1、ACCELERATING THE EVOLUTION 2022 Sustainability&Social Impact ReportREADING THIS REPORTIn our second annual Sustainability and Social Impact Report:We describe our Environmental,Social and Governance(ESG)efforts for the financial year 2022(from Jan.1,2022 to Dec.31,2022).We have reported with referen

2、ce to the Global Reporting Initiative(GRI)2021 standard for certain sections of this report.Selected information in this report was assured,to the limited assurance standard,by an external independent assurer as per ISAE 3000.We detail our new evoluSHEIN roadmap,an enterprise-wide strategy that will

3、 drive our environmental and social impact initiatives and reporting as SHEIN continues to evolve into the future.We are committed to the United Nations Global Compact(UNGC)Ten Principles,and this report serves as our Communication on Progress.23SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOC

4、IAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXWELCOME TO SHEINS 2022 SUSTAINABILITY AND SOCIAL IMPACT REPORT1845SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:E

5、QUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXINTRODUCTIONReading this reportA note from our CEOSHEIN at a glance A note from our global head of ESG2022 ESG highlightsOur approach:evoluSHEIN 0206081012142020212222232325262828283234383841424242434647484

6、849495252525454565960606164666872PEOPLE:EQUITABLE EMPOWERMENT Securing access to self-expression for our diverse customer communityCustomer-centricity and inclusivityCustomer data securityEmpowering talent to achieve their full potentialLabor and management relationsTraining and educationOccupationa

7、l health and safetyDiversity and Equal OpportunityEmpowering external talent:SHEIN X ProgramImproving life in each community we reachSupplier governanceSHEIN Responsible Sourcing(SRS)ProgramSupplier Community Empowerment ProgramGiving back to our global communityPLANET:COLLECTIVE RESILIENCEDecarboni

8、zing our supply chainCarbon footprintClimate risks and resilienceSourcing responsible products and materialsSourcing responsible productsChemicals and product safetyPreferred material sourcingevoluSHEIN by Design PackagingProtecting biodiversity and animal welfareMaterial traceabilityBiodiversityAni

9、mal welfarePROCESS:WASTE-LESS INNOVATIONOptimizing resource efficiencyWaste mitigationWater conservationDesigning circular systemsBuilding a circular ecosystemSHEIN ExchangeExtended Producer Responsibility(EPR)Accelerating sustainable innovationInnovation at SHEINScaling sustainable entrepreneurship

10、GOVERNANCEMaterialityResponsible business practicesUN SDG summary table ANNEX18365000A NOTE FROM OUR CEOSHEIN has a unique business model that is relevant to the way todays customers like to shop and we are working hard to build a thriving ecosystem where the beauty of fashion is accessible to all.W

11、e recognize the role SHEIN must play in supporting the communities we reach and the environment we all share.In 2012,we realized that fashion had become out of touch with the way modern customers shop.My team and I set out to change this by combining accurate demand measurement capabilities with a t

12、echnology-enabled,flexible supply chain.This model changed the industry by allowing us to produce items“on-demand”while minimizing excess inventory waste.Like all companies,we are on a sustainability journey.However,what sets us apart is our leadership ambition,underpinned by our use of innovative t

13、echnology to reduce inventory waste and deliver products at affordable prices to customers around the world.Therefore,I am delighted to publish our second annual Sustainability and Social Impact Report.Our first report was an important milestone in our commitment to advance sustainability.Amid indus

14、try pressures,we believe that it is more important than ever to drive continued progress in our sustainability and social commitments and increase transparency on our efforts to achieve those commitments.This years report demonstrates our continued sustainability progress in 2022 and covers several

15、targets.I am particularly proud of our:1.Work to align our programs and reporting with international frameworks.2.Strides in enhancing sustainability throughout our products lifecycle,from preferred materials to responsible manufacturing processes and promotion of the circular economy.3.Development

16、of the evoluSHEIN roadmap,which will help drive ongoing efforts while creating a baseline for us to measure our success.Everyone deserves a more equitable and sustainable future.And I am confident that SHEIN can become a catalyst for that transition.Sky Xu,CEO,SHEIN 67SHEINACCELERATING THE EVOLUTION

17、2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXSHEIN AT A GLANCEAbout Us Founded in 2012,SHEIN is a global fashion,beauty and lifestyle retailer making the beauty of fashion accessible to

18、 everyone through a unique business model that combines demand measurement capabilities with a digitally empowered supply chain.Here is how our business works:SHEIN engages with its customers using its mobile app and website and leverages industry trends research and a global team of designers to id

19、entify popular trends.We then work with our third-party suppliers Approximately 5,400 contract manufacturers150SHEIN app available in languages50+Our BrandsOver 11,000 Offices in19 Countrieswomen in senior management40to produce small production runs of each product,often consisting of no more than

20、100 to 200 pieces.When we see customers responding well to a product or design with orders exceeding our current stock,our proprietary supply management software identifies a third-party supplier from our network with the capacity and expertise to produce enough garments to satisfy the actual demand

21、.This unique,on-demand production model enables us to virtually eliminate excess inventory waste.This means we can offer a wide range of products at competitive prices without accumulating large inventories of unsold products.Countries servedemployees worldwide+89SHEINACCELERATING THE EVOLUTION2022

22、SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXA NOTE FROM OUR GLOBAL HEAD OF ESGSHEIN thrives because of its ability to adapt and constantly evolve.Weve come a long way:2022 built on and furt

23、her involved transformation in our approach to social and environmental sustainability,thanks in large part to the full mandate,trust and commitment of our CEO and Leadership.In addition to greater transparency,we developed a holistic roadmap with actions and goals to tackle key material issues.We s

24、et a new level of accountability as part of our ambition to make a desirable and sustainable future accessible to all.Comprising nine key priorities under three strategic pillars,the evoluSHEIN roadmap sets out what we can do as a business to bring about change.Adept at leveraging technology to impr

25、ove efficiency,we are using our expertise to help deliver tangible,positive outcomes.So far,that includes tackling waste and circularity all along our value chain including deep supply chain waste mapping,circular product development,strengthening our on-demand production model and launching end-of-

26、life garment recycling solutions.Our journey is underway.But it wont have the desired impact if we are not collectively acting on it.The complexity and global scale of the challenges we face require both internal coordination with every department taking concrete actions to activate the roadmap,and

27、external partnership with all our suppliers,partners and stakeholders walking alongside us on our path forward.We at SHEIN are optimistic.Using our disruptive mindset to tackle social and environmental challenges,we can achieve our targets by 2025 and beyond.Adam Whinston,Global Head of ESG,SHEIN101

28、1SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEX2022 ESG HIGHLIGHTSMARCH 2022Textile Exchange MembershipWe became members of Textile Exchange to support our

29、 adoption of preferred fibers and participate in collective action for a more sustainable textile industry.APRIL 2022 Canopy CommitmentsWe joined the CanopyStyleand Pack4Good initiatives to end the use of vital forests in our fabric and paper-based packaging by 2025.APRIL 2022 EvoluSHEIN by DesignWe

30、 launched our evoluSHEIN by Design product initiative introducing pieces made with responsibly-sourced materials and manufacturing processes.JUNE 2022 Extended Producer Responsibility(EPR)The Or Foundation became a grant recipient of US$5 million to support mitigation and remediation efforts in comm

31、unities most impacted by textile waste.SEPTEMBER 2022 Carbon Commitments We announced our carbon baseline and 2030 targets,as well as the launch of partnerships with Apparel Impact Institute(Aii)and Brookfield Renewables to support our emissions reduction strategy.OCTOBER 2022 World Circular Textile

32、 Day CommitmentWe joined the WCTD community to work toward a fully circular textile future by 2050.20232022OCTOBER 2022 SHEIN ExchangeWe launched our peer-to-peer resale marketplace in the US as an integrated feature of the SHEIN app to encourage our customers to engage with the circular economy and

33、 prolong the life of their garments.b y D e s i g n1213SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXOur ambitionAction is driven by desire.We can all envi

34、sion a desirable future that motivates us to evolve,innovate,create and make progress.SHEIN was founded on the vision of making the beauty of fashion accessible to all regardless of culture,gender,age,body type,ability,or economic status through the application of world-class operational capabilitie

35、s that would help eliminate inefficiencies across the value chain.Looking to the future,it is time to evolve our ambition:to make a desirable future-not just desirable fashion-accessible to all.We envision a future where PEOPLE are equally empowered to access their full potential,where global citize

36、ns take collective action to ensure the climate resilience of our PLANET,and where industry embraces innovation and circularity in each business PROCESS to solve the uniquely human issue of resource waste.This is our vision of a more sustainable,desirable future for all.Our Approach Sustainability i

37、s not a destination but an ever-evolving journey.To guide our next steps,we have developed a holistic strategy for addressing social and environmental challenges and making positive impacts as SHEIN continues to evolve into the future.We call it our evoluSHEIN Roadmap.Our evoluSHEIN Roadmap is compr

38、ised of nine key priorities under three strategic pillars PEOPLE,PLANET,and PROCESS focusing on the critical challenges facing our company and the larger fashion industry.We have organized this report accordingly to help our stakeholders follow our journey.ACCELERATING THE EVOLUTION TOWARD A DESIRAB

39、LE FUTURE ACCESSIBLE TO ALLOur evoluSHEIN Roadmap1415SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXOUR PEOPLE PILLAR:EQUITABLE EMPOWERMENTPeople are at the

40、 center of our business.We are committed to providing opportunities for people across the SHEIN ecosystem to access their full potential while maintaining integrity,inclusivity and respect for all.We strive to improve the lives of our customers,employees,brand partners,suppliers and members of the l

41、arger global community that our business impacts each day.We have set aspirations to empower these stakeholders to hold us accountable to:Be a preferred brand for customer self-expression Be a top-ranking employer for employee talent Be a preferred brand partner for creative talent collaborations Be

42、 a preferred,responsible purchasing partner for suppliersTARGETS AND ASPIRATIONSOUR PLANET PILLAR:COLLECTIVE RESILIENCEWe are committed to decarbonizing our supply chain,sourcing responsible materials and protecting biodiversity and animal welfare through collective action.We have set targets that d

43、rive our operational teams and supply chain partners to reduce the environmental footprint of our products and facilities,which include:Reduce our greenhouse gas emissions(scopes 1,2 and 3)by 25%by 2030 Become carbon-neutral in scope 2 by 2030 Source 100%forest-safe viscose and paper-based packaging

44、 by 2025 Ensure all packaging contains 50%preferred materials by 2030 Source 50%of SHEIN branded products through our evoluSHEIN by Design initiative by 2030OUR PROCESS PILLAR:WASTE-LESS INNOVATIONWe are committed to continuously improving our processes to reduce waste and enable a circular future.T

45、his begins with leveraging our small-batch,tech-enabled,on-demand production model to continue minimizing waste and optimizing resource efficiency across the value chain.It also means designing systems that help close the loop on todays linear processes,using our rapid test-and-scale methodology to

46、drive sustainable innovation in our own operations and in the industry.We have set goals to drive the establishment of these alternative business models,which are to:Engage the majority of SHEINs customers in circularity by 2025 Become a global leader in rescuing deadstock materials from becoming wa

47、ste Establish a fully circular textile supply chain by 2050 in alignment with our World Circular Textile Day commitment1617SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGO

48、VERNANCE ANNEXOur 3 strategic priorities for driving impact are to:Secure access to self-expression for our diverse customer communityEmpower talent to achieve their full potential Improve lives in each community we reach1819SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEI

49、NINTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXEQUITABLE EMPOWERMENTBound by our commitment to integrity,inclusivity and respect for all,we are working to create opportunities that help empower our customers,employees,suppliers,par

50、tners and other stakeholders.OUR PEOPLE PILLAR:SECURING ACCESS TO SELF EXPRESSION FOR OUR DIVERSE CUSTOMER COMMUNITYSHEIN seeks to empower customers to have safe access to affordable means of self-expression regardless of culture,gender,age,body type,ability or economic status.We aim to bridge the g

51、ap between accessibility and sustainability in fashion.*including Curve,Maternity,SHEIN Petite,Extended SIzes,SHEIN Tall,SHEIN Fit+,Dazy,SHEIN UnisexDesigning for Inclusivity in 2022 Customer-Centricity and Inclusivity SHEINs customer community is passionate about self-expression through fashion.SHE

52、INs agile on-demand business model aims to make exactly what customers want when they want it while making all items affordable and accessible.We leverage constant innovation and technology that allow us to pass savings on to customers to deliver a variety of affordable products.Ultimately,this mode

53、l creates more access to the latest styles so that everyone can enjoy the beauty of fashion.We meet our customers where they are by providing online access to our products and services in more than 150 countries around the world.Our products and services reflect our customers diversity,and our mobil

54、e application is available in over 50 languages.We respect and seek to represent our customers in their SHEIN shopping experience because we want every customer who visits our platform to feel seen,included and valued.We apply a customer-centric,variety-over-volume approach by leveraging data analyt

55、ics and AI to predict trends to propose styles that satisfy all desires and adapt our offering to a broad size spectrum.In 2022,roughly 17%of our products were specifically designed to serve select customers styling needs,such as extended sizing and alternative fit proportions.17%of styles designed

56、for specialty fit collections Non-traditional collections*Traditional collectionsCustomer Data SecurityWe strive to offer our customers a safe and reliable shopping experience by reducing the risks inherent to an online business model.This involves deploying industry-standard data protection technol

57、ogies and advanced security analytics that protect our infrastructure and our customers data.Further bolstering our data security program,we collaborate with leading security firms to conduct risk assessments based on internationally recognized security standards and frameworks including ISO 27001,N

58、IST and PCI DSS.And we have built our security and privacy frameworks around applicable laws and regulations,such as the LGPD,CCPA and GDPR.SHEIN only collects the information necessary to complete transactions.Furthering our commitment to transparency,we provide customers with clear notices to ensu

59、re they understand what we do with it.We do not sell or enrich any of the data we collect.2021SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXWe give our emp

60、loyees and brand partners around the world opportunities for skills development and career growth while respecting their diverse cultures,abilities and lifestyles.At WorkWe offer our employees diverse opportunities to grow their careers while promoting a safe working environment with access to educa

61、tional resources.This includes helping our employees identify and achieve career goals and hosting team-building events and volunteer activities that allow them to give back to their communities.Training and Education Continuous improvement is an important value at SHEIN.Our online learning manageme

62、nt system(LMS)offers flexible learning resources to support our talent development and business empowerment initiatives.Occupational Health and Safety Our Workplace Health and Safety Statement governs the management of work-related health and safety risks across all SHEIN warehouses,distribution and

63、 supplier manufacturing facilities and corporate offices.It sets out the principles guiding our approach to Health,Safety and Environment(HSE),outlines our responsibilities towards those we work with and the communities in which we operate and works in tandem with our CoE.Additionally,we are adding

64、risk-based warehouse interventions.For example,in 2022,we conducted the following actions in our US warehouses:1.Risk Management:a.Risk Walks-Conducted monthly by a member of the safety committee.Learnings from these walks are discussed during monthly meetings with each shift of workers.Any correcti

65、ons needed are owned by a member of the EMPOWERING TALENT TO ACCESS THEIR FULL POTENTIALIn 2022,our employees participated in 3,827 courses and completed 5,709 individual training sessions on our LMS.1,100 associate and management employees attended in-person learning sessions.In 2022,we held 52 tra

66、ining sessions on“Staff Business Conduct Ethics and Anti-Fraud”with 3,206 staff members from offices in Shenzhen,Nanjing and Guangzhou.Our Department of Internal Control and Audit held 26 anti-fraud standard training sessions for contract performance and textile innovation,attended by a total of 2,5

67、03 people across warehousing operations,the textile manufacturing department,purchasing and its related departments.Our implementation of the Warehouse Management Manual included training 1,247 participants on employee behavior standards and risk mittee and implemented via a management structure to

68、ensure accountability.b.Safety Meetings-Conducted by Safety Specialists each month during which a safety topic is presented and passed to a safety committee member in each shift.c.Monthly Audits-Conducted by Safety Specialists so we can verify items such as proper placement of fire extinguishers,fla

69、mmable cabinets,eye wash stations etc.Any discrepancies or corrections are sent to the owner(e.g.,maintenance,contractors and/or facility departments).d.Incident Report Log-A Safety Specialist keeps up with any workplace incidents or non-occupational incidents and ensures they are reported according

70、ly.2.Medical Care:a.Partnership with Outside Clinics-Any associate requiring outside medical attention while at work is sent to a clinic for medical care.This is covered by SHEIN.b.Post-incident Follow-Up-A Safety Specialist follows up accordingly after an incident(daily,weekly or monthly).3.Correct

71、ive Action and Prevention:a.Safety violations are cited and noted with a remediation plan.b.Requirements to remediate are made to relevant warehouse departments when any serious risk is detected to prevent re-occurrence.c.Safety Orientation for new hires-a Safety Specialist takes associates on a fac

72、ility tour and covers safety policies.Labor and Management RelationsSHEIN has adopted a Code of Ethics(CoE)outlining employee requirements,rights and obligations.Every SHEIN employee undergoes training on the CoE and agrees to be bound by its requirements throughout their employment with the company

73、.Our policies explicitly prohibit the bribery of public officials by SHEIN employees and third parties conducting work on behalf of SHEIN.We also prohibit discrimination,harassment,bullying,retaliation and conflicts of interest and promote a safe and healthy work environment.SHEIN has created a mult

74、ilingual,dedicated Ethics and Compliance channel for employees and our suppliers employees to raise concerns about suspected violations of the CoE.The channel enables anonymous complaints,and each complaint is investigated.We conduct local training sessions in key markets to ensure employees are awa

75、re of the Ethics and Compliance hotline,and that any employees conducting investigations do so effectively and in accordance with applicable laws,the CoE and industry best practices.2223SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERM

76、ENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXDiversity and Equal Opportunity We are committed to creating a more inclusive business and a work culture in which talent can achieve their full potential.We are continuing to develop our Diversity,Equity and Inclusion(DE&I

77、)programs.In 2022,we further aligned our anti-harassment policies within our Global Code of Ethics(CoE)as well as managerial practices with global best practices.Our global anti-discrimination policies reaffirm that all people-regardless of gender,gender identity and expression,sexual orientation,ra

78、ce,religion,ethnicity,age or other marginalized groups-have the right to be free from harassment and have access to a safe,welcoming work environment.This work represents the foundation of our values and our pledge to support marginalized communities through our hiring and promotion practices.We tak

79、e all harassment seriously and train our employees on these policies,including sexual harassment awareness trainings.We have created a global hotline that directs all registered complaints to SHEINs legal department for review and follow-up.Additionally,we reinforced the anti-harassment language in

80、our CoE and launched mandatory,company-wide training on the policy.Gender Equality From the start,SHEIN has championed women in leadership roles.Two of SHEINs four founders are women,reflecting the importance of female leadership in our C-suite.Approximately 55%of our employees are women,including a

81、round 40%of our global senior management.27In 2022 we hired new employees from nationalities.2425SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXThrough SHEI

82、N X,we are helping entrepreneurs launch their fashion collections all over the world.An incubator program that guides designers through processes from product development and manufacturing to marketing and logistics,SHEIN X offers classes,mentorship and unique tools like SHEINs analytics suite that

83、provide designers with a view of the overall process and customer feedback.Over the last two years,SHEIN has invested more than US$55 million to empower nearly 3,000 aspiring designers and artists from more than 20 countries,supporting them in their journey to launch their own fashion collections to

84、 global audiences.SHEIN funds the initial production of a designers or an artists collection,and handles the marketing,shipping and payment so designers and artists avoid the financial risk or burden of producing and can launch their own fashion collections and adopt our on-demand production approac

85、h.Since launching SHEIN X,weve worked with designers and artists from over 20 countries,including Australia,Brazil,Canada,China,Germany,France,Indonesia,Italy,Japan,Malaysia,Mexico,Saudi Arabia,Singapore,Spain,Thailand,the UK and the USA.Future-facingIn 2023,we hope to invite 1,000 new designers and

86、 artists from around the world to join SHEIN X.These designers may have opportunities to work with world-renowned designers,participate in exclusive events,and/or take part in exchanges around the world.And as of January 2023,SHEIN partnered with the Graduate Fashion Foundation to support the SHEIN

87、X fashion design competition in which European designers will compete for the chance to be featured in the SHEIN X Fashion Show in Paris in June of 2023.EMPOWER TALENT TO ACCESS THEIR FULL POTENTIALSHEIN X PROGRAM FOR DESIGNERS“A core pillar of our business model is empowering entrepreneurs.The SHEI

88、N X program nurtures designers,helping them elevate their brands on the global stage.We are dedicated to continuing our SHEIN X outreach and efforts amongst designer and artist communities around the world,taking another step forward in making the beauty of fashion accessible to all.”Molly Miao,Chie

89、f Operating Officer,SHEIN“SHEIN expressed interest in working with me.We are family now;I truly love my SHEIN family.The public exposure has been really good!SHEIN is giving small businesses a platform to sell and be great!I have one blazer that has sold thousands!Couldnt have done that on my own.I

90、try to create designs and pieces that complement the body and shed more light on the fabulous parts of the body.Im a size 16.So many of the people who shop with me are of similar size and similar body types.For that reason,we are also venturing into larger sizes permanently.My next collection Im lau

91、nching will be sizes 10-20.A market,I believe,that could still use some love.Im very excited!”2627SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXSHEIN X DES

92、IGNER:KENYA FREEMAN“SHEIN expressed interest in working with me.We are family now;I truly love my SHEIN family.The public exposure has been really good!SHEIN is giving small businesses a platform to sell and be great!I have one blazer that has sold thousands!Couldnt have done that on my own.I try to

93、 create designs and pieces that complement the body and shed more light on the fabulous parts of the body.Im a size 16.So many of the people who shop with me are of similar size and similar body types.For that reason,we are also venturing into larger sizes permanently.My next collection Im launching

94、 will be sizes 10-20.A market,I believe,that could still use some love.Im very excited!”IMPROVING LIVES IN EACH COMMUNITY WE REACHWe work to improve working and living conditions across our global value chain and in each community we reach through economic opportunities,support programs,volunteerism

95、 and philanthropic giving.A business can only achieve success with the support of a healthy community.SHEINs community includes not only employees and the customers we serve,but also all the stakeholders along our value chain.SHEIN is committed to managing our supply chain responsibly and uplifting

96、the people in our ecosystem.Supplier PartnersWe source products and materials from an extensive network of third-party suppliers across the globe and invest in our collaboration with these supply chain partners.This extends to supporting them on their journey towards social and environmental sustain

97、ability.We do this by establishing and communicating our supply chain policies,investing in supplier training and compliance enforcement,and launching supply chain improvement programs and projects to tackle key industry challenges.Supplier GovernanceCode of ConductSHEINs third-party suppliers must

98、sign and agree to abide fully by the SHEIN Supplier Code of Conduct(CoC)before they are allowed to work with SHEIN.Suppliers must also agree to hold their third-party agents and brokers to the standards covered in the CoC.All new suppliers of SHEIN-branded products must also undergo a vetting proces

99、s before starting to work with SHEIN.During the vetting process,we review supporting documents to demonstrate suppliers compliance with the CoC and conduct an onboarding SRS audit.In the context of this report the term audit refers to assessment visits to cut and sew factories,materials producers an

100、d warehouses.The SRS audit is an assessment conducted to evaluate a suppliers performance in terms of theirprocesses,capabilities and adherences to the SHEIN Supplier Code of Conduct and SHEIN Responsible Sourcing(SRS)Policy.The SRS audit is carried out either by a third-party verification agency hi

101、red by the company or carried out by the company itself.The CoC is informed by the core conventions of the International Labor Organization(ILO)and the United Nations Universal Declaration of Human Rights(UDHR).It prohibits the use of forced and child labor as core principles,and outlines clear comp

102、liance requirements regarding the payment of wages,workplace health and safety,labor and social welfare,and environmental standards.It also requires our suppliers to comply with applicable laws and regulations.SHEIN Responsible Sourcing ProgramThe SHEIN Responsible Sourcing(SRS)Program establishes c

103、lear definitions and criteria for violations of SHEINs CoC,including remedy procedures and penalties where warranted.To enforce compliance,SHEIN partners with credible third-party verification agencies and certified internal auditors to conduct regular,unannounced SRS audits of partners facilities.W

104、e terminate business relations with partners who refuse to cooperate with our SRS audits or fail to correct detected violations of the CoC within stipulated timelines.Details of the SRS Policy are publicly available online.SHEINs executive management is responsible for reviewing our Supplier CoC,app

105、roving the methodology and frequency of our SRS audits,ensuring sufficient budget and approving implementation partners.Executive management cascades responsibility for implementing the CoC down through our structured management system.The ESG operations team regularly reports audit findings to our

106、Global Head of ESG and members of the executive leadership team.Supply Chain Due Diligence Key Points:SHEIN has conducted 2,425 audits covering 1,941 contract manufacturers which account for approximately 84%of SHEIN-branded products by procurement value in 2022.SHEIN has also conducted 387 other au

107、dits of textile and packaging suppliers and providers of other ancillary services.Our audit program is conducted by internal teams and third-party auditors including Bureau Veritas,Intertek,Openview,SGS and TUV.Suppliers are audited against an extensive assessment checklist that evaluates their comp

108、liance with SHEINs Supplier CoC.They are required to provide supporting documentation as part of the audit,and their workers are interviewed.All new contract manufacturers must submit to an audit assessment as part of the onboarding process before they start working with SHEIN.SHEIN educates our sup

109、pliers about complying with the CoC through regular training sessions.SHEIN has built a multi-channel feedback system for the workers at contract manufacturers,empowering them to anonymously submit complaints,feedback and suggestions via email,phone or a commonly used local chat app.SHEIN has establ

110、ished clear definitions and criteria for CoC violations,including remediation procedures and penalties where warranted.In all cases,suppliers are provided with a copy of their audit report,which includes any violations,in order to encourage continuous improvement.Particularly severe violations are a

111、ddressed according to a zero-tolerance approach and would result in the termination of the business relationship with SHEIN should suppliers fail to take remedial actions within 30 days.Suppliers found to have committed violations that fall within Zero-Tolerance Violation(ZTV)categories will have or

112、ders suspended immediately.The SRS program is managed by our ESG team but SHEIN also trains staff from other departments to work to extend responsibility to our own company.To date,over 477 SHEIN staff members have completed best-practice training on how to screen,evaluate and choose suppliers that

113、will meet our standards.GrievancesActing on our commitment to empower workers,we make sure they have the right to raise grievances and make their voices heard.Essential to this is our policy forbidding discrimination against both internal and external whistleblowers,which is embedded in the SHEIN Co

114、C to which all suppliers must adhere.Additionally,our suppliers are required to ensure the visible posting of our SHEIN CoC,which includes a section specifying access to the SHEIN grievance WeChat hotline and email through which workers can anonymously submit complaints,feedback and suggestions.This

115、 hotline goes directly to the SHEIN ESG team who have dedicated personnel trained in managing worker grievance cases.2829SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVE

116、RNANCE ANNEXAs part of our commitment to improving lives in our supplier communities,our SRS Program conducts performance evaluations of supplier facilities to monitor compliance with our Code of Conduct.We grade them on a sliding scale from A,for outstanding performance,to Zero Tolerance Violation(

117、ZTV),which is automatically assigned to any facility where a ZTV violation is detected.The grading is based on their adherence to the SRS assessment framework.If a facility receives two consecutive D evaluations or a ZTV,it is required to undergo an improvement program,which consists of training and

118、 investment to help the supplier achieve a higher rating.These grades impact our buying decisions.As we strive to be responsible procurement partners,SHEIN rewards suppliers who score well according to SRS audits with awards and special programs exclusively sourced from top-rated partners,such as ou

119、r evoluSHEIN by Design product initiative(see page 46).Conversely,those who fall into the ZTV category are not eligible to receive orders from SHEIN until they have remediated those violations.In 2022,as part of our continuing effort to improve working conditions at our suppliers facilities,we have

120、expanded the definition of what qualifies as a violation.Regardless of stricter audit criteria,we have seen an increase in A-grade facilities and a decrease in the percentage of ZTV facilities,which we attribute to successful implementation of our Code of Conduct and related trainings.The stricter g

121、rading methodology has also resulted in a larger proportion of supplier facilities being flagged as D-grades,which does not necessarily indicate worse performance,but does enable SHEIN to take a more active role in advocating for improvements in those facilities.According to our SRS protocol,facilit

122、ies with D-grades are to be closely monitored with the risk of a negative procurement decision should violations persist.In 2022,SHEIN conducted 2812 total SRS audits.This included 2,425 audits covering 1,941 contract manufacturers which accounted for approximately 84%of SHEIN-branded products by pr

123、ocurement value for 2022.It also conducted 387 other SRS audits of textile and packaging suppliers and providers of other ancillary services,such as warehousing facilities.Zero Tolerance Violations(ZTVs)To encourage transparency and accountability within our supply chain,we have chosen to disclose f

124、urther details on the ZTVs identified through our SRS auditing process.When ZTVs are discovered,SHEIN assigns an SRS facilitator to oversee the correction process IMPROVE LIVES IN EACH COMMUNITY WE REACHPERFORMANCE EVALUATION AND CONTINUOUS IMPROVEMENT 2021 2022 Total SRS audits performed 664 2812 Z

125、TV categories-%of total SRS audits where this ZTV was identified Co-located Living/Working Spaces:Dormitories are located in the same building as the production workplace or warehouse 3.2 4.5 Emergency Exit Violation:Insufficient emergency exits in the production workshop,warehouse or dormitory 2.0

126、4.2 Wage Violation:Supplier is paying employees under the local minimum wage 3.3 2.3 Open fire in workplace or dormitory 1.5 2.2 Emergency Exits Violation:Presence of locked emergency exits in the workplace,warehouse or dormitory 3.2 2.1 Workplace Safety Hazards:Falling risk,signs of structural dama

127、ge to the building or other risks to worker safety 3.8 0.7 Charging electric vehicles or their batteries inside the production workshop,warehouse or dormitory-0.5 Direct or flue-type gas water heaters are used in employee dormitories -0.4 Age Violation:The presence of workers or persons in the workp

128、lace under 16 years old 1.8 0.3 Supplier Refuses SRS Audit Evaluation 0.3 0.2 Involuntary Labor:all forms of coercion (e.g.requirement to pay deposits to start work,delayed or withheld wages,confiscation of workers documents)0 0.1 Environmental Violations Disclosed on the IPE(Institute of Public&Env

129、ironmental Affairs)Platform-0.1 Attempted Bribery Offering bribes to evaluators in violation of integrity principles -3 major risks.Corrective action is required.ZTV:Zero Tolerance Violation detetected Immediate corrective action is required.2022 SRS Audit Grades%of supplier facilities receiving eac

130、h grade“-”indicates category not considered ZTV under 2021 SRS audit3031SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXWe respect our suppliers as valuable

131、partners in the SHEIN ecosystem.To foster these vital partnerships,we created the Supplier Community Empowerment Program to support our supplier partners and their communities in the different stages of their development journey.Through the program,SHEIN has been implementing long-term initiatives t

132、o empower our partners across four key pillars:factory enhancement,technology innovation,training support and community engagement.At the end of 2022,SHEIN announced an additional commitment of US$15 million in funding over four years to the Supplier Community Empowerment Program to facilitate mater

133、ial The SHEIN Spotlight programSHEIN believes empowering families in the communities where we work,source and live is essential to our collective advancement.To reinforce this developmental journey,we created“SHEIN Spotlight,”a program offering financial support to help communities through lifes big

134、gest moments,and families in need due to financial hardship caused by major illnesses.SHEIN Spotlight provides the opportunity for roughly 46,000 workers in 254 factories to apply for grants.Since the programs inception in 2021,it has awarded grants to 251 families totaling US$378,000.The grants hav

135、e benefitted 677 young people,including 475 school-aged children.SHEIN also assembled a team of“Spotlight Ambassador”volunteers from our own team who have spent more than 690 hours volunteering within supplier communities and continues to grow.IMPROVE LIVES IN EACH COMMUNITY WE REACHSHEIN supports G

136、oal 8 by sustaining per-capita economic growth and helping small-scale suppliers grow while meeting responsible labor standards including the elimination of modern slavery(see full SDG summary on page 68).“SHEINs continued empowerment subsidies made this renovation plans possible”SUPPLIER COMMUNITY

137、EMPOWERMENT PROGRAM improvements to factories.In 2022,SHEIN spent US$1.3 million to upgrade 83,000 m2 of supplier workspace covering 29 facilities and approximately 4,500 workers.Training In 2022,SHEIN conducted over 380 training sessions for workers in the supply chain,covering topics including ent

138、erprise management,organizational structure and business processes,such as quality inspections and quality assurance certification offered by third-parties such as Intertek and SGS.In 2023,we plan to conduct more than 480 training sessions for workers in the supply chain,incorporating workshop cours

139、es that focus on lean production models.Technical Innovation In addition to material improvements to factories,SHEINs Supplier Community Empowerment Program works to support suppliers in their technical innovation,waste reduction,training and operational management and production efficiency optimiza

140、tion.The program has enabled many suppliers to meet market demand more efficiently while reducing waste and conserving resources.SHEIN supplier,Mr.Liao,founded his factory in 2007.Since then,his business has grown into an independent industrial group employing over 1,000 people working on SHEIN prod

141、ucts.He benefited from SHEINs Supplier Community Empowerment Program in 2022.The renovation plans for his factory included the improvement of 30,138 sq.ft.of factory space accommodating 160 employees.Another 430,556 sq.ft.factory is currently under construction and should be completed by the end of

142、2023.“SHEINs continued empowerment subsidies made this possible,”explained Mr.Liao.3233SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXMexico SHEIN and the A

143、sociacin Mexicana de Ayuda a Nios con Cncer(AMANC)foundation built an integrated partnership from the ground up to support Mexican children with cancer.This includes a monetary donation of US$60,000,the organization of activities to fulfill the dreams of children with cancer,workshops on emotional a

144、nd mental health support for parents and children taught by experts and in-kind donations of new clothing for the children and their families.FranceSHEIN cooperated with La Culotte Rouge to develop a special co-branded collection in support of the organizations mission to educate and inform young wo

145、men about their menstrual cycle.SHEIN donated US$27,300 to support the organization of physiological hygiene lessons in schools,the dissemination of informational materials and the provision of hygiene products to young women in financial difficulty.Philippines SHEIN supported Save The Children Phil

146、ippines through a monetary donation of US$40,000 and over 5,700 pieces of kids clothing to provide more than 1,000 children and 500 families impacted by Super Typhoon Odette with relief and early recovery assistance.SingaporeSHEIN has been working with SG Her Empowerment(SHE)to empower girls and wom

147、en victims or survivors of online harassment or abuse.Bearing in mind the effect that social media can have on body image,mental health and self-esteem,we partnered with SHE to organize a dialogue aimed at driving awareness about body positivity.GIVING BACK TO OUR GLOBAL COMMUNITY We understand our

148、responsibility to impact change.SHEIN Cares is our philanthropic commitment to support organizations advancing important causes in the communities where we live and work around the world.IMPROVE LIVES IN EACH COMMUNITY WE REACHUnited KingdomSHEIN is partnering with Dress for Success Greater London,a

149、 charity that provides styling,mentoring and interview support to unemployed women to help them succeed in job interviews.Since 2020,SHEIN has donated over US$140,000 to the charity providing support to 450+women in their journey toward economic independence.Brazil SHEIN donated US$100,000 and over

150、6,000 items of clothing to the NGO Gerando Falcoes to support their mission to end poverty and empower low-income youth in the communities favelas to enter the professional market.In 2022,we spent over US$1.1 million on programs related to womens health,disaster relief,community development and envi

151、ronmental protection.This representation illustrates a handful of the initiatives that we supported in 2022.3435SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE AN

152、NEXOur 3 strategic priorities for driving impact are to:Decarbonize our value chainSource responsible products&materialsProtect nature and biodiversity 3637SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIEN

153、CEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXCOLLECTIVE RESILIENCEWe collaborate across our shared ecosystem to ensure long-term sustainability anchored in respect for planetary boundaries.OUR PLANET PILLAR:Weve set science-based targets to support an impactful and realistic decarbonization roadma

154、p.BackgroundAccording to the United Nations,the fashion industry contributes to between 8%and 10%of global carbon emissions*.Managing the environmental impacts across the entire value chain has become a key focus of our work.Setting tangible 2030 targets requires reliable data.To that end,weve worke

155、d with industry experts to quantify and monitor our impact across our operations from sourcing,production and processing of materials,product assembly,in-house operations and logistics to the end-of-life disposal of our products.Our collaboration with Intertek has been instrumental in understanding

156、our GHG emissions and setting appropriate emissions reduction targets.Additionally,it continues to let us track and measure our progress and conduct scenario analyses to drive fact-based decision making.Our Carbon FootprintIn September 2022,we completed the baseline study of our 2021 emissions and a

157、nnounced our commitment to reduce absolute greenhouse gas(GHG)emissions across our entire value chain by 25%by 2030.In 2022,production volume increased by 57%and our emissions increased by 52%.The change in our absolute emissions from 6.04 to 9.17 million tonnes CO2e from 2021 to 2022 comes from the

158、 strong growth of our business.We are at the beginning of our mitigation journey and began implementing decarbonization programs at the end of fiscal year 2022 More than 99%of our emissions are from scope 3,which means less than 1%of emissions came from SHEINs corporate operations and the vast major

159、ity were from supply chain partners,transportation,use of our products and other sources not under SHEINs direct corporate control.In 2022,our emissions in tonnes CO2e,were 3,781 tonnes in scope 1,with 19,505 tonnes in scope 2 net of Renewable Energy Credits(RECs),and 9.15 million tonnes in scope 3.

160、DECARBONIZING OUR SUPPLY CHAINScope 1Direct EmissionsScope 2Our Scope 2 emissions decreased due to purchasing Renewable Energy Credits(RECs).Scope 3GHG Protocol CategoriesUpstream TransportationDownstream Transportation and DistributionBusiness Category(Business Travel)Purchased Goods and ServicesCa

161、pital GoodsWaste generated in operationsCategoryFossil fuel combustionCH4 fugitiveHFCs fugitiveCO2 fugitiveMarket-based*Location-based Scope 2 emissions were 60,939 tonnes in 2022.In certain cases,we were able to make more granular measures (shown below)n/aTransportation from SHEIN to consumersTrans

162、portation of return packagesn/aProduct supply chainPackaging materialPurchased data servicesn/an/aDescription2561830850.0426,39219,4472,056,13914,194/3,728,248139,614/53,107/25,5073,205,2423,7901,0115,575,068271,2087,10060,92435231%56%-73%n/a50%94%n/a15%n/a2021 in tonnes CO2e99180819820.2419,505 202

163、2in tonnes CO2e+3,864%+31%-36%+508%-26%change*Source:un.org*See accounting scope description in Annex 1.1(scope 1)and Annex 1.2(scope 2)3839SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-

164、LESS INNOVATIONGOVERNANCE ANNEXDECARBONIZE OUR SUPPLY CHAINSHEINs business model is focused on being resilient and continuing our support for the transition to a low-carbon future.In 2022,we partnered with Risilience,an organization founded by faculty members of the Center for Risk Studies at the Un

165、iversity of Cambridge Judge Business School to better understand our climate risks.Risilience uses a rigorous,scenario-based framework that integrates a wide range of risk classes with the latest international standards in climate science to provide a comprehensive view of a corporations balance she

166、et relative to climate change.We studied two types of risks:The physical risks related to the change in weather patterns that could impact SHEINs operation and supply chain.The risks arising from the effects of climate change on soil and water accessibility and extreme weather events could cause dis

167、ruption in raw material supply and market demand as well as operational downtime in key facilities with possible damage to physical assets.CLIMATE RISKS&RESILIENCEOur Main OperationsWe set a 42%reduction target in scope 1 by 2030,heading towards carbon neutrality in our direct operations.Our direct

168、operations emissions account for 1%of our total emissions and are mainly linked to electricity usage.By 2030,we will have implemented programs to better control and reduce the electricity we use in our offices and plan to use renewable energy for 100%of our own operations.Our Indirect EmissionsWe ac

169、knowledge that most of our emissions lie in scope 3 and significant work remains to be done in collaboration with our suppliers.Through a new partnership with Apparel Impact Institute(Aii)and Brookfield Renewable Partners,weve begun to promote renewable energy use and energy efficiency projects aime

170、d at reducing carbon emissions.We have committed to investing US$7.6 million in Aii programs to help us achieve our supply chain carbon reduction goals.Acting on our commitment made in the fall of 2022,we engaged with our suppliers to start implementing our decarbonization programs in 2023.“Brookfie

171、ld has one of the largest renewable power and energy transition platforms in the world and has a long and proven track record of providing power and decarbonization solutions globally across a wide range of sectors in the economy.Along with Brookfield Growth,the technology investing arm of Brookfiel

172、d and an existing investor of SHEIN,we are pleased to extend our relationship with the company and support SHEINs newly-announced decarbonization commitments.We look forward to applying our renewable and energy transition expertise to help bring those objectives to bear.The opportunity to decarboniz

173、e the fashion industry is immense.”Daniel Cheng,Managing Director of Brookfield Renewable Power,Asia Pacific The transition risks range from increased pressure on companies to secure their reputation and license to play to changes in consumer preferences leading to more sustainable purchasing option

174、s.Policy and regulation constraints will tighten with the rising price of carbon.We modeled several climate mitigation strategies to explore the differential effects they would have on our CO2e footprint and our business risk to help us prioritize our key GHG impact areas.The key initiatives we expl

175、ored were use of sustainable aviation fuels(SAFs),nearshoring of production to cut down on transportation and air freight and switching to preferred materials for products and packaging.4041SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPO

176、WERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXSOURCING RESPONSIBLE PRODUCTS AND MATERIALSWe are committed to using materials with a lower environmental impact and preferred performance properties that meet high quality and safety standards to protect both people an

177、d the planet.Sourcing Responsible ProductsSourcing responsible products and materials starts with the basics:quality and safety.We understand that our customers trust us to deliver safe,affordable products that meet their quality expectations.There is also a growing desire for environmentally prefer

178、red materials.SHEINs approach includes:Aligning product quality and safety standards with industry regulations and best practices.Hiring experts to help establish and manage compliance protocols according to these standards.Conducting training for both internal staff and supplier partners on best pr

179、actices for compliance.Requiring suppliers to provide up-to-date product quality and safety documentation.Material and finished product testing for harmful and restricted substances and quality done in partnership with third party experts and independent labs.Accelerating the adoption of environment

180、ally preferred materials with lower carbon,water and chemical footprints.Quality and DurabilityWe require our textile suppliers to submit updated quality test reports on factors like tear strength,pilling and color fastness,for which SHEIN has set strict standards at or above the industry norm.Moreo

181、ver,our product quality team has developed protocols for testing products that enter our warehouse for compliance with these standards.Through these efforts,we aim to prolong the life of our garments and decrease microfiber shedding during their lifetime.Weve set rigorous targets for continuous impr

182、ovement of product quality,looking to standardized testing and customer feedback to guide our efforts.Chemicals and Product SafetySHEIN engages with industry experts such as Textile Exchange and the American Apparel&Footwear Association(AAFA)to reinforce current practices for managing product compli

183、ance.SHEIN has compiled and maintains a Restricted Substances List(RSL)in reference to the International RSL Management(AFIRM)Working Group for Apparel and Footwear,REACH,POPs and other relevant national and regional regulations.All SHEIN partner suppliers must ensure that the raw materials,semi-fin

184、ished and/or finished products they provide comply with the requirements of the SHEIN RSL.We also develop proactive control plans and arrange relevant testing activities in consideration of the material and product categories.Suppliers are required to agree to and comply with the requirements set fo

185、rth in the SHEIN RSL.Moreover,fabric suppliers must provide test reports and Certificates of Conformance attesting to their compliance with our RSL.Products found to violate the SHEIN RSL are removed from sale.Preferred Material SourcingSHEIN targets reducing emissions by 25%by 2030.Part of our deca

186、rbonization strategy is to use lower-impact materials.This means transitioning from virgin polyester to recycled polyester and utilizing other preferred materials such as forest-safe,man-made cellulosic fibers.It also means using as little new material as possible through small-batch,on-demand produ

187、ction processes and utilizing rescued deadstock fabrics from other brands that otherwise would have gone to waste.In 2022,SHEIN became a member of Textile Exchange,a global non-profit driving positive action on climate change across the fashion,textile and apparel industry.We aspire to learn from Te

188、xtile Exchange and continue to explore incorporating the next generation of fibers into our products.SHEINs Fiber Portfolio for Textile ProductsPolyester:64%Recycled Polyester:3 major risks.Corrective action is required.ZTV:ZTV detected.Immediate corrective action is required.Calculation methodology

189、:The percentage for each grade is calculated by the number of supplier facilities with the corresponding grade resulting from the SRS inspection conducted in 2022 divided by the total number of supplier facilities assessed under an SRS audit in 2022.7677SHEINACCELERATING THE EVOLUTION2022 SUSTAINABI

190、LITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXTO THE DIRECTORS OF ROADGET BUSINESS PTE LTD.We have been engaged by the Board of Directors of Roadget Business PTE Ltd.(the Company)also referred to under

191、 the brand name as SHIN to perform a limited assurance engagement on selected information(the Selected Sustainability Information)set out in Appendix 1A and Appendix 1B,presented in the Company and its affiliates(collectively referred to as the Groupy Sustainability and Social Impact Report for the

192、year ended 31 December 2022(Sustainability and Social Impact Report 2022)with regards to the disclosures set out in Appendix 2 referred to reporting and scoping boundary of the Selected Sustainability Information under the Global Reporting Initiative(the GRI)index that can be found in the GRI conten

193、t index 2021(the Reporting Criteria)and the Group managements definition and measurement criteria.Our assurance engagement does not extend to information in respect of earlier periods or to any other information linked to the sustainability information or the Groups website,including any images,audi

194、o files or embedded videos.Our Limited Assurance ConclusionBased on the procedures we have performed as described under the Summary of the procedures we performed as the basis for our assurance conclusion and the evidence we have obtained,nothing has come to our attention that causes us to believe t

195、hat the Selected Sustainability Information in the Groups Sustainability and Social Impact Report 2022,is not prepared,in all material respects,with reference to the Reporting Criteria(Appendix 1A)and the Group managements definition and measurement criteria(Appendix 1B).We do not express an assuran

196、ce conclusion on information in respect of earlier periods or on any other information linked to the sustainability information or the Groups website,including images,audio files or embedded videos.Understanding how the Group Management has Prepared the Sustainability InformationThe absence of a com

197、monly used generally accepted reporting framework or a significant body of established practice on which to draw to evaluate and measure sustainability information allows for different,but acceptable,measurement techniques that can affect comparability between entities and over time.Consequently,the

198、 sustainability information needs to be read and understood together with the Reporting Criteria and the basis of preparation set out in the Groups Sustainability and Social Impact Report 2022.Responsibilities of the Group management for the Sustainability and Social Impact Report 2022 The Group man

199、agement is responsible for Selecting or establishing suitable criteria for preparing the Selected Sustainability Information;The preparation of the Selected Sustainability Information in accordance with the Reporting Criteria and the Group managements definition and measurement criteria;and Designin

200、g,implementing,and maintaining internal control over information relevant to the preparation of the Selected Sustainability Information that is free from material misstatement,whether due to fraud or error.Responsibilities of the auditorWe are responsible for Planning and performing the engagement t

201、o obtain limited assurance about whether the Selected Sustainability Information is free from material misstatement,whether due to fraudor error;Forming an independent conclusion,based on the procedures we have performed and the evidence we have obtained;and Reporting our conclusion to the Board of

202、Directors of the Company.As we are engaged to form an independent conclusion on the Selected Sustainability Information as prepared by Group management,we are not permitted to be involved in the preparation of the Selected Sustainability Information as doingso may compromiseour independence.Professi

203、onal Standards AppliedWe conducted our engagement in accordance with the International Standard on Assurance Engagements 3000(Revised)Assurance Engagements other than Audits or Reviewsof Historical Financial Information issued by the International Auditing and Assurance Standards Board.INDEPENDENT L

204、IMITED ASSURANCE REPORT ON SELECTED SUSTAINABILITY INFORMATION IN ROADGET BUSINESS PTE LTD.S SUSTAINABILITY AND SOCIAL IMPACT REPORT 2022Our Independence and Quality ControlWe have complied with the independence and other ethical requirements of the International Code of Ethics for Professional Acco

205、untants(including International Independence Standards)issued by the International Ethics Standards Board for Accountants which is founded on fundamental principles of integrity,objectivity,professional competence and due care,confidentiality,and professional behaviour.Our firm applies International

206、 Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance withethical requirements,professional standards,and applicable legal and regulatory requirements.Summary of the Procedures we Performed

207、 as the Basis for our Assurance ConclusionWe are required to plan and perform o u rwork to address the areas wherew e have identified that a material misstatement of the Selected Sustainability Information is likely to arise.The procedures we performed were based on our professional judgment.In carr

208、ying out our limited assurance engagement on the Selected Sustainability Information,our procedures include:Evaluated the suitability in the circumstances of the Groups use of the GRI index,as the basis for preparing the Selected Sustainability Information in the Sustainability and Social Impact Rep

209、ort 2022;Through inquiries,obtained an understanding of the Groups control environment,processes and information systems relevant to the preparation of the Selected Sustainability Information,but did not evaluate the design of particular control activities,obtain evidence about their implementation

210、or test their operating effectiveness;Evaluated whether the Groups methods for developing estimates are appropriate and had been consistently applied,but our procedures did not include testing the data on which the estimates are basedor separately developing our own estimates against which to evalua

211、te the Groups estimates;Performed analytical procedures by comparing the expected targets to actual emissions or consumption,and by comparing current period to prior period,and made inquiries of Group management to obtain explanations for any significant differences we identified;Performed sample te

212、sting of the Selected Sustainability Information on GHG emissions against the Reporting Criteria as set out in the Sustainability and Social Impact Report 2022;Tested a sample of supplier audits to assess that they have been carried out during the year,either by verification agencies hired by the Gr

213、oup or by the Group itself.Our procedures did not include the validation of the conclusions included in these reports on any violations of applicable labour laws;Tested a sample of supplier audit gradings to assess that they have been accurately reported in the Selected Sustainability Information.Th

214、e gradings are for factories and supplier facilities and are calculated in accordance with the definition and measurement criteria established by the Group management set out in the Appendix 2 of this assurance report.Our tests involved recalculating these gradings based on the results on violations

215、 of the supplier audits performed by verification agencies or by the Group itself,if any;and Considered the presentation and disclosure of the Selected Sustainability Information in the Sustainability and Social Impact Report 2022.The procedures performed in a limited assurance engagement vary in na

216、ture and timing from,and are less in extent than for,a reasonable assurance engagement.Consequently,the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had we performed a reasonable assurance engagement.Use of Inde

217、pendent Limited Assurance ReportThis independent limited assurance report is made solely to Board of Directors of the Company for the purpose of providing a limited assurance conclusion on the Selected Sustainability Information in the Groups Sustainability and Social Impact Report 2022.As a result,

218、the report may not be suitable for another purpose.For the avoidance of doubt,all duties and liabilities(including without limitation those arising from negligence)to third parties,are specifically disclaimed.The Contracts(Rights of Third Parties)Ordinance does not apply,and only the signing parties

219、 to the engagement letter contract have any rights under it.Deloitte Touche TomatsuHong Kong,29 May 20237879SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXA

220、PPENDIX 1AList of Selected Sustainability Information presented in the Groups Sustainability and Social Impact Report 2022 with reference to the Reporting Criteria of GRI Standards 2021.APPENDIX 1BList of Selected Sustainability Information presented in the Groups Sustainability and Social Impact Re

221、port 2022 in accordance with the Group managements definition and measurement criteria.*As explained in the section under“Summary of the Procedures we Performed as the Basis for our Assurance Conclusion”of our assurance report,our procedures did not include the validation of the results included in

222、the supplier audits performed by verification agencies or by the Group itself.Therefore,no assurance is given on the table of“Percentage of facilities with a given ZTV category”set out on page 31 in the Sustainability and Social Impact Report 2022.*SRS-SHEIN Responsible Sourcing TopicEnvironmental P

223、erformance TopicSupply Chain Management GRI Standards-Selected Topic-Specific DisclosureGHG emissions total inventory(tonnes CO2e)1.Scope 12.Scope 2 Specific Disclosure1.Number of SRS*audits(includes multiple visits)2.Percentage of supplier facilities receiving each grade:A,B,C,D,and ZTV*Market-base

224、d methodGRI Standards 2021GRI 305-1,GRI 305-2DisclosureIn 2022,SHEIN conducted 2812 total SRS audits.A:4%B:14%C:47%D:24%ZTV:11%DisclosureIn 2022,our emissions in tonnes CO2e,were 3,781 tonnes in scope 1,with 19,505*in scope 2 net of Renewable Energy Credits(RECs)Page number in the Sustainability and

225、 Social Impact Report 2022Page 38Page number in the Sustainability and Social Impact Report 2022Page 30Page 308081SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE

226、ANNEXAPPENDIX 2Reporting and Scoping boundary of the Selected Sustainability Information2A.Selected Global Reporting Initiative(“GRI”)Sustainability Reporting Standards disclosures:The below reporting principles are marked as“Yes”under external assurance column of“SHEIN 2022 GRI Content Index”publis

227、hed by the Group.Reporting principles can be found in the section“Reading this report”of the Groups Sustainability and Social Impact Report 2022.Emissions:1.Direct(Scope 1)GHG emissions(Disclosure 305-1),reported in page 38 in the Groups Sustainability and Social Impact Report 2022.The reporting bou

228、ndary is defined following the operational control approach and data availability.The GHG emissions include emissions from operating sites(offices,and warehouses)in Belgium,Brazil,Canada,China,Poland,UAE,and USA.The GHG quantification method and process are in accordance with ISO14064-1:2018 and GHG

229、 Protocol.CH4 fugitives from septic system are estimated based on working hours of employees(converted into man day)and emissions factors per man day.For refrigerants,fugitive emissions are estimated based on the emission factors(annual leakage%of initial refrigerant charge)and the operating time(fr

230、om time put into use till end of the year).For fire extinguishers,all potential emissions are included in the first year of installation.Refrigerants that are CFCs and HCFCs are not included in the calculation,e.g.,R22,R123.2.Energy indirect(Scope 2:Market-based method)GHG emissions(Disclosure 305-2

231、),reported in page 38 in the Groups Sustainability and Social Impact Report 2022.The reporting boundary is defined following the operational control approach and data availability.The GHG emissions include emissions from operating sites(offices,warehouses)in Belgium,Brazil,Canada,China,Poland,UAE,an

232、d USA.The GHG quantification method and process are in accordance with ISO14064-1:2018 and GHG Protocol.Emissions of the electricity consumption covered with Renewable Electricity Certificates(RECs)are calculated as zero emissions.2B.Selected Information as per Group managements definition and measu

233、rement criteria Supply Chain Management(Number of SRS audits):1.Number of SRS audits(supplier audits),reported in page 30 in the Groups Sustainability and Social Impact Report 2022.The Group defines suppliers(contract manufacturers)as being direct finished goods suppliers(garment factories),supplier

234、s of intermediate goods and raw materials such as textiles and packaging,as well as providers of other ancillary services such as product warehousing.The Group defines audit as SHEIN Responsible Sourcing(“SRS)audits performed by SHEIN and verification agencies against the SRS assessment framework to

235、 monitor compliance with SHEINs Code of Conduct.Supply Chain Management(Percentage of supplier facilities with the following grades:A,B,C,D,and ZTV):1.Percentage of supplier facilities with the following grades A,B,C,D,and ZTV,reported in page 30 in the Groups Sustainability and Social Impact Report

236、 2022.The Group defines and includes suppliers of direct finished goods(contract manufacturers),and other suppliers of intermediate goods,raw materials,or other ancillary services.The facilities of these suppliers are assessed under SRS audit to evaluate their performance in terms of their processes

237、,capabilities,and adherences to SHEIN Supplier Code of Conduct in accordance with the SHEIN Responsible Sourcing(SRS)Policy.These assessments result in supplier facilities receiving a performance grade.Tier-1 are defined as contract manufacturing suppliers who directly hold procurement contracts wit

238、h the Group to produce finished products,such as apparel,shoes,bags,accessories,and beauty products.Tier-2 are defined as suppliers who provide the intermediate goods and raw materials such as textiles and packaging to either Tier 1 suppliers or directly to the Group.Other suppliers include provider

239、s of other ancillary services such as product warehousing to either Tier 1 suppliers or directly to the Group.For each grade,there is a score range.Based on the SRS assessment framework,the results are calculated to derive a score,which will further determine the grade.A:90 points and above:minor fl

240、aws.Continued improvement is advised.B:75 to 90 points:some general risks.Continued improvement is advised.C:60 to 75 points:1-3 major risks.Corrective action is required.D:below 60 points.3 major risks.Corrective action is required.ZTV:below zero.ZTV detected.Immediate corrective action is required

241、.The percentage for each grade is calculated by the number of supplier facilities with the corresponding grade resulting from the SRS inspection conducted in 2022 divided by the total number of supplier facilities assessed under an SRS audit in 2022.8283SHEINACCELERATING THE EVOLUTION2022 SUSTAINABILITY&SOCIAL IMPACT REPORTSHEININTRODUCTION PEOPLE:EQUITABLE EMPOWERMENT PLANET:COLLECTIVE RESILIENCEPROCESS:WASTE-LESS INNOVATIONGOVERNANCE ANNEXWe welcome your questions and feedback via SHEIN 2022 Sustainability and Social Impact report is also available to read and download at .Thank you.