ATRenew : Download ATRenew 2021 ESG Report







2021· Environmental, Social and Governance Report

To Give a Second Life to All Idle Goods

CONTACT US

Headquarter: 12th Floor, Building 6, No.433 Songhu Road, Yangpu District, Shanghai, China

Phone: +86 400 161 6365

Investor Relations: ir@atrenew.com

Public Relations: pr@atrenew.com

Brand Partner: brand@aihuishou.com

2021

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

ATRENEW · 2021 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

Contents

01

02

03

04

05

06

Introduction to

Improved Corporate

Green Development

Customer-oriented

Commitment to Technol-

A Prosperous

ATRenew

Governance

through Circular Economy

Quality Control

ogy and Innovation

Co-development

Company Profile

07

Reiterating ESG

25

Tackling Climate Change

41

Product Quality Control

56

Innovation

69

People-oriented

79

Corporate Culture

12

ESG Governance

26

Green Industry

42

Supply Chain Management

63

Digital Intelligence Upgrade

74

Workplace Safety

84

Corporate Governance

13

Communication with Stakeholders

27

Green Operation

47

Customer Service

66

Intellectual Property

75

Employee Development

86

Risk Management & Compliance

15

Identification of Material Issues

29

Green Consumption

51

Product/Service Accessibility

68

Contribution to Industry

77

Social Responsibility

90

Social Recognition

23

ESG Risk Management

31

Green City

53

ESG Key Performance

33

Appendix:GRI Standard Contents Index

93

ATRENEW · 2021 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

ABOUT

THIS REPORT

This is the second environmental, social and governance report (hereinafter referred to as the “Report”) by ATRenew Inc. and its subsidiaries (hereinafter referred to as “ATRenew”, the “Company” or “We”). It intends to elaborate on the Company’s systems and performance in environmental, social and governance matters (hereinafter referred to as “ESG”), and to objectively disclose the management and effectiveness of our sustainable development, in response to the expectations of all stakeholders and the public.

Scope of Reporting

The Report covers the period from January 1, 2021 to December 31, 2021 (hereinafter referred to as “the reporting period” or “this year”) and focuses on the ESG management and achievements of ATRenew. In order to provide better backward and forward comparisons for this Report, some information and data may be traced back to 2020 or earlier, or extended to 2022.

The Report covers the operations of ATRenew Inc. and its major subsidiaries in the People’s Republic of China, including the operations of AHS Recycle, PJT Marketplace, Paipai Marketplace and AHS Device. Any content that diverges from this scope will be explained in the Report.

Reference and Principles

The United Nations Sustainable Development Goals (SDGs) by 2030

The framework developed by Task Force on Climate-related Financial Disclosures (TCFD), as per Financial Stability Board’s (FSB) request

The Global Reporting Initiative Standards (GRI Standards) released by the Global Sustainability Standards Board (GSSB)

The industrial guidelines issued by the Sustainability Accounting Standards Board (SASB)

Topics of concern to world-leading rating agencies such as MSCI and Sustainalytics

Instructions to Appellations

“ATRenew”, “the Group”, “the Company” and “we”all refer to ATRenew Inc. and its subsidiaries, namely ATRenew.

01

ABOUT THIS REPORT

Sources of Information and Reliability Assurance

The information and data disclosed herein are derived from the relevant internal data collection systems, statistical reports, public information and official documents of the Company such as the prospectus and annual report submitted by ATRenew Inc. to the US Securities and Exchange Commission. The monetary amounts herein are all denoted in RMB.

The Company rebranded itself from “AiHuiShou” to “ATRenew” in Chinese in 2020. As a result, internal policies and standards made prior to this were named under the brand “AiHuiShou”.

Process of Reporting

The Report has been prepared following a systematic procedure, including working group formation, identification of important stakeholders, stakeholder interviews, identification and ranking of material ESG issues, determination of the boundary of ESG reporting, collection of materials and data, framework determination, report drafting, report design, review by departments and senior management, etc.

Format

The Report supports online reading and is available in Chinese and English.

Confirmation and Approval

Upon confirmation by the management, the Report was submitted by the ESG Committee (hereinafter referred to as “ESGC”) under the Board of Directors and was approved by the Board of Directors on May 20, 2022.

Contact Us

For any comments or suggestions on our disclosure and performance on environmental, social and governance matters, please contact us via the following methods:

Email: ir@atrenew.com

For more information, please visit our website

02

ATRENEW · 2021 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

Letter from

CEO

To give a second life to all idle goods

The year 2021 was an extraordinary year. Repeated outbreaks of COVID-19, extreme weather and natural disasters presented society and enterprises with new risks and challenges. With a better world in mind, we are deeply aware that it is more important than ever for an enterprise to shoulder its social responsibility and promote circular economy as well as green and sustainable development.

Moving forward with persistence and pragmatism.

Bearing in mind our original aspiration and sense of social responsibility, ATRenew has consistently strengthened our risk controls, refined internal control systems and adhered to compliance standards. Together with our business partners, we strive to fulfill our social responsibilities through our actions, and aim to develop a low-carbon economy.

A visionary in the industry.

As a leader of the digital circular economy, ATRenew continually seeks innovation and cooperation. While focused on our supply chain capabilities, we realize the returns from automation. We’ve also established product quality inspection standards and grading levels to enable the quality inspection and operation capabilities of small and medium-sized businesses for the benefit of the entire industry.

Developing the circular economy for a greener future.

Given China’s promotion of a low-carbon circular economy, the pre-owned electronics industry is booming. Thanks to this, ATRenew’s total revenue in 2021 reached RMB7.78 billion, a year-on-year increase of 60.1%. After listing in June 2021, the Company exceeded expectations and achieved its goals for three consecutive quarters. The Company had a clear business strategy: taking on JD.COM as a strategic partner in the ecosystem and

03

LETTER FROM CEO

adhering to the core strategy of “city-level service integration”. We made development of automation technology a core competitive imperative. In 2021, the research and development expenses under the non-GAAP1 measures were RMB219 million, a year-on-year increase of 50.6%, boosting the Company’s technological edge. Through investment in R&D, we have spread our automatic quality inspection capabilities across China, so as to build the Company’s innovation clusters. In order to improve operational efficiency, the Group independently developed and launched “Matrix 2.0”, a new automated quality inspection system and “Camera Box 3.0”, a mobile phone intelligent inspection device at the Changzhou Operation Center. As for empowering merchants’ quality inspections, ATRenew has greatly improved the quality inspection operation capabilities of small and medium-sized merchants through “Device Hero”, an intelligent inspection tool. Adhering to the goal of sustainable development, we use innovative technologies to drive the development of the circular economy industry. In 2021, we contributed greenhouse gas emission reductions by 463,692 metric tons, leading the green development of the pre-owned electronics industry.

Caring for our employees.

Employees are the core driving force and an indispensable asset to enterprise development. We care about our team members’ health and safety, and strive to protect their rights and interests. We are constantly updating our training system, so as to improve our employees’ capabilities. We are also continually improving the compensation and welfare policies for employees. Through dialogue platforms such as our “Listener Program” and “Workplace Improvement Forums”, we show care to each employee, to enhance their sense of happiness and belonging.

Meeting the needs of the people to help build a better society.

ATRenew pays close attention to people’s livelihood and social needs, actively carrying out charity work such as poverty alleviation, disaster relief and education support. In the 2021 Zhengzhou flood, ATRenew swiftly responsed to help the disaster-stricken areas to ensure education was not interrupted. During the year, the Group actively participated in biodiversity public welfare projects such as the protection of the East Asian finless porpoise. We also joined hands with several well-known consumer brands to convey the concept of low-carbon and environmentally friendly consumption to the public. Combining efforts for sustainable development, we aimed to promote green recycling and reuse of electronic products in society.

To promote China’s carbon neutrality goals and implement the national policy of circular economy, ATRenew set an example in the pre-owned electronics industry. We actively promote green and sustainable development, and strengthen the management of carbon emissions, so as to support the development of the circular economy. Looking to the future, our goals are:

o strengthen our leadership in the pre-owned electronics industry in China, contributing to increased recycling rates and industry development;

e the world a better place by reducing electronic waste and prolonging the lifecycle of consumer electronics.

This report is the second ESG report published by ATRenew. In the future, we will continue to publish annual ESG reports, to demonstrate our commitment to ESG standards and practices. ATRenew will always pay attention to our economic, social and environmental impact. We aim to solve social problems, create social value and empower enterprises with energy and competitiveness. Bearing the mission “to give a second life to all idle goods” and the beautiful vision of becoming a worldwide innovator and leader in the pre-owned electronics industry, ATRenew will continue to promote the ESG cause, so as to contribute to the sustainable development of human society!

Kerry Xuefeng Chen

CEO of ATRenew

1 Non-GAAP technology and content expenses are calculated as technology and content expenses under US GAAP measures excluding the impact of share-based compensation expenses and amortization of intangible assets and deferred cost resulting from assets and business acquisitions.

04

ATRENEW · 2021 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

Highlights of Responsibility Performance

in Key Areas

Service & Innovation

o enhance the consumer experience and bring “green recycling to the doorstep of every consumer”, ATRenew continues to upgrade its offline recycling stores to offer convenient and secure recycling services. As of end of 2021, the total number of AHS stores reached 1,287, a net increase of 556 stores for the year. In addition, the Company installed approximately 300 additional self-service recycling kiosks, further increasing the total number of kiosks to over 1,800. On the retail front, the number of Paipai Selection stores totaled 21 by the end of 2021, and the overall users of Paipai reached 5.54 million. Covering 214 cities across China, ATRenew provides consumers with easy access to recycling and shopping services nationwide.

, ATRenew operates7 regional operation centers and 95 city-level operation stations, enabling large-scale inspection capabilities and support to merchant users. These operational facilities fortify the competitive moat of its core strategy of “city-level service integration”, particularly in lower-tier cities. As such, the Company has received wide recognition from merchant users – the registrants totaled 273,000 by the end of 2021.

Adhering to its “technology-driven” business strategy, ATRenew invested RMB 219 million1 in technology research and development in 2021, a year-on-year increase of 50.6%. Through its proprietary automated quality inspection facilities, such as “Matrix 2.0” system and “Camera Box 3.0” module, ATRenew is able to evolve at scale and minimize man-made inspection errors. This further protects the rights and interests of each consumer recycling and shopping for a pre-owned electronic device.

As the leading pre-owned electronics transactions and services platform, ATRenew spares no effort to lead the industry towards standardization. The Company pioneered the formulation of quality inspection criteria, inspection technics, streamlined process, data wiping standards, after-sales warranty standards, and dispute handling standards. ATRenew divides all pre-owned mobile phones (excluding defunct phones) into 36 quality inspection grades for to-business sales and 6 grades for to-consumer retail. This grading mechanism is widely recognized by merchant participants in the industry. In addition, ATRenew upgraded the “Device Hero”, a portable inspection tool the size of a power bank. The quality inspection system is incorporated into the device and users can easily grade pre-owned phones with this tool. This optimizes the transaction experience, especially for small- and medium-sized merchants.

, the number of newly added intellectual property rights (IPR) authorizations of ATRenew were

146.

, the processing rate of ATRenew customer complaints was

100% with an average resolution time of less than 24 hours,

and the satisfaction rate of customer complaint resolution was 98.51%.

Environmental

ATRenew is committed to contributing to the circular economy, while adhering to China’s carbon peak and carbon neutrality goals, as well as the “Tanpuhui” scheme. This is a carbon reduction incentive that can give value to the work of citizens. One of ATRenew’s milestones is its successful launch of the model for carbon emission reduction through recycling and reuse of pre-owned mobile phones. ATRenew calculates that reusing one pre-owned phone reduces carbon emissions by 30.41 kg. As a result, in 2021 the Company reduced emissions by a total of 463,692 metric tons through re-commercializingpre-owned phones. This is equivalent to the carbon sink of 2.3 million mu of urban forests in one year2. ATRenew will continue to raise consumer awareness of carbon emission reduction and to provide education on greener lifestyles.

  1. Non-GAAPtechnology and content expenses are calculated as technology and content expenses under US GAAP measures excluding the impact of share-based compensation expenses and amortization of intangible assets and deferred cost resulting from assets and business acquisitions.
  2. The average annual carbon sink per mu of urban forest is 0.2 tCO2e. This refers to the statistics of the annual average emission reduction of all the disclosed forest management projects in China Certified Emission Reduction (CCER) scheme. Mu is a Chinese unit of land measurement and one mu

is equal to 666.7 square meters. And tCO2e stands for tonnes of carbon dioxide equivalent. According to MioTech.

05

HIGHLIGHTS OF RESPONSIBILITY PERFORMANCE IN KEY AREAS

ATRenew partners with qualified organizations for proper disposal of e-wastes, and oversees its disposal process and quality of work, ATRenew responsibly disposed of 223,000 devices in 2021, reducing 35.7 metric tons of e-waste.

T he number of second-hand mobile phones in circulation increased by 396,921 contributed by automation technology transformation in Changzhou Operation Center, equivalent to reducing carbon emissions by 12,070 metric tons.

, ATRenew obtained the

ISO 14001 environmental management system certification.

  • he greenhouse gas emission intensity (Scope1+ Scope2) of ATRenew was 0.37 Tonne CO2e/RMB1,000,000, a decrease of 28.8% year-on-year.

Social

, ATRenew had a total of

2,497 full-time employees, and 13 of our employees have pre-existing disability.

ATRenew values employees’ physical and mental health. We set up a Listener Program to receive and resolve employees’ issues anonymously, give feedback once a week, and publish the “Listener Program Responses” bi-monthly. Problems are sorted, reviewed and improved efficiently.

According to the training staff differences, ATRenew conducts multi-level and diversified training, such as the Sailor Program, Navigator Program and New Employee Training, etc. In 2021, the average training hours of employees was 8 hours. We value the occupational health of front-line employees greatly and conduct daily safety inspections, weekly checks of security risks, and monthly fire-fighting training.

ATRenew continuously empowers small merchants’ operation, providing specialized training for 1,000 Paipai Marketplace merchants and 7,273 PJT Marketplace merchants.

ATRenew is committed to social responsibility. In 2021, we donated RMB5.05 million to participate in the flood rescue in Henan Province. We continue to carry out the public welfare education for children in mountain villages through “AHS Charity and Love·Digital Education Aid Program for Rural Children”. We supported 52 schools, provided educational resources to more than 9,840 children in mountain villages, and delivered 2,952 sessions.

Governance

The board of directors of ATRenew consists of 8 members, including 1 chairman, 4 directors and 3 independent directors (including 1 female independent director). All the directors have extensive experience in the industry and bring professional insights from the Internet and logistics, audit and capital markets, marketing and sustainable development.

In 2021, a total of 7 Risk Management Committee (RMC) meetings were held to discuss 23 risk issues. We formulated over 70 rectification and improvement plans by reviewing all accidents; we identified and summarized internal control deficiencies to compile 40 risk control matrices for the business. We carried out anti-fraud investigations, identifying 13 anti-fraud control activities. All the above work has been assigned to specific departments and relevant responsible persons, followed up regularly to carry out rectification and optimization work.

  • here was 0 corruption litigation case in ATRenew. A total of 6 irregular integrity checks were carried out, so as to identify, assess and prevent fraud risks.

ATRenew has passed the Level 3 assessment under China’s Multi-Level Protection Scheme and has obtained ISO 27001 information security management system certification.

ATRenew developed the Seraph Program, an anti-spiderdecision-making system for the protection of business asset data scenarios. The Seraph Program resulted in a reduction of malicious requests from 35.5% to 0.12% by continuously improving defense strategies.

06

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

ATRenew Inc. published this content on 09 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 June 2022 02:11:04 UTC.

Publicnow 2022

All news about ATRENEW INC.

Sales 2022 10 193 M
1 525 M
1 525 M
Net income 2022 -587 M
-87,8 M
-87,8 M
Net cash 2022 1 816 M
272 M
272 M
P/E ratio 2022 -19,6x
Yield 2022
Capitalization 4 767 M
713 M
713 M
EV / Sales 2022 0,29x
EV / Sales 2023 0,19x
Nbr of Employees 2 497
Free-Float 55,3%



Duration :


Period :




ATRenew Inc. Technical Analysis Chart | MarketScreener



Income Statement Evolution

Sell

Buy

Mean consensus BUY
Number of Analysts 4
Last Close Price 21,05 CNY
Average target price 75,92 CNY
Spread / Average Target 261%


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