It has been 20 years since ESG was officially proposed by the United Nations as an overall concept. Over the past 20 years, sustainable development has gradually evolved from a concept to an important part of enterprises creating their own value and building a sustainable ecosystem.

Sustainable business establishes the purpose and role of business based on social purposes, so as to re-examine all aspects of an enterprise's strategy, operation, production, and sales, find the optimal path between the economic interests, social interests, and environmental interests of the enterprise, and promote the harmonious development and overall progress of business, society, and the environment. The integrated development of sustainable concepts and industry has become a hot topic of concern in the industry. How to develop sustainable development methods at the commercial level has become an important issue facing enterprise development.

On April 23, Li Ning Group (02331) released the “2023 Environmental, Social and Governance (ESG) Report”. This is the 18th year in a row that Li Ning Group has issued its corporate social responsibility/ESG report. As early as 2006, Li Ning issued its first corporate social responsibility report, and in 2014, it took the initiative to release the first ESG report, all reflecting Li Ning's leading sense of sustainability.

Li Ning's sustainable strategy pursues integrating responsible ideas into the entire value chain of product design, procurement of production materials, production and processing, marketing, and waste treatment, improving social and environmental management systems, and moving towards a sustainable vision through innovation and transformation. This report not only showcased Li Ning's sustainable development implementation achievements in “innovation and application of environmentally friendly materials,” “intelligent green operation,” and “responsible supply chain system construction,” but also presented innovative breakthroughs in product design, manufacturing, supply chain management, marketing and sales, and consumer service with many data and examples, and handed over the latest sustainable answers.

Eco-friendly products, an innovative practice leading to sustainable consumption

Looking at the sports equipment market, the entire industry is accelerating its green transformation as the country's “dual carbon” goal progresses steadily and consumer demand for sustainable consumption continues to rise.

Green, low-carbon, and innovative. In fact, these industry buzzwords are no stranger to Li Ning. As early as 2019, Li Ning officially released the “Li Ning” light elastic technology platform, which became a revolutionary part of Li Ning's independent technology matrix; in 2022, Li Ning released silk upper technology using bio-based products as raw materials, and applied the technology to the midsole. In 2023, Li Ning will go one step further in the field of sustainability, not only actively developing strategic cooperation on environmental technology and production materials, but also promoting environmentally friendly materials into diverse scenarios through independent research and development and innovation, providing sports enthusiasts with sustainable consumption choices.

According to the report, Li Ning has achieved good results in the application of new low-carbon materials in footwear products, including silk technology, rubber substrates, GCR and GCU. As of 2023, the application rate of lace uppers in Li Ning's running shoe products was about 60%; compared with the use of traditional soles, Li Ning reduced carbon emissions by about 1,500 tons, 438 tons, and 1,176 tons by using GCR, GCU, and rubber soles, respectively.

Li Ning also cooperated with a professional third party to measure the carbon footprint of the Blitz 10 basketball shoes and ultra-lightweight 21 running shoes launched in 2023, and obtained ISO 14067 certification. Among them, the carbon footprint of Flash 10 is 8.74 kg CO2-E/bis, and the ultra-light 21 carbon footprint is 6.39 kg CO2-E/bis. Compared with previous generation products, the carbon footprint was reduced by more than 30% after applying environmentally friendly materials and production processes.

After applying environmentally friendly materials and production processes, the carbon footprint of Li Ning's ultra-light 21 running shoes decreased

In terms of clothing products, Li Ning's extensive use of recycled materials in products and packaging has also brought new breakthroughs. In 2023, Li Ning used a total of about 2,839 tons of recycled environmentally friendly yarn, reducing carbon emissions by about 2,731 tons; by using eco-friendly packaging made of 100% recycled polyethylene, the total carbon reduction amount was about 1,500 tons compared with using virgin plastic packaging.

Li Ning not only provides consumers with environmentally friendly products, but also continues to leverage its rich professional competition resources, incorporate environmental protection concepts into professional sports, and encourage more people to practice a sustainable lifestyle. In the 2023-2024 season of the China Men's Basketball Professional League (CBA), Li Ning will produce game uniforms using environmentally friendly yarn made from recycled plastic bottles. In total, more than 166,400 plastic bottles will be recycled, weighing 3808 kg.

Li Ning CBA League Environmental Competition Uniform

From material research and development to product integration, Li Ning's continuous exploration and innovation of green technology and production materials is promoting the diversified development of environmentally friendly products and providing consumers with more green choices.

From the headquarters to the base to the store, Li Ning's operations are becoming more and more green

If low-carbon innovation in products such as running shoes and racing uniforms is the “visible” side of the consumer, then supporting the green transformation of R&D, production, and logistics aspects of enterprise operations requires a common determination to change throughout the value chain, as well as long-term resource investment. At present, Li Ning has implemented the concept of green operation into every aspect of the company's daily reach, including not only the company's headquarters and logistics base, but also extended to terminal stores.

Li Ning chose to start at the corporate strategy level — in 2022, Li Ning will gradually study and formulate company-wide carbon reduction and carbon neutrality plans, covering the three headquarters in Beijing, Shanghai, and Shenzhen and two innovative R&D and supply bases in Hubei and Guangxi, as well as local offices, stores, supply chain, warehousing and logistics, travel, etc., covering the company's scope 1, scope 2, and part of the three carbon emissions.

As environmental goals and plans gradually become clear, various departments are also operating to accelerate the implementation of the low-carbon transition.

According to the latest report, the Beijing Li Ning Center headquarters has built a 1.16 MW photovoltaic power plant in the park and is equipped with more than 5,000 solar panels, with a total power generation capacity of more than 1.5 million kilowatts in 2023. At the same time, office buildings such as the Shanghai Li Ning Center and Shenzhen Li Ning Center have also implemented intelligent office systems through upgrades to reduce the consumption of resources such as water and electricity.

At the Jiading Li Ning East China Smart Logistics Center in Shanghai, with the help of an intelligent park platform and automated equipment, Li Ning not only improved the efficiency and accuracy of sorting and storage operations, but also achieved operation under unlit conditions through the construction of a “black light factory”, thereby reducing the energy consumption of the warehouse.

Li Ning East China Smart Logistics Center Black Light Warehouse

In the store terminal scenario of direct communication with consumers, the Shanghai Li Ning Center flagship store built by Li Ning Company is also becoming a link between the company's green operation and the sustainable consumption of users.

At the beginning of the flagship store design, Li Ning Company used a series of environmentally friendly building materials and technologies, and used straw board materials based on straw. While achieving zero formaldehyde and being degradable, Li Ning reduced its dependence on increasingly scarce resources such as wood. It is worth mentioning that Li Ning also adjusted the lighting plan in store operation. Compared with the traditional plan, the number of lights was reduced by 18%, and a real-time energy consumption monitoring and intelligent control system was built, covering major equipment such as air conditioning, lighting, and advertising screens, which can realize intelligent switching between store clerk mode, business mode, and closing mode in various operating states, effectively improving energy management efficiency.

Shanghai Li Ning Center flagship store carbon data board

According to information, the flagship store has a display area for various products such as basketball series, running, fitness, and sports lifestyle, and a coffee area. The 800-square-meter store is operated in an orderly manner through a low-carbon system. It is not only a new sports experience center integrating shopping, sports, and leisure, but also a brand new experiment in low-carbon operation.

Supply chain management can only be responsible for the long term

Go fast alone, go a long way. As for the long-term issue of sustainable development, it is not enough to save energy and reduce emissions by ourselves; it is also necessary to work with upstream and downstream industries to promote sustainable transformation. And this requires the joint efforts of supply chain partners.

As a leading domestic sports brand enterprise, Li Ning plays a key role in coordinating the upstream and downstream supply chains in the industry, managing many types of suppliers such as materials, production, and logistics. Over the years, Li Ning has been committed to building a responsible supply chain system to achieve a win-win situation for sustainable development by upgrading management systems, strengthening responsibility audits, and carrying out risk assessments.

In 2023, Li Ning further upgraded and optimized the supplier management system, and introduced a bonus mechanism for supplier sustainable projects for the first time to evaluate and provide training on supplier energy and carbon emission management, resource recycling, and application of environmentally friendly materials to help suppliers continuously improve the quality of environmental management.

In addition, Li Ning also carried out third-party social responsibility audits on 126 suppliers, covering about 83% of finished and semi-finished product suppliers. In the end, all participating suppliers received green and blue cards, and no yellow or red suppliers.

In terms of environmental protection, Li Ning has carried out carbon inspections on major suppliers since 2020. As of 2023, Li Ning has completed carbon screening work for about 40 suppliers. At the same time, Li Ning also conducted energy and carbon emission management training for suppliers to jointly discuss future energy saving and carbon reduction plans, laying a good foundation for subsequent formulation of carbon footprint reduction plans for suppliers and products.

From running shoes to apparel, from stores to parks, from its own operations to moving forward hand in hand with supply chain partners... Li Ning Group, which upholds the long-term concept, has gone further and deeper on the path of sustainable development.

In the long run of sustainable development with no end, Li Ning recently proposed the sustainable slogan “Look Further, Run Further” (Look Further, Run Further).

Moving forward with a long-term vision is not only an attitude, but also a determination.