October 31, 2024

As climate change intensifies, the world is accelerating its shift towards sustainability and low-carbon practices. Governments are tightening environmental regulations to curb greenhouse gas emissions, promote renewable energy, and foster sustainable consumption. The 2015 Paris Agreement remains a critical global framework, with 196 countries pledging to limit global warming to well below 2°C, and ambitions to keep it below 1.5°C.

Industries are also embracing decarbonization, prioritizing energy efficiency, circular economy principles, and electric transportation. By aligning with the UN's Sustainable Development Goals, businesses are not only addressing climate change but also securing long-term success in an increasingly environmentally conscious market.

China’s Commitment to Green and Low-Carbon Growth

As the largest emitter of carbon dioxide, China plays a critical role in the global fight against climate change. China has committed to achieving carbon neutrality by 2060, a goal supported by ambitious targets to peak carbon emissions by 2030. The country's policy landscape is shaped by its 14th Five-Year Plan, which outlines concrete steps toward energy transition, including expanding the share of non-fossil energy to 25% and promoting the development of green technologies like hydrogen and energy storage.

China’s Belt and Road Initiative (BRI) also reflects its commitment to green development, with increasing emphasis on Green Finance and sustainability guidelines for overseas investments. While challenges remain in balancing economic growth with environmental protection, China's policies are steadily evolving to support its green transformation, paving the way for future cooperation in global sustainability efforts.

ZKH’s Exploration On Green And Low-carbon Development

Many companies hesitate to adopt ESG initiatives, concerned that compliance will add burdensome costs and complexity to their operations. As a result, they often take a "wait-and-see" approach, observing competitors before making changes. However, ZKH believes that integrating ESG into corporate strategies would be a chance for companies to unlock new growth opportunities, enhance reputation, and build long-term competitiveness.

Over the past decade, ZKH has made significant strides in establishing and evolving our ESG initiatives, driving impactful changes across sustainability, social responsibility, and governance.

Following international standards like GRI, ISSB, ISO14064, and ISO14067, along with China’s “1+N” policies, ZKH has crafted a thorough master plan to drive green and low-carbon initiatives, aiming to make a positive impact on the industry. In addition to establishing a dedicated greenhouse gas management team, ZKH developed a greenhouse gas management manual, conducted a comprehensive carbon inventory and verification, and continually benchmarks against industry best practices. The plan focuses on four main areas: source control, status enhancement, upstream influence, and downstream customer empowerment.

Source Control: Green principles are woven into every phase, from site selection and design to construction, procurement, operations, and transportation. This includes implementing LEED green building standards in the design of self-built facilities and utilizing new energy vehicles for logistics and transportation.

Status Enhancement: ZKH analyzes current practices to identify risks and opportunities, targeting four areas of improvement—green warehousing, green transportation, green office practices, and fostering an environmentally conscious lifestyle among employees.

Upstream Influence: ZKH enhances green practices throughout the supply chain by implementing strict access controls, daily management, and regular assessments. In collaboration with the top three logistics providers, ZKH also shares emissions reduction commitments and offers carbon management consulting and carbon accounting services.

Customer Empowerment: ZKH supports clients in reducing emissions by recommending energy-saving solutions, promoting green and low-carbon products, disseminating ESG and dual-carbon management knowledge, and assisting customers in achieving carbon reductions.

Externally, ZKH actively involved in energy-saving and environmental protection organizations, publicly discloses climate-related information, evaluates ESG performance through EcoVadis, commits to zero-emission freight transport, and declares itself as a local pilot demonstration enterprise for carbon management and SBTi-aligned scientific carbon targets.

Latest Initiatives and Innovations in ZKH’s Green Supply Chain Development: Digital Product Passport System for Industrial Goods

The increasingly severe global climate and environmental challenges have led to a worldwide consensus on the imperative of green and low-carbon development.

The European Union and other developed countries have taken the lead in green product eco-design, digital product passport (DPP) and other aspects of the clear requirements, and will be used as an important standard for products to enter the market. For example, the Digital Product Passport (DPP) initiative launched by the EU requires products to contain full life cycle data information to support the construction of green supply chains. This international trend has brought new challenges to the export of China's products, while also provided new opportunities for us to enhance the international competitiveness of our products.

The construction of the new project by ZKH: DPP Management System is aimed at responding to this market demand and enhancing the green competitiveness and export capability through digital means, and promoting the efficient use of resources and reduce environmental pollution.

As a critical link in the supply chain, ZKH connects numerous industrial product manufacturers with downstream users globally, providing essential compliance, carbon, and ESG data. Using AI-driven data generation and blockchain technology, ZKH has developed a digital product passport system that applies carbon labels to industrial products, offering comprehensive traceability and enhancing digital capabilities across the supply chain.

This system, based on voluntary data disclosure, ensures data authenticity and privacy. Through AI, ZKH eliminates information silos, provides smart data support, and assists companies in optimizing green supply chain management. It also addresses the needs of consumers, producers, and regulators for transparent product information, secure data flow, and improved data-sharing among supply chain participants.

Towards a Greener Future, Together

In today’s rapidly evolving market, sustainability and low-carbon practices are not just initiatives; they are essential pathways to long-term success. Our extensive efforts in ESG, carbon management, and digital product passports showcase our dedication to creating a greener, more resilient supply chain. Together with our partners, we aim to adapt and innovate for a more sustainable future, embracing the potential for growth while reducing environmental impact.

We invite you to join us in these efforts, transforming today’s challenges into tomorrow’s opportunities for a sustainable future. Let’s work together towards a greener, more prosperous world.

About ZKH

ZKH is a digital industrial service platform as well as a product company, providing customers with a one-stop solution of industrial products procurement and management, realizing transparency, efficiency and cost-reduction of industrial supply chain. ZKH provides a wide range of Spare Parts, General Consumables, Office Supplies, Manufacturing Assembly, Chemicals, including 32 dominant product lines with SKUs exceeding 17 million.