering and Bidding Law of the People’s Republic of China Company Law of the People’s Republic of China
Regulation on the Supervision and Administration of Cosmetics Securities Law of the People’s Republic of China
Measures for the Supervision and Administration of Production and Distribution of Cosmetics Guidelines for Corporate Governance of Listed Companies
Code of Practice for Quality Management in the Production of Cosmetics Law of the People’s Republic of China Against Unfair Competition
Measures for the Supervision and Management of Toothpaste Anti-monopoly Law of the People’s Republic of China
Brand Structure Management Manual of Yunnan Baiyao Group Articles of Association
Quality Culture Outline of Yunnan Baiyao Group Rules of Procedure for General Meetings
Quality Code of Conduct for Baiyao People Rules of Procedure for Board of Directors
Quality Management Manual Working System for Independent Directors
Transportation Management System Rules of Procedure for Supervisory Committee
Management Measures for Carriers Internal Control Manual
Society Drug Recall Management Procedure Comprehensive Risk Management System
Management of Drug Safety Incidents Opinions on Strengthening and Improving Discipline Inspection of Yunnan Baiyao Group Co. Ltd (for
Trial Implementation) (the “Opinions”)
Management Measures of R&D Management Committee of Yunnan Baiyao Group Co. Ltd Corporate
Governance Opinions for Party Committee and Discipline Inspection Commission Work Coordination Promotion
Specification on the Management of Entrusted Scientific Research Project Funds Mechanism of Yunnan Baiyao
Management Measures for Internal Entrusted Research in Yunnan Baiyao Group’s R&D Projects Rules of Procedure for Discipline Inspection Commission of Yunnan Baiyao
Measures for Management of R&D-type Governmental Projects in Yunnan Baiyao Group’s Central Work System of Discipline Inspection Commission
Research Institute
Work System of Letters and Visits
Patent Management Measures of Yunnan Baiyao Group Co. Ltd
Measures for Integrity Risk Control
Patent Application Process of Yunnan Baiyao Group Co. Ltd
Responsibility System for the Work of Clean and Honest Party Building
Patent Management Measures of Central Research Institute
Code of Conduct for Business Ethics
Customer Response Management System
Internal Communication and Handling Mechanism for New Product Complaints of Yunnan Baiyao Labor Law of the People’s Republic of China
Marketing Standardized Phraseology Labor Contract Law of the People’s Republic of China
Information Security Management System Employment Promotion Law of the People’s Republic of China
Information Security Organization and Management Measures Law of the People’s Republic of China on the Protection of Minors
Management Measures for User Behavior and Information Security Training Social Insurance Law of the People’s Republic of China
Management Measures for Information Security Incident Management Measures for Share Incentives of Listed Companies119 2023 CORPORATE SOCIAL RESPONSIBILITY REPORT AND ENVIRONMENTALSOCIAL AND GOVERNANCE REPORT YUNNAN BAIYAO GROUP CO. LTD. List of Laws and Regulations and Internal Policies 120
Scope Policy Name Feedback Form
Rules for the Listing of Stocks on the Shenzhen Stock Exchange
Dear readers:
Guiding Opinions on the Implementation of the Pilot Employee Stock Ownership Plan for Listed
Companies
Greetings!
Work Safety Law of the People’s Republic of China
Thank you for taking the time to read through this report. We highly value and eagerly await your feedback
Law of the People’s Republic of China on Prevention and Control of Occupational Diseases on its contents. Your comments and suggestions play a vital role in our ongoing efforts to enhance corporate
Recruitment Management Measures of Yunnan Baiyao Group Co. Ltd ESG information disclosure and foster best practices in ESG management. We genuinely welcome and deeply
appreciate your valuable input!
Labor Contract Management System
Basic Norms of Enterprise Internal Control 1.Your overall evaluation on our ESG performance
Very good Good Fair Poor Very poor
Qualification Management Measures of Yunnan Baiyao Group
2. Your overall evaluation on this report
Position Management System
Very good Good Fair Poor Very poor
Internal Recommendation Management Measures for Talent Introduction of Yunnan Baiyao Group
3. How would you rate our performance regarding stakeholder communication?
Job Rotation Management Measures Very good Good Fair Poor Very poor
Corporate Salary Management System of Yunnan Baiyao Group Co. Ltd
4. How would you rate our performance regarding product liability?
Governance Very good Good Fair Poor Very poor
Employee Stock Ownership Plan (ESOP)
5. How would you rate our performance regarding environment safety and occupational health?
Stock Incentive Scheme
Very good Good Fair Poor Very poor
Performance Management System
6. How would you rate our performance regarding employee responsibilities
Production Safety Target Management System Very good Good Fair Poor Very poor
Production Safety Responsibility System 7. Whether the content disclosed in this report meets your expectations
Yes No Not sure
Safety Training and Education Management System
8. What are your comments and suggestions regarding our ESG performance and this report?
Safety Management System for Warehouses and Tank Areas
Fire Prevention Explosion Prevention and Fire Prohibition Management System
Management System for Hazardous Chemicals and Significant Hazardous Sources
Management System for Precursor Chemicals
Public Welfare Donation Management Measures of Yunnan Baiyao Group Co. Ltd