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Our Commitment

Ms.SunYafang

Chairwoman of the Board and Executive Vice President

Information and communications technology drives traditional industries forward and serves as a catalyst for their development. As the fourth industrial revolution takes hold, new innovations and disruptive technologies will boost that development to a whole new level. More companies are starting to look beyond capital gains, exploring how they can benefit from participation in a sound industrial ecosystem. This has driven our transition from an industrial civilization to one that thrives as an ecological community. Against this backdrop, sustainability is not only a recurring theme in global social and economic activities, but a matter of strategy.

At Huawei, we have built our sustainability management system around the needs of our customers and other stakeholders. We are constantly improving our approach, striding forward with clear direction and a common goal. We provide quality ICT products, solutions, and services to thousands of businesses and governments, and billions of people. To date, we have deployed more than 1,500 networks in over 170 countries and regions. We have redoubled our efforts to reinforce compliance systems in our subsidiaries outside China, appointing and training compliance officers in 85 key countries to ensure that we abide by all applicable laws and regulations. Dedicated employees are at the heart of everything we do. In our commitment to develop local ICT talent, we have increased the percentage of local hires to 72% in our offices outside China. We provide our outstanding employees with a solid platform for realizing their full potential, while creating more jobs in local communities and boosting local economic growth. Last year, we also established a mature network security assurance system. This system includes contingency plans for 10 potential emergency scenarios, such as earthquakes and war, with procedures that help customers rapidly restore networks and ensure stable network operations. Huawei is an active player in the ICT industry. We are fortunate in that we can leverage our own ICT expertise to improve competitiveness and efficiency—and do so in a responsible, sustainable way. We will continue to work with all sectors of society to embrace the world of new opportunities that sustainable development brings, while promoting socioeconomic growth and improving the environment in which we live.

As the world prepares itself for the sweeping changes of digitization, we must remain open and collaborative to maximize the value of connections. Economies are going digital, and it’s no longer practical to forge ahead alone; instead, we must carefully position ourselves and grow together as a thriving ecosystem. Moving forward, we will remain focused and continue to patiently invest in the future, applying ourselves to the pursuit of momentous technological breakthroughs. Our ultimate goal is to enable full connectivity between people and people, people and things, and between things and things, and in doing so create a more sustainable, better connected future.

Kevin Tao

Chairman of the CSD Committee

ICT is crucial for human progress in modern society. It is clear that connectivity-centered ICT technologies are catalyzing transformation in every industry. In addition to boosting business efficiency and enriching people’s lives, ICT is transforming society in a way that creates economic opportunities, protects the environment, and makes our world more sustainable.

In 2015, we remained focused on our Pipe Strategy and achieved strong growth in all our business segments. Nevertheless, business growth is not our only goal, as we are equally committed to fulfilling our corporate social responsibilities and pursuing sustainable development. In short, we aim to build a Better Connected World. To this end, we place great emphasis on sustainable operations, provide customers with sustainable products, solutions, and services, and collaborate with partners to create a robust business ecosystem.

Sustainable Operations

Operating with integrity and compliance is one of our key focus areas. We always live up to our core value of inspiring dedication and take good care of our employees. To minimize the environmental impact of our operations, we are exploring ways to save energy and cut emissions, and introducing clean and renewable energies. To build a more sustainable supplier ecosystem, we have comprehensively embedded sustainability requirements into our procurement strategies, processes, and supplier management.

In 2015, our employee localization ratio outside China reached 72%, and our investment in global employee benefits exceeded US$1.4 billion, up over 25% year-onyear.

Through technological and management improvements, we saved 44.3 million kWh of electricity, with our energy consumption per unit of sales revenue dropping by more than 10% year-on-year. Our in-house solar power stations generated 20 million kWh of electricity, reducing CO2 emissions by approximately 18,000 tons. As part of our efforts to more effectively manage the supply chain, we refined our conflict minerals management strategy, investigated 977 suppliers concerning their use of conflict minerals, and followed responsible procurement practices.

Occupational health and safety has long been our focus. In this regard, we have established a corporate-level global safety incident ownership mechanism, and adopted a range of measures to mitigate and eliminate risks. In 2015, we extensively deployed the On-Board Diagnostic (OBD) system to manage driver behavior in regional projects. This system produced positive results, including an award from Vodafone that recognized our best practices for driving safety management.

Sustainable Products and Solutions

In the Internet era, cyber security and user privacy are key industry concerns. We emphasize that our commitment to cyber security will never be outweighed by the consideration of commercial interests. We continuously optimize our approach to managing cyber security and user privacy, and have created an end-to-end assurance system. Our ongoing efforts have paid off: In 2015, we received the Transparency Award for cyber security from the governments of four cities in Lower Saxony, Germany. Another example of external recognition is the 10-Year Excellence in Information Security Testing Award from the International Computer Security Association Labs.

We have integrated eco-design and circular economy practices into the entire product lifecycle, and created our circular economy business model, including the cradle to cradle practices for sustainable resource use. At the product design stage, we aim to maximize product lifespan and ensure easy take-back, maintenance, recycling, and reuse. Our design approach also adopts the lifecycle assessment methodology to help us select recyclable or compostable materials, thus minimizing material use. Thanks to these measures, in 2015 we reduced the rate of waste sent to landfills to 2.03%. In China and Malaysia, we set up an online device recycling system that allows our consumers to trade in their old phones and receive subsidies on new ones. This system complements our existing Global Green Recycling Program, which comprises 444 recycling stations across 23 countries and regions.

We have also obtained leading environmental certifications for certain of our products, which demonstrate their strong environmental credentials. In 2015, six Huawei phones were certified based on the UL110 standard, and five of them (e.g., the P8 and Mate8) achieved the highest level (Platinum) UL110 certification. Our entire range of campus network switches were certified with the Green Product Mark of TÜV Rheinland.

We have also obtained leading environmental certifications for certain of our products, which demonstrate their strong environmental credentials. In 2015, six Huawei phones were certified based on the UL110 standard, and five of them (e.g., the P8 and Mate8) achieved the highest level (Platinum) UL110 certification. Our entire range of campus network switches were certified with the Green Product Mark of TÜV Rheinland.

Sustainable World

In 2015, we connected millions of people to high-speed networks in both developed (e.g., Canada) and developing (e.g., Sri Lanka) countries. In Kenya, we launched a new initiative to improve the affordability of smartphones by enabling people with low incomes to purchase phones on installment. In Ethiopia, our Desktop Cloud Solution helped over 50,000 students learn more efficiently with the aid of ICT technologies. To support innovation and developers globally, we launched the Developer Enablement Plan with US$1 billion of funding, technology platforms, and other support. We also expanded Seeds for the Future, our CSR flagship program, to 67 countries and regions. So far, this program has benefited more than 15,000 students and increased local people’s engagement in the digital society.

We also responded quickly to the 8.1-magnitude earthquake in Nepal to restore key base stations at hospitals, government agencies, disaster relief centers, and embassies within 24 hours after the disaster. We provided essential communications services to emergency services and local victims, and maintained stable equipment operations during peak hours. Throughout the year, we ensured reliable communication for nearly 3 billion people worldwide, and supported network stability during more than 130 major events and natural disasters.

We made tremendous progress in increasing the energy efficiency of our communications products and data centers, with major improvements in battery storage and energy management technologies. For example, we reduced the power usage effectiveness (PUE) of data centers to 1.45. If natural cooling is used, this number can be further reduced to 1.2, ranking among the best in the industry. We expanded our ICT solutions for solar power stations to improve their efficiency. Our smart photovoltaic (PV) solution is able to reduce over 9 million tons of CO2 emissions every year.

Work Priorities for 2016

With a global presence, Huawei faces diverse business situations in local countries and regions where it operates. Technology is advancing at a lightning pace; so is the way it is used. Our stakeholders are placing increasingly high requirements on us. These trends are bringing us face to face with tremendous challenges. However, with challenges also come opportunities. These are both key driving forces behind our management improvements, and we strive to turn them into competitive advantages. In 2016, we will focus our efforts on the following priorities:

  • Bridging the digital divide to enable information access for more people;
  • Implementing end-to-end practices for cyber security and user privacy protection, and supporting network stability during major events and natural disasters worldwide;
  • Optimizing our eco-design skills to provide more energy-efficient products and solutions;
  • Implementing our circular economy strategy and expanding the Global Green Recycling Program;
  • Continuing the supplier energy conservation and emissions reduction program to build a greener supply chain;
  • Rolling out social contribution activities around the world;
  • Enhancing communication with customers, governments, industry players, and other key stakeholders; and
  • Conducting a sustainability maturity assessment to drive continuous improvements in all our business domains.

We are an ambitious company and we view sustainability as key to our survival and development. We are striving to integrate sustainability into everything we do, and empower all employees to contribute as much to Huawei’s sustainable development as they can. I’m thankful to our employees for their efforts, and to our stakeholders for their ongoing support.

Huawei stands ready to collaborate with other industry players to make tremendous breakthroughs. I look forward to greater success in 2016.