Gree Electric Appliances [000651:CH] is an international household appliance enterprise engaging in the R&D, production, sales of household and central air conditioners, refrigerators, water heater, etc. According to rating agency CSRHub, the Chinese firm scores 45 out of 100 in overall Corporate Social Responsibility (CSR) performance, compared with 19,040 companies worldwide. An analysis of the company's environmental, social, and governance policies are as follows:
Environment: Continues to Improve Energy Effiency
Gree prioritizes energy efficiency and rational use of energy resources in its manufacturing process. According to its 2018 CSR report, the firm reduced average energy consumption of its air conditioners by 3.05%, cutting carbon dioxide (CO2) emissions by 3,133.31 tons.
In 2018, the company launched a series of projects to update in-house technologies for lighting, its chiller system and water recycling. In regards to pollution prevention, it employs self-testing schemes in line with China’s Ministry of Ecology and Environment (MEE), conducting daily checks on wastewater pollutants and annually air pollutants.
Notably, Gree’s 2018 CSR report did not report on initiatives or policies on how the group restores or rebuilds the environment, nor information regarding its activities to offset the environmental impacts of transportation by its staff.
Social: Lacks Supply Chain Safety Policies
From a social perspective, Gree has stepped up efforts to cultivate internal talent among its employees. The company was 88th in Forbe’s Yearly rankings of best employers globally and was ranked sixth in China.
In an effort to secure health and safety for its staff, Gree claims to fully comply with the ISO 9001 quality management system (QMS) standard, environmental management system standard ISO14001, occupational health and safety management system framework OHSAS 18001.
Gree's labour union has helped 177 employees’ families suffering from serious illnesses and accidents with donation amounting to RMB1.65m as of December 2018.
In regards to Gree’s supply chains, Gree is helping sales agents set up management systems for making a sales plan and forecast, improving their digital transformation. Moreover, the company innovates on supply chain management to eliminate corporate corruption. However, Gree’s 2018 CSR report did not specify policies to safeguard the health of suppliers and sales distributors.
Gree’s 2019 annual earnings report indicated that it employed 88,846 staffs in 2019, compared to 88,800 staffs a year earlier. The company’s chairwoman, Dong Mingzhu, received the highest total salary within the company, standing at RMB865m in 2019.
Governance: Employs Independent Governance Structure
Seen from Gree’s 2019 annual earnings report, the company employs an independent governance structure and holds separate operation from its controlling shareholder, stated-owned Zhuahai Gree Group.
Gree has implemented a Nomination Board Committee to review the qualifications of senior executives, board members, supervisors; has a Remuneration and Evaluation Committee dedicated to design salary range structure; and has an Audit Committee to review internal risks of the company, drafted financial reports, etc.
Gree employs three independent directors but has not implemented CEO-Chairwoman Separation. The tenure of the current Chairwoman Dong Mingzhu started from May 25, 2012 and expects to end on January 15 2022.
The company employs a remuneration mechanism, under which employees are compensated with fixed wages and floating-wages linked to their performance. Gree also implemented an awards mechanism, encouraging R&D teams to make technological breakthroughs.
Notably, the company did not report details on gender diversity in its 2019 annual earnings reports.