ZTE Releases 2021 Sustainability Report

Fulfilling Corporate Social Responsibilities and Injecting Digital Intelligence into Sustainable Development

SHENZHEN,China,June 17,2022 --ZTE Corporation (0763.HK / 000063.SZ),a major international provider of telecommunications,enterprise and consumer technology solutions for the mobile internet,today has released its 2021 sustainability report across the globe.

The report shows that ZTE,following the strategic positioning of "driver of the digital economy",proactively fulfilled its corporate social responsibilities in 2021. With the active implement of sustainable development in areas,such as operational governance,compliance management,talent development,innovation empowerment,openness and transparency,green development,and community contribution,the company creates shared value for stakeholders and society.

ZTE has annually released its sustainability reports for 14 consecutive years since 2009.

Keeping continuous independent innovation and industrial digital intelligence development,and fulfilling corporate social responsibilities

The uncertainties brought by the complex global situation,the lingering COVID-19 pandemic,population aging,and ecological degradation in 2021 are imposing greater challenges to sustainable development. In this process,digital and intelligent transformation based on new information technologies is playing an irreplaceable role,promoting the development of telecommuting,online collaboration,distance learning,telemedicine,smart factories,unmanned mining,and smart ports.

"Digital and intelligent transformation has equipped our society with the 'immunity' to uncertainties,guaranteeing economic growth and sustainable development",said Xu Ziyang,President of ZTE Corporation. "As a major player and contributor dedicated to the ICT industry for 37 years,ZTE keeps making innovations and breakthroughs,and is always willing to embrace changes. In this way,the company continuously expands its capabilities and business in terms of digital and intelligent technologies,and brings about infinite possibilities for digital and intelligent applications."

According to the report,in order to follow the strategic positioning of "driver of the digital economy",ZTE always takes technological innovation as the top driving force of its development and adheres to building stronger core competence. The company has established several state-of-the-art global R&D centers. To further foster innovation,ZTE keeps investing in core areas such as 5G wireless technology,core networks,transport networks,access networks,and chipsets,with the R&D investment accounting for over 10% of the company's revenue for years.

By December 31,2021,ZTE had filed more than 84,000 global patent applications,with over 42,000 granted,among which the number of chipset patent applications and granted chipset patents reached 4,572 and 1,990 respectively. According to a report published in November 2021 by IPLytics,a leading patent data company,ZTE ranked fourth in the world in the number of 5G Standards-Essential Patents (SEP) declarations disclosed to the European Telecommunication Standards Institute (ETSI).

In the era of digital economy full of business uncertainties,ZTE is always committed to achieving high-quality growth together with the communications industry,verticals,and society by means of efficient collaboration in an open and transparent manner. By participating in the co-construction of a digital and intelligent ecosystem,ZTE strives to accelerate the digital and intelligent transformation of the whole society.

By engaging deeper into verticals,ZTE provides scenario-based solutions that truly create value for verticals through modular components. The company has established partnerships with over 500 global partners,with whom we have explored nearly 100 innovative 5G application scenarios for factories in Thailand,ports in Belgium,farms in Austria,as well as industry,transportation,power,environmental protection,and many other verticals in China.

Reinforcing internal management and pursuing high-quality growth

The year 2021 was crucial for the growth phase defined in ZTE's three-phase strategy. ZTE adhered to technological leadership and achieved high-quality growth,laying a solid foundation for its steady stride into the expansion phase and toward its goal of becoming a world's top 500 company.

Xie Junshi,Executive Vice President and Chief Operating Officer at ZTE,said,"Under these circumstances,ZTE has maintained stable operations,as we are committed to high-quality sustainable growth. We make continuous efforts to consolidate our three cornerstones,namely,compliance,internal control,and talent."

Upholding compliance and integrity in operations,ZTE has incorporated compliance requirements into the company's business processes,thereby building a best-in-class compliance management system that is aligned with the company's business practices. In this way,the company strives to achieve sustainable development together with its customers,suppliers,and other business partners around the world.

As for internal control and corporate governance,by using digital tools,ZTE has established a relatively complete system for risk management and internal control,and constantly improved the Business Continuity Management (BCM) system. With these efforts,the company has effectively enhanced operational continuity,improved turnover efficiency,and reduced operational risks.

Regarding talent development,ZTE keeps attracting and motivating core talent. For example,since its launch in 2014,the Blue Sword Program has been cultivating future leaders for the company,as evidenced by the first trainees who have been playing leading roles in the company. In 2021,ZTE stepped up efforts in campus recruitment,offering over 6,000 positions in fields like R&D,marketing,operation support,and supply chain to excellent graduates worldwide.

Securing customers' trust with openness and transparencyand creating a win-win cooperation ecology

ZTE is committed to providing customers with secure and trustworthy products and services,and ensuring the security of communications network equipment,to promote digital transformation.

In 2021,ZTE obtained the certification of ISO 9001,TL 9000,QC 080000,ESD,ISO 45001,ISO 14001,and ISO 22301 management systems,covering the company's major R&D centers and manufacturing bases and 62 main product categories. In the same year,ZTE shortened its Mean Time to Repair (MTTR) by 29.5% compared with that in 2020. Moreover,the company offered remote customer support and spare parts services in 65 countries,with the customer satisfaction rate exceeding 99%.

For win-win partnership,ZTE has updated the Supplier CSR Agreement and Supplier CSR Code of Conduct to guarantee the responsible and sustainable development of its partners across the value chain. In addition,ZTE has released the Conflict Minerals Report based on the due diligence and assessment of 255 suppliers. In the future,due diligence and assessment on conflict minerals will cover all of its suppliers.

Taking green development into practice and leading the digital way to carbon neutrality

Facing the challenges brought by low-carbon transformation,ZTE paves a green path to digital economy by promoting green operations,green supply chain,and green digital infrastructure,and empowering the green development of industries,thereby facilitating the sustainable development of operators and verticals. Working with its partners,ZTE continues to explore innovative and green 5G applications with over 60 exemplary projects delivered worldwide,with the goal to realize carbon peak carbon neutrality ahead of 2030 and before 2060,respectively.

In 2021,ZTE started the company-level dual-carbon strategic project and completed the establishmentand capability improvementof the dual-carbon strategic team,and more than 170 team members participated in the training in the ISO 14064 and Science-BasedTargetsinitiative.

ZTE maintained CDP B rating for actions on climate change and supplier engagement. According to the data disclosed on CDP website,more than 40 leading suppliers in ZTE's supply chain established decarbonization strategies.

As for office operations,ZTE has launched nine energy-saving projects in China,saving 21.56 million kWh of electricity annually. ZTE reduced the use of packaging materials by 689.1 tons through the design of packaging weight reduction.

By 2021,ZTE had established 140 recycling sites worldwide. In China,the company optimized 4 centralized waste recycling and processing platforms and conducted in-depth cooperation with more than 10 leading environmental protection institutions in the industry,reaching the overall recycling rate of 97%. Through long-term in-depth cooperation with more than 150 environmental protection institutions overseas,ZTE ensured that the recycling business met the local environmental protection requirements of different countries,and achieved the overall recycling rate of 98%.

ZTE's PowerMaster hybrid power solution won the award of 2021 Technological Innovation Solution for Carbon Peak and Neutrality and High-Quality Development by China Energy News.

Adhering to tech for social good,and actively contributing to global communities

While pursuing business development,ZTE also takes an active part in public welfare activities. Centering on recipients and their real needs,ZTE focuses on educational development,medical assistance,vulnerable population assistance,rural vitalization,and environmental protection,and ensures that all public welfare projects effectively respond to recipients' needs and achieve expected social benefits. ZTE constantly fulfills its CSR through donations and technological empowerment.

In 2021,ZTE Foundation donated CNY 13.17 million and organized 220 public welfare activities,benefiting a total of 12,000 people,and alsolaunched a brand-new volunteer service system called "ZTE Volunteer" and set up 15 volunteer branches worldwide with over 5,600 volunteers by far,representing a year-on-year growth of 76% in terms of the number of volunteers.

In the future,ZTE will continuously conduct digital operations,build a resilient organization,and contribute to the implementation of the dual-carbon strategy for sustainable growth. As a faithful driver of the digital economy,the company is committed to fulfilling its CSRs and working with employees and partners for win-win success in harmony with the environment,to build a promising future and explore more opportunities amid the rising tide of digitalization.

For the full version of ZTE 2021 Sustainability Report,please download via the link below.

https://res-www.zte.com.cn/mediares/zte/Files/PDF/white_book/2021_ZTE_EN.pdf

Media Contacts:

Margaret Ma

ZTE Corporation

Tel: +86 755 26775189

Email: ma.gaili@zte.com.cn