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Sustainability reporting on the year 2011
FOSHAN XINGUANG KNITTING CO.,LTD.
GRI Report
Sustainability reporting on the year 2011 About this Report
II
About this Report Reporting period
This report primarily focuses on thinking, efforts and accomplishments of Xinguang Knitting Co,Ltd. for fiscal
year 2011, the period from January 1, 2011 to December 31, 2011, with the data reflecting the actual results for
that period.
The report also includes the thinking, approaches and data prior to January 1, 2011.
Reporting cycle
This report is Xingguang Knitting Co.,Ltd’s second GRI report. The report is published annually.
Reporting boundary
In principle, this report covers the wholly owned operations of Xinguang Knitting Co.,Ltd, while the
environmental sections cover the printing and dyeing supplier that has formed water recycle system in conjunction
with Xingguang Knitting Co.,Ltd.
Please note that this report generally uses the term “Xinguang” to indicate the Xinguang Knitting Co, Ltd. Our
sustainability report publishes once a year.
Process for defining report content
Adhering to importance, integrity and comparability about GRI and principle of stakeholder participation, the
development of criteria for materiality and selection of priorities for reporting have been based on Xinguang’s
experience of many years with respect to sustainability topics, complemented by analyses of corporate
development strategies, differentiation of key topics and comprehensive dialogues with stakeholders.
Written standard
In the present GRI report of 2011, through the voluntary application of G3.1 Guidelines which was written by GRI
(Global Reporting Initiative), we believe our information disclosure reaches B level.
Data Source and Measurement
All data concerning KPIs source from Xinguang’s official files and statistical reports. During the period of
selecting indicators which are published in this report, Xinguang mainly thinks over the relevance, materiality and
availability of different concrete indicators.
Sustainability reporting on the year 2011 Content
III
Content
Cover Page
About this Report ............................................ II
Message from the chairman ........................... 1
Organizational Profile ..................................... 2
Corporation Introduction ........................... 2
Organizational Structure ............................ 2
Awards ......................................................... 2
Social Responsibility Sense ...................... 2
Corporation Governance ................................ 5
Member of governance body ..................... 5
Compensation mechanism ........................ 5
Communication mechanism ...................... 5
Conflicts of interest avoiding mechanism
............................................................................. 5
Risk management ....................................... 5
External charts endorsed .......................... 6
Membership in association ....................... 6
Engagement with stakeholders ................. 6
Economic ......................................................... 7
Product safety management ..................... 8
Production process reconstruction .......... 8
Quality control ............................................ 9
Capability of self-testing ............................ 9
Environment ..................................................10
To perfect regulatory system,
strengthen routine monitoring ................ 10
Actively to build green supply chain...... 10
Water ......................................................... 10
Energy consumption ............................... 12
GHG Emissions, effluent and waste ....... 13
Labor .............................................................. 16
Principle of non-discrimination .............. 16
Focusing on job training ......................... 17
Communication from the heart ............... 18
Human Rights ................................................ 19
Democratic managment .......................... 19
Reinforcing propaganda of human
rights ................................................................. 19
Prevention of child labor, forced and
compulsory labor ..................................... 20
Society ........................................................... 21
Integrity management and fair
competition ...................................................... 21
Anti-corruption ......................................... 21
Community ................................................ 21
Outlook 2012 ................................................. 23
GRI Content Index ........................................ 24
B level: Self declaration ............................... 30
Feedbacks ..................................................... 31
Sustainability reporting on the year 2011 Message from the chairman
1
Message from the chairman
An enterprise’s sustainable development requires itself to alter its
development mode radically, to have foresight of scientific
development and production concept of making overall plans and
taking all factors into consideration. However, nowadays there are
still numerous enterprises which ignore environment, community
and impair staff’s interest to maximize their own profits. As we know, all things in the world are in
relation with each other, so this kind out-dated, unilateral development mode will make it difficult
for an enterprise and its surroundings to form a sustainable development circle, which means that an
enterprise will court death eventually.
In recent years, stagnating of the global economy due to Euro-debt crisis and decreasing demands of
western economy have led to a decrease of production orders in global factories, which
consequently made numerous enterprises close down. Our enterprise confronted with all the
difficulties and transformed the crisis into an opportunity, while most enterprises were pessimistic
and disoriented about future. We seized the opportunity brought by enlarging domestic demand and
expanded domestic marketing portion and made the whole saleroom in an increase state. Seizing
both foreign market and domestic market, we kept promoting technology innovation, developing
new products and producing low-price products with high quality. Having had a long history of 60
years and gone through all kinds of setbacks, our enterprise has had a solid foundation. Faced with
the trend of enterprises closing down, we should never get disoriented but keep sober. We should
establish and hold the policy of sustainable development, thus we have made a strategy plan of the
following five years.
Our Corporation
CO2 Electricit Water Waste Steam
-25%
-25%
-25%-25%
-25%
Sustainability reporting on the year 2011 Organizational Profile
2
Organizational Profile
Corporation Introduction
Founded in 1954, Foshan Xinguang Knitting Co. Ltd is a historic factory, reconstructing from stated-owned
Foshan Pioneer Knitting Manufacturer to Sino-foreign joint ventures limited liability company in 1999. Due to
urban rectification and environment protection, the company has realized an integral moving from Chancheng
District to Xiqiao Science and Technology Industrial Park, Nanhai District, where is famous for fabrics.
Company’s existing plant area is 30,000m2, and its main products include series of children and adults’ fashion
made from knitting fabrics of different structures. The company processes and manufactures apparel productions
for international famous brands, such as Puma, Reebok, Dunlop, Redwood, Stussy, Obey, Cygele, Unedfeated,
Gotzburg and so on.
Organizational Structure
Awards
In Nov.2010, awarded Chinese Science and Technology Contribution Award in Knitting Industry
In May 2011, awarded Creditable Corporate in Guangdong Province
Social Responsibility Sense Enterprise vision
Foshan Xinguang, to become prior in knitting profession, and to be one of National Top 500 knitting enterprises;
To respect and value staff and to assure employee’s individual growing up and developing with Xinguang;
To maximize profits for shareholders and to pay back society positively.
Chainman
General
Manager
Vice General
Manager
Garment Operate
Department
Union
President
Purchase
Department
Administrative
Office
Warehouse Garment
Factory
A.Q.L.
Team
Interior
Department
HR
department
Facility
Department
Finance
Department
Sustainability reporting on the year 2011 Organizational Profile
3
Core values
Build a world-famous brand with best quality.
Make perfection more perfect with best service.
Boost enterprise benefits with fine workmanship.
Produce Eco-textiles to fulfill social responsibility.
CSR strategy
Xinguang has established a social responsibility management system, covering responsibilities of economy, safety
production, products quality, environment, human rights and society aspects. We promise and execute strictly
moral norms, laws and regulations. We also care about and respond to expectations of relevant interest parties to
undertake the responsibilities for economy, environment and society. Through these efforts, we will realize a
win-win among government, staff, society and environment and hold sustainable development.
Figure 1 Frame of CSR Responsibility
Sustainability reporting on the year 2011 Organizational Profile
4
CSR action plan
In recent years, we vigorously carried out enterprise’s social responsibilities. During the process, we gradually
realized that although we had certain achievement, as we can see the GRI Report of Xinguang in 2010/2011, the
awareness of social responsibilities of staff and even the whole supply chain should be improved. Therefore, we
need to improve from the following aspects:
Firstly, we should promote the staff’s awareness of social responsibilities and create a cultural atmosphere brave
enough to undertake social responsibilities. We will embark from enterprise management and make the staff
realize the importance of taking social responsibilities from top to down. We will radicate an example enterprise
and organize management to learn the concept and method of it.
Secondly, we should deepen the alteration cooperation of energy conservation and emission reduction with
suppliers. Since the year before last year, water consumption of toilets in workshop was replaced with rinse water
provided by printing and dyeing supplier, which achieved a win-win. We will promote cooperation and
communicate practical experience of energy conservation and emission reduction. We will make efforts together to
create green production environment and achieve the goal of ecological knitting.
Sustainability reporting on the year 2011 Corporation Governance
5
Corporation Governance
Member of governance body Table 1 Member of management
Management Responsibility
Chairman
LU Mingkeng
Be responsible for enterprise’s financial affairs.
General Manager
Li Lichang
Be responsible for enterprise’s overall operation and actualize annual business plan and
investment projects, emphasizing on promote enterprise’s economic profits.
Vice General Manager
Huang Weiming
Be responsible for enterprise’s administration operation, function division and appointing and
removing of middle management; representative of quality management system; and be
responsible for human right affairs.
Vice Party Secretary
Chen Zhengnan
chairman of Labor Union
Huang Jianchang
Give a training for new employees about enterprise’s basic situation and security education;
check all sanitation, security, and fireproofing regularly and assure working environment
meets products’ fabricating requirement.
Compensation mechanism To make personal goal of high management comply with the middle and long-term strategy of realizing enterprise
achievements, signing a prosecution contract and share plan is essential to confirm high management’s salary. On
the basis of signing prosecution contract and setting annual goal, we decide salary of each director and
management.
Communication mechanism To enhance staff’s participation of enterprise management, we set up communication mode at each administrative
level. There are mainly vertical communication, including congress of workers and staff, internal website, email,
monthly staff suggestion consult and advice mail box in workshop, and so on. Therefore, management can have a
perspicuity of staff’s interest requirement, indicating our valuing and respecting staff’s rights and interest.
Conflicts of interest avoiding mechanism Controlling beforehand is an important system of settling conflict of interest among directors. We employ high
management strictly and they must sign Foshan Xinguang appointment contract, which clearly regulates post
qualifications, function purview and payment and welfare. As with important operational decision-making, we
convene a directorate meeting and adopt an open vote system to make the decision.
Risk management We set up risk management system, and strengthen risk warning and prevention and value cultural construction of
risk management. We also help staff to set up a concept of “whenever and wherever here is risk”, and cultivate
favorable ability of managing risks. Through overall risk identification, our risks are mainly market risk and
production safety risk. In allusion to the former, we hold a production meeting among middle and high
management weekly and order quantity estimating meeting monthly, and discuss future market demand and price
change and corresponding action we should take. As with production safety risk, morning meeting in workshops
can awake staff to pay attention to production safety all the time and we hold fire drill yearly to strengthen staff’s
Sustainability reporting on the year 2011 Corporation Governance
6
warning awareness of safety production.
External charts endorsed By far, we haven’t yet attended or supported convention, tenet, or other proposition about economy, environment,
and society launched by external individual or organization.
Membership in association China Textile Enterprises League
China Knitting Association
Guangdong Province Textile Profession League
Foshan Textile Fashion Trade Association
Xiqiao Textile Association
Xiqiao Chamber of Commerce
Engagement with stakeholders The stakeholders are in accordance with the first GRI report issued by our enterprise. But this report we add
expectations and requirements of relevant interest parties when exposing relevant interest parties. It is summarized
through communication forms such as emails, phones, enquiries, daily communication, and speaking face to face.
Table 2 Engagement with stakeholders
Stakeholders Basis for identification and selection Key topics Approaches to stakeholder engagement
Shareholders Being the owner of enterprise To maximize the profit Monthly office meeting/annual shareholder
convention
Customers Being the source of enterprise value To supply super quality
products with best price Email/interview/telephone conference
Staffs Being the bedrock of value creation To ensure stable employment
and rights protection
By signing labor contract/advice mail
box/monthly staff suggestion consult
Suppliers Being the strategic partner To maintain long term
cooperation Email/interview
Government Being the law maker and defender of
lasting peace & stability
To comply with the laws, to
pay tax
Interview/policy execution and acceptation of
supervision
Community Being the provider of public service To support the community
development Interview/ participant in management
Sustainability reporting on the year 2011 Economic
7
Economic
900900900900
1100110011001100
0
200
400
600
800
1000
1200
2010 2011
Basic¥wage¥level¥in¥Foshan
China¥CPI¥in¥2011
4.60
4.90 4.90
5.40 5.305.50
6.40 6.50
6.20 6.10
5.50
4.20 4.10
0.50.50.50.5
11111.21.21.21.2
-0. 2-0. 2-0. 2-0. 2
0.10.10.10.1 0.10.10.10.10.30.30.30.3
0 .50 .50 .50 .50 .30 .30 .30 .3
0.50.50.50.5
0.10.10.10.1
-0.2-0.2-0.2-0.2
0 .30 .30 .30 .3
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
D
ec
¥o
f¥
20
10
J
an
¥o
f¥
20
11 F
eb
M
ar
A
pr
M
ay
J
un
J
ul
A
ug
S
ep
O
ct
N
ov
D
ec
Year¥on¥year %
Month¥on¥month %
Xinguang all along maintains competitive advantages by best quality with best price, although the ever increasing
competitive pressure of cost from Southeast Countries. In 2011, the business volume with existing customers
boosts and developed new ones. The turnover in 2011 keeps an upward tendency. However, the profit has been
squeezed by the growing increased operational cost. The profit dropped by 26.45%.
In 2011, we contributed tax of RMB7.29 millions with down 11.14%. Even so, we are still one of top 20, whose
payment to government ranges from RMB 5 million to RMB 10 million.
Turnover
8695.82
13013.62
02000400060008000
100001200014000
2010 2011Year
/10,000
Turnover by customer
48.52 0 36.9
5411.79
3560.23
1586.982454.62
8431.18
179.2 160.8
0100020003000400050006000700080009000
Puma Obey Asobio Russell Others Customer
/10,000)
2010
2011
Operation Cost
72474.7
109236.3
0
20000
40000
60000
80000
100000
120000
2010 2011Year
/10,000
Payment of Workshop Employee Wages
857.86
700.49
2.59
1.7
0100200300400500600700800900
1000
2010 2011 Year
/10,000
0
0.5
1
1.5
2
2.5
3
Annual wage per capita
Workshop EmployeeWages
Annualwage per capita
Tax payment
728.76
809.93
680
700
720
740
760
780
800
820
2010 2011 Year
/10,000
Profit
41.89
30.81
05
10
15202530
354045
2010 2011 Year
/10,000
To do what is best for shareholder s
Sustainability reporting on the year 2011 Economic
8
Product safety management We strictly comply with the Basic Safety Technology Prints, General Specification for Eco-Textiles and advocate
green production. Along with our textiles has passed the authorization of Oeko-tex 100, our productions has
become environmentally confidence textiles exempted from inspection.
To make garment metal-free prior to delivery is our product safety management principle. We have purchased
metal detectors NCA made in Japan to have every garment to passed through it, starting from all accessories and
trims to the bulk. For management, meanwhile, we developed “One Person, One Needle” Policy. All sewing
workers must be familiar with Needle Replacement Procedures before starting sewing; new needles are only
handed out when the damaged needle or all needle parts of a broken needle are returned to nominated person: If all
parts of broken needles can not been found out, the sewing garment need to pass through the metal detector. Only
the garment without broken needles can the employee get the new needle. All broken needles (all parts) must be
taped on the broken needle report, which can guarantee the sewing garment without needles as well as manage the
needle stock control.
Under above stringent product safety management, significant fines for non-compliance with laws and regulations
concerning the provision and use of products and services never occur in Xinguang.
Production process reconstruction As we can see from below chart, we only assigned one nominated worker to examine cutting panels and printings.
And only after sending panels to have printed in printing factory can the worker examined the printings.
Intermittent working caused is common as well as losing panels easily. But through improving process, we divide
the panel checking and printing checking, that is for both are done by two nominated person. And the checking
work must been done immediately once the cutting was finished. Now the production fluency has been greatly
advanced, lowering the losing panels and stimulating workers’ production enthusiasm. Currently, the daily panel
checking quantities jump to around 4,000 pieces, up 50% than before.
* Pattern:the template of cutting fabric.
Figure 2 Reconstruction of cutting procedure
Approve
pattern
Approve
pattern
Spread
fabric
Cut fabric Panel check Print check
Before
Cut fabric Panel check& Print
check
After
Spread
fabric
Sustainability reporting on the year 2011 Economic
9
Quality control Xinguang gradually formulates the systematic quality control
process:Inline—Endline—ZDC—A.Q.L. and trains qualified QC personnel. On
every control process we collect the daily/weekly/monthly/quarterly defects
statistics, compared with the defective rates benchmark. The comparison analysis
can statistically support how to lower the defects rate at weekly quality control
meeting. Now the production defective rate in Xinguang is down to 5%.
Capability of self-testing To save time and fee of regular fabric and garment testing, our inhouse-lab has
been accredited by SGS to do the normal testing items from 2010. The inhouse-lab
has helped us to cut down the cost greatly. The average monthly testing fee has
declined to RMB 30,000-50,000 from RMB 100,000-200,000 and 1 working days
we only take but 7-8 working days on SGS side. Nevertheless the testing items in
our testing room have not been added since 2010. So we should equip the testing
room more and thus keep ongoing improving the capability of self testing.
Sustainability reporting on the year 2011 Environment
10
Environment
Xinguang strictly implements domestic environmental law, such as Environment Protection Law of People’s
Republic of China and Energy-Saving Law of People’s Republic of China. At the end of 2010, Xinguang tried to
introduce environmental managing system ISO14001. Unfortunately, it didn’t pass the authentication. The main
reason was that our employees didn’t attach great importance to environment protection and their awareness of
environment protection was weak. But we didn’t give up and continued to perform the standard environmental
management system and made it specified. In order to make the employees and top level of management familiar
with Xinguang environmental policy and advantages of environment protection on company’s economic interest,
we held all kinds of environmental awareness trainings for all staff.
To perfect regulatory system, strengthen routine monitoring Our enterprise has gradually formed a work team led by deputy general manager, coordinated by GM office,
equipment department, logistic department and financial department, etc. to manage, fulfill, and supervise
environment protection. Its work contains the designation of social responsibility management, implementation of
social responsibility practice (statistics), communication about social responsibility and compiling of social
responsibility reports. Among them, daily supervision to collect, count and analyze energy consumption data are
critical. It is beneficial to promote energy conservation by collecting, analyzing and contrasting energy utilization
and consumption between offices and workshop.
Figure 3 Routine Monitoring System
Actively to build green supply chain Confronted with frequent “green bulwarks” built by western developed countries and continuously atrophied
consumer confidence due to poisonous and harmful food, our enterprise clearly realized it’s quite necessary to
build a green supply chain in the long term. The green supply chain requires that the design of the products’ whole
lifecycle layout should be done from the perspective of environment protection and ecological consideration,
including green design, green material, green production, green purchasing, packaging and transportation.
Certainly the applying of concept of green supply chain also spread among our relevant interest parties including
suppliers and clients. Therefore, our enterprise integrates the layout of products’ green lifecycle step by step
combing with our own reality.
Water
The water consumption source is mainly from the water supplying system planned by industrial park committee,
which does not make great impact on the surface water, ground water, lakes and rivers. During our production
process, it rarely involves water for industry. Instead, water for life is dominating supply for our office toilets and
workshop toilets. Our water-saving plans combine management and technological reformation of energy
conservation and emission reduction, inclusive of water statistic, water reusing, publicity and education of
water-saving, routine inspection of water-pipes.
Equipment Dept.
Financial Dept.
Logistic
Dept.
KPI
Report Administ-
Rative Office
Water & Energy Management
Waste, Capacity, fuel fee
Vice
G.M.
Sustainability reporting on the year 2011 Environment
11
� Water used in office building
The toilets of office building have been installed squatting pans with tank of 6l water, which can help us to reduce
water consumption by 1020l per day while compared with the squatting pans with tank of 9l—there are usually 68
staff in our office and it is estimated one person go to the toilet 5 times. In addition, the water tap on the 3th floor
are sensor controlled, which get rid of the bad habits of leaving with turning off the tap.
Water tap of sensor controlled Squatting pans with tank of 6l water
� Water used in workshop
The workshop toilets make full use of the rinse water produced by HengHui Dyeing factory. The factory has a
system for shunting of dyeing water. The dirty water will be shunted to waste water treatment plant, and clean
water will be shunted the underground cistern for reuse. We save 6-7 tons water per day as a result.
Water for life t
48446
45651
4400044500450004550046000465004700047500480004850049000
2010 2011 Year
Water for life t
23.0522.14
0
5
10
15
20
25
2010 2011 Year
Water for lifeconsumption t
Water for lifeconsumption pergarment t/pic
� Retrieving steam condensate in printing and dyeing factories
Henghui printing and dyeing factory is our important fabric dyeing supplier. However, printing and dyeing factory
is high energy-consuming enterprises and consumes a lot of steam during the process of fabric rinsing, desizing,
steaming, and drying, etc. It is calculated that a large and medium-sized enterprise produces tons of steam
condensate and quantities of redundant steam. However, enthalpy in the water pipe is as high as 600 to 800kj/kg,
which obviously a resource of great value to be utilized. Since the steam condensate recovery machine put into use,
the factory has retrieved substantive redundant steam and heat. As a result, we have eliminated tail steam emission
and formed a virtuous circle of steam condensate retrieving. The use ratio of heat energy in the factory has
increased by 50% with 200m3 steam condensate recovery. The water temperature of it is about 50 to 60℃, which
decreases electricity consumption of heating up water leading to a 20% to 30% decrease of electricity
consumption.
Sustainability reporting on the year 2011 Environment
12
Energy consumption � Electricity
Table 3 lists in 2011 the energy-saving management and initiatives we launched, whose effects are notable.
Xinguang saw electricity consumption a drop to 0.2179 kw/h per piece garment, reaching the 5 years’ goal. It
might also note that the off-peak power consumption management implemented by industrial park plays an
important role. Thus, we are still prudent to the consumption reduction of electricity.
Table 3 Electricity Management& transformation
Office
Toilet lighting transformation Change the switches into Acousto-optic induction switches; The lights are up when
people come and the lights go out when people leave.
Computer management
transformation Employees have to turn off the monitor power if they leave more than 10 minutes.
Workshop
Installation of servo direct drive
on sewing machines
Partly install the servo motors which adopt electronic servo control on old sewing
machines.
Lighting switches modification The lighting switches in workshops have been changed to parallel circuit to reduce
useless lighting.
� Diesel and gasoline
The diesel consumption and gasoline consumption lay on the business cars and trucks in Xinguang. We finished
installing GPS monitoring system in business cars, which can effectively measure mileage and track refueling. For
the trucks, we issued concrete measures to improve vehicle using .Those projects have successfully brought us an
expense reduction by around RMB60,000-70,000 as well as the decrease amount of burning fuel.
� Steam
Steam consumption in Xinguang mainly is to iron ready garment in the ZDC. We enhanced trainings for
garments-ironing workers in 2011(as included in 2010 GRI report). Compared with 2010, we not only
strengthened the training, but also transformed regular training into monthly training. In addition, we avoided
steam waste by setting a standard process of ironing clothes.
Sustainability reporting on the year 2011 Environment
13
19164
21081
18000
18500
19000
19500
20000
20500
21000
21500
2010 2011
Gasoline¥Consumption l
0.0100
0.0093
0.0088
0.0090
0.0092
0.0094
0.0096
0.0098
0.0100
0.0102
2010 2011
Gasoline¥Consumption¥per¥garment l/pic
GHG Emissions, effluent and waste
� Waste water
Our production procedures include cutting, sewing, packing, which don’t produce industrial sewage. Therefore,
the source of our sewage comes from drainage of offices and workshop toilets. It is non-poisonous and harmless,
belong to ordinary domestic sewage. Since we pave waste pipes complying with arrangement and management of
industrial zone, which are directly connected to sewage disposing factory, there don’t exist a problem of
disordered draining or secret draining. We are informed by the sewage disposing factory that the total discharge of
our living sewage in 2011 is 45,651 tons, decreasing by 5.77% compared with 2010.
Sustainability reporting on the year 2011 Environment
14
� Waste
Papers
We have realized a 100% recovery of paper scraps since we
moved to new plant in 2008. Paper scraps produced in working
process occupied a great percentage. Therefore, we implemented
several management measures, including: documents used for
interior circulating except official ones printed both sides,
reducing copy amount by passing along documents as many as
possible, promoting paperless office, and making full use of
enterprise’s email, etc.. Meantime, we placed a paper-retrieving
carton beside copying machine to remind staff of saving paper.
Paper used classification Paper-retrieving cartons
Non-paper scraps
Non-paper scraps are mainly package poly bags for garments.
Before 2011, there were repeatedly poly bag orders because of
oversight during poly bag purchasing. Withal, we strengthen
approval management of poly bag purchasing. We require that
the purchasing is effective unless directors approved and signed
for affirmation.
Abandoned panels
Abandoned strips are mainly from cutting workshop. In2011,the
abandoned panels has decreased by 3.12%. The main reasons of
abandoned strips decrease is: on one hand, we bought more
computer cutting beds; on the other hand, we improved fabric
spreading management (two fabric spread workers account, sign
and fill in layers of spreading fabric.) In consequences, the
veracity of quantities of cutting slice improved, thus decreased unnecessary waste during cutting.
Sustainability reporting on the year 2011 Environment
15
� CO2 Emission
It is known that CO2 emissions are directly linked with the energy consumption. Based on above energy reduction,
the sum of CO2 emissions accordingly reduced.
0.2876
0.2724
0.2500
0.2600
0.2700
0.2800
0.2900
0.3000
0.3100
0.3200
2010 2011
CO2¥Emission¥per¥garment kg/pic
CO2¥Emission¥in¥Enablon¥report kg/pic
*According the carbon calculation of BP China
1gasoline(L )=2.3 CO2(kg)
1 diesel(Kg )=3.06 CO2(kg)
1 electricity(kw/h )=0.997 CO2(kg)
Sustainability reporting on the year 2011 Labor
16
Labor
Xinguang strictly obeys the labor contract law of People’s republic of China. Sign contracts with our employees
legally and the rate of contract-signing reaches to 100%. We always pay salary to employees punctually and
respect their privacy. In 2011, there is no significant labor dispute arising in Xinguang.
We emphasize production safety management. New employees must receive 3-Tiers Safety Education. And we
edited employee handbook for new employees, which makes them know about enterprise’s regulations and
systems. Manufacturing workers must wear protection equipments before beginning their online work and all the
cutting tools must be placed together. Now the risk of staff casualty has been decreased to lowest since we have
computer automatic cutting bed. In 2011, the rate of industrial injury, occupational diseases and work delay is 0.
In 2011, we still faced up hardship on recruitment. The total workforce by the end of 2011 is down 52.22%
compared to a year earlier with the manufacturing moving westward.
The turnover in 2011 is 138 in total, and the turnover rate approached 27.6%. The high staff leaving rate
demonstrates the necessary of improving the labor management.
Our employees are legally covered social comprehensive insurance and entitled to the mandatory holidays.
However, some employees reject enrolling in the social insurance program because of deduction from income.
Only 172 employees were covered in 2011 and the rate is 63.7%. We will intensify education to the importance of
social insurance known to them. By 2013, least 80% employees are insured by the social insurance.
Benefit List
Meal allowance Free body check
Free shuttle Birthday gifts
Attendance bonus Seniority wage
Principle of non-discrimination
Xinguang performs “Equal, Non-discrimination” recruiting policy, resisting racial discrimination, gender
discrimination, age discrimination, region discrimination and so on. There is no discrimination case at Xinguang in
2011. “Equal Opportunity, Competing for Job” is our employing principle. We firmly set the same level of basic
salary for same job. At the end of 2011, the work force distributions are as follows:
By gender, the ratio of men to women is basically same as last year.
By region, the ratio of other province except Guangdong slightly declines because of the change of national
policies and growing increase of the living standard in coastal cities.
By age, our employees are comparatively young. Mostly are below 35.
Sustainability reporting on the year 2011 Labor
17
Gender
32%
68%
Male
Female
Region
55%
45%
Guangdong
Except¥Gusngdong
Age
63%
28%
9%
18-35
36-45
>45
Focusing on job training
Xinguang is exploring the win-to-win development between employees and company. We overall plan employees’
vocational skills and company’s development program through monthly employees’ opinions consulting meeting.
And we always hold the training for our employees, about occupational health and safety, labor laws, production
skills and management knowledge. We hold 50 occupation trainings in 2011, including physical testing trainings
for inhouse-lab workers, fixing operation skill trainings for ZDC workers, quality requirement trainings for all
staff, lectures of strengthening the cohesive force. The average time per training is 1.5 hours and all staff benefit
from these meetings.
By the end of each month and year, Xinguang will hold the competition of “Process Star”. The awardee can gain
bonuses, which increases the employees’ motivation. For example, annual garment capability for one employee is
increased from 5100pcs in 2010 to 7600pcs in 2011.
Table 4 Comparison of production efficiency
Content 2010 2011
Total workforce 411 270
Capacity(in 10,000 pieces 210.16 206.24
Capacity per capita in 10,000 pieces 0.51 0.76
process star of ironing competition of ironing garment competition of stiching garemnt
garment(front centre)
Sustainability reporting on the year 2011 Labor
18
Communication from the heart
To enhance staff’s participation of enterprise management, Xinguang set up all kinds of communication methods:
congress of workers and staff, internal website, email of high directors, monthly staff suggestion consult and
advice mail box in workshop, and so on.
In summer of 2011, we received complaint about the high temperature in workshop from the advice mail box. Our
managers quickly responded to this matter by installing cooling spray devices by the end of 2011. This year, the
workers reflected the cooling system is helpful to prevent the high temperature.
Advice-mail box in workshop Cooling-temperature machine
Sustainability reporting on the year 2011 Human Rights
19
Human Rights
Continuous improving is the guideline of developing human rights work and respecting staff’s legitimate interest
is the core. We emphasize humane care, as presented in 5.1 in our first GRI report. We respect staff’s material and
mental demands, create equal and fair opportunity of business development. We also exert staff’s creativity,
enhance their loyalty, thus improve product efficiency and strengthen enterprise’s competitiveness.
Democratic managment
Xinguang has established congress of workers and implemented democratic management for over 20 years
according to Trade Union Law and Union Rule to work independently. The labor union in Xinguang still worked
according to daily procedures and completed the 2011 working plan step by step, including:
We adopted the advice made on staff suggestion consult that company provided herbal tea for free and offered
herbal tea and soup for free in the canteen.
The labor union went to visit Zhanghuijuan who was in hospital because of nephropathy and Liqiaoyi whose hand
bone had a fracture and got to know their family and living condition.
In the Women’s Day activities, we invited Doctor Li to have physiological hygiene lessons for female workers and
held activity of visiting the park.
We insisted on safety education and fire drill for employees.
Since the level of minimum wage has been raised, labor union conferred with the enterprise and strived for
employees’ lawful rights and interests.
As for migrant employees visiting family during Spring Festival, company gave a fare reimbursement. Besides,
company holds annual staff dining together.
Annual staff dining Kick off meeting of safety production Knowledge forum at Women’s day
The coverage of employees participating in collective bargaining agreement is 100%. On the basis of national
laws and regulations, staff representatives conferred with company about working hours, holidays, wages,
mandated welfares and festival activities, etc and signed collective contracts in the end. On Dec. 28th, the
Collective Bargaining Agreement was approved on the labor union presented by employee representatives and
company representatives. Employee representatives signed on it and it was valid from then.
Reinforcing propaganda of human rights
Xinguang specializes in OEM, accordingly requiring production workers to assemble with little knowledge. They
have weak awareness of protecting their rights. Based on this, Xinguang holds all kinds of trainings one or two
times each year, aiming at enhancing employees’ awareness of human right and right protection. In addition, we
intensify education of human right for employees by pasting propaganda material on spare area in public places in
company.
Sustainability reporting on the year 2011 Human Rights
20
Prevention of child labor, forced and compulsory labor
The number of child labor and forced and compulsive labor in Xinguang in 2011 is 0, the same as in 2010. This is
because Xinguang always strictly controls workers employing. Since company has bought the ID card, check
pseudo system, entering new recruits’ ID information into the system, we can read new recruits’ real ID
information, such as name, household register and age, etc, which can help us to confirm recruits’ real ID.
As with avoiding forced employment and compulsive labors, signed labor contract has a provision that employees
must apply for resign a month in advance.
As for avoiding child labor, company also use visual inspection, making a careful comparison to see if the
employee is in accordance with what ID card says. By doing this, we can avoid employ workers with false ID
card.
Sustainability reporting on the year 2011 Human Rights
21
Society
You are what you done for society----the citizen image
Integrity management and fair competition
Xinguang is mainly engaged in export-oriented economy, which requires us to not only obey domestic laws and
regulations, but also understand and execute law requirement of import countries. Integrity is a basic principle of
marketing economy. Based on this, we establish and carry out standard system of stocking and shipment
inspection and our products pass rigorous commodity quality supervision conducted by circulating field. We
obtain clients’ favor by developing new fabrics continuously, adopting new craft and providing products of super
quality but not by advertising, slandering competitors or aimlessly following price war. Xinguang has never been
sanctioned for violating laws and regulations as well as significant fines.
Anti-corruption
Combating corruption and upholding integrity in Xinguang is always limited to the education of party members in
party organization. By far, we haven't set up a set of complete system of internal investigation, anti-corruption and
anti-commercial-bribe in the whole company. This is the exact place where Xinguang should improve in later
management.
In 2011, Xinguang educated the warehousing department, purchasing department, and financial department
how to reject the counterfeit invoices and reimbursement slips. And one customer required us to conclude Vendor
Incorruptibility Convention, which had great enlightenment significance to Xinguang. In this respect, Xinguang
will establish an incorruptibility convention fit for Xinguang and encourage staff to study and get trained. We will
standardize the procedures of purchasing and financial staff’s transacting note cancelling and set up
incorruptibility gradually. In consequence, we will perfect our rules and regulations about anti-corruption and
anti-commercial-bribe.
Community
Committed to the community development
Community is one of our important stakeholders. Dedicating our
efforts to build harmonious community relation is the goal of Xinguang
to propel community development. As for relevant community parties,
we have local government and management committee of science and
technology industrial park. We set labor union chairman and deputy
general manager as main contact persons, hammering at complying
with local community’s management methods and existing principles,
eradicating things that damage community, and set up a good image of
serving the community. The two main contact persons are active to
participate in community administration, care community environment
protection, carry out community public security, and pursue safety
production. Meanwhile, Xinguang responds positively to the “Do Good
to Xiqiao” activity held by local government, contributing to eliminate
Sustainability reporting on the year 2011 Society
22
community poverty. In 2011, Xinguang took part in community
activities about 13 times. They mainly are:
Charity activity held by the government
The whole employees in Xinguang donated 11,755.4yuan in total. We
organized over 40 persons to participate the charity activity, indicating
the determination of Xinguang to eliminate community poverty and
build harmonious community.
Tree planting
Xinguang responded actively to the industrial park’s call about planting
trees on Tree Planting Day. On that day, top level management and staff
representatives participated planted 6,000 saplings. The participants
included chairman, secretary of party committee, deputy general
manager and HR manager, etc.
Fun sports
The industrial park committee holds fun sport activities in March every
year. And all large and middle-sized enterprises send a team to take part
in it. In 2011, Xinguang sent a team of 11 persons and gained an excellent grade of ranking 8th.
Sustainability reporting on the year 2011 Society
23
Outlook 2012
Being the first year of our five-year strategic plan, the year of 2011 is of special
significance to whether we can realize sustainable development. Review the
development process of the enterprise on all sides, we had certain achievements, for
example, the goal of energy consumption to decrease by 25% by 2015(i.e., yearly
decreasing rate being 5% at least compared with the consumption amount of energy
2010) was achieved. However, we noticed that performance assessment might differ
because GRI report was lack of consolidated date collection and caliber. Even so, we
were still keeping improving as we could, and finding an approach that could unify
economic benefit, environmental benefit and social benefit. Standing in the new
development beginning, we would plan as a whole on the basis of scientific outlook
on development and firmly inherit the concept of “Quality supreme, security first,
innovation bold, people oriented and production clean”. In addition, we would tamp
our foundation and seek for progress in a stable condition to enhance abilities of
sustainable development on all sides, including business operation, environment, and
society.
Sustainability reporting on the year 2011 Outlook 2012
24
GRI Content Index
Section Description Chapter in Xinguang
Sustainability Report
Page
Strategy and Analysis
1.1 Statement from the most senior
decision-maker of the organization
Message from the chairman 1
1.2 Description of key impacts, risks, and
opportunities.
Message from the chairman 1
¥ ¥ ¥ ¥
Organizational Profile
2.1 Name of the organization. Corporation Introduction 2
2.2 Primary brands, products, and/or services. Corporation Introduction 2
2.3 Operational structure of the organization,
including main divisions, operating
companies, subsidiaries, and joint ventures.
Organizational Structure
2
2.4 Location of organization's headquarters. Corporation Introduction 2
2.5 Number of countries where the organization
operates, and names of countries with either
major operations or that are specifically
relevant to the sustainability issues covered in
the report.
Corporation Introduction
2
2.6 Nature of ownership and legal form. Corporation Introduction 2
2.7 Markets served (including geographic
breakdown, sectors served, and types of
customers/beneficiaries).
Corporation Introduction
2
2.8 Scale of the reporting organization. Economic, Labor 7, 16
2.9 Significant changes during the reporting
period regarding size, structure, or ownership.
Corporation Introduction 2
2.10 Awards received in the reporting period. Awards 2
¥ ¥ ¥ ¥
Report Parameters
3.1 Reporting period (e.g., fiscal/calendar year)
for information provided.
About the report II
3.2 Date of most recent previous report (if any). About the report II
3.3 Reporting cycle (annual, biennial, etc.) About the report II
3.4 Contact point for questions. Feedbacks 31
3.5 Process for defining report content. About the report II
3.6 Boundary of the report (e.g., countries,
divisions, subsidiaries, leased facilities, joint
About the report II
Sustainability reporting on the year 2011 GRI Content Index
25
ventures, suppliers).
3.7 State any specific limitations on the scope or
boundary of the report (see completeness
Principle for explanation of scope).
About the report
II
3.8 Basis for reporting on joint ventures,
subsidiaries, leased facilities, outsourced
operations, and other entities that can
significantly affect comparability from period
to period and/or between organizations.
About the report
II
3.9 Data measurement techniques and the bases
of calculations, including assumptions and
techniques underlying estimations applied to
the compilation of the Indicators and other
information in the report.
About the report
II
3.10 Explanation of the effect of any re-statements
of information provided in earlier reports, and
the reasons for such re-statement (e.g.,
mergers/acquisitions, change of base
years/periods, nature of business,
measurement methods).
About the report
II
3.11 Significant changes from previous reporting
periods in the scope, boundary, or
measurement methods applied in the report.
About the report
II
3.12 Table identifying the location of the Standard
Disclosures in the report.
GRI content Index 24-29
3.13 Policy and current practice with regard to
seeking external assurance for the report.
About the report II
¥ ¥ ¥ ¥
Governance, Commitments and Engagement¥¥¥¥
4.1 Governance structure of the organization,
including committees under the highest
governance body responsible for specific
tasks, such as setting strategy or
organizational oversight.
Organizational Structure,
CSR strategy,
Member of governance
body
2,3,5
4.2 Indicate whether the Chair of the highest
governance body is also an executive officer.
Organizational Structure 2
4.3 For organizations that have a unitary board
structure, state the number and gender of members of the highest governance body that
are independent and/or non-executive
members.
Organizational Structure
2
4.4 Mechanisms for shareholders and employees
to provide recommendations or direction to
Communication mechanism 5
Sustainability reporting on the year 2011 GRI Content Index
26
the highest governance body.
4.5 Linkage between compensation for members
of the highest governance body, senior
managers, and executives.
Compensation mechanism
5
4.6 Processes in place for the highest governance
body to ensure conflicts of interest are
avoided.
Conflicts of interest
avoiding mechanism 5
4.7 Process for determining the composition,
qualifications and expertise of the members of
the highest governance body and its
committees, including any consideration of
gender and other indicators of diversity.
Member of governance
body
5
4.8 Internally developed statements of mission or
values, codes of conduct, and principles
relevant to economic, environmental, and
social performance and the status of their
implementation.
Enterprise vision,
Core values
2-3
4.9 Procedures of the highest governance body
for overseeing the organization's identification
and management of economic, environmental,
and social performance, including relevant
risks and opportunities, and adherence or
compliance with internationally agreed
standards, codes of conduct, and principles.
CSR strategy
3
4.10 Processes for evaluating the highest
governance body's own performance,
particularly with respect to economic,
environmental, and social performance.
CSR action plan
3-4
4.11 Explanation of whether and how the
precautionary approach or principle is
addressed by the organization.
Risk management
5
4.12 Externally developed economic,
environmental, and social charters, principles,
or other initiatives to which the organization
subscribes or endorses.
External charts endorsed
6 ¥¥¥¥
4.13 Memberships in associations (such as industry
associations) and/or national/international
advocacy organizations.
Membership in association
6
4.14 List of stakeholder groups engaged by the
organization.
Engagement with
stakeholders 6
4.15 Basis for identification and selection of
stakeholders with whom to engage.
Engagement with
stakeholders 6
4.16 Approaches to stakeholder engagement,
including frequency of engagement by type
Engagement with
stakeholders 6
Sustainability reporting on the year 2011 GRI Content Index
27
and by stakeholder group.
4.17 Key topics and concerns that have been raised
through stakeholder engagement, and how the
organization has responded to those key
topics and concerns, including through its
reporting.
Engagement with
stakeholders
6
¥ ¥ ¥ ¥
Economic
EC1 Direct economic value generated and
distributed, including revenues, operating
costs, employee compensation, donations and
other community investments, retained
earnings, and payments to capital providers
and governments.
Economic
7-8
¥ ¥ ¥ ¥
Environmental
Energy
EN3 Direct energy consumption by primary energy
source.
Energy consumption 12-13
EN4 Indirect energy consumption by primary
source.
Energy consumption 12-13
EN5 Energy saved due to conservation and
efficiency improvements.
Energy consumption 12-13
EN6 Initiatives to provide energy-efficient or
renewable energy based products and
services, and reductions in energy
requirements as a result of these initiatives.
To perfect regulatory
system, strength routine
monitor,
Actively to build green
supply chain,
Energy consumption
10-13
EN7 Initiatives to reduce indirect energy
consumption and reductions achieved.
Energy consumption 12-13
Water
EN8 Total water withdrawal by source. Water 10-11
EN10 Percentage and total volume of water recycled
and reused.
Water used in office
building, Water used in
workshop; Retrieving steam
condensate in printing and
dyeing factories
11
Emission, Effluent and waste
EN16 Total direct and indirect greenhouse gas
emissions by weight.
CO2 Emission 15
EN21 Total water discharge by quality and Waste water 13
Sustainability reporting on the year 2011 GRI Content Index
28
destination.
EN22 Total weight of waste by type and disposal
method.
Waste Management 14-15
¥ ¥ ¥ ¥
Labor
Employment
LA1 Total workforce by employment type,
employment contract, and region broken
down by gender.
Labor
16-17
LA2 Total number and rate of new employee
Hires and employee turnover by age, gender,
and region
Labor
16-17
¥ ¥ ¥ ¥
Labor/management relations
LA4 Percentage of employees covered by
collective bargaining agreements.
Labor 16
LA7 Rates of injury, occupational diseases, lost
days, and absenteeism, and number of
work-related fatalities by region and gender.
Labor
16
Training and education
LA10 Average hours of training per year per
employee by gender and by employee
category.
Focusing on job training
17
Equal remuneration for women and men
LA14 Ratio of basic salary of men to women by
employee category.
Principle of Non-
discrimination 16
¥ ¥ ¥ ¥
Human Rights
Non-discrimination
HR4 Total number of incidents of discrimination
and corrective actions taken.
Principle of Non-
discrimination 16
Freedom of association and collective bargaining
HR5 Operations and significant suppliers identified
in which the right to exercise freedom of
association and collective bargaining may be
at significant risk, and actions taken to
support these rights.
Democratic
Management
19
Child labor
HR6 Operations and significant suppliers identified
as having significant risk for incidents of
child labor, and measures taken to contribute
to the elimination of child labor.
Prevention of child labor,
forced and compulsory labor 20
Forced and compulsory labor
Sustainability reporting on the year 2011 GRI Content Index
29
HR7 Operations and significant suppliers identified
as having significant risk for incidents of
forced or compulsory labor, and measures to
contribute to the elimination of all forms of
forced or compulsory labor.
Prevention of child labor,
forced and compulsory labor
20
Remediation ¥¥¥¥ ¥¥¥¥
HR11 Number of grievances related to human rights
filed, addressed, and resolved through formal
grievance mechanisms.
Communication from the
heart 18
¥ ¥ ¥ ¥
Society
Local communities
SO1 Percentage of operations with implemented local
community engagement, impact assessments, and
development programs.
Community
21
Corruption
SO2 Percentage and total number of business units analyzed
for risks related to corruption.
Anti-corruption 21
SO3 Percentage of employees trained in organization's
anti-corruption policies and procedures.
Anti-corruption 21
SO4 Actions taken in response to incidents of corruption Anti-corruption 21
Compliance
SO8 Monetary value of significant fines and total number of
non-monetary sanctions for non-compliance with laws
and regulations.
Integrity management and
fair competition 21
Product
PR5 Practices related to customer satisfaction, including
results of surveys measuring customer satisfaction.
Production process
reconstruction,
Quality control,
Capability of self-testing
8-9
PR9 Monetary value of significant fines for non-compliance
with laws and regulations concerning the provision and
use of products and services.
Product safety management
8-9
Sustainability reporting on the year 2011 B Level: Self declaration
30
B level: Self declaration
A supplementary GRI Report also presents the fundamental information for especially interested parties in the
sequence of the GRI indicators. The Xinguang Sustainability Report 2011 comply with the GRI G3.1 guidelines at
the “B level” from the graduated GRI reporting system (see following chart). Application level B, which Xinguang
has achieved, requires the most comprehensive coverage of all requirements. Information concerning about 20
Performance Indicators contained in the GRI guidelines must be disclosed. This concerns the report profile (points
1.1-4.17), as well as management approaches and performance indicators in terms of economic (EC), environment
(EN), labor (LA), human rights (HR), society (SO) as well as product responsibility (PR).
Sustainability reporting on the year 2011 Feedbacks
31
Feedbacks
Distinguished readers, we are particularly grateful for you to read the Xinguang Knitting Co, Ltd. Sustainability
Report of 2011. If you have found any mistakes, please feel free to fill in the form below and e-mail to
[email protected] or fax to 0757-81258826.
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