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Smarter technology

with a purpose

www.lenovo.com

Lenovo Group Limited

2019/20 Environmental, Social and Governance Report

Stock Code 992

This report is printed on environmentally friendly paper manufactured from elemental chlorine-free pulp

Printed on chemistry free plate system and soy ink

Contents

21.0 EXECUTIVE LETTERS

4A Message from our Chairman and Chief Executive Officer

6A Message from our Chief Corporate Responsibility Officer

82.0 INTEGRATING SUSTAINABILITY

10 Report Parameters

11 Materiality and Stakeholder Engagement

14 Lenovo and the U.N. Global Compact

16 3.0 PRACTICING ETHICAL BUSINESS

18 Organizational Profile

19 FY 2019/20 Economic Performance

20 Corporate Governance

22 Ethics and Compliance

25 Privacy Program

26 4.0 PRODUCT RESPONSIBILITY

28 Sustainable Quality Management

29 Cross-organizational Quality Assurance

31 Compliance

32 Quality Recognitions

34 Smarter Innovation

38 5.0 MANUFACTURING AND SUPPLY CHAIN OPERATIONS

40 In-house Manufacturing Operations

40 Health and Safety Key Programs

45 COVID-19 Response

47 Manufacturing Recognitions

50 Supply Chain Operations

60 Supplier Diversity

62 6.0 PEOPLE

64 Our Culture and Our People

65 Diversity and Inclusion

76 Social Investments

86 A Smarter Response to COVID-19

88 7.0 PLANET

90 Lenovo’s Environmental Commitment

94 Environmental Impact of Lenovo Operations

98 Lenovo Emissions Reduction Targets

106 Environmentally Conscious Products

119 Product End-of-life Management (PELM)

121 Supporting a Transition from a Linear to a Circular Economy

128 8.0 CONSOLIDATED METRICS, OBJECTIVES AND TARGETS

130 FY 2019/20 Consolidated Metrics

138 FY 2019/20 Performance

143 FY 2020/21 Objectives and Targets

146 9.0 APPENDIX

148 Lenovo’s Global ESG Recognition

150 Reference Documentation

153 Material Topic Boundaries

154 The U.N. Global Compact Communication on Progress

155 GRI Content Index

160 Hong Kong Stock Exchange ESG Reporting Guide

Content Index

/167

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SmartertechnologywithapurposeLenovoGroupLimited2019/20Environmental,SocialandGovernanceReportStockCode992Contents21.0EXECUTIVELETTERS4AMessagefromourChairmanandChiefExecutiveOfficer6AMessagefromourChiefCorporateResponsibilityOfficer82.0INTEGRATINGSUSTAINABILITY10ReportParameters11MaterialityandStakeholderEngagement14LenovoandtheU.N.GlobalCompact163.0PRACTICINGETHICALBUSINESS18OrganizationalProfile19FY2019/20EconomicPerformance20CorporateGovernance22EthicsandCompliance25PrivacyProgram264.0PRODUCTRESPONSIBILITY28SustainableQualityManagement29Cross-organizationalQualityAssurance31Compliance32QualityRecognitions34SmarterInnovation385.0MANUFACTURINGANDSUPPLYCHAINOPERATIONS40In-houseManufacturingOperations40HealthandSafetyKeyPrograms45COVID-19Response47ManufacturingRecognitions50SupplyChainOperations60SupplierDiversity626.0PEOPLE64OurCultureandOurPeople65DiversityandInclusion76SocialInvestments86ASmarterResponsetoCOVID-19887.0PLANET90Lenovo’sEnvironmentalCommitment94EnvironmentalImpactofLenovoOperations98LenovoEmissionsReductionTargets106EnvironmentallyConsciousProducts119ProductEnd-of-lifeManagement(PELM)121SupportingaTransitionfromaLineartoaCircularEconomy1288.0CONSOLIDATEDMETRICS,OBJECTIVESANDTARGETS130FY2019/20ConsolidatedMetrics138FY2019/20Performance143FY2020/21ObjectivesandTargets1469.0APPENDIX148Lenovo’sGlobalESGRecognition150ReferenceDocumentation153MaterialTopicBoundaries154TheU.N.GlobalCompactCommunicationonProgress155GRIContentIndex160HongKongStockExchangeESGReportingGuideContentIndex22019/20LenovoEnvironmental,SocialandGovernanceReport1.0Executiveletters4AMessagefromourChairmanandChiefExecutiveOfﬁcer6AMessagefromourChiefCorporateResponsibilityOfﬁcer32019/20LenovoEnvironmental,SocialandGovernanceReportAMessagefromourChairmanandChiefExecutiveOfﬁcerLookingbackatthelast12monthstheworldhasexperiencedoneofthemostsignificantperiodsofglobalchangeandtransformationwehaveeverseen.Asaleaderofabusinessemploying63,000peopleandservingcustomersin180marketsaroundtheworld,IamacutelyawareandfocusedonthewiderroleLenovoplaysintheworldtoday.Wehavearesponsibilitytoallourstakeholderstomakeprogressonourclimatechangecommitments,makeapositivesocialimpactinthecommunitieswherewedobusiness,andstrivetobeamodelcorporatecitizeninourethical,customerservice,andsupplychainbehaviors.It’swiththebackdropofawarenessandresponsibilitythatI’mproudoftheaccomplishmentsanddeterminationoftheLenovoteaminthelastyear,andourambitionsfortheyearsahead.CONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXINTEGRATINGSUSTAINABILITYEXECUTIVELETTERS52019/20LenovoEnvironmental,SocialandGovernanceReportChina’s2019WomeninTechlist.However,ourcommitmenttodiversitygoesbeyondjustourownteamsandtooursuppliersandstrategicsourcingprocesstoo.INNOVATINGASMARTERFUTUREFORALLAcompanyofdiverseinnovators,westillbelieve,evenafter35yearsinbusiness,thatourjobofcreatinginclusivetechnologyisneverdoneandthatnooneshouldbeleftbehindinourshareddigitalfuture.Thisisthecorebeliefbehindourvisionandpurposetoprovide“smartertechnologyforall”.In2019,wewereproudtoexecuteonourvisionwhenweappointedthecompany’sfirstAccessibilityandInclusionAdvisor—HabenGirma—andsignedboththeValuable500inclusivityinitiativeandGSMADigitalDeclaration.Whilewefocusondeliveringourinnovationsforall,ourpurposeisalsoleadingour10,000engineers,researchersandscientistsaroundtheworldincreatingsmartertechnologiessuchastheworld’sfirst5GPCandfirstfoldablelaptop.Atthesametimeusingartificialintelligenceinnotonlyourownproducts,butalsothroughourworkwithcustomersinindustriessuchashealthcareandagriculture.LOOKINGAHEAD—FUTUREGOALSLookingaheadourfocuscontinuestobeonhowwebuildalong-termsustainablebusinessforouremployees,ourcustomersandourcommunitiesforthedecadesahead.Technologyisbreakingdownbarriers,democratizingaccessandempoweringchange—butaswelookforward,wemustensurethelegacyofCOVID-19doesnotdivideourworldfurther.Forthenext10yearswearefocusedonnew,ambitioustargetsincludingdiversityandinclusiongoalsandclimatechangetargetsaspartoftheglobalScienceBasedTargetsInitiative.WhileIamproudofourownprogressacrossallelementsofESGandtheindustryaccolades,Iknowwemustdomore.MoretodrivechangewithinLenovo,thetechnologyindustryasawholeandthewiderworld.Ultimately,myfocusistoensurethatwenotonlymakeanimpact,butthatouremployees,leadership,behaviorandinnovationsreflectourvisionofsmartertechnologyforall.YangYuanqingChairmanandChiefExecutiveOfficerLenovoOURGLOBALRESPONSETOCOVID-19COVID-19hasovershadowed2020forthewholeworldandLenovohasrespondedtothisglobalchallengeinmultiplewaystosupportnotonlycustomers,partnersandemployeesbutalsothecommunitieswhereweliveandwork.Ouractionshaveincludedrelentlessteameffortstobringtechnologytoemergencyhospitals(WuhanandNewYork),partneringwithIntelongenomeresearchtofightthevirus,providingsystemsforgovernmentstomeettheunprecedenteddemandinprocessingunemploymentservices(Australia),anddonatingproductstoschoolchildren(China,Italy,US)toenableeducationduringlockdowns.Andmuchmore.Lenovo’scontributionhasexceededUS$13million—theresultofaglobalcollaborationbetweentheLenovoFoundation,businessentitiesandexecutives.Moreimportantly,ouractionshavebeencustomizedtotheuniqueneedsofthediversecommunitieswherewedobusiness,maximizingthevalueandimpactofeverycontribution.Alongsideourphilanthropicefforts,theglobalsupplychainteamworkednightanddaytoharnessthepowerofbothourin-houseandthird-partymanufacturingsitesaroundtheworldtoadjustcapacityandrebalanceproduction.AlthoughourprimarysmartphonemanufacturingsiteinWuhanwasrequiredtocloseforseveralmonths,theteamralliedtomovepartsandsupplyaroundtheworldtotakeadvantageofotherfacilities.Thisincredibleflexibilityandresilienceofourglobalfootprintreinforcesthatourglobalsourcing,localdeliverycapabilitiesandoperationalexcellenceareLenovo’scorecompetenciesandkeyfactorsinourabilitytoovercomecomplexchallenges.BUILDINGADIVERSEANDINCLUSIVEORGANIZATIONEnsuringadiverseandequitableworkplaceandecosystemwhereeveryonecanthrivehasbeenpartofwhoLenovoissinceourbeginning.TheFY2019/20marksthesecondyearofourannualDiversityandInclusionreport,includingprogressinglobalrepresentationoffemaleexecutives(18.5%),expansionofouremployeeresourcegroups,andanemployeeengagementscoreofmorethan90%asreportedbyemployeesinourannualLenovoListenssurvey.WealsoreceivedthesecondconsecutiverecognitionontheBloombergGenderEqualityIndex,earned100percentontheHumanRightsCampaign(HRC)Foundation’sCorporateEqualityIndexforthethirdconsecutiveyear,andhadtwoVPsofthecompanynamedtoForbesAMessagefromourChiefCorporateResponsibilityOfﬁcerAtLenovo,weknowthatsustainabilityisanongoingjourney.Ourobligationtoourstakeholdersdoesnotendwithourfinishedproductsorworkplaces.Recentglobaleventshavehelpedusreflectonthemeasurableimpactouractivityhasonourcommunitiesandourplanet.Iamhopefulthatwecanworktogetherandbeinspiredbytheselessonstoaddresssustainabilitychallengesinthefuture.Asaglobaltechnologyleader,Lenovoiscommittedtooperateasasustainablebusinesswithpoliciesandproceduresthatbenefitourenvironmentandestablishacultureofintegrity.Weplanforlong-termsuccessbyintegratingtheTenPrinciplesoftheU.N.GlobalCompactintostrategiesandoperations.LenovomeasurestheEnvironmental,SocialandGovernance(ESG)activitiesthathaveanimpactonourstakeholdersandourbusiness.Wewanttoreassureourstakeholdersthatevenduringatimeofcrisis,weremainfocusedonthesemattersaswedemonstrateresiliency.BeginningwiththeFiscalYear2019/20,wewilladdressthereportasthe“ESGReport”,whichconveysamorepreciseassessmentofourCompany’sactionsandthebroadscopeofourcommitmenttoidentifyopportunitieswhichmayimproveourstrategyanddecision-makingprocess,driveinnovationandoperationalefficiencies,andreducerisksassociatedwithclimatechangeandeconomicgrowth.CONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXINTEGRATINGSUSTAINABILITYEXECUTIVELETTERS72019/20LenovoEnvironmental,SocialandGovernanceReportInFY2019/20,wecontinuedtomakeprogressacrossarangeofESGactivities.Keyhighlightsinclude:•RenewableEnergy—WereducedourScope1and2greenhousegasby92percentrelativetoFY2009/10.Wealsoexpandedourcommitmenttosustainableoperationswithon-siterenewableenergyinstallationslikethe3.9MWsolarpanelarrayrecentlyinstalledatourNorthAmericanfacilitiesinNorthCarolina.•CDP—LenovoachievedascoreofA-onthe2019CDPClimateChangeresponseandanAontheCDPSupplierEngagementresponse,bothofwhichareratedattheLeadershiplevel.Theseacknowledgementsreflectourunderstandingofourcontributiontoclimatechange,coordinatedactiononclimateissues,implementationofbestpracticesrelatingtoclimatechange,andongoingtransparencyaroundclimatechangeissues.•2020GreenFreightAsia—Lenovoisthefirstshippertoeverqualifyfor3-LeafCertificationfromGreenFreightAsia(GFA)forourperformanceinChina,inadditiontoreceiving2-LeafCertificationbyGFAforoureffortsinIndia.ThesecertificationsrecognizeLenovo’scommitmenttoengagesuppliersandkeypartnerstocontinuallyenhancetheirsustainabilitypractices,includingreducingtransport-relatedcarbonemissionsinthedeliveryofourproducts.•ClosedLoopPost-ConsumerRecycledContent(CL-PCR)—Insupportofamorecirculareconomy,Lenovoisproudoftheprogresswe’vemadeinexpandingourCL-PCRplasticsprogramtoincludethesematerialsin66ofourproducts—asignificantincreasefrom21productsinthepreviousreportingyear.•2020BloombergGenderEqualityIndex,andthe2019HumanRightsCampaignCorporateEqualityIndex—Lenovowasrecognizedfortheoutstandingperformanceofourdiversityandinclusioninitiativesacrosstheorganization.Thisrecognitiondemonstratesourcommitmenttosupportingadiverseworkforceandcreatinganinclusiveenvironmentwiththeintendedoutcomeofeachemployeefeelingasenseofvalue,respect,andbelonging.•Loveon31GlobalMonthofService—Lenovoengagedemployeesaroundtheworldinstrategicallyalignedvolunteerismthrough‘LoveOn31’,Lenovo’sglobalmonthofservice.Employeesgavemorethan13,000hoursinvolunteerservicefocusedonempoweringunderprivilegedpopulationswithaccesstotechnologyandSTEMeducationwhilemeetingtheuniqueneedsoftheircommunities.In2019,LoveOn31grewtoinclude55differentofficesin37countriesacrosssixcontinents,directlyimpactingnearly56,000peopleinthemonthofMay2019.ParticipationinLenovo’sannualglobalmonthofservicehasgrownby43percentsinceitbeganin2017.•2019HangSengCorporateSustainabilityIndex—LenovowasratedAAbytheHongKongQualityAssuranceAgency,achievingthebestoverallscoreintheITindustry.ThisistheninthconsecutiveyearthatLenovohasbeenincludedinthisranking,showingLenovo’songoingcommitmenttosustainability.•2019PlatinumAwardsinBestCorporateGovernanceandSustainabilityandSocialResponsibilityReportingAward—ThisistheseventhconsecutiveyearthatLenovowaspresentedwiththeCorporateGovernanceawardandthesecondconsecutiveyearreceivingtheSustainabilityandSocialResponsibilityreportingawardfromtheHongKongInstituteofCertifiedPublicAccountants(“HKICPA”).Lenovorecognizesthatouropportunitiestomaketheworldmoresustainablearenotjustoperationalbutcanbeseenthroughthemanyinnovativeapplicationsofourtechnologythatcontinuetobenefitourenvironmentandthehealthofcommunitiesaroundtheworld.Aswecontinueshapingtechnologytocreateabetterworld—weareinspiredbytheuseofLenovotechnologytomeasureandadapttoclimatechange,conservetheenvironment,andprovideaccesstoSTEMeducation.WeareproudtoshareourrecentachievementswhichunderscoreLenovo’shigherpurpose—tobeaglobalcitizencontributingtosolutionsthatsupportamoresustainableplanetbyprovidingsmartertechnologyforall.JohnCerretaniVicePresident,DeputyGeneralCounselandChiefCorporateResponsibilityOfficerLenovo2.0Integratingsustainability10ReportParameters11MaterialityandStakeholderEngagement14LenovoandtheU.N.GlobalCompact102019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYREPORTPARAMETERSABOUTTHISREPORTThisisLenovoGroupLimited’s14thannualEnvironmental,Social,andGovernance(ESG/Sustainability)Report.ItcoverstheFiscalYear2019/20(April1,2019throughMarch31,2020).ThemostrecentSustainabilityReportpriortothiswaspublishedinAugust2019fortheFiscalYear2018/19.Thisandpreviousreportsareavailableat:https://investor.lenovo.com/en/publications/reports.php.ThisreportisconsideredacompaniondocumenttoLenovo’sannualandinterimreports.TheFiscalYear2019/20AnnualReportcontainsanESG/SustainabilityOverviewonpages125–140.SCOPEOFTHEREPORTThisreportcoversLenovo’sglobaloperations,exceptwherenoted.PleaseseetheMaterialTopicBoundarieschartonpage153fordetailsandthescopeofcoverage.Allreferences,unlessotherwisenoted,aretoLenovo’sfiscalyear,whichendsMarch31.Ouroperations:•CorporateheadquartersinHongKong•PrimaryoperationalhubsinBeijing,China;andMorrisville,N.C.,USA•MajordevelopmentandmanufacturingfacilitiesaredescribedintheManufacturingandSupplyChainOperationssection•In-housecallcentersinvariousmarketsLenovo’sSustainabilityProgrammeasurestheEnvironmental,SocialandGovernance(ESG)activitiesthathaveanimpactonourstakeholdersandourbusiness.BeginningwithFY2019/20,wewilladdressthisreportasthe‘ESGReport’,whichconveysamorepreciseassessmentofourCompany’sactionsandthebroadscopeofourcommitments.REPORTCONTENTThecontentofthisreportisinformedbytheEnvironmental,SocialandGovernance(ESG)ReportingGuidesetoutintheRulesGoverningtheListingofSecuritiesonTheStockExchangeofHongKongLimited(the“StockExchange”)(the“ListingRules”),theGlobalReportingInitiative(GRI)Standards,andtheneedsofLenovo’sstakeholders.Lenovohascompliedwithall“complyorexplain”provisionsassetoutintheHongKongStockExchange’sESGGuide.ThisreporthasbeenpreparedinaccordancewiththeGRIStandards:Coreoption.NOTESNotesintheConsolidatedMetrics,FY2019/20PerformanceandFY2020/21ObjectivesandTargetssectionsapplytoallplacesthroughoutthedocumentwherethatdataisused.EXTERNALASSURANCEAccreditedthirdpartieshaveprovidedverificationservicesforcertainenergy,greenhousegas(GHG)emissions,wasteandwaterdatainthisreport.DuetotheCOVID-19pandemic,somethird-partyexternalverificationwascompletedvirtually.Integratingsustainability112019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYBASISOFCALCULATIONSAllfinancialdataisdenotedinU.S.dollars.Lenovomayinsomeinstancesfacevariouschallengeswhenmeasuringitsperformance.Iftherearecontingenciesassociatedwiththedataprovided,thosecontingencieswillbenotedinthedocumentation.Lenovocontinuestostriveforexcellenceinmeasuringandimprovingitsperformancebyaddingnewindicators.Whennewindicatorsareadded,itmaytaketimetodelivertrendinginformation.Therefore,wemaynotalwaysprovideinformationpubliclyuntilwearecertainthatthisdatacanbedeliveredinahigh-qualityandconsistentmanner.CONTACTINFORMATIONFORTHISREPORTANDFEEDBACKForquestionsorotherinformationaboutthisreportortoofferfeedback,pleasecontact:Ms.MarisolBerrios,SustainabilityReportingManager,8001DevelopmentDriveMorrisville,N.C.27560,email:environment@lenovo.com.MATERIALITYANDSTAKEHOLDERENGAGEMENTLenovo’sintegrationofESGimpactsintoitsstrategy,planning,implementationandreportingactivitiesbeginswithanassessmentofmaterialtopics.WebelieveidentificationofmaterialconcernsrelatedtoESGisintegraltoachievingourbusinessgoalsofminimizingriskandmaximizinggrowthandreturnsoncapitalwhilefulfillingourcommitmenttooutstandingcorporatecitizenship.TheBoardofDirectorsandmanagementacrossallmajorfunctionsoftheCompanyregularlyconductassessmentstoidentifyandcategorizematerialconcernsthroughitsEnterpriseRiskManagement(ERM)framework,includingESGrelatedissues.Materialconcernsarefurtherclarifiedandaddressedthroughcompanymanagementsystems.Lenovo’senvironmentalmanagementsystem(EMS),forexample,providesaframeworkforassessmentofsignificantenvironmentalaspects(SEA),regularlyscheduledaudits,measurementofkeyperformanceindicatorsandcontinuousimprovement.ThisSEAevaluationprocessandtheERMprocessprovidevaluableinputintoLenovo’soverallESGmaterialityassessmentprocess.OtherbenefitsoftheEMSincludemonitoringourprogressonpreviouslyidentifiedmaterialconcernsandmorequicklyspottingemergingissues.Inadditiontothesecorporatelevelriskmanagementprograms,individualbusinessunitssuchastheGlobalSupplyChain(GSC)organizationmanagetheirownriskmanagementprocessesthatfeedintothecorporatelevelprogramsanddisclosure.Lenovo’sannualESGReport,(formerlytitled“SustainabilityReport”),providesanaccountingoftheCompany’senvironmentalandsocialresponsibilityperformanceforthepreviousfiscalyear.WedeterminethescopeofthereportbyanESGMaterialityAssessment,aprocesswhereLenovoevaluatesanddeterminesthesignificant,ormaterial,economic,environmental,socialandgovernancetopics.TheresultsoftheMaterialityAssessmentalsoguideuswithevaluatingandprioritizingstakeholderinputs.Thisassessmentwascarriedoutinearly2020.Lenovoacknowledgesthatavarietyofexternalperspectivesarerelevanttoidentifyingmaterialissues.Weregularlyengagewithavarietyofstakeholdersandconsidertheirfeedbackasweaffirmwhatismaterialtoourbusiness,developourESGstrategy,setourgoalsandreportonourprogress.122019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYEnvironmentalSocialGovernance・Emissions・Energy・ProductPackagingandMaterials・Waste/Recycling・Water・Community/Philanthropy・DiversityandInclusion・HumanRights・Safety・EconomicPerformance・Ethics/Integrity・DataPrivacyandSecurity・ProductQuality・Regulatory/Compliance・TechnologyandInnovationESGMATERIALITYASSESSMENT:MATERIALTOPICSInadditiontotheseandotherformalstakeholderinteractions,wecollaboratewithindividualstakeholdergroupsonanad-hocbasisasneeded.EachsectionofthisreportcontainsexamplesofLenovo’sengagementwithstakeholders.Ourenvironmental,qualityandothermanagementsystemshavedefinedprocessesforobtainingandanalyzingstakeholderinputtohelpimproveourperformanceaswellasmanagerisk.Lenovo’snetworkofGeographicEnvironmentalAffairsFocalPointsengagewithlocalsalesteamsandcustomersonaregularbasis.ThisisdonethroughdetailedresponsestocustomerquestionsandmeetingsatcustomerlocationsoratLenovo’sbriefingcenters.ThesemeetingsallowLenovotogetdirectfeedbackonourenvironmentalandotherprograms.Examplesoffeedbackincludeinformationonecolabelpreferences,requestsforpackagingoptimization,andrequestsforfurtherinformationwhichmaycontributetocustomers’internaleducation.STAKEHOLDERENGAGEMENTLenovoactivelymanagesitsrelationshipswithcustomers,employees,suppliers,investors,regulators,membersofthecommunitiesinwhichitoperates,andotherstakeholderswhoseactionscanaffecttheCompany’sperformanceandvalue.Weengageourstakeholdersinseveralways,including:•Surveysanddirectcustomerinteraction•Employeesurveys•Supplieraudits,conferences,andquarterlybusinessreviews•Phoneconferences,webinarsandmeetingswithindustrytradegroupsonregulatoryissues•OngoinginteractionswithlocalcommunitiesandLenovo-organizedcommunityserviceevents•Respondingtoinvestor,analyst,andnon-governmentalorganization(NGO)surveysandinquiries132019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYLENOVO’SSTAKEHOLDERSAdvocacyGroupLocalCommunitiesBoardofDirectorsRegulators/LegislatorsIndustryAssociationsSupplyChainCustomersEmployeesInvestors•Reportedcarbonemissionsdataandstrategiestothe2019CDP(formerlyCarbonDisclosureProject).LenovoachievedascoreofA-onthe2019CDPClimateChangeresponseandanAontheCDPSupplierEngagementresponse,bothofwhichareratedattheLeadershiplevel(seetheEnvironmentalImpactofLenovoOperationssectionformoredetails).•Weexpandedtheuseofinnovativeformsofpost-consumerrecycledcontent(PCC).Lenovoexpandedouruseofclosed–looppost-consumerrecycledplasticmaterials(CL-PCR)sourcedfromend-of-lifeinformationtechnologyandelectronicsequipment(ITE)—from21productsinFY2018/19to66productsinFY2019/20.This214percentincreasedemonstratesLenovo’scommitmenttosupportingacirculareconomy.•Providedfreeconsumerrecyclingoptionsinmanygeographies(seetheRecoveryandRecyclingTrendsinthePlanetsection).KeyESGissuesaddressedthroughLenovo’sengagementwithstakeholdersinthepastfiscalyearincludeconcernsaboutconflictminerals,protectinghumanrightsinthesupplychain,climatechangemitigationandimpact,recycling,andproductcertifications.Lenovo’sresponsestotheseconcernsincluded:•FollowingthecloseofFY2019/20,LenovofinalizedourthirdgenerationofClimateChangegoalsandsubmittedthemforapprovalbytheScienceBasedTargetsInitiative(SBTi).•WecompletedsolarprojectsatourfacilitiesinMorrisvilleandWhitsett,NC,USAandinHefei,andWuhan,China.Bytheendofthefiscalyear,thecurrentsolarcapacityofalltheseprojectswasapproximately16megawatts(MW).•EmployedtheRBAConflictMineralsReportingTemplate(CMRT)forReasonableCountryofOriginInquiry(RCOI)effortsacross95percentofourprocurementspendandoursupplychain,andtheResponsibleMineralsAssuranceProcess(RMAP)forauditing/certifyingofidentifiedsmelters.142019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYLENOVOANDTHEU.N.GLOBALCOMPACTSince2009,LenovohasbeenasignatoryoftheUnitedNationsGlobalCompact(UNGC),avoluntaryinitiativebasedonCEOcommitmentstoimplementuniversalsustainabilityprinciplesandtotakestepstosupporttheUnitedNationsSustainableDevelopmentGoals(SDG),whichclearlydefinetheworldwewant—applyingtoallnationsandleavingnoonebehind.Launchedin2000asaspecialinitiativeoftheUNSecretary-General,theUNGCprovidesaframeworkfordevelopingamoresustainableandresponsiblebusiness.Today,theUNGCisthelargestcorporatesustainabilityinitiativeintheworld,withmorethan9,500companiesand3,000non-businesssignatoriesbasedinover160countries.Itisacalltocompanieseverywheretoaligntheiroperationsandstrategiestotenuniversallyacceptedprinciplesintheareasofhumanrights,labour,environmentandanti-corruption.TheUNGC’smissionistomobilizeaglobalmovementofsustainablecompaniesandstakeholderstocreatetheworldwewant.TheUNGCprovidesorganizationswitheasyaccesstoauthoritativeguidance,training,toolsandsupport,alongwithglobalreachandmulti-stakeholderconnections,whileenablingbusinessestoachievetheirsustainabilityobjectives.Lenovo’sobjectivesandtargetsconsistofESGactivitiesthathaveanimpactonourstakeholdersandourbusiness.Wemeasuretheseactivitieswithinourbusiness,projects,programsandactivitiessothatwecanassessourdirectandindirectcontributionstowardtheUNSDG.EnvironmentalSocialGovernance152019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYEmissionsEnergyProductPackagingandMaterialsWaste/RecyclingWaterCommunity/PhilanthropyDiversityandInclusionHumanRightsSafetyEconomicPerformanceEthics/IntegrityDataPrivacyandSecurityProductQualityRegulatory/ComplianceTechnologyandInnovationLENOVO’SESGMATERIALTOPICSANDTHEUNSDGS:3.0Practicingethicalbusiness18OrganizationalProﬁle19FY2019/20EconomicPerformance20CorporateGovernance22EthicsandCompliance25PrivacyProgramCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY182019/20LenovoEnvironmental,SocialandGovernanceReportORGANIZATIONALPROFILELenovoGroupLimited(HKSE:992)(ADR:LNVGY)isaUS$50billionFortuneGlobal500company,with63,000employeesandoperatingin180marketsaroundtheworld.Focusedonaboldvisiontodeliversmartertechnologyforall,wearedevelopingworld-changingtechnologiesthatcreateamoreinclusive,trustworthyandsustainabledigitalsociety.Bydesigning,engineeringandbuildingtheworld’smostcompleteportfolioofsmartdevicesandinfrastructure,wearealsoleadinganIntelligentTransformation—tocreatebetterexperiencesandopportunitiesformillionsofcustomersaroundtheworld.Tofindoutmorevisithttps://www.lenovo.com,followusonLinkedIn,Facebook,Twitter,YouTube,Instagram,WeiboandreadaboutthelatestnewsviaourStoryHub.Lenovohasthebelowcorebusinessgroups:•TheIntelligentDevicesGroup(IDG)encompassesthePCandSmartDevicesbusiness,includingPCs,tablets,augmentedandvirtualreality(AR/VR),smartdevices,softwareandservices,andtheMobileBusinessGroup(MBG),includingMotorolaMobilityLLC(Motorola),forsmartphones;and•TheDataCenterBusinessGroup(DCG),whichincludesservers,storage,networking,softwareandservices.Alongsidethesecorebusinessgroupswehaveinvestedinnewandburgeoningopportunitiesforthefuture—includingthelaunchofthreenewbusinessgroupsasadrivingforcebehindthetransformationalignedtoour3Sstrategy.ThesegroupsaretheDataIntelligenceBusinessGroup(DIBG),theConvergedNetworkBusinessUnit(CNBU)andtheCommercialInternetofThings(CIoT)group.InparalleltheLenovoCapitalandIncubatorGroup(LCIG)fortifiesourintelligenttransformationstrategybyidentifyingandinvestinginsomeoftoday’smostcutting-edgetechnologiesthathavethepossibilitytobethemainstreamtechnologiesoftomorrow.LenovoisincorporatedandheadquarteredinHongKong,withkeyoperationscentersinBeijing,ChinaandMorrisville,NorthCarolina,USA.Lenovo’sMorrisville,NorthCarolina,USAlocationPracticingethicalbusinessCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY192019/20LenovoEnvironmental,SocialandGovernanceReportFY2019/20ECONOMICPERFORMANCEGROUPOVERVIEWDetailedresultsaboutLenovo’sbusinessperformanceandhighlightsareavailableintheFY2019/20AnnualReportandattheLenovoInvestorRelationswebsite.Full-yearrevenueexceededUS$50billionforsecondconsecutiveyearRecordpre-taxincomeofUS$1.02billion,up19%year-on-yearNetincomeofUS$665million,up12%year-on-yearUS$50BPC&SMARTDEVICEMOBILEBUSINESSDATACENTERRecordrevenueofalmostUS$40billionLaunchediconicrazrsmartphoneNon-hyperscalerevenuegrew5.3%year-on-yearExtended#1leadershipofglobalPCmarketwithshareof24.5%forthefullyearImprovedPTIyear-on-yearbyUS$96millionHighPerformanceComputing#1supercomputerleadershipextended,now173oftop500systemsworldwide#1CONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY202019/20LenovoEnvironmental,SocialandGovernanceReportCORPORATEGOVERNANCETrustandintegrityformkeyculturalfoundationsforLenovo.Lenovopromotesaculturethatstrivestoattainthehigheststandardsofethicalbusinessconductandcompliancewithalllawsandregulationswhereveritoperates.ItspoliciesandprogramsalignwithitsobjectivetooperateethicallyinallLenovobusinessactivities.TheboardofdirectorsandthemanagementofLenovoGroupLimitedstrivetoattainandupholdahighstandardofcorporategovernanceandtomaintainsoundandwell-establishedcorporategovernancepracticesfortheinterestofshareholdersandotherstakeholdersincludingcustomers,suppliers,employeesandthegeneralpublic.TheCompanystrictlyabidesbythegoverninglawsandregulationsofthejurisdictionswhereitoperatesandobservestheapplicableguidelinesandrulesissuedbyregulatoryauthorities,andregularlyundertakesreviewofitscorporategovernancesystemtoensureitisinlinewithinternationalandlocalbestpractices.ThroughouttheFiscalYearendedMarch31,2020,theCompanyhascompliedwiththecodeprovisionsoftheCorporateGovernanceCodeandCorporateGovernanceReport(the“CGCode”)setoutinAppendix14totheListingRules,andwhereappropriate,mettherecommendedbestpracticesintheCGCode,withtheexceptionthattherolesofthechairmanoftheBoard(the“Chairman”)andthechiefexecutiveofficeroftheCompany(the“CEO”)havenotbeensegregatedasrecommendedbycodeprovisionA.2.1oftheCGCode.INTERNALCONTROLFormanyyears,theCompanyhashadanintegratedapproachforinternalcontrolwhichisconsistentwiththeCommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO)internalcontrolframework.Withinthisframework,managementisresponsibleforsettingtheappropriatetonefromthetop,performingriskassessments,andowningthedesign,implementationandmaintenanceofinternalcontrol.OtherteamssuchasFinance,Legal,andHumanResourcesprovideexpertisetomanagementtoassistitinundertakingitsresponsibilities.TheBoardandtheAuditCommitteeoverseetheactionsofmanagementandmonitortheeffectivenessoftheestablishedcontrols,assistedbyassuranceprovidedbytheexternalandinternalauditors.MoreinformationaboutLenovo’sinternalcontrolframeworkbeginsonpage88intheFY2019/20AnnualReport.TheBoardisthehighestgoverningbodyintheorganizationandisresponsibleforoverseeingtheoverallstrategyoftheCompanyanddirectingandsupervisingitsaffairsinaresponsibleandeffectivemanner.TheBoardhasestablishedacleargovernancestructureandtheoverallapproachhasbeendesignedtosupportandworkwithinourorganizationalstructuretomeetthechallengesofthefuture.FurtherdetailsonLenovo’scorporategovernance,thecomposition,responsibilitiesandmainactivitiesoftheBoardandBoardCommitteesduringFY2019/20areincludedtheCorporateGovernanceReportonpages56–106oftheFY2019/20AnnualReport.CONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY212019/20LenovoEnvironmental,SocialandGovernanceReportGovernanceStructureTheBoardhasestablishedacleargovernancestructureandtheoverallapproachhasbeendesignedtosupportandworkwithinourorganizationalstructuretomeetthechallengesofthefuture.FurtherdetailsonLenovo’scorporateSHAREHOLDERSANDOTHERSTAKEHOLDERSBOARDOFDIRECTORSInternalAuditLenovoExecutiveCommitteeAuditCommitteeCompensationCommitteeNominationandGovernanceCommitteeChiefExecutiveOfﬁcerSeniorManagementAmanagementcommitteecomprisingtheCEOandcertainmembersoftheseniormanagementCOMMUNICATIONWITHINVESTORSANDOTHERSTAKEHOLDERSLenovoisdevotedtodevelopinganeffectivetwo-waycommunicationwithshareholders,investorsandequityanalyststoenhancethetransparencyoftheCompanyandhasestablishedaContinuousDisclosurePolicyfordisseminatinginformationtoourshareholders.TheInvestorRelationsteamiscommittedtomaintaininginteractivecommunicationswiththecapitalmarkettofacilitatebetterunderstandingbytheinvestmentcommunityofLenovo’sintelligenttransformationstrategy,businessoperations,andlatestdevelopments.Theteamalsopro-activelyrespondstomajorissuesofconcerntothecapitalmarkettoofferallnecessaryinformationinatimelyandaccuratemanner.Duringthefiscalyear2019/20,theCompanycontinuedtofacilitateeffectivecommunicationswithitsshareholders,investors,andanalyststhroughmultiplechannelsincludinginvestorconferences,roadshows,one-on-oneandgroupmeetings,teleconferences,Companyvisits,theInvestorRelations(IR)website,socialmedia,IRnewsletters,andIRalerts.governance,thecomposition,responsibilitiesandmainactivitiesoftheBoardandBoardCommitteesinFY2019/20areincludedintheCorporateGovernanceReportonpages56–106oftheFY2019/20AnnualReport.InformationaboutLenovo’s2020AnnualGeneralMeetingandotherInvestorRelationsactivitiesareavailableonpages102–103intheFY2019/20AnnualReportandattheLenovoInvestorRelationswebsite:http:/Lenovo.investor.com.ESGMANAGEMENTLenovo’sCorporategovernanceframeworkincludesaCorporateSustainabilityPolicy,signedbytheChairmanandCEO,Mr.YangYuanqing,whichoutlinestheESGprinciplesthatguidetheCompany’soperations.Ourgovernancestructure,includingtheBoardofDirectors,provideasolidfoundationfortheESGprogramframeworkandprocesstoregularlyevaluateandaddressESGrisks.Lenovo’ssystemicapproachtomanagingESGprogramscreatesacompetitiveadvantageinarapidlychangingeconomy.TheintegrationofastrongESGprogramaddressesthegrowingconcernsofindividualconsumersandlargeenterprisecustomersaroundtheglobe.AtLenovo,thegrowthofourprogramismeasuredacrossthethreepillarsofourESGstrategy—Environmental,SocialandGovernance.CONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY222019/20LenovoEnvironmental,SocialandGovernanceReportOurenvironmentalprogramsextendbeyondtheecolabelsandthecarbonfootprintoftheproductsthatwemanufacturetoprogramsthatalsoidentifyclimatemitigationopportunitiesinouroperations,oursupplychain,productend-of-lifemanagement,andmanyotherareas.Wesetstrategicenvironmentalgoalsandweregularlyassessandmanageclimate-relatedrisksandopportunities.Oursocialprogramsareframedwithaglobalmindsetwhichchampionsdiversityandinclusion.Wearecommittedtoadvancingdiversityacrossourworkforcestartingwithourtopexecutives,andadvancingscience,technology,engineeringandmath(STEM)education,increasingaccesstoopportunitiesfordiversepopulations,andempoweringemployeestoimproveglobalcommunities.Thisisdonethroughvariousprograms,includingtheLenovoFoundationandLenovoFoundationBeijing.WorkingcloselywiththeBoard,seniorleadershipoverseesESGrelatedpoliciesandprogramsthatareexecutedbythebusinessunits.Lenovo’sBoardofDirectors,LeadershipTeam,andallmajorfunctionsoftheCompanyutilizetheEnterpriseRiskManagementframeworkandprocesstoregularlyevaluateandaddressESGrisks.Lenovo’sBoardofDirectorsreviewedupdatesonESGinMayandAugust2020,whichincludedareviewandtheapprovalofLenovo’sAnnualReport’sESGcontent.ETHICSANDCOMPLIANCELenovoiscommittedtoconductingbusinesslegally,ethicallyandwithintegrity.LenovohasanEthicsandComplianceOffice(ECO)thatoverseesethicsandcomplianceacrosstheCompanyandpromotesanorganizationalculturecommittedtoconductingbusinesslegally,ethicallyandwithintegrity.TheECOworksinpartnershipwithbusinessunitsacrosstheglobetoensuretheyoperatewithinlegalandethicalobligations.TheECOiscommittedtoraisingawarenessabouttheimportanceofethicsandcomplianceintheworkplaceandplaysacriticalroleinprovidingemployeeswiththeinformation,resources,andtrainingtheyneedtomakeinformeddecisions.TheECOoverseesLenovo’sCodeofConduct(“Code”),whichestablishesclearexpectationsforemployeecompliancewithpoliciesrelatedtolawfulandethicalbusinessconduct.Lenovo’sCodereflectsanextensionofourcultureoftrustandintegrityandourcontinuedcommitmenttoethicalbusinesspracticesandcomplyingwiththelaw.OurCodeholdsemployeesaccountablefortheirbehaviorandhelpsemployeesdeterminewhentoseekadviceandwheretoobtainit.RegulartrainingontheCodeandrelatedpoliciesisprovidedtoreinforcetheCompany’scommitmenttocomplianceandconductingbusinesswithintegrity.TheCode,policies,andrelatedawarenessandtrainingmaterialsareprovidedontheCompany’sintranetandthroughperiodiccommunications.CONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY232019/20LenovoEnvironmental,SocialandGovernanceReportTheExecutiveEthicsCommitteeprovidesexecutive-leveloversightofLenovo’sEthicsandComplianceprogram.TheInvestigationOversightCommittee(IOC)workswiththeECOandoverseestheCompany’sinternalinvestigationprocess.TheRegionalEthicsandComplianceCommitteeprovidestheECOwithglobalperspectiveandinsight.BUSINESSPRACTICESLenovo’sCodeandpoliciesstronglysupportethicalandresponsiblebusinesspractices:Anti-BriberyandAnti-CorruptionLenovohasananti-briberyandanti-corruptionpolicythatreinforcesprovisionsintheCodeandprovidesadditionalguidanceregardingcompliancewithglobalanti-briberyandanti-corruptionrulesandlaws.Anti-CompetitivePracticesandFairCompetitionLenovo’sCodeandpolicyonanti-competitivepracticesandfaircompetitionforbidemployeesfromenteringintoanagreementordiscussionthatwouldresultinsettingprices,limitingtheavailabilityofgoodsorservicesonthemarketoragreeingtoboycottacustomerorsupplier.IntellectualPropertyLenovorespectstheintellectualpropertyrightsofothers.ItistheCompany’spolicytoavoidanyinfringementofcopyrightorotherintellectualpropertyrightsofothercompaniesandindividualsintheconductofitsbusiness.Employeesareexpectedtoobtainandabidebylicensesorotherpermissionsasappropriate.AuditsLenovoconductsinternalauditseachyeartoprovideassurancethatitsethicalbusinesspoliciesandpracticesarebeingfollowed.TheBoardanditsAuditCommitteeoverseetheactionsofmanagementandmonitortheeffectivenessoftheestablishedcontrols,assistedbyassuranceprovidedbytheexternalandinternalauditors.Duringthelastyear,InternalAuditissuedmultiplereportscoveringsignificantoperationalandfinancialunitsworldwide.Moreinformationcanbefoundonpages86–90oftheFY2019/20AnnualReport.RAISINGQUESTIONSORCONCERNSLenovohasestablishedclearprocessesandreportingchannelsforquestionsorconcerns.Employeesareprovidedguidanceonhowtoraisequestionsorconcernsregardinganyaspectoftheirwork.Employeesareencouragedtoraiseconcernstotheirmanagers,HumanResources,theECO,InternalAudit,CorporateSecurityortheLegalDepartment,aboutanypotentialissuesincludingthosepertainingtoknownorsuspected:•FraudbyoragainstLenovo•Unethicalbusinessconduct•Violationoflegalorregulatoryrequirements•Substantialandspecificdangertohealthandsafety•ViolationofLenovo’scorporatepoliciesandguidelines,particularlyourCodeofConductInaddition,Lenovoprovidesformal,confidentialwaystoreportconcerns,askquestionsorrequestguidancebyemailorthroughtheLenovoLine.TheLenovoLineisaconfidentialreportingsystemthatisaccessible24hoursaday,sevendaysaweekbysecurewebsiteortoll-freetelephonewithtranslatorsavailable.Whereallowedbylaw,employeesmayreportconcernsaboutbusinesspracticesanonymously.CONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY242019/20LenovoEnvironmental,SocialandGovernanceReportReportswill,totheextentpermittedbylawandconsistentwithaneffectiveinvestigation,bekeptanonymousandconfidential.Lenovoregardsanysuspectedviolationoflaw,policyortheCodeasaseriousmatterandiscommittedtofollowinguponallreportedconcerns,whichareaddressedandtrackedtoresolution.Lenovohasaclearnon-retaliationpolicy,whichisapartofourCodeofConduct.Lenovodoesnottolerateharassment,retaliation,discriminationorotheradverseactionagainstanyemployeewho:•Makesaninternalreportingoodfaith•ProvidesinformationorassistsinaninvestigationregardingsuchareportReportsofallegedretaliationwillbepromptlyaddressedandinvestigated.InternalinvestigationsareconductedatLenovowhensituationsthatmayviolateourpolicies,theCodeofConductorthelawarereportedoridentified.AllLenovointernalinvestigationsareoverseenbytheIOC.TheIOCmeetsmonthlytotrackreportsofunethicalorillegalconductandtodiscussinternalinvestigationsandmitigationofissues.Lenovoalsoprovidesdetailedinformationaboutitsinternalcontrolsframeworkandenterpriseriskmanagement,includingethicsandcompliance,initsCorporateGovernanceReport,whichbeginsonpage56intheFY2019/20AnnualReport.QuestionsregardingethicsandcompliancemaybesentbyemailtotheECOatethics@lenovo.com.PUBLICPOLICYAsaglobalbusiness,Lenovomaintainsgoodrelationshipswithgovernmentsaroundtheworldandstrivestobeagoodcorporatecitizeneverywhereweoperate.LenovoGovernmentRelationsisresponsibleforcoordinatingLenovo’scommunications,lobbyingandotherinteractionswithgovernmentofficialsandpolicymakers.Lenovoemployeesshouldnotlobby,communicatewithpublicofficialsonpolicymatters,makepoliticalcontributions,provideequipmentorservicesorengageinpoliticalactivitiesonLenovo’sbehalfexceptinaccordancewithapplicablelaworpolicyandincoordinationwithLenovoGovernmentRelations.Employeesmayparticipateinpoliticalactivitiesonanindividualbasis,withtheirownresources,andontheirowntime.TAXAPPROACHLenovoiscommittedtoconductingbusinesslegally,ethicallyandwithintegrity,andthiscommitmentextendstoourapproachontaxstrategy,operationsandcompliance.InformationaboutLenovo’sFY2019/20taxpositioncanbefoundinourFY2019/20AnnualReport,inthe“NotestotheFinancialStatements”,onpages232–234.CONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY252019/20LenovoEnvironmental,SocialandGovernanceReportPRIVACYPROGRAMLenovorecognizesthegreatimportanceofprivacytoindividualseverywhere—customers,websitevisitors,productusers,employees—everyone.TheresponsibleuseandprotectionofpersonalandotherinformationundertheCompany’scareisacorevalue.ToensureadherencetoLenovoprivacypolicies,principlesandprocesses,theCompanymaintainsaglobalPrivacyProgramledbytheLegalDepartmentandacross-functionalPrivacyWorkingGroupcomprisedofkeypartnersdrawnfromInformationSecurity,ProductSecurity,ProductDevelopment,Marketing,E-Commerce,ServiceandRepair,HumanResources,andothergroups.KeyelementsofLenovo’sapproachtoensuringprivacycomplianceinclude:•MonitoringprivacyregulatorytrendsandimprovingLenovo’sprivacypractices•Harmonizingglobaldataprivacyrequirementsintoacorporate-widesetofguidingprivacyprinciplesintendedtodrivehowLenovohandlespersonalinformation•DevelopingandupdatingLenovoprivacypoliciesandprocedures•Providingcontractualsupporttoensurethatrisksassociatedwithanydataflowsarecoveredbyappropriatecontractualterms;thisincludesassistingtheLenovoLegalCenterofExcellence(COE)initseffortstoupdatecontracttemplatesandimprovingprivacy-focusedcontractexhibits.InFY2019/20,thePrivacyProgramprovidedinputintomorethan200contracts•Providingearlyinputtoproductdevelopmentteamsbyincorporatingprivacycheckpointsintoformalproductdevelopmentplans•Preparingprivacyimpactassessmentsandconductingpre-launchprivacycompliancereviewsofproducts,software,websites,marketingprograms,internalsystems,andvendorrelationships.InFY2019/20,thePrivacyProgramconductedmorethan650pre-launchreviewsofconsumerproducts•Respondingtorequestsfromindividualsabouttheirpersonalinformation•CoordinatingLenovo’sresponsetolawenforcementandothergovernmentrequestsforpersonallyidentifiabledata•Developinganddeliveringprivacy-focusedtrainingprograms;inFY2019/20,thePrivacyProgramconductedmorethan20tailoredprivacytrainingstoover1,700employees•WorkingcloselywiththeCorporateInformationSecurityOfficetotimelyidentifyandrespondtoinformationincidentsinvolvingpersonalinformation•MaintainingaPrivacyProgramintranetwebsiteforemployeesthatservesasaresourcecontainingguidancedocuments,contracttemplates,compliancechecklists,andinsightsforcommunicatingwiththeprivacyteamTheLenovoPrivacyProgramcanbereachedatprivacy@lenovo.com.262019/20LenovoEnvironmental,SocialandGovernanceReport4.0Productresponsibility28SustainableQualityManagement29Cross-organizationalQualityAssurance31Compliance32QualityRecognitions34SmarterInnovation272019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY282019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYDEVELOPMENTMANUFACTURINGTRANSPORTATIONINSTALLATIONUSESERVICERECYCLINGSUSTAINABLEQUALITYMANAGEMENTLenovodeliverssuperiorqualityproductsandiscommittedtoensuringthatitsproductsaresafethroughouttheirlifecycle.ProductLifeCycleAssessment(LCA)principlesguideLenovoinensuringthateverystageoftheproduct’slifeistakenintoconsideration,includingdevelopment,manufacturing,transportation,installation,use,serviceandrecycling.ThisenablesLenovotogaindeepinsightintoopportunitiesforriskandcostminimizationaswellasuncovernewopportunitiesforenhancingandincreasingproductqualitytomeettheneedsofaninformedpublic.Corporatestrategies,policiesandguidelineshavebeendesignedtosupportLenovo’scommitmenttoproductsafety.LenovostrivestoensurethatourproductsmeetallapplicablelegalrequirementsaswellasvoluntarysafetyandergonomicspracticestowhichLenovosubscribes,whereverourproductsaresold.Lenovo’sglobalQualityManagementSystem(QMS),whichhasearnedISO9001(InternationalOrganizationforStandardization)certification,ensuresthecontinualdeliveryofdesignimprovementsintocurrentandfutureproducts.LenovostronglyembracestheISO9001commitmenttoaneffectivequalitymanagementsystemandisdedicatedtoexceedingindustrystandardsforproductqualityandreliability.Tomaintainthisqualitylevel,Lenovoemploysanactiveclosed-loopprocesswithvariousfeedbackmechanisms.ThesefeedbackmechanismsprovideProductresponsibility292019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYquickresolutionofcustomerissues.Whenproductissuesarediscovered,weperformrootcauseanalysisandfeedtheresultsbackintomanufacturing,developmentandtestorganizationsensuringthatsimilarissuesdonotarisewithcurrentorfutureproducts.BecauseLenovoproductsfaillessoftenandhavealongerlifespan,fewerresourcesarerequiredfortheirupkeepandend-of-lifemanagement.Lenovo’scomprehensiveproductdevelopmentprocessincludesprototypedevelopment,producttestingandfocusgroupstoensuretheCompanymeetsthediverseneedsofglobalcustomers.Forexample,Lenovoproactivelyelicitsinputondesignandproductfeaturesfromcustomersandpartners.Prototypesareextensivelyevaluated,andfinalproductsundergorigoroustestingtoensuretheymeetstringentstandardsspecifictotheirapplicationandusebeforetheyareclearedforshipment.Lenovo’sTechnicalEvaluationCenterprovidesinformationandrecommendationstoLenovoengineering,andLenovo’sLessonsLearnedfeedbackloopcontributestotherefinementandmaturationofourprocessesandeliminationofrecurringproblems.Asaresult,Lenovo’sproductrepairactionratesareamongthelowestintheindustry.Lenovoleadersareresponsibleforestablishingobjectivesandmeasuringresultstodrivecontinualimprovementinqualityandcustomersatisfaction.AllLenovoemployeesareexpectedtocontributetothiscontinualimprovementasanintegralpartofourqualitymanagementsystem.Lenovo’scorporateQualityPolicyisavailableat:www.lenovo.com/quality.ServiceandSupportMetrics•RepairActionsandCallVolume•ResolutionEffectiveness•ResolutionCycleTime•OverallSatisfactionOverallQualityKPIs•WarrantyRepairPerformance•Year-on-YearImprovement•CriticalSituations•CustomerSatisfactionQualityPolicyISO9001ISO14001Standards&ComplianceBMS1.QualityRollcalls2.WeeklyQualityReviews3.MonthlyBusinessUnitReviews4.Geo/ServiceInterlocks5.SeniorLeadershipTeamReviewsGlobalSupplyChainMetrics•FirstPassYield•OutofBoxMetrics•RepairActions•On-timeDeliveryBusinessUnitsMetrics•ProductQuality—FailureRates•ProductLifeCycleManagement•TimetoMarket,TimetoVolumeProductQualityMetrics•Year-on-YearImprovement•WarrantyRepairPerformance•CriticalSituationManagement•CustomerSentimentCROSS-ORGANIZATIONALQUALITYASSURANCE302019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYCUSTOMER-FOCUSEDTESTINGOncetheproductdevelopmentphaseiscompleted,Lenovoproductsundergoaseriesofcustomer-driventestspriortoproduction.Testingincludesongoingcustomersimulationevaluationsandcustomersimulationauditstoevaluateproductqualitybyremovingsystemsfromtheboxandsettingthemupintypicalcustomerconfigurations.Additionally,extendedcustomersimulationtestsareconductedonasamplebasiswithvariousconfigurationsofproductoptionsandsoftware.Thelastevaluationsimulatestheperformanceoftheproductthroughvariousstandardcustomerapplications.Lenovohascontinuedtoenhanceourcustomer-focusedprogrambysendingtechnicalteamstosupporton-siteinstallationsforcustomers.Duringandaftertheinstallation,thereisongoingdialoguebetweenthecustomerandLenovotoensuretimelyfeedbackoninstallationprogress.Thisallowscorrectionstobequicklyputinplace,andfortheteamtopreemptpotentialissues.Thishasproventobehighlyadvantageousduringnewproductreleases,aspotentialissuescanbepromptlyaddressedtominimizetheimpactonallcustomers.SAFETYANDERGONOMICSLenovoiscommittedtoensuringthatourproductsaresafethroughouttheirlifecycle,includingdevelopment,manufacturing,transportation,installation,use,serviceandrecycling.Corporatestrategies,policiesandguidelineshavebeendesignedtosupportthiscommitmenttoproductsafety.Eachemployeebearsapersonalresponsibilitytoadvancethefollowingobjectives:SelectsupplierswhodemonstratesimilarcommitmentstosafetyComplywithapplicablelegalrequirementsandvoluntarysafetyandergonomicspracticestowhichLenovosubscribesProvidecustomerswithlabeling,instructions,andotherinformationtosafelyuseLenovoproductsReportsafetyinitiativesandincidentstoseniorexecutivemanagementContinuallyimproveproductsafetyprocessesInvestigateproductsafetyincidentsandtakepromptremedialactionstoprotectcustomersandemployeesFosteremployeeinvolvementandprovideappropriateresourcestodevelopandimplementsuccessfulproductsafetyinitiativesLenovo’sProductSafetyPriorities312019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYWithafocusedemphasisonproductsafetyandquality,Lenovoisachievinghighcustomersatisfactionanddeliveringqualityproducts,solutionsandservices.Lenovopromptlyinvestigatesandrespondstoanypotentialsafetyorqualityissueassociatedwithourproducts.Whenneeded,Lenovoworkswithgovernmentalsafetyagenciestorespondtocustomerallegationsofasafetyrelatedincident.Intherareeventaproductrecallisrequired,Lenovowillworkwiththeappropriatesafetyauthoritiestocommunicatetheissueandremedytothepublic.InFY2019/20therewerenoproductrecallsforanyLenovoproduct.Lenovo’sProductSafetyandErgonomicsPolicyisavailableat:https://www.lenovo.com/us/en/social_responsibility/Lenovo-Policy-Product-Safety-and-Ergonomics.pdfACCESSIBILITYLenovoiscommittedtoprovidingtechnologyforall,includingtheagingandpeoplewithdisabilities.Wearewidelyrecognizedforourfocusonhumanfactorsandergonomicsandhavealong-standingcommitmenttodeliverworld-classproductsandservicesthatcanbeusedbyeveryone.Smartdesignandintuitivefunctionalitybenefiteveryonewhousestechnology,includingthosewithdisabilities.LenovoproductsaredevelopedtoensurecompliancewithbestpracticesandaretestedwithavarietyofAssistiveTechnologies(AT),includingscreenreaders,screenmagnifiersandspeechrecognitionsoftwarespanningdifferentpriceranges.Lenovohasestablishedandmaintainsanaccessibilitypolicyforourproductsandservicesthatincludesaclosed-loopprocesstoensurecompliance.Lenovoconsidersaccessibilitythroughoutthedesigncycleandconsultswithpersonswithdisabilitiesforfurtherinputonourproducts.LenovohasteamedupwithLevelAccess,anindustry-leadingaccessibilityservicesvendor,toensureourproductsconformwithU.S.Section508oftheRehabilitationActandwiththeCommunicationsandVideoAccessibilityAct(CVAA)of2010.FormoredetailedinformationonhowLenovoprovidesassistancetouserswhohavehearing,visionandmobilitylimitationsandhelpsthemgetthemostoutoftheircomputerexperience,pleaseclickhere.COMPLIANCELenovohasestablishedcompliancesystemstoensureourproductscomplywiththelawsandregulationsineachcountrytowhichweship.Lenovoproductsaredesigned,testedandapprovedtomeetworldwidestandardsforproductsafety,electromagneticcompatibility,wirelesshomologation,environmental,ergonomicsandotherregulatoryrequirementswhenusedfortheirintendedpurpose.Moreinformationoncomplianceaswellasproductcompliancedocumentscanbefoundatwww.lenovo.com/compliance.322019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYQUALITYRECOGNITIONSInFY2019/20,Lenovoreceivedanall-timehighnumberofproductawardsandhonorsfromworldleadingtechnologytradeassociations,withrecognitioninnumerouscategories,includinginnovation,speed,qualityanddesign.Fromsmartphonestoserversandeverythinginbetween,Lenovocreatestechnologycapableoftransformingthewaywelive,work,andplay.Lenovorecognizeshowmuchpotentialthefutureholdsfortechnology,andwearemotivatedtobuildsmartersolutionsforthethingsthatmatterthemosttoourcustomers.Ourcustomer-ledinnovationiscontinuouslytransformingbecauseweneverstoplisteningtoandlearningfromcustomerfeedback.QualityInnovationAwardLenovo’sPCSDQualityteam,inassociationwiththeAILab,wasrecognizedinthe2019ChinaAssociationforQualityInnovationContest,achievingthehighestlevel,QIC-V,fortheresearchproject‘QualityBigDataAnalysisBasedonProductSentimentIndex(PSI)’.TheChinaAssociationforQualityisviewedastheauthorityonqualityinChina.Manyglobalcompaniesstriveforthisrecognitionandonlyafewareselected.Thesuccessofthisprojectisattributedtothecustomerinsightthatdrivesqualityimprovementsforourproducts.Lenovo’scustomercentricfocus—combinedwiththeinnovationandcommitmentthatourcustomersexpect,enabledustoachievethisprestigiousrecognition.PRODUCTSREVIEWED2744TOP-RATEDPRODUCTS590PRODUCTAWARDS321332019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYIndustrialProductEco-DesignDemonstrationEnterpriseLenovowasrecognizedforparticipationinthefirstpilotenterpriseofthe2019MinistryofIndustryandInformationTechnologyofChina(MIIT)Eco-DesignPilotProject.Afterthreeyearsofexplorationandpractice,Lenovo’steamsuccessfullydemonstratedagreenproductdevelopmentconceptguidedbyLifeCycleAssessment(LCA)principlesformicrocomputerproducts,whichincludeddesign,manufacturing,andrecycling.ExcellentEnterpriseAwardofChinaEnvironmentalLabelingInOctober2019,LenovowasrecognizedasakeycontributortotheChinaEnvironmentalLabelingProduct(CELP),whichisoverseenbytheEnvironmentDevelopmentCenterintheMinistryofEcologyandEnvironmentofthePRC.LenovowasacknowledgedforearningthelargestnumberofCELPcertificatesinChina’sITCindustryinadditiontoitslong-term(2008–2019)contributiontothedevelopmentofCELPstandardsandcertification.Lenovo’s100MillionthSmartdevicesuccessfullylaunchedinWuhanInJuly2019,Lenovolaunchedits100millionthsmartdevice—theLenovoZ6Promobilephone—intheWuhanmanufacturingsite.Lenovo’sChairmanandCEO,Mr.YangYuanqing,andtheheadofLenovoGlobalSupplyChain,Mr.GuanWei,joinedemployeesastheywitnessedthishistoricalmomenttogether.TheWuhansiteisoneofLenovo’slargestandmostadvancedintegratedfacilityandsince2013,hasbeensupportingR&D,productionandsalesofsmartphones,tabletsandothermobiledevicesfortheChineseandglobalmarkets.LenovoNamed#1PCCompanyInJuly2019,LenovoachieveditshighestPCmarketshareeverandreturnedtothetopspotintheworld.AccordingtopreliminarydatareleasedbytheInternationalDataCorporation(IDC),Lenovo’sworldwidemarketsharehit25.1%forfiscalquarterone,upalmost3pointsyear-on-year,andasolid1.4pointsaheadofthenearestrival.ThisisthefirsttimeLenovohasevercrossedthe25%marketsharelevel.Thestrongsharenumberscamefromrapidgrowth,asLenovo’sPCvolumewasup18.2%year-on-year,morethan13pointsfasterthantheoverallmarket.Ittakeshardworkanddedicationtoachievethe#1PCranking.WeallplayaroleinbringingtolifeourvisionofsmartertechnologyforallandourmissiontobetheleaderinIntelligentTransformation.Ourrenewedfocusonservingourcustomers,innovation,entrepreneurship,andteamworkwithintegrityandtrustisthedrivingforceforLenovo’ssuccess.342019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSMARTERINNOVATIONSmarterEyeCareModeBluelightispartofthevisiblelightspectrumandisconsideredHEV,orhigh-energyvisiblelight.Althoughblue-turquoiselightisimportantforhelpinginfluencethebody’sinternalclockforbeingawakeandsleeping,continuedexposuretobluelightisthoughttocontributetodamagedretinalcells.Understandingthepotentialdangersofbluelight,Lenovo’sAll-in-One(AIO)desktopwasdesignedwithtechnologythathelpstoreducethebluelightemittedfromLEDsinWindows“night-lightmode”bydisplayingwarmercolorsthathelpreduceeyestrain.ThisinnovativefeaturewasrecognizedduringFY2019/20,asseveralLenovoAIOdesktopcomputerssystemsreceivedtheworld’sfirstlowbluelightcertificationfromTÜVRheinland,anindependentprovideroftechnicaltestingservicesforproductsafetyandquality.Moreinformationisavailableonourwebsiteat:www.lenovo.com/us/en/blue-light.Source:AmericanAcademyofOphthalmology,https://www.aao.org/eye-health/diseases/amd-macular-degeneration.352019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSmarterunlocksnewexperiencesWearelivinginthemidstofatechnologyrevolutionastheworldmigratesfrom4Gto5G.Theearlyadoptershaveconfirmedthat5Gisagamechangerasthemarketpotentialfor5Gapplicationscontinuestoexpandrightbeforeoureyes.Motorola,partofourMobileBusinessGroup(MBG),haslongbeenattheforefrontof5G,havingbeenapartoftheresearch,standardizationandtestingforthistechnologyfromanearlyphase.Andin2019,Motorolamadehistoryasthemanufacturerwholaunchedtheworld’sfirst5Greadysmartphoneusinggroundbreakingmillimeterwavetechnologyenablingmulti-Gbpsdatarates.Lenovounveiledthefirst5Glaptopinearly2020andlaterreleasedthe5GYogalaptopinJune2020,supportingbothupto100MHzchannelsinsub-6GHzbandsand800MHzchannelsinhighfrequencymillimeterwavebandsandachievingmulti-Gigabitperseconddatarates.Whatmayseemlikeanovernightexplosionforsome,5Gisnolongerbeingappliedjusttocellphones.Thistechnologyenableslongbatterylife,lowlatency,ultra-reliability,highdevicedensity,and(Gbps)dataratedesigncomponents.Theflexibilityofthistechnologyisnowbeingappliedtoimmersivehigh-definitionAR/VR,4K/8Kvideo,entertainment,gaming,robotics,connectedvehicles(includingV2X),InternetofThings(IoT)devicesandverticalslikesmartcities,eHealth,sensors,drones,smartfarmsaswellasIndustrialInternetofThings(IIoT)—smartfactories(Industry4.0).Ratherthanrequiremultiplenetworks,5Gisoptimisedforasinglesoftwaredrivenvirtualised-sliceablenetworkthatsimultaneouslyservesthenumeroususecasesmentionedaboveandtraditionalsmartphonedelivery,thusreducingoperators’operatingandcapitalexpenses(OPEX)and(CAPEX),andtimetomarket.5GalsoenablesEdgenetworkingandcomputingwhichisanintegralpartofanend-to-end(E2E)networkalongwiththecloud.IoTVerticalsSensorsSmartCitiesEHealthDronesSmartFarmsV2XIIoT-SmartFactory(Industry4.0)Ultra-reliablelow-latencymmWaveforextremeeMBBTimesensitivenetworkingWirelessindustrialethernet362019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYTherearestillsomeregionsaroundtheglobewhere5Ginfrastructureisinitsearlystagesandnetworkstandardsarestillemerging.TheglobaloutbreakofCOVID-19hasreinforcedtheimportanceofusingthepoweroftechnologytofightthepandemicandprotectthewell-beingofsociety.Asmanybusinesseslookforwaystomanagetheuncertaintyanddisruptioncausedbytherecentevents,technologywillbecomeempoweredtoleadorganicgrowthtrendsinwork-from-home(WFH)andstudy-at-home(SAH)includingtheneedforhigh-definitionimmersiveAR/VR.Inevitably,thiscreatesademandforupgradednetworksthatcansupportthenumberofconnecteddevices,thusrequiringmorebandwidthtofunctioneffectively.When5Gisfullydeployedaroundtheglobe,itwillplayakeyroleinthewaywecommunicate,andthewaybusinessisconductedaroundtheworldwithmoreadvancedconnectivity,superiorcapacity,lowerlatencyandgreaterspeedintransmissions.Itmayalsoextendnetworkstoremotelocationsforpeoplethatarecurrentlywithoutinternetaccess.InAsia,afterroughlyninemonthsoflaunching5G,networksarecarrying21percentofalltraffic.CurrentlyinChina,thereareapproximately50citieswith5Gcapabilities,over130,000basestations—servingapproximately10millionsubscribersand13.8millionhandsets.However,forthesebenefitstoberealizedmorebroadly,itisessentialthatwehavethedevicesthatarecapableofenabling5Gandtheinformationthatitprocesses.372019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYManyregionsaroundtheworldcontinuedevelopingtheinfrastructurenecessaryforitsmainstreamadoption,suchas5Gantennasandtheirelementsaswellasnetworkedgecomputingplatforms.Fornow,theimportanceliesinraisingawarenessofitsfuturepotential.Thebusinessesthattaketheleadnowandbring5Gintotheirdigitaltransformationstrategieswillstayaheadoftheevolution.Inthemeantime,Lenovoislisteningtocustomerfeedbackandcollaboratingwithtechnologyonnewproductdevelopment,buildingsmartersolutionsthatwillsupportthemuchanticipated5Gtransition.Buildinguponourdeephistoryininnovation,ourintentistoputmeaningfultechnologyinconsumershandsassoonasit’sreadyandneverstoplookingfornewwaystodeliversmartertechnologyforall.Sources:https://news.lenovo.com/pressroom/press-releases/lenovo-transforms-traditional-form-factors-that-embrace-a-foldable-future-and-launches-worlds-first-5g-pc/https://news.lenovo.com/pressroom/press-releases/motorola-connects-you-to-5g-first/https://news.lenovo.com/5g-and-cyber-security-what-businesses-need-to-know/382019/20LenovoEnvironmental,SocialandGovernanceReport5.0Manufacturingandsupplychainoperations40In-houseManufacturingOperations40HealthandSafetyKeyPrograms45COVID-19Response47ManufacturingRecognitions50SupplyChainOperations60SupplierDiversity392019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY402019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYIN-HOUSEMANUFACTURINGOPERATIONSLenovo’smanufacturingbusinessmodelcombinesjoint-venture(JV)partnerships,Company-ownedmanufacturing,andoriginaldesignmanufacturer(ODM)capacity.Thishybridmodelgivesusacompetitiveadvantagethatallowsustobringnewinnovationstomarketfasterwhilemaintainingstrongcontroloverproductdevelopmentandsupplychainoperations.ItalsoallowsustodirectlycontrolourESGimpacts.Thisprovidesuswithameanstotailorourglobalmanufacturingoperationsandproductstoregionalmarkets.AllLenovoglobalmanufacturinglocationsareISO9001(Quality),ISO14001(Environmental)andISO45001(OccupationalHealthandSafety)(OHS)certified.Asrequiredbytheseinternationallyacceptedstandards,weimplementmanagementsystemswhichincorporateobjectivesandtargetsateachcertifiedfacility,withthegoaltocontinuallyimproveasafeandhealthyworkenvironmentforouremployees.Inaddition,Lenovoencouragesitssupplierstoachievethesecertifications.HealthandSafetyFrameworkandPerformanceLenovoadherestoworld-classstandardsforemployeeworkplacesafetythroughourOHSManagementSystem.Weintegrateandmeasurenewfacilitiesintooursystemtomeetourstricthealthandsafetystandards.AllLenovoglobalmanufacturinglocations,includingJVlocations,areISO45001certifiedbyanaccreditedthird-partyauditor.HEALTHANDSAFETYKEYPROGRAMSIncidentInvestigation&CorrectiveActionPerformanceEvaluationEmergencyPreparednessPrevention&ControlAwareness&CommunicationHazardIdentiﬁcation&RiskAssessmentComplianceManagementINTENDEDOUTCOMESMANAGEMENTSYSTEMOHS-MSISO45001RBACodeofConductWorkSafetyStandardization(Chinasites)EnhancementofPerformanceFulﬁllmentofComplianceObligationsAchievementofObjectivesLeadershipandWorkerParticipationPLANCHECKACTIONDOManufacturingandsupplychainoperations412019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYWeimplementthissystemintoourorganization’sstrategyandoperations,whichintegrateshealthandsafetyprogramsthroughoutourglobalmanufacturingfootprint.Thisisthroughaprocessofplanning,education,prevention,controls,performanceevaluationandcontinuousimprovementwhicharevitaltoachievingtheCompany’sobjectives.Lenovomaintainsoneofthelowestinjuryratesintheindustry.InFY2019/20,therewerenofatalitiesormajorincidents.Wehadarecordableinjuryrateof0.03andacaserateof0.03daysawayfromwork.MoreinformationisavailableintheConsolidatedMetricssectionofthisreport.CertificationandAuditsLenovoiscommittedtoensuringthatworkingconditionsatallourmanufacturinglocationsandsupplychainsaresafe;workersaretreatedwithrespectanddignity;operationsareenvironmentallysound;andbusinessoperationsareconductedresponsiblyandethically.WehaveimplementedprogramstoensurecompliancetotheResponsibleBusinessAlliance(RBA)CodeofConduct.Ourmanufacturinglocationscontinuallyundergohealth,safetyorenvironmentalaudits.SomeexamplesincludeCorporateinternalaudits,ISOCertificationaudits,customerrequestedaudits,andindustrystandardauditssuchasRBAaudits.DuringFY2019/20,LenovohadthreeinternalmanufacturinglocationsthathaveundergoneRBAValidatedAuditProgram(VAP)audits,andtwositeswereawardedSilverLevel,onePlatinumLevel,andoneofthesealsoreceivedaFactoryofChoiceaward.Plansareinmotiontoensureallofourmanufacturinglocationsreceiveindependentthird-partyRBAaudits.TheplanincludesfouradditionallocationsthatwillundergoRBAVAPauditsinFY2020/21,withagoalofreceivingFactoryofChoiceawardsattwolocations.TheremaininglocationswillundergoRBAVAPauditsinFY2021/22,withagoalofreceivingFactoryofChoiceatthreelocations.Whenwecompletethisplanandachievethisgoal,ourin-housemanufacturingnetworkwillachieve100%RBAVAPcompliance.FY2019/20CompletedFY2020/21(Planned)FY2021/22(Planned)RBAVAP:3sitesRESULTS:Silver:2Platinum:1FactoryofChoice:1(RBAVAP:7sites)(RBAVAP:11sites)Lenovoandourindustrycontinuetobechallengedbytheissueofworkinghours.Duringthisfiscalyear,theelectronicsindustryfacedsubstantialsupplyshortageswhichdroverecordskews,creatingsignificantchallengesintermsofmanagingovertimeandconsecutivedaysworked.Lenovoisworkingtoputbettertechnologytoolsandinformationinplacetoallowemployeesandmanagerstomakeinformeddecisionsaboutovertimework.RBAVAPauditsofourShenzhen,ChinaandMonterrey,Mexicoplantsshowedsignificantprogressinthisareaandwearerollingoutdevelopmentsattheselocationstoothersitestodriveimprovements.Otherareasofimprovementincludelabourpracticesforinterns,establishingmorecommunicationschannelsforemployee/managementdiscussions,decreasingtheamountoftimeemployeeswholeaveLenovohavetowaitbeforetheyreceivetheirfinalpaychecks,androllingouttoolstoalloriginaldesignandmanufacturing(ODM)partnerstomovetoamonthlydatareportingcadence.InadditiontoregularRBAandotheraudits,LenovomonitorsNon-GovernmentalOrganization(NGO)reportsregardingLenovooperations.Wherecredibleissuesareflagged,Lenovowillconductanimmediateinvestigationandimplementcorrectiveactionsasappropriate.422019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYHazardIdentificationandRiskAssessmentWeuseahazardandriskidentification-basedapproachtoassesspotentialhazardsandrisksinourdailyoperationsandprojects.Whenthereisachangeintheworkplace,suchastoaproductionlinelayout,equipment,applicablelegalrequirements,weconducthazardidentificationandriskassessmentstopreventnewhazardsandreducerisks.Annually,eachmanufacturinglocationconductshazardandriskassessmentsusingLenovo’sriskmanagementprocesstodetermineifadditionalprecautionsareneededforhealthandsafetymanagement.Lenovo’sHazardIdentificationawardprogramisoneofthemanywayswhichweengageemployeesandencourageparticipationinthehealthandsafetymanagement.Thisprogramenablesemployeestounderstandhowtoidentifypotentialrisksandhazardsintheirdailyworkenvironment.Throughthisandotherprograms,weareabletoincreaseawarenessandimplementasenseofownershipinmaintainingasafeworkplaceforeveryone.IncidentInvestigationandCorrectiveActionWhenawork-relatedinjury,illnessornear-missincidentoccurs,managersandtheOHSTeamquicklyinitiateaninvestigationoftheincident,developcorrectiveactionplans,andtracktheactionstoclosure.Aspartofthe‘LessonsLearned’process,aSafetyBulletinAlertisdistributedtoallmanufacturinglocationstoensurecorrectiveactionsareinplace.Thisenablesotherlocationstobenefitfrominformationsharinganddatastatisticsandanalysis,whichcontributetocontinuousimprovementandreducesrepeatedincidents.PreventionandControlTheOHSteamhasadoptedaproactivepreventionstrategyapproachtomanageidentifiedhazardswiththeobjectivetopreventwork-relatedinjuries,illnessandfatalities.Weintegrateoccupationalhealthandsafetyrequirementsattheearlieststageinthelifecycleofthefacility;theequipment;theplanningprocess;ornon-routineactivitiesandprojects.Werecentlydevelopedadetailedguidebookentitled‘PreventionThroughDesign’,tosupporteachlocationwiththedesignrequirementsofsafetypreventionattheearlieststagesofnewequipmentinstallations.Wehavealsoimplementedcontrolsrelatedtopurchasedgoods,equipmentandservices,andthecontrolsrelatedtocontractorsandvisitorstotheworkplace.HealthandSafetyCultureorTrainingLenovobelievesintheprincipleof“PeopleFirst”andplaceshighimportanceonpromotingastronghealthandsafetyculture.EmployeeparticipationisessentialtothesuccessofOHSmanagementaswedevelopprocessesandonlinetoolstoexpandtheawarenessofallemployeeswithtrainingaswellassite-specificsafetyinformation.SafetyCommitteesatourmanufacturingandselectedfieldlocationsmeetregularlyandcoverarangeofsafetytopics,givingallparticipantstheopportunitytoengageandbeapartofthecompany’scorrectiveactionprocess.Inadditiontotheeducationdesignedtomeetregulatoryrequirements,eachyearLenovomanufacturingsitespromoteHealthandSafetyMonthorHealthandSafetyWeekwhichincludevariousactivitiestoreinforceawareness.432019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYLenovo’sExecutiveManagementdemonstratesleadershipandcommitmentina‘SafetyAccountabilitiesCommitmentMeeting’attheHefeiplantinChina.EmployeesparticipateinchemicalsmanagementtrainingattheWuhanplantinChina.EmployeesparticipateinESG/SocialResponsibilitytrainingattheShenzhenplantinChina.EmployeesattheChengduplantcompletedFirstAidTrainingandCertificationbytheRedCrossSocietyofChina.EmployeesatthePondicherryplantinIndiacelebrateNationalSafetyWeekinMarch2020.EmployeesattheMonterreyplantinMexicosupportthe‘AllCancersAwarenessCampaign’.442019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYTheCrisisManagementTeam,EmergencyResponseTeam,andtheRecoveryTeamfromtheHuiyang,Chengdu,andShenzhenplantsinChinaparticipateina‘BusinessContinuityPlan’desk-topdrill.EmployeesattheHefeiplantinChinaparticipateinafirstaiddrill.EmployeesattheNECplantinJapanparticipateinafirecontroltraininganddrill.EmployeesattheHuiyangplantinChinaparticipateinaproductionlinemachinesafetydrill.EmployeesatthePondicherry,IndiaplantparticipateinOHSandSecuritytraining.452019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYEmergencyPreparednessOuremployeesareourmostvaluableasset.Lenovo’semergencyplanspecifiesproceduresandprocessestohandlesuddenorunexpectedsituations.Ourpriorityistoensurethatemployeesbecomefamiliarwithemergencyplanningandorganizationalstructures,andthatweprovideskillssuchasfirstaid/CPRtrainingtorespondtoemergencieswhichtheymayencounter.Thegoalistoalwaysbeprepared.COVID-19RESPONSERecently,LenovorespondedswiftlytotheCOVID-19pandemicatallLenovofacilities.Anumberoffieldlocationsandofficefacilitiesremainedcloseduntilsuchtimethatlocalauthoritiesdeemeditsafetoresumeoperations.Employeeawarenesswasvitaltothecontainmentofthepandemic’simpactonLenovoandouremployees.Lenovoimmediatelyimplementednumerousresponseactionsatmanyfacilities,including:•Communicatedtheimportanceofproperhandwashinganddisinfectingsurfaces.•Encouragedno-contactinteractionsamongstcolleaguesandcustomersbyencouragingemployeestoavoidhandshakesandphysicalcontactwhilegreeting.•Increasedsocialdistancingawarenesswiththesixfeet(twometers)rulewhenpossible—includinginstallationofalternativeworkstationsand/orshieldsorbarriers,enforcedspacedoutdiningroomseating,andimplementeddistancingmarkersatallemployeecongregationareas.•Limitedin-personmeetingsbyprovidingtoolstoconductvirtualmeetingswheneverpossible.•Incorporatedbodytemperaturescreeningandthermalimagingequipmentatessentialmanufacturinglocationstoprotectemployeesbymonitoringhealthstatuspriortoenteringthefacility.•Implementedfacemaskpoliciestoprotectemployeeswhileonthepremises.•Installeddisinfectingstationsandprovidedhandprotectionanddisinfectingsuppliesforemployeeswhilecontinuingtoidentifybestpracticetoprotectemployees.•Institutedflexibleworkschedulestoreducethenumberofemployeesonlocationatanygiventimeandprovidetimetodisinfectworkareasbetweeneachshift.DuetoCOVID-19,dailydisinfectionwasimplementedforthesafetyofallemployeesattheWuhanplantinChina.EmployeesattheWuhanplantinChinareceiveddoor-to-doorbusserviceduringtheCOVID-19epidemic.462019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYEmployeesattheWuhanplantinChinapracticedsocialdistancinginthecafeteria.DailydisinfectionofthebusfortransportingemployeesattheIndaiatubaPlantinBrazil.HealthandsafetyprecautionswereimplementedwithtemperaturemonitoringandhandsanitizingstationsforallemployeesattheentryofthePondicherryplantinIndia.AtemporarymedicalclinicwasprovidedforemployeesattheHuiyangPlantinChinaduringCOVID-19pandemic.SocialdistancingmarkerswereusedtokeepemployeessafeattheUnitesStatesFulfillmentCenter(USFC)inWhitsett,NorthCarolina,USA.472019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYMANUFACTURINGRECOGNITIONSTheLenovoMonterrey,Mexico,plantreceivedthe‘RBAPlatinumRecognition’and‘FactoryofChoice’AwardinMay2019.TheLenovoShenzhen,China,plantreceivedthe‘RBASilverRecognition’inJuly2019.TheLenovoChengdu,China,plantreceivedthe‘2019WorkSafetyStandardization2ndLevelEnterprise’recognitionfromSichuanProvinceGovernment.TheLenovoHuiyang,China,plantreceivedthe‘2019WorkSafetyStandardization’recognitionfromHuizhouCityGovernment.•TheUnitedStatesFulfillmentCenter(USFC)inWhitsett,NorthCarolina,USAwasrecognizedwiththe12thconsecutiveannual‘GoldAwardforOutstandingHealthandSafety’in2019.•LenovoThinkPlaceinMorrisville,NorthCarolina,USAwasrecognizedwiththe15thconsecutiveannual‘GoldAwardforOutstandingHealthandSafety’in2019.•LenovoDevelopmentDriveinMorrisville,NorthCarolina,USAwasrecognizedwiththe6thconsecutiveannual‘GoldAwardforOutstandingHealthandSafety’in2019.482019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYLenovowasawardedthe“2019InfluenceAwardonClimateAction”fromCDPChinaforperforminginthetoprankofthe1,027ChinesecompaniesrespondingtoCDP.CDPcollectsinformationonclimaterisksandlowcarbonopportunitiesfromtheworldwidecompaniestocompileaglobaldisclosuresystemthatenablescompaniestomeasureandmanagetheirenvironmentalimpacts.InJuly2019,Lenovo’sGlobalSupplyChainorganizationwasawardedthe‘NationalGreenSupplyChain’fromtheMinistryofIndustryandInformationTechnologyofChina—aprestigiousrecognitionforagreensupplychainenterprisewhichdemonstratesinnovationandpromotesthesustainabledevelopmentofgreenmanufacturing.Ontopofmeetingstrictqualifyingconditions,Lenovowasrequiredtoconductarigorousself-assessment,followedbyfieldevaluationsbyathird-partyagency.InAugust2019,theChinaMinistryofIndustryandInformationTechnologyawardedLenovo’sChengduandtheHefei(JV)siteswiththe‘NationalGreenFactory’awardforsuccessfullyapplyingagreensupplychainsystem.Theawardisbasedonthesuccessfulapplicationoffivecriteria:GreenProduction,SupplierManagement,GreenLogistics,GreenRecyclingandGreenInformationDisclosure.Also,atotalof75modelsofdesktopandnotebookproductswererecognizedwith‘GreenDesignProduct’awards.TheMinistrypraisedLenovoforsuccessfullyachievingthe‘GrandSlamofChinaGreenManufacturing’.Lenovocontinuestoinvestingreenmanufacturingthroughenergy-savingandenvironmentallyfriendlyproducts;exploringinnovativetechnologyandsolutions,includingrecyclingelectronicwastes;andreducingemissionsthroughinnovationsthatproducelighterproductpackaging.Formoreinformationaboutthisrecognition,pleaseclickhere.Lenovo’semployeesatthejointventureLCFCplantinHefei,China,celebratethe2019NationalGreenManufacturingrecognition.492019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYLenovoSlovakiaisFitwelCertifiedTheSlovakiaofficeearnedthefirstFitwelCertificationinLenovo’s‘RealEstateandWorkplaceSolutions’(REWS)portfolioandthefirstFitwelcertificationinEasternEurope.TheFitwelBuildingStandardservesasawaytomeasurehowhealthyaworkspacehasbeendesignedandoperated.Lenovo’sFitweljourneybeganduringtheSlovakiasiteselectionandcontinuedacrossarangeofapproaches.Elementssuchaswalkability,amenities,accessibility,andsafetywereconsideredforthenewlocation.Throughoutdesignandconstructionofthespace,theteamfocusedonincludinghealthymaterials,activedesignstrategies,andsmartworkplaceelements.InFebruary2019,Lenovo’sGSCPondicherrymanufacturingteaminIndiawasrecognizedwithtwoNationalAwards:The“BestInClass—ManufacturingICONAward”waspresentedtoLenovofordemonstratingtheiconicpillarsofIndiamanufacturing,whichincludeBestPractices,ITAutomations,CXDrive,InnovativeCultureandProduction,Quality,Cost,Delivery,Safety,andMoraleperformance.Lenovowasalsoawarded“BestInClass—EnterpriseQualityManagementAward”fordemonstratingoutstandingqualitymanagementperformanceinsupplier,process,productquality,field,systemsandemployeecommitments.502019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSUPPLYCHAINOPERATIONSLenovoiscommittedtopromotingstrongESGpracticeswithourdirectsuppliersandtheirsupplychains.Ourpolicyistogobeyondbasiccompliancewithmanyapplicableenvironmental,social,andgovernancestandards.Ourpracticeistoimproveresultscontinuallyandtoexceedmarketplaceexpectations.Werecognizethereisnoendtothisjourney,andwemustcontinuetostriveforbroaderprogramsandincreasedtransparency.Insupportofthesegoals,Lenovohasstrongsuppliercontractualrequirements,acomprehensivesuppliercodeofconduct,andextensivesuppliervalidationprograms.ThisincludesformaleffortsfortheRBACodeofConductimplementation,respectforhumanrights,environmentalimpactreduction,responsiblesourcingofmaterials,andensuringstablesuppliersincommunitiesinwhichweoperate.Formostofourprocurementspend,werequiredirectandindependentvalidationofsuppliercompliance.Overallsupplierstabilityandsustainabilityperformanceistrackedandreportedtoseniormanagement.Finally,educationandcapabilitybuildingpracticesareinplace.TohelpeliminateESG-relatedriskinoursupplychain,Lenovohasimplementedthefollowingprogramsandkeymetricsforperformance(expressedasapercentageofoverallspendingunlessotherwiseindicated).Ourlonger-termgoalistoachieve95percentormoreforeachofthesemetrics.KeySupplierProgramsandAttainmentOverallPerformanceContractualRequirementsResponsibleBusinessAlliance/HumanRightsResponsibleSourcingofMaterialsEnvironmentalImpact/WasteSupplierStabilitySupplierManagementTrainingandCapabilityBuilding512019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYOverallSustainabilityIndicators(ByProcurementSpend)98%•Ninety-eightpercentofourprocurementspendiswithlessthan100largecompanieswithastrongfocusonESGmanagement,whichallowsustomitigatesustainabilityriskmoreeasily.95%•Ninety-fivepercentofoursuppliersareindependentlyauditedandcoveredinourdirectvalidationefforts.•Allaretrackedacross25keysustainabilityindicators.•ThisincludescriticalTier2andTier3supplierswithsubstantialvolume.98%•Ninety-eightpercentofoursuppliersaretrackedwithreal-timebusinessstabilitytools,aswerecognizethatstrongcompaniesaretypicallymoresustainablecompanies.95%ISO•Ninety-fivepercentofoursuppliersarecertifiedtoISO9001/ISO14001/ISO45001(Quality,Environmental,andOHS),animprovementfromninetypercentinFY2018/19.90%•NinetypercentissuepublicsustainabilityreportsusingtheGlobalReportingInitiative(GRI)reportingstandardsandaddressinghumantrafficking,animprovementfromeighty-onepercentinFY2018/19.75%•Seventy-fivepercentareformalmembersoftheResponsibleBusinessAlliance(RBA),animprovementfromsixty-sevenpercentinFY2018/19.95%•Lenovopubliclydisclosesninety-fivepercentofoursupplierswiththeirfullnameandaddress.•ThislistingalsoincludesallLenovomanufacturingsites.522019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYCONTRACTUALSTIPULATIONSLenovo’sstandardpurchasecontractandpurchaseordertermsandconditionsstipulatesupplier’scompliancewithenvironmentalspecifications,hazardousmaterialavoidance,ozone-depletingsubstanceelimination,productsafety,personaldataprivacy,liabilityinsurance,andfullcompliancewithallapplicablelaws,includingexportandimportandproductsafety.Suppliersmustalsoimplementandcertifythedocumentedqualityandenvironmentalmanagementsystems.Additionally,suppliersmustcomplywithSupplierCodeofConductwhichmaybefoundat:https://www3.lenovo.com/us/en/social_responsibility/Supplier_Code_of_Conduct.pdf.TherearemultiplecodeelementsunderSupplierCodeofConductandtheelementofNon-DiscriminationandNon-Retaliationrequirethatsupplierscannotdiscriminateagainstemployeesbasedonrace,color,gender,religion,age,nationality,socialorethnicorigin,oranyotherlegallyprotectedclass.AnydeviationtothetermsrequiresapprovalfromourLegalDepartment,andspecifichigh-risktermsrequireadditionalseniorprocurementandbusinessunitmanagementapprovals.Finally,compliancewithourcomprehensiveSupplierCodeofConductcouldbeexecutedeitherinseparateanduniqueSupplierCodeofConductAgreement,standardpurchaseagreementsorstandardpurchaseorders.RBACOMPLIANCEWecontractuallyrequiresupplierstosupportResponsibleBusinessAlliance(RBA)requirements.LenovoisanofficialRBAmember,andweexceedthemembershiprequirementsofassessmentsandaudits.Followingareourkeyprogramelements:•Ninety-fivepercentcoverageofsuppliersbyspendisinourprogram.Wetakeaconservativeapproachandvalidatemostofoursupplierbusinessvolume.•Alloftheabovemustconductformalrisk-assessmentsannuallyusingRBAtemplatesandonlinereportingtools.•Alloftheabovemustconductformalindependent,third-partyauditswithRBAapprovedauditorsevery24monthsregardlessoftheirrisk-assessmentresults.•WedriveforthemostrigorousRBAValidatedAuditProgram(VAP)audits—seventy-fivepercentofoursupplierauditsareVAPaudits.•Programstatus,includingopenassessments,audits,actionplans,andclosureofactionitemsarecomprehensivelyreportedmonthlytoseniormanagement.•Overallsummaryanddetailsofauditscoresarereportedquarterly.•Suppliersaremeasuredacross15RBAspecifickeyindicatorssuchastimeliness,scores,certificationsforsupplierreportcards.•AlloutsourcedmanufacturersareISO9001,ISO14001,andOHSAS18001(orISO45001)certified.•ApproximatelythirtypercentofsuppliershaveformalRBARecognitioncertification,whereclosureauditshaveindependentlyvalidatedauditfindingstoahighdegree.OneofLenovo’sinitiativesforFY2020/2021istoincreasesupplierswithVAPRecognitionto50percentofspendanddriveincreasedratesofRBAFactoryofChoicecertificationwithoursuppliers.532019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYWorkingHoursorTimeOffandOtherLabourStandardsLenovorecognizestheneedtomonitorthepracticessuppliersusetoprotectthehealth,safety,andhumanrightsoftheiremployees.Whenthereareauditfindings,weensureclosureofsupplieractionplans,andwetracksuppliersfortwosubsequentquarterstoverifysustainedimprovementandcompliance.LikemanycompaniesdoingbusinessinChina,ourmostcommonsupplierauditfindingsarerelatedtoworkinghoursandtimeoffforemployees.Inadditiontoauditfindings,LenovoalsomonitorsNGOreportingonissuesthatpotentiallyinvolveLenovo’ssupplychain.Ifcredibleissuesareraised,Lenovowillimmediatelylaunchaninvestigationandtakecorrectiveactionasappropriatewiththesupplier.Lenovocontinuestobelievethatthebestwaytoeliminatepotentialhumanrightsabuseinthesupplychainisthroughcollectiveaction,andwecontinuetosupporttheRBA’seffortstoaddressthesechallengesasanindustrycoalition.Forissuesrelatedtoworkinghours,werequestthatsuppliersusetheformalRBAworkinghourstemplatetodemonstratetheircompliance.Furthermore,weconductquarterlyassessmentstoreportontheseissues.NinetypercentofsupplierauditsdidnothavepriorityfindingsonworkinghoursinFY2019/20.Wealsorequiredouroutsourcedmanufacturerstoreporttheiremployeeworkinghoursandtimeoffperformancemonthlyviaanonlinetoolsothatwecantakeactiontoresolveanyissuesthatareidentified.Concerningotherlabourstandards,LenovoimplementstheRBAprogramovertheSA8000certificationbecausethelatteronlyfocusesonlabour,andtheformerencompassesthesamelabourconcernsalongwithEnvironmentalandOHSconcerns.Lenovorecognizestheissueoflivingwageswithoursuppliersisagrowingtopicofconcern;policies,programs,andbaselinesaretoolsthatcanbeusedtodriveimprovementsinthisarea.FY2019/20RBAAuditComplianceResultsOuroverallmedianauditperformanceisnotedbelow.Eachyearrepresentsapproximately50percentcoverageofourtotalprocurementspend.Scoresarebasedonaweighted200-pointsystemwherepriorityandmajorfindingshavesignificantweighting.Ourquantitativetargetsaretoachieveauditscoreshigherthan170andzeropriorityfindingsineveryaudit.AllSuppliersOutsourcedManufacturingSection20142015201620172018201920182019Total116147177156170167153174Labour137149.5173164167166157169Health&Safety150160186172186187174189Environment179183200185200200182200Ethics183200200200200200198200ManagementSystem185188200200200200189200PriorityFindings10000000MajorFindings86343363542019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYHUMANRIGHTSINLENOVO’SSUPPLYCHAINLenovorespectshumanrightsinallitsactivities,includingthoseinvolvingitssupplychain.WemanagealloperationsconsistentwiththespiritandintentoftheUnitedNations(U.N.).UniversalDeclarationofHumanRightsandtheInternationalLabourOrganization(ILO)DeclarationonFundamentalPrinciplesandRightsatWork.AsasignatorytotheU.N.GlobalCompactsince2009,wesupportandrespecttheprotectionofinternationallyproclaimedhumanrightsandensurethatourbusinesspracticesarenotcomplicitinhumanrightsabuses.Westrivetoupholdthesestandardsandtodemonstrateourcommitmenttothemwithoursupplychainsocialresponsibilityprograms.Aspreviouslynoted,weconductafullRBACodeofConductimplementationwithinoursupplychain,wherethecodecoversextensivehumanrightsandlabourconcerns.Furthermore,ourcomprehensiveLenovoSupplierCodeofConductupholdsourvaluesandincludesprovisionsprohibitingcorruption,bribery,humantrafficking,discrimination,andretaliationtoworkercomplaints.Lenovorequiresoursupplierstohaveformalgrievancemechanisms.RESPONSIBLESOURCINGOFMATERIALSLenovorecognizestheimportanceregardingtheprocurementofrawmaterialswhensourcedfromregionsexperiencingpoliticalandsocialconflict,whichmayincludetheconflictmineralsoftin,tantalum,tungsten,andgold(3TG)fromtheDemocraticRepublicoftheCongo(DRC)orsurroundingcountries.Weacceptresponsibilityeventhoughwedonotsourcematerialsdirectlyfromthearea,andtheycomefromsourcesthatmaybeovertensupplychaintiersawaywherewehavelittletonocontrol.Therefore,Lenovohasadheredtothefollowingeffortssince2012andexpectsoursupplierstodothesame:•U.S.SecuritiesandExchangeCommission(SEC)‘Dodd-Frank1502Rule’•OrganizationforEconomicCooperationandDevelopment(OECD)DueDiligenceGuidelinesforResponsibleSourcingMaterialsfromConflict-AffectedandHigh-RiskAreas•RBAResponsibleMineralsInitiative(RMI)programsInparticular,theRMIistheworld’sleadingorganizationforriskidentification,riskassessment,andriskmitigationeffortsforresponsiblesourcingbycompanies.Itsmembershipconsistsofover380oftheworld’slargestcompanies,allusingthesameprograms.LenovobelievesinresponsiblesourcingandnotparticipatinginboycottsintheDRCorotherareasastheRMI,andotherentitiesdrivenewefforts.Boycottsdonotimprovethesituationinthelocalcommunities.Someorganizationslookonlyatproductlevelcertificationsandactivelytailortheireffortstoaddressonlymaterialsintheirproducts.Lenovolooksatsuppliers’company-levelreporting,andwestrivefor100percentconformantsmelterswhethertheirmaterialsareusedinourproductsornot.552019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYLenovofullysupportseffortsoftheRMItoaddressmaterialsbeyond3TG.InFY2019/20,weformallyconductedafullcobaltsupplychainduediligenceeffort.WewillcoordinatewiththeRMIastheyperformriskprofilesonothermaterials,assesstheircontentinourproducts,anddevelopduediligenceeffortstomitigatesupplychainrisk.TheseeffortshavealreadystartedwithRMI’scoordinationwiththe‘DriveSustainability’organizationastheyhavealreadydevelopedriskprofilesonover30materialsintechnologyandautomotiveproducts.ProgramComponents•Acomprehensivepublicconflictmineralspolicy•Definedmanagementowners,systemsandautonomousworkinggroups•ContractualrequirementsforsupplierparticipationandcompliancewithourSupplierCodeofConduct•EnsuresuppliershaveresponsiblesourcingofmaterialspoliciesandduediligenceprogramsviatheRBACodeofConductaudits•UtilizethefollowingRMIprogramsfor95percentofourprocurementspend:oConflictMineralsReportingTemplate(CMRT)forReasonableCountryofOrigin(RCOI)toconductriskidentificationon3TGsmeltersinoursupplychainoSmelterInformationExchange(SIE)toconductariskassessmenttodeterminewhichsmeltershavebeenauditedandcertifiedasbeingconflict-freeconformantoResponsibleMineralsAssuranceProcess(RMAP)toauditsmeltersoParticipatingintheRMISmelterEngagementTeam(SET)andCobaltteamstoidentifyandtoengagesmeltersoActingasaSinglePointofContact(SPOC)forassignedsmelters•ReportingtheprogramstatustoLenovo’sChiefCorporateResponsibilityOfficer•PubliclyreportingaformalConflictMineralsReport(CMR)andalistofthesmeltersinoursupplychain562019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY2019/20ProgramPerformance(ByProcurementSpend)97%•Overallconflict-freestatusimprovedto97percentfrom89percent100%Ta•Tantalummaintaineda100percentconflict-freestatus98%Sn•Tinimprovedto98percentfrom95percent96%W•Tungstenimprovedto96percentfrom92percent95%Au•Goldimprovedto95percentfrom82percent100%•Ourduediligencecoversallbusinessunits,includingtherecentFujitsuClientComputingLtd.jointventure90%•Supplierswithpublicconflictmineralspoliciesimprovedto90percentfrom80percent70%•Supplierswithpublicconflictmineralsreportsimprovedto70percentfrom50percent78%•SupplierswhoareformalRMImembersimprovedto78percentfrom67percentCobaltalsoisamaterialofconcerninthatminingoperationsmaybeatriskofusingchildlabour.TheRMIanditsmembersareveryearlyinthisjourneytoinstitutionalizecobaltduediligenceandtoachievethesamelevelofconformanceasConflictMinerals.Asnotedabove,Lenovoconducteditsfirstfullduediligencesurveyandvalidationofconformancethisyearforcobalt,andtheresultsareasfollows:•Eighty-sixpercentresponseratefromsuppliers•Forty-fivepercentofcobaltsmeltersareauditedandcertifiedandconformant•Sixty-ninepercentofsmeltersareformallyactivetobecomeconformant,wheretheyhavesignedagreementswiththeRMIandindependentauditorstoprepareforandtoreceiveanaudit572019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYFY2019/20GSCProgramHighlightsLenovoreceivedthetopscorefromCDPfortheSupplierLeadershipEngagementBoard.TheCDPrecognizesthatanorganization’saverageupstreamemissionsarearound5.5timesgreaterthanitsdirectoperations.ThetopscoredemonstratesLenovo’seffectivenessinengagingoursuppliersonclimatechange.CDPassessesperformanceonsupplierengagementusingacompany’sresponsetoselectedquestionsongovernance,targets,Scope3emissions,andvaluechainengagementintheCDPclimatechangequestionnaire.Followingareprogramhighlights:•Ninety-fiveofourprocurementspendissurveyed/trackedannually•Eighty-fivepercentofoursuppliershavepublicGHGreductiongoalsandthird-partyverification•Eighty-threepercentformallyreporttoCDP,animprovementfromseventy-twopercent•Eighty-fivepercenthavepublicwaterandwastereductiongoals,anincreasefromseventypercent•Sixty-onepercenthaveISO50001EnergyManagementcertifications,animprovementfromfiftypercent•Forty-fourpercenthavepubliclycommittedtoone-hundredpercentrenewableenergy,animprovementfromthirteenpercentWecontinuouslyaimtoimproveoureffortsonallresponsiblesourcingofmaterials.Wehavemadesignificantprogressonconflictmineralsandareworkingtodosooncobaltandothermaterials.Fulldetailsandstatisticsonourprograms,efforts,andresults,aswellasourConflictMineralsReportareavailableatLenovo’ssustainabilityresourceswebpageat:https://www.lenovo.com/us/en/sustainability-resourcesTop25LenovowasincludedinGartner2020SupplyChainTop25,rankingat#15–asignificantclimbfromtheprevious#34ranking.Thisannualrecognitionidentifiesleadingsupplychainorganizationsthatexhibitadaptabilityandresiliency,especiallyduringtimesofdisruption.LenovoishonoredtobehighlightedasoneoftheTop25companiesthatpossesstheseandothercapabilities.Formoredetailsaboutthisannouncement,pleaseclickhere.GREENHOUSEGASEMISSIONS,WATERUSAGE,ANDWASTEGENERATIONLenovocontinuestodriveforaccuratereportingandreductionofgreenhousegasemissions(GHG),waterusage,andwastegenerationacrossoursupplychain.WeaskoursupplierseveryyeartoformallyreporttheirenvironmentalimpactdataviatheRBAonlinereportingtoolortheCDP(formerlyCarbonDisclosureProject)reportingplatform.Ourgreatestchallengewiththereductionofabsolutesupplieremissionsandenvironmentalimpactsisnotindividualsupplierperformance,butthegrowthinourbusinessandprocurementspend,whichhasincreased200percentsince2010,whileemissionshavegrownapproximately100percent.582019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY•Suppliersaremeasuredacrosssixrelatedenvironmentalkeyindicators(i.e.publicgoals,actualreductions,CDPScores,third-partyverification)forsupplierreportcards•WereceivedmaximumpointsforsuppliersrelatedtoIEEE1680.1criteriacovering:oISO14001EnvironmentalManagementSystemscertificationoISO50001EnergyManagementSystemscertificationoPublicenvironmentalreportingofgreenhousegasemissionsoFluorinatedGreenhouseGas(F-GHG)reductionsSUPPLIERSTABILITYRISKMANAGEMENTLenovorecognizesthatstrongandstablecompanieshavebettersustainabilityprograms,haveagreaterpositiveimpactinthecommunitiesinwhichtheyoperate,andarelowerriskstothesupplychain.Wealsoknowlong-termsupplierrelationshipssupportstablecommunitiesinwhichoursupplychainoperatesandprovidesthefoundationforcompliancewithsocial,ethical,andenvironmentalrequirements.Westrivetodevelopandmaintaintheserelationships.Mostofoursupplierrelationshipshavebeeninplacefordecades,andLenovohaslong-termrelationshipswithsuppliers,whichenablesstabilityinthecommunitiesinwhichweoperate.InFY2019/20,thepercentageofourspendinghasbeenamongbusinesseswith20—40+yearsinbusiness.20304060%40%20%TheGlobalSupplyChain(GSC)teamutilizestheDun&Bradstreet’sSupplierRiskManagerTooltoprovideriskmanagementservicesintheevaluationofnewandcurrentsuppliers.TheapplicationallowsLenovototrackmultipleriskindicators,receivereal-timealertsandtotakeactionbeforeimpactsoccur.SUPPLIERPERFORMANCEEVALUATIONANDBUSINESSREVIEWSLenovo’ssupplierperformanceprogramsaretomeasureperformancetobusinessandESGcriteria,provideregularscorecardfeedback,andengagesuppliersinbusinessreviewsandconferences.Typically,wecover95percentofourprocurementspendinmuchoftheseefforts.Theseactivitiesserveasthefoundationformutualdiscussionsonimprovingbusinessrelationships,standardscompliance,andfuturebusinessvolumeincreasesordecreasestothebestperformingsuppliers.95%SupplierPerformanceEvaluation(ReportCards)FollowingareLenovopracticesforsupplierreportscards:•Coreperformanceismeasuredandquantifiedacrossquality,delivery,technology,cost,andservicewithnumeroussub-criteriaforatotalof25componentsoftheevaluation.•ESGperformancewithourtop100suppliersisquantifiedwithabout25keyindicatorsacrossRBA,environmentalimpact,conflictminerals,andsustainabilityreportingfactors.592019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY•ESGisthenappliedasanoverallpenalty/creditmultiplieracrosstheapproximately200supplierreportcardsissuedeachquarter.SupplierBusinessReviewsandEngagementsLenovoconductsfourkeyeffortsonsupplierperformance,expectations,andinitiatives.•Quarterlytopandcoresupplierstypicallyreceiveface-to-facereviewsontheirperformance.•Semi-annually,Lenovo’sSupplierAdvisoryCouncilbringstogetherexecutivesfromthetop40supplierscoveringabout80percentofprocurementspend.Lenovo’sexecutiveparticipationincludesourChiefExecutiveOfficer,businessunitexecutives,andseniorvicepresidentsfromthesupplychain,researchandtechnology,anddevelopmentorganizations.Thesesuppliersareconsideredcriticalsuppliers.•Semi-AnnuallywesendacommunicationslettertosuppliersonourSupplierCodeofConduct,ethicalsourcing,RBAcompliance,environmentalandresponsiblematerialsexpectations,andcompliance.•WeorganizeanannualsupplierconferencewheretopexecutivesfromsuppliersandLenovomeettobuildrelationshipsanddiscussoverallperformanceandkeyinitiativesforthenextyear.TRAININGANDCAPABILITYBUILDINGInternalTrainingWeconductnumerouscommunicationandeducationactivitiesthroughouttheyearwithglobalsupplychainpersonnel,asnotedbelow.Typically,thereisaneventeverymonthaswellsaseducationpackages,subjectmatterexperts,andtargetedtrainingareavailableon-demand.•CSRNewsletters•SupplierCodeofConductTraining•OverallCSR/RBA/EnvironmentalSpecific/ConflictMineralsTraining•MasterSupplierSustainabilityScoreCard25KeyIndicators•SupplierReportCardpenaltiesandcredits•Employeecommunicationsonethical,anti-bribery,anti-corruptionexpectations190classesAlso,theRBAprovidestheE-LearningAcademy,whichprovidesnumerouscoursesontheenvironment,social,andgovernancetopics.DuringFY2019/20,360Lenovoemployeesparticipatedinapproximately190classes.ExternalCapabilityTrainingAsnotedabove,asubstantialportionofoursuppliersandourprocurementspendarewithlargenationalandinternationalsuppliers.TheymanagetheircorporateESGprogramsandalsoengagedirectlywithourprograms.Therefore,theneedfordirectcapabilitytrainingforthesesuppliersisgreatlyminimized.Additionally,sincealargepercentageofourprocurementspendisRBAmembers,theyhaveaccesstothecomprehensiveRBAE-LearningAcademywithvariousprogrammodules,guidance,andtools.Wedo,however,provide:•Semi-annualcommunicationsontheRBA,environmentalimpact,conflictminerals,andSupplierCodeofConductexpectations602019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY•Ad-hoceducationasnecessarywherewedirectlyengagewithapproximately25percentofoursuppliers(ofourtop95percentprocurementspend)SUPPLIERDIVERSITYLenovorecognizestheimportanceofsupplierdiversityandiscommittedtoensuringthatitisanintegralpartofourstrategicsourcingandprocurementprocesses.WebelievethatthesuccessoftheorganizationandsocietydependsonenablingDiverseBusinessEnterprises(DBE)toshareineconomicgrowth.OurcommitmentistomaximizeDBEparticipationthroughthedevelopmentofmutuallybeneficialbusinessrelationshipswiththesefirms.AtLenovo,weareawarethatourSupplierDiversityProgramisnotonlybeneficialtoourbusinessbyinfluencingandincreasingourcustomerbase,promotinginnovation,andprotectingsales.Wealsorecognizethatitsupportsdiversesuppliersbycreatinginclusiveanddecentemploymentforall,whichenablessustainableeconomicgrowthandproducesleaderswithinourcommunities.IntheU.S.,LenovopartnerswithavarietyofnationalandregionalorganizationssuchastheNationalMinoritySupplierDevelopmentCouncil(NMSDC),theWomen’sBusinessEnterpriseNationalCouncil(WBENC),UnitedStatesHispanicChamberofCommerce(UHSCC),aswellasotherlocalChambersofCommerce.Thoughtheseorganizations,Lenovoalsoparticipatesinnational,regional,andlocaleventsaimedatpromotingandcreatingopportunitiesfordiversesuppliers.“SupplierDiversityhasevolvedfromthethoughtprocessthatitisafeel-goodprogramortherightthingtodo.TodaySupplierDiversityprovidessubstantialcostsavingstoprocurementandgivesLenovoastrongerpositionwhenwecompetefornewsalesopportunities.”—JonathanWilkins,ProgramManager,SupplierDiversity,LenovoFY2019/20SupplierDiversitySpendResults17.5%ofoursourceablespendiswithdiverseandsmallbusinesses$251.9MSmallBusinessSpend$139.8MWomenOwnedBusinessSpend$132.2MMinorityOwnedBusinessSpend$1.8MVeteranOwnedBusinessSpend$382.3MSpendingwithsmallanddiversesuppliersWecontinuetogrowourspendwithdiversesuppliersYOYincreaseinspendineachcategory23.8%Small20.8%Women15.3%MBEForU.S.only612019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYInFY2019/20,Lenovoachieved:•SpendwithsmallbusinessesexceedUS$250Mtotal—increased23.8%vs.previousyearand11.5%oftotalspend•SpendwithdiversebusinessesexceedUS$380Mtotal—increased24.9%vs.lastyearand17.5%oftotalspend•LenovowasnominatedforCorporationofTheYearthroughtheNationalMinoritySupplierDevelopmentCouncil(NMSDC)•LenovowasawardedtheCarolinas/VirginiaSupplierDevelopmentCouncil(CVMSDC)TotalImpactAwardForU.S.onlyLenovo’sSupplierDiversityProgramManager,JonathanWilkins,accepting‘CVMSDCTotalImpact’AwardJanuary2019.Formoreinformation,pleasevisitourSupplierDiversitywebpage.LenovoandSchneiderElectricAnnounceStrategicPartnershiptoWorkonSmartGreenManufacturinginChinaInNovember2019,LenovoannouncedastrategicpartnershipwithSchneiderElectrictodevelopsmartgreenmanufacturingsolutionsfortheChinesemanufacturingsector.ThepartnershipwillpromotedigitalinnovationwithLenovo’sIndustrialInternetofThings(IIOT)LeapIOTsolutionandSchneiderElectric’ssmartgreenmanufacturingsolutionbasedonEcoStruxure.Thecombinationwillbuildablueprintthatcanprovidesmartmanufacturingsolutionstodiscreteandhybridmanufacturingoperationsinvariousindustries.Inparticular,thefocuswillincludeA.I.algorithmsandbigdataasitrelatestoefficiencymanagement,predictivemaintenance,productionquality,andotherindustrialapplicationstoenablesmartgreenmanufacturingfurther.Formoreinformationaboutthisannouncement,pleaseclickhere.622019/20LenovoEnvironmental,SocialandGovernanceReport6.0People64OurCultureandOurPeople65DiversityandInclusion76SocialInvestments86ASmarterResponsetoCOVID-19632019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY642019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYOURCULTUREANDOURPEOPLEAtLenovo,westronglybelievethattechnologyisourgreatequalizer.Itholdsthepowertomakeourworld,ourcommunities,andourcompanymorediverseandinclusive.WhenwecombineitwithwhatmakesLenovounique,itenablestransformationandwearedriventorespondtothechallengesofsuchadynamicworld.Ourglobalnatureisourgreateststrength.Italsoisourgreatestchallengebecausedesigningvitalsystems,structures,andprocessesisnotone-size-fits-allatLenovo.Bycreatingglobalframeworksthatareoftenoperationalizedlocally,weachievebusinessobjectiveswhilealsoallowingforlocalcustomizationandflexibility.The“WeAreLenovo”culturalprinciplesofServingourCustomers,Innovation,Entrepreneurship,andTeamworkwithIntegrityandTrustaretheheartofLenovo’smanagementpractices.Ourleadersthroughouttheworldarecommittedtotheseprinciplesandaredrivenbyasenseoflong-termresponsibility.LABOURPRACTICESANDHUMANRIGHTSLenovo’sHumanRightspolicycommunicatesourrespectforhumanrightsinallthatwedoandhowweextendthoserightstoouremployeesandbusinesspartners.Lenovo’sHumanRightspolicyupholdsandsupportstheuniversalhumanrightsidentifiedintheU.N.DeclarationonHumanRightsandtheU.N.GlobalCompact.Lenovodoesnotpermittheuseofchildlabour,forcedlabourorcoercion,includingphysicalpunishment,inanyLenovooperation,andinthoseofoursupplychain.Ourcultureandourpeople652019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSince2009,LenovohasbeenasignatoryandactiveparticipantintheU.N.GlobalCompact,apublic-privatestrategicpolicyinitiativeforbusinessescommittedtoaligningoperationsandstrategieswithtenuniversallyacceptedprinciplesofhumanrights,labour,theenvironmentandanti-corruption.Asasignatory,wesupportandrespecttheprotectionofinternationallyproclaimedhumanrights,includingtherighttofreedomofassociationandcollectivebargaining.Formoreinformation,pleaseseeLenovo’sHumanRightsPolicy.ToconfirmthatLenovomanagesalloperationsconsistentwiththespiritandintentoftheU.N.UniversalDeclarationofHumanRightsandtheInternationalLabourOrganization(ILO)DeclarationonFundamentalPrinciplesandRightsatWork,weperformduediligenceacrossthevaluechaintoidentifyrisksandavoidcomplicityinhumanrightsviolations.Weprovideaccesstogrievancemechanisms,investigateallegationsandescalateknowncasesofhumanrightsabusetoseniorleadership.Wealsoincorporatetrainingandaccountabilityforrespectinghumanrightsacrossthebusinessandthesupplychain.LenovomanufacturingsitesundergoregularauditsforcompliancewithRBA,ISO45001,andotherstandardsandrequirements.FormoreinformationonauditresultsandhowLenovoprotectshumanrightsinitssupplychain,pleaseseeSection5—ManufacturingandSupplyChainOperations,andtheLenovoAnti-SlaveryandHumanTraffickingStatement.DIVERSITYANDINCLUSIONAsauniquelyglobalbusiness,DiversityandInclusion(D&I)areamongLenovo’sgreateststrengths.Ourleadersthroughouttheworldholdadeepcommitmenttoinnovationandafar-reachingmindsetfueledbyasenseofourlong-termresponsibility.Adiversebusinessmodelstartsatthetop.Webelievethataglobalworkforceshouldreflecttheglobalcustomersthatitserves,andthisbeginswithleadershipthatisrepresentativeofthevariousculturesandethnicitiesthatcompriseourinternaltalent.Lenovoiscommittedtoadvancingandgrowingourinclusiveculturewithanongoingfocusondiversity.Weareplacingagrowingemphasisoninclusiontoleverageourdiversetalent.Researchconsistentlyshowsthatdiversityimprovesbusinessoutcomesandresultswheninclusionliesatthecoreoftheculture.Webelievethatasatrulyglobaltechnologycompany,wehaveanevengreaterresponsibilityinadvancingdiversityandinclusionglobally.We’rebringingawarenessaboutinclusiontoallourleadersandallouremployeesinavarietyofways.Toconveyourcommitmentintheseareas,LenovorecentlypublisheditssecondGlobalDiversityandInclusionReport.Tolearnmore,pleaseseethe2019DiversityandInclusionReport.RecognizingDiversityatAllLevelsWerecognizethevalueofdiverseleadershipatalllevels.LenovorecognizedtheimportanceofdiversityandestablishedtheroleofChiefDiversityOfficerafteritexpandedoutsideofChinain2005.Inourmorethan15yearsasaglobalcompany,wehavestructuredourselvestosupportdiversityandinclusion.AsatthedateofFY19/20AnnualReport(May20,2020),Lenovo’s11-memberBoardofDirectorswasthehighestgoverningbodyintheorganization,andwascomprisedofgloballydiversedirectorshailingfromChina,Japan,theUnitedKingdomandtheUnitedStatesofAmerica.TheBoardofDirectorsisresponsibleforoverseeingthecompany’sstrategyandsupervisingitsactions.TheLenovoExecutiveCommittee(LEC)isLenovo’stopmanagementcommitteethatgovernsourbusinessacrossfunctions,geographies,andbusinessunits.Ourtop14leadersincludethreewomenandrepresentfivedifferentnationalities.Tolearnmore,pleaseseethe2019DiversityandInclusionReport.662019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYIn2018,weoutlinedseveralkeygoalsacrossexecutiverepresentationandglobalimpactforwhichweareontracktoachieveduringthecalendaryear2020:•Achieve20percentfemaleexecutiverepresentationworldwide.•Achieve28percenttraditionallyunder-representedracialorethnicexecutiverepresentationintheU.S.AdditionalFY2019/20D&Imetricscanbefoundinthe8.0ConsolidatedMetricssectionandinthe2019DiversityandInclusionReport.FY2019/20PercentageofEmployeesbyGenderFY2019/20NumberofEmployeesbyRegion64%36%MalesFemale18%12%62%8%ChinaAmericas(LatinAmerica/NorthAmerica)AsiaPacific(excludingChina)EMEA(Europe,MiddleEast,Africa)EMBEDDINGDIVERSITYANDINCLUSIONINEMPLOYEEDEVELOPMENTOurapproachtogrowingemployees’D&Icapabilitiesistoembeditwithineachofouremployeedevelopmentprograms.WhiletheconceptsofD&Ilookdifferentacrossthevariousprograms,they’reallanchoredbyourcorporateprinciplesofcustomerfocus,entrepreneurship,innovation,andteamworkwithintegrityandtrust.Someexamplesoftheseprogramsinclude:ManagementDevelopment—DiversityofthoughtiscelebratedbyencouragingmanagerstoseekoutdiversecandidateswhenhiringandthroughtheuseoftheDiSCassessmenttobetterlearnaboutpeople’sbehavioralstyleswithinmanagertraining.Participantsindirectortraininglearntoexpandtheirglobalawarenessbybecominganthropologists,andnottourists,whenlearningaboutothercultures.Anti-Harassment—Globally,employeesandmanagersarerequiredtotakepartinanti-harassmenttrainingtitled“GlobalInclusionTraining”upononboardingandareenteredintothecompany-widebiennialcycletopromotepositivebehaviorsthatfosteraninclusiveworkplace.Thisisarequirementforemployeesinnon-manufacturingroles.NewEmployeeOrientation—InNewEmployeeOrientationintheU.S.andChina,aportionoftheonboardingtrainingisdedicatedtoanoverviewofEmployeeResourceGroups,ourD&ICommitment,andourCodeofConduct.672019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYGlobalAwarenessTool—Withcustomerrepresentationinmorethan180markets,we’veinvestedinatoolforglobalawareness.Itallowsemployeesandmanagerstobetterunderstandthemselves,theirteams,andotherculturesacrosselementslikecommunicationandstatus.Allemployeesareinvitedtocreatetheirfreecultureprofileinthesystemandexploreself-guidedtraining.Thistoolalsocontainsinformationabouteverycountry,includingculturalcustomsandpronunciationsofcommongreetings.GROWINGOURTALENTEqualityismorethanavisualrepresentationofdiversity—italsomeansensuringequalopportunitiesforgrowthanddevelopment.Throughnumerousinternalprograms,Lenovoiscommittedtogrowingourdiversityoftalentandfosteringleadersofthefuture.Someofourmostsuccessfulprogramsinclude:LeadershipDevelopmentProgramsBoththeglobalWomen’sLeadershipDevelopmentProgram(WLDP)andU.S.MosaicLeadershipDevelopmentProgram(MLDP)develophighpotentialtalentfortheexecutiveranks.Women’sLeadershipDevelopmentProgram(WLDP)—Foundedin2014,theWomen’sLeadershipDevelopmentProgram(WLDP)servesasaglobalcorporateinitiativeforadvancinghigh-potentialfemaledirectorsintoexecutiveroles.PartneringwithLinkageInc.,apremierprofessionaldevelopmentcompanyspecializingindevelopingfutureleaders,theprogramservesanannualcohortofbetween20–25participantsfromaroundtheworld.Eachcohortundertakesanine-monthdevelopmentseriesofassessments,workshops,coaching,andskill-buildingactivitiesthatenhancecriticalleadershipcompetenciesandamplifyvisibilitytoseniorexecutives.Sinceitsinception,theWLDPprogramhaspromoted33percentofparticipantsintoexecutiveroles.MosaicLeadershipDevelopmentProgram(MLDP)—ModeledafterthesuccessoftheWLDPprogram,theMosaicLeadershipDevelopmentProgram(MLDP)waslaunchedin2017,toadvancehigh-potentialdirectorswhohavebeenidentifiedasreadyforthenextstepintheircareers.Theprogramrepresentsmenandwomenacrossvariousdimensionsofdiversity,includingtraditionallyunderrepresentedU.S.raceandethnicgroups,LGBTQ,IndividualswithDisabilities,andVeterans.Sinceitsinception,theMLDPprogramhaspromotedsevenpercentofitsparticipantsintoexecutiveroles.EarlyCareerDevelopment—Lenovo’sUniversityRecruitingProgramispartofaglobalstrategicinitiativetodrivebusinesstransformationbyfosteringearlycareertalentgrowthacrosstheorganization.Theseprogramsaredesignedtoengagetalentedstudentsandrecentgraduatestojump-starttheircareers,withaspecialfocusondiversityandinclusion.Wehiremorethan500EarlyCareerHiresacrossallgeographiesandbusinessunitsaseitherregularentry-level,full-timeroles,orasapartofspecificrotationalprograms.Tolearnmoreaboutourearlycareerdevelopmentprograms,pleaseclickhere.682019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYEMPLOYEERESOURCEGROUPSOurglobalEmployeeResourceGroups(ERG),guidedbyourDiversityandInclusionOffice,playaninstrumentalroleinadvancingtheemployeeexperience.WestrivetomakesurethatoneortwolocalexecutivesponsorssupporteachERG.OurcurrentERGsconsistof:WomeninLenovoLeadership(WILL)—Morethanadecadeago,Lenovorecognizedtheneedtosupportwomenintheworkplace,andasmallgroupoffemaleexecutivescreatedWomeninLenovoLeadership(WILL)asitsfirstERG.WILLhasphysicalchapterslocatedinallfiveofourgeographies:China,Asia-Pacific(AP),Europe,MiddleEast&Africa(EMEA),LatinAmerica(LATAM),andNorthAmerica(NA).CountrieswithchaptersincludeMexico,Brazil,Argentina,theU.S.,Canada,theUK,France,Norway,Sweden,Germany,Australia,andChina,amongothers.WILLfocusesonsupportingandcultivatingwomen’scareersatLenovo.Diversitas—ThisERGwaslaunchedinBratislavabyemployeeswhoarepassionateaboutmakingLenovomoreinclusive.Atthe2017EuropeanDiversityAwardshostedinLondon,DiversitaswonOutstandingEmployeeNetwork,beatingoutthousandsofothernominations.Itsmembersraiseawarenessaboutcutting-edgetopicsintheSlovakworkplace.Diversitashosts15eventsannually,includingcelebratingDiversityMonthwithanin-officePrideParadeandDiversityFair,collectingcharitabledonations,anddeliveringHumanResourcestraining.NewandExpectantMothersOutreach(NEMO)—Lenovorecognizestheneedforaworkenvironmentthatflexestofitemployees.Tosupportworkingmoms,we’repilotingtheNewandExpectantMothersOutreach(NEMO)ERGinNorthAmericatohelpnewandexpectantmothersthroughcommunitysupportandmentorship.Thisgroupfocusesoncreatingasupportivenetworkofmomswhohelpfosterasmoothtransitionintotheworldofbalancingworkandmotherhood.Additionally,theteamhelpsimproveworkplaceconditionsincollaborationwithlocalfacilitiesteams,bysecuringadditionalparkingspacefornewandexpectantmothers,aswellasdedicatedspaceforprivatenursingrooms.BlackLeadersAchievingSuccessinTechnology(BLAST)—BLASTwaslaunchedin2014andservesmorethan300AfricanAmericanemployeesacrossNorthAmerica.Thegroupstrivestoinspire,support,andempoweritsleadersthroughenlightenment,exposure,mentorship,andoutreach.Itprovidesregularcareerdevelopmentopportunities,includingitssix-month“Empower”mentorprogram,whereallparticipatingemployeesacrossallband-levelscantakepartina1:1mentorsessiononpresentationskills,branding,andleadershiptraining.BLASTalsoregularlyhostsinternalexecutivesandexternalguestspeakerpanelsforbestpracticeinsights,featuresamonthlyrecognitionprogramforsignificantmemberachievementsandpromotions,andpartnerswithotherERGstogivebacktothecommunitythroughtheLenovoFoundation.HispanicsofLenovoAssociation(HOLA)—LaunchedinOctober2017,HOLAfocusesonempowering,developing,andadvancingthenextgenerationofLenovoleadersofHispanic/Latinodescent.Itfacilitatesroundtablediscussionsledbyexecutivesponsors,givingemployeesanopportunitytosharetheirexperiencesaroundnetworking,professionaldevelopmentandwork/692019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYlifeintegration.HOLAalsohostsanannualdiasporamulticulturaleventcelebratingHispanicHeritageMonthinSeptember.PRIDE—WiththeacquisitionofMotorolain2014,LenovobecamemoreinvolvedintheLGBTQcommunity.OurMotorolaChicagoofficesupportedtheLGBTQERGandparticipatedinPrideMonthinChicagoandSanFrancisco.InrecentyearsthroughthefinancialsupportoftheLenovoFoundation,fundssupportedStartOutinChicago,anon-profitthatpromotesLGBTQequalityandcombatdiscriminationinthebusinessworld.LenovolauncheditsLGBTQgroupforNorthAmerica(NA)withapaneldiscussioninJune2018.TheconversationbroughttogetheralliesandLGBTQleadersintheorganizationtotalkabouttheirexperienceasD&I,Sales,andTalentAcquisitionLeaders,andtheirroleinattractingtoptalent.LenovoEmployeesofAsianDescent(LEAD)—Establishedin2019,LEADcelebratesandpromotestheheritageofeachandeveryAsianethnicitywithinLenovo,assistingindevelopingthefullpotentialofAsianLenovoemployeesprofessionallywhileengagingandgivingbacktothelocalAsiancommunities.LEADalsoservesasaresourceinassistingLenovotoachieveitsgoalofadiverseandinclusiveworkingenvironment.RisingEmployeesAtLenovo(REAL)—Establishedin2020,REALisdedicatedtobuildingacommunityoftomorrow’sleadersbyacceleratingthegrowthofearlycareerprofessionalsandconnectingthemwiththeleadersoftoday.ABetterLenovoforEveryone(ABLE)—Lenovo’snewestERGwaslaunchedinApril2020.ABLE’smissionistoofferacommunityofsupportforLenovoemployeeswithdisabilities,orcolleagueswhosupportfamilyorfriendswithdisabilitiesathomeorarepassionateaboutbeingalliesforthedisabilitycommunity.Thatsupportcomesintheformofguidanceforresources,navigatingbenefits,andsupportingcommunityorganizationswithsharedvalues.TRAININGANDDEVELOPMENTLenovoinvestsintalentdevelopment,takingarobustandsystematicapproachtoemployeemanagementandexecutivedevelopment.Ourapproachtargetsbuildingthecapabilitiesofourpeopleandourorganizationinthreeways:ExperiencesontheJob—learningwhiledoing.Wedesign70percentofcareerdevelopmenttohappenonthejob.ColleagueRelationships—mentors,guides,coachesandmanagers.Wedesignfor20percentofemployeedevelopmentthroughsharingtheirsuccessesandfailureswithothersandbyseekingguidanceandadvice.Education—formaltrainingintheclassroomoronlinethatteacheskeyprinciplesandskills.Wedesign10percentofourlearningopportunitiestobeformaleducation.70%20%10%On-the-jobcareerdevelopmentGuidanceandadvicefrommentors,managersFormaleducation–onlineandclassroomLEARNINGDETAILSANDMETRICSWecombinethesethreetraininganddevelopmentmethodstomaximizelearninginasystematicapproach,includingformalemployeeandleadershipeducationprograms,targetedpeopleplanningandglobalrotations,employeenetworkgroupforums,executivecoaching,structuredfeedback,andavarietyofadditionalassessmentsanddevelopmenttools.702019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYLenovo’sonboardingtrainingincludesacombinationofinstructor-ledandonlinecoursesontheCodeofConduct,InformationSecurity,andPrivacyBasics.Ontopofthesecore-requiredcourses,LenovoequipsnewhireswithhistoryontheLenovoWay,anti-harassment,andculturalbehaviorstraininginordertogainastrongunderstandingofthecompany’soperationsandvalues.TheGlobalLearningandDevelopmentteamhascraftedastair-steptrainingapproachthatencompassesalllevelsoftrainingfrompersonaldevelopment,preparationformanagement,tomanagerandexecutivedevelopment.Thesecoursesaredeliveredgloballybothin-personandvirtuallyandarecarefullydesignedaroundleadershipprioritiesandbehaviorskillsthatsupportLenovo’smissionandvision.Grow@Lenovo,Lenovo’slearningmanagementsystem,hostsalmost10,000differentonlinetrainingcourses,ineightdifferentlanguages.InMarch2020,theplatformwasbeingusedbynearly9,000employeesandmaintainingamonthlyaverageof2.4hoursperuser.ThetrainingplatformalsoprovidesresourceslikefreebusinessbooksandGlobeSmart,atoolthatcanimprovecrossculturecollaboration.Lenovodevelopsitsowntrainingcontentforsales,product,andprocesstraining,butalsolooksexternallyforotherneededcontent-likeprofessionalortechnicalskillstraining.Lenovoisalwayslookingfornewwaystomatchbusinessandemployeedevelopmentneedsthroughlicensingcontentfromreputableexternalvendors.InFY2019/20,ourdatasuggeststhatU.S.employeestypicallyreceive14.5hoursoftrainingperyear(1.2hourspermonth)indigitallearningthroughGrow@Lenovo.TheFY2019/20Grow@Lenovomonthlyaveragesinclude:AvgHoursPerUser1FY19/2019,551FY18/1917,867AvgLearningObjectCompletions3FY19/2027,195FY18/1915,426AvgHoursPerLearnerFY19/202.3FY18/192.4AvgUniqueActiveUsers2FY19/209,219FY18/198,6841Totalsrepresenttheaverageofallcombinedhoursrecordedforalluniqueactiveusers.2AvgUniqueActiveUsers—individualcontributorswhousedGrow@Lenovo,includesfull-timeemployeesandcontractors.3Learningobjectsrefertoanycourse,curriculum,video,orquizthatisassignedorcompletedbyauser.712019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYEMPLOYEECOMMUNICATIONSLenovoactivelyfostersopencommunicationamongemployees,aswellascommunicationbetweenemployeesandthecompany.Weleveragevariousavenuestocommunicateaboutstrategicandbusinessupdates,programactivities,andnewsaboutLenovoaroundtheworld,including:•Regularemailcommunicationsbetweenemployeesandseniorleadership.•Ouremployeeintranet,LenovoCentral,whichhousesthelatestLenovonewsaswellasemployeetoolsandresourcestoaccessLenovopolicies,programactivities,andprocessestheyneedtoknow.•Short,informalvideoswithmembersofourseniorleadershipteamtodivedeeperintostrategicmilestonessuchasquarterlyearningsannouncements,majorbusinessbreakthroughs,orstrategiccustomereventsthroughouttheyear.•Ourweeklynewsletter,ThisWeekatLenovoCentral,whereemployeescangetaquicksnapshotintothebiggestLenovonewsoftheweek.Toensureouremployeesareeffectiveandinformed“brandambassadors,”Lenovoholdsregularemployee(AllHands)meetingsineachofitsbusinessunitsandfunctions,typicallyonaquarterlybasis.Employeesattendinpersonwhenpossible,withremoteparticipationenabledthroughacombinationofwebstreamandconferencecalls.Thesemeetingsfeatureampleopportunitiesforemployeestoaskquestions,interactwitheachotherandtheirseniorleaders,andhearthelatestonLenovo’sstrategyandmission.Guestspeakershelpemployeesdeepentheirknowledgeaboutotherareasofthecompany.Meetingsmayberecordedforlaterplaybacktoensureemployeescanreviewanythingtheymayhavemissed.Lenovo’sgoalistoensurethatouremployeesarefullyinformedonthestrategicdirectionofthecompanyandthattheyhavefirsthandaccesstoourseniorleaders.InlightoftheCOVID-19pandemic,Lenovoleadershiphasbeendedicatedtoregularlycommunicatewithemployeesonregulatoryupdates,workplacechanges,andwaystostayemotionally,physically,andfinanciallysupported,includingourEmployeeAssistanceProgramsaroundtheglobe.Tohousethesecommunicationsandresources,wehavecreatedaninternalCOVID-19updatespagehousedonouremployeeintranetsothatemployeescanalwaysfindthelatestupdates,news,andquickresourcelinksinoneplace.LenovoListensEmployeeEngagementSurveyLenovoseekstheinsightsofitsemployeesworldwidethroughitsLenovoListensemployeeengagementsurvey.ThissurveyisdesignedtogaininsightsonhowLenovoemployeesviewtheirjobs,theirmanagement,theirteams,theirrewardsandthecompanyasawhole.LenovoListensisanimportantmeasureofemployees’pride,motivationandcommitmenttostayingatLenovo.Researchshowsthatmeasuresofemployeeengagementcanbeusedtopredicttheamountofeffortthatemployeesarewillingtoinvestintheirjobsaswellasemployeeretention.Inaddition,employeeengagementcanbetiedtoimportantmeasuresoforganizationalperformance,includingfinancialresults,customersatisfactionandoperationalefficiency.722019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSurveyresponsesareanalyzedbyathird-partysurveyvendorandreportedbacktoLenovoinaggregateformat,ensuringnoindividualresponsescanbeidentified.Managersofalllevelsareencouragedtousetheirresultstoidentifyareaswheretheycanimproveandcreatemeaningfulactionplans.Post-surveyfocusgroupsarealsoconductedtobetterunderstandemployeeinputanddriveactionplanningatthemanagementandcorporatelevelforcontinuousimprovement.LenovoListensisconductedannuallytoenableanagile,continuallisten-respondmechanism.InourFY2019/20annual‘LenovoListens’employeeengagementsurvey,94percentofemployeesaroundthegloberesponded—anincreaseoffivepercentagepointsfromthepreviousyear.TheastoundingnumberofresponsesfromeverybusinessandgeographyisaclearindicationofourcollectivecommitmenttocontinuedgrowthandimprovementwithinLenovo.89%94%5060708090100FY2015/16FY2017/18EmployeeParticipationRateFY2018/19FY2019/2087%87%LenovoListensSurveyEmployeeParticipation732019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYInFY2019/20weintroducednewquestionsaboutLenovo’senvironmental,socialandgovernanceperformance.Resultsshowthat91percentofourparticipatingemployeesbelievethatLenovoisanenvironmentallyresponsiblecompany;88percentofouremployeesbelievethatLenovoisgenuinelyinterestedinthewell-beingofsurroundingcommunities;and94percentofouremployeesbelievethatLenovoisethicalinitsbusinessdealings.Lenovoremainscommittedtotakingclearactionsbasedonthisfeedback,whichiscriticaltoLenovo’ssuccess.WewillcontinuetodriveimprovementstomakeworkingatLenovoengaging,productive,andareflectionofthe‘WeAreLenovo’cultureanchoredbyourcorporateprinciplesofservingourcustomers,innovation,entrepreneurship,andteamworkwithintegrityandtrust.LenovoEmployeeFavorabilityGlobalNorm5060708090100LenovoisanenvironmentallyresponsiblecompanyLenovotakesagenuineinterestinthewell-beingofcommunitiesinwhichitdoesbusinessLenovoisethicalinitsbusinessdealings91%82%88%79%94%84%LenovoListensSurvey—SampleofResults742019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYCOMPENSATION,BENEFITSANDPERFORMANCEWestrivetocreateapersonalizedandsupportiveworkingenvironmentforour63,000employeesaroundtheworldbygivingthemtheflexibilitytomanagetheiruniquelifeneedsandtheirwork.Toensurewecanattractandretainhigh-qualitytalentinthecompetitivetechnologymarketplace,weofferavarietyofbenefitsforemployeesandtheirfamilies.Benefitspackagesfollowthesestrategicguidelines:•PositionLenovocompetitivelywithinthelocalmarketplace.•AlignwithandsupportLenovo’sbusinessandculturestrategy.•EmphasizeLenovo’scommitmenttowellnessandfamilies.Toachievethesegoals,Lenovomustbeflexibleandconsidervaryingcustoms,practices,legalrequirements,andemployeeexpectationsaroundtheworldtodesignimpactfulbenefitsprograms.Ouremployeesareourmostvaluablestrategicresource,andwefocusoncreatingbenefitplansthatrecognizetheirtalentsandcontributions.OurTotalRewardsapproachconsistsoffiveelements:compensation;benefits;work-lifebalance;performanceandrecognition;anddevelopmentandcareeropportunities.Thesefiveelementsarecriticalinourabilitytoattract,motivate,andretainourmostvaluablestrategicresource—ourpeople.Wepayforperformancebecauseexceptionalperformancedrivesbusinessperformance.Eachemployee’sKeyPerformanceIndicators(KPIs)supporttheoverallbusinessstrategy.Wecontinuallymonitorandevaluatemarkettrendsandindustrypracticesinourworkplacelocationstoensureoursalariesarecompetitive,andwereactquicklytochanges.OurperformancemanagementprogramallowsallLenovoemployeesworldwidetosettheirgoalsfortheyear,receivefeedbackontheirperformanceanddevelopmentneeds,beevaluatedontheirperformance,and,ifeligible,receiveaperformancebonus.Formalassessmentsoccuronceortwiceayearforallemployees,andmanagersareexpectedtoprovideongoingfeedbackthroughouttheyear.Wetrackcompletionofemployeeperformancereviewsattheendoftheperformancereviewcycletomakesureeveryemployeereceivesfeedback.Wedesigncompetitivecompensationprogramstoattract,motivate,andretaintalent,includingamixofbasepayandshort-termandlong-termincentiveplans.Givenourglobalbusinessdemands,ourglobalpolicyallowsemployeestoworkremotelywhenitmakessense.Globallyweofferflexiblebenefitsinmultiplemarkets(China,Mexico,HongKong,andtheUK)toprovideemployeeswitharangeofchoicesforbenefitsthatfittheirneedsatvariousstagesintheirlife.Choicesvarybygeographydependingonthelocalmarket,butoftenincludetheopportunitytoaddadditionalinsurancecoverage(life/disability/criticalillness/dependenthealthcare)ortopurchasesome“lifestyle”typebenefitslikepetinsurance,home,orautoinsuranceatdiscountedrates.752019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYOperationalChangesLenovoprovidesadvancenoticeofsignificantoperationalchangesinaccordancewithlocalrequirementsandcollectivebargainingagreementsinthelocationsinwhichweoperate.Wemeetregularlywithemployeesandprovideinformationonbusinesschanges.Incaseswhereoperationalchangesarerequired,wetakestepstomitigatenegativeimpacts.Lenovohasregularemployees,supplementalemployeesandcontractworkers.Fromtimetotime,thecompanydecidestomoveworkfromonecountryorregiontoanotherinsupportofthebusinessstrategyandobjectives.Wetakegreatcarewhenthesedecisionsaremadetonotifyaffectedemployeesandnon-employeesasrequiredbylocaland/orcountrylawsandprovideseveranceandcareerandtrainingassistanceasrequiredbylocal/countrylaws.AWARDSANDRECOGNITIONS762019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSOCIALINVESTMENTSLenovo’ssocialinvestmentsarefocusedonSTEMeducationandempoweringdiverseandunderresourcedpopulations,themesthatareintegraltothesuccessofourbusiness.Lenovohasagoalofcommittingaminimumofhalfapercentofitspretaxincometoglobalsocialinvestmentprogramsandinitiatives.Lenovo’sinvestmentsareexecutedthroughcorporateandFoundationgivingdonethroughtheLenovoFoundation(U.S.501(c)(3))andLenovoFoundationBeijing(non-profitregisteredinChina).BusinessandFoundationassetsaremanagedbyacentralteamthatisfocusedoncollaboratingacrossbusinessunitsandgeographiestomaximizetheimpactofLenovo’sgiving.HighlightsfromLenovo’sFY2019/20philanthropyinclude:•LenovoachieveditsgoalofimpactingonemillionpeoplethroughLenovoglobalphilanthropyefforts,aheadofourcalendaryear2020goal.•InMay2019,theLenovoFoundationledLenovo’sthirdannualglobalserviceevent,“Loveon31.”Sincetheinaugural2017event,theprojectgrewby70percentinthenumberofindividualsdirectlybenefited.•LenovobegananewpartnershipwithJangala,anorganizationthatprovidesnetworkconnectivityinremote,hardtoreachareas,andareasimpactedbynaturaldisasters.Thispartnershiprecognizesthecoupledneedsoftechnology,qualityconnectivity,andeducation.Intheirfirstyearofpartnership,JangalaandLenovoprovidedconnectivityandhardwaredonationsthroughcollaborationswithAmalaEducationandSkateistan,whoprovideeducationtorefugeesandunderservedpopulationsinKenya,Eswatini,AfghanistanandCambodia.•InNovember2019,theLenovoFoundationhelditssecondannualgrantroundincelebrationofLenovo’s35thBirthdaygivingUS$210,000tocharitableorganizationsaroundtheworldtosupportprojectsalignedtoLenovoFoundation’smission.•SinceFebruary2020,LenovohasgivenmorethanUS$13millioninresponsetotheglobalCOVID-19pandemic.Atthecloseofthefiscalyear,LenovohadprovidedUS$7millioninresponsetourgenttechnologyneedsforhospitalsandstudents,withdonationscontinuingintoFY2020/21.DetailsonLenovo’sresponsetoCOVID-19areincludedonpages86-87.Byfocusingonthesocialinvestmentobjectivesbelow,LenovomeetsthediverseneedsofthecommunitieswhereLenovoemployeesandconsumersliveandwork.GLOBALDISASTERASSISTANCENaturaldisastersareprojectedtoincreaseinfrequencyandseverityasaresultofclimatechange,andcommunitiesaroundtheworldPartnerwithcharitableorganizations,educationalinstitutionsandcivicorganizationstoamplifytheimpactofLenovo’ssocialinvestmentsaroundempoweringdiverseandunder-resourcedpopulationswithaccesstotechnologyandscience,technology,engineering,andmath(STEM)education.Engageemployeesinvolunteerism,sharingthevalueoftheirexpertiseandtalentwithcommunitymembers.ConnectwithcivicandcommunityleaderstostrategicallyenhanceLenovo’scharitablegivingmission,whileprovidingdisasterresponseandrecoveryonaglobalscale.LENOVO’SSOCIALINVESTMENTOBJECTIVES772019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYneedtoprepareandadaptattimesofnaturaldisasterandcrises.Toaddressthisincreasedneed,Lenovodevelopedamatrixedprocessinordertoconsistentlyrespondtonaturaldisastersbasedonimpactandlocalalignment.ThenewprocesswasdeployedtohelpmanageLenovo’sdisasterresponsethroughthecombinedcontributionsfromemployees,theLenovoFoundation,andourcorporatedisasterresponsepartnerships.SeetheConsolidatedMetricssectionfortheLenovoFoundationFY2019/20contributionreport.August-September2019—HurricaneDorian(BahamasandU.S.)LenovorespondedtotheneedsofHurricaneDorianwithUS$20,000allocatedacrosstheBahamasandtheUnitedStates(U.S.).TheHurricanestruckOcracokeIsland,acommunitynearLenovo’sMorrisville,NorthCarolina,NorthAmericaHeadquarters.EmployeesvolunteeredandcollaboratedwiththeU.S.Veteran’sCorpsandthestateofNorthCarolinatorespondstrategicallytocommunitymembers’needs.December2019—FlashFloodinginJakarta,IndonesiaLenovorespondedwithUS$20,000directedtotheFoodBankofIndonesiatoprovideimmediatesupporttooverwhelmedsheltersandresponseagenciesastheyworkedtoshelterandfeedhundredsofthousandsofresidentsinthewakeofJakarta’sflashflooding.January2020—AustralianWildfiresLenovodonatedUS$50,000totheAustralianRedCrosstohelpwithresponseeffortstotheJanuarywildfires.Duetotheimpactofthewildfires,morethan30millionacresofcommunitiesandwildliferefugeburned,acutelyaffectingthestatesofNewSouthWalesandVictoria.February-March2020—COVID-19PandemicAsaglobalcompany,LenovobeganrespondingtotheoutbreakofCOVID-19asearlyasFebruary2020.Asthevirusspreadaroundtheworld,Lenovo’scommitmentandresponsestrengthened.SeetheConsolidatedMetricssectionformoredetailsaboutLenovo’snearlyUS$13millionresponsetoCOVID-19.EMPLOYEEENGAGEMENTANDVOLUNTEERISMEmployeeVolunteerismInadditiontophilanthropicinitiatives,Lenovoempowersemployeestogivebacktotheircommunitiesthroughvolunteerism.InMay2019,Employeesgatheredtofacilitatethe8,000tabletsdonationinWuhan,China,inthewakeofCOVID-19.AstudentwhoreceivedatabletthroughtheWuhandonationtoenabledistancelearningproudlydisplayshisinternet-enabledtech.Inadditiontotechnologydonationsfordistancelearning,LenovoalsosupplieddonationsoffoodtolocalfoodbanksduringtheCOVID-19pandemic.782019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYnearly3,000employeesaroundtheworldwereabletotakeadaytovolunteerthroughLoveon31,Lenovo’sGlobalMonthofService.Employeesgavemorethan13,000hoursinvolunteerservicefocusedonempoweringunderprivilegedpopulationswithSTEMeducationandtechnologybasedontheuniqueneedsoftheircommunities.ThecompanyprovidestimeoffforvolunteerismandoffersemployeesinNorthAmericaa100percentmatchfortheireligiblecharitabledonations,uptoUS$10,000peremployeeeachyear.Lenovoglobalemployeeengagementisledbyemployeechampionsattheofficelevel,directedbyaleaderineachgeography,andcentralizedacrossbusinessunitsandgeographiestomaximizeimpactandprovidecontinuityatthegloballevel.EmployeevolunteerismatLenovoisanchoredbyLoveon31,anemployee-drivenGlobalMonthofServicethathasgrownby43percentinemployeeparticipationsinceitbeganin2017.TheimpactofthisbenefitanditspositivemessagetoemployeescanbeseeninthegrowthmetricsforLenovo’sGlobalMonthofServicebelow.FY2019/20Loveon31GlobalMonthofServiceMetrics54Lenovoofficesparticipated13,355volunteerhours2,855employeesparticipated55,942individualsimpactedGrowthFY2019/20FY2018/19FY2017/18DollarsgiventocommunitythroughLoveon31US$250,000increasedinvestmentsinceprojectbeganUS$550,000US$352,000US$300,000Individualsdirectlyimpactedthroughprojects70percentgrowthsince201755,942Individuals32,526Individuals33,000IndividualsParticipatingoffices69percentgrowthsince201754offices38offices32officesUniqueprojects(officeshostmultiple)127percentgrowthsince201786projects45projects37projectsEmployeevolunteers43percentgrowthsince20172,855volunteers2,100volunteers2,000volunteersHoursspentindirect,hands-onservice(transportationandtimeawayfromworknotincluded)16percentgrowthsince201713,355hours9,700hours11,500hours792019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYEmployeeGivingInadditiontoitsvolunteerinitiatives,LenovograntsemployeesinNorthAmericaamatchfortheireligiblecharitabledonations.InFY2019/20,Lenovoincreaseditsmatchfrom50to100percentforemployeecontributionsmadethroughpayrolldeductions.ThecollectivevalueofLenovo’smatchinginNorthAmericaaloneamountedtoUS$963,435.LenovoispleasedtoexpandtheemployeematchinggiftprogramtoothergeographiesthroughmatcheddonationsofUS$380,650.SeetheConsolidatedMetricssectionfortheestimatedvalueofemployeegiving.Throughpartnershipswithvariousnon-profitorganizations,Lenovoalsomakescontributionswhichstrengthentheimpactofemployeedonationstoorganizationsinotherregions.Asanexample,forthethirdyearinarow,LenovoemployeesintheBelgium/Netherlands/LuxembourgregiondidaninternalproductauctiontofundraiseforSavetheChildren.Theteamraisedarecord-breakingUS$70,000.TheLenovoFoundationmatchedtheirdonationinordertomakeanevengreaterimpact.MoreexamplesofLenovo’sglobalcharityactivitiesareincludedintheCharitableGivingbyGeographysection.Inadditiontotheemployeematchingprogramabove,theLenovoextendstheNorthAmericamatchinggiftbenefittotheLenovoBoardofDirectors.ThismatchinggiftprogramisavailabletoallDirectorswhosupportorganizationsthatmeetLenovo’sgivingguidelines.CHARITABLEGIVINGBYGEOGRAPHYLenovomakeslocalized,strategicallyalignedinvestmentsacrossitsgeographies.Majorpartnershipsineachgeographyarehighlightedbelowasthelargestinvestmentsineachregion.NORTHAMERICALenovodonatedmorethanUS$2millioninNorthAmerica(UnitedStatesandCanada)inFY2019/20.Majorpartnershipsareoutlinedbelow.NAFandtheLenovoScholarsNetworkNowinitssixthyear,theLenovoScholarsNetworkhasprovidedmorethan12,000studentsfrom133publichighschoolsacrosstheUnitedStatestheopportunitytolearnhowtodevelopmobileapplications.LenovoandNAFcreatedtheannualMobileAppDevelopmentCompetitionin2014toengageunderservedhighschoolstudentsinSTEM,whilealsoprovidingentrepreneurialandtechnologyskillsneededtopursuecareersincomputerscience,programmingandengineering.Inthesummerof2019,Lenovoalsohiredmorethan25highschoolstudentsasinternsattheMorrisvilleheadquarters.AmericanRedCrossLenovohasastrongpartnershipwiththeAmericanRedCross,supportingitsexpertiseindisasterresponseattimesofcrisisandinvestinginitsabilitytorespondatalltimes.InFY2019/20,Lenovoinvestedin“RCView”technology.ThespecialsoftwareenablestheRedCrosstomanageitsresponseresourcesinrealtime,throughlivegeographicalpositioningoftrucksandsupplies.Lenovo’ssupportwillhelpcommunitiesacrosstheUnitedStatesbebetterpreparedwithup-to-dateRCViewtechnology.Inadditiontoitsongoinginvestment,LenovopartnerswiththeRedCrossforbi-monthlyblooddrivesatLenovo’sMorrisville,NorthCarolinaoffice,andengagesemployeesinsupportfortheRedCrossduringnaturaldisasters.WakeTechnicalCommunityCollegeLenovosupportsdiversityinSTEMineverypartofthetalentpipeline,includingWakeTechnicalCommunityCollege.LenovoFoundationandLenovosupportsWakeTechnicalCommunityCollegewithanendowedscholarshipforfourstudentseachyear.Equipmentdonationsandpaidwork-basedlearningopportunitiesarealsoprovided.Lenovohasmaintainedatrackrecordof802019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYhiring1in4studentsthatparticipateinitsprogramsintofulltimejobsinLenovo’sDataCenterGroup.Inadditiontosupportforstudents,Lenovohasprovidedbuildingsponsorshipfortheschool’snewcampusinResearchTrianglePark.NorthCarolinaBusinessCommitteeforEducationTheReady,Set,App!mobileappdevelopmentcompetitionwasdevelopedinpartnershipwiththeNorthCarolinaBusinessCommitteeforEducationandLenovo.Ready,Set,App!challenges9–12gradestudentsinpublicschoolstodevelopamobileapptoaddressorsolveaproblemintheirschoolorcommunity.Thestudents’appstackledissuessuchaspoverty,immigration,foodinsecurity,andmentalhealthawareness.Inadditiontoexpandingcomputerscienceskills,Ready,Set,App!honedteamworkskills,problem-solving,andencouragedstudentstobeentrepreneurs.IllinoisScienceandTechnologyInstituteandtheSTEMChallengeOverthepastsevenyears,Lenovo’sMotorolaMobilityheadquartersinChicagohasparticipatedintheIllinoisScienceandTechnologyInstitute’sSTEMChallenge.TheChallengematchesIllinoishighschoolswithindustrypartners,challenginghighschoolstudentstosolveareal-lifeindustryproblem.Studentsarementoredbyindustryprofessionalsoverafive-monthperiod,learningimportant21stcenturyskillsandgainingabetterunderstandingofthemodernworkplace.AspartofNorthAmerica’sLoveon31eventsandpartnershipwithNAF,LenovoheldapanelwithearlycareeremployeesandNAFstudents.EmployeesinChicagomadeahugeimpactduringtheirGlobalMonthofServiceProjectSunshinekitpack,providingSTEMactivitiestochildreninhospitalsacrossthecountry.CHINALenovoChinafocusesonhelpingthoselivinginpovertythroughcashcontributionsandemployeeengagement.LenovoparticipatedintheChinaFoundationforPovertyAlleviation’sShanxingzhe,“GreatWalker”2019event.WiththehelpofLenovoemployees,customers,partners,andmedia,35teamswerecreatedtoaccomplish50kilometersinhiking.ParticipationwasbolsteredbythepresenceofourChairmanandChiefExecutiveOfficer,Mr.YangYuanqing,whocompletedthejourneyin12hoursand12minutes.Theevent’sfundraisingbenefitted3,500childreninneedwithnearlyUS$130,000insuppliestokeepthemwarmforthewinter.812019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYDreamStarterLenovohaspartneredwithDreamStarterinHongKong.DreamStarterisaneducationinnovationinitiativethathasconnectedmorethan5,000teachersandstudentswithcorporations,institutionsandpubliccommunitiestoturndreamsintosustainableprojects.LenovohassupportedthreeschoolswithadonationofLenovomachinesthatareusedintheschoolsforonlinelearning.ThroughDreamStarter,employeesfromtheLenovoHongKongofficehaveparticipatedinworkshopsheldforchildrenaspartoftheLoveon31GlobalMonthofService.LoveonSTEMLenovoChinacommittedsignificantresourcestoengagestudentsandteachersinimpoverishedareaswithgreateraccesstoscience,technology,engineeringandmath.•SmarterTechnologyforAllthroughLenovoSmartEducationoLenovoChinaprovidedUS$1.7millionretailvalueofproductdonationsandsmartdevicestoimpoverishedareasinTibet,Chuxiong,andNingnantoengagestudentsineducation.•DonatedSTEMResourcesforStudentsoEngagedemployeesthroughFireflyclasses,providing286LenovovolunteerstoteachSTEMclassestostudentsinruralareas.Employeesprovidedacollective3,624hoursofvolunteerismforthisproject.oProvidedaFireflyScienceSummerCampfor20childrenininnerMongolia.oDonated16,572ScienceEducationBooksto23remoteprimaryschoolsandbenefitted1,358children.oDonatedproject-basedlearningandSTEMlessonsto16under-resourcedschools.oProvidedscholarshipsforstudentsatfouruniversitiesinChina,developingapipelineoffreshtalentwhilesupportingstudentsintheireducation.•ProvidedteachertraininganddevelopmentoProvidedteacherdevelopmentfor12scienceteachersinwesternChinatoengagethemwithadvancedteachingmethods.InHongKong,employeessharedaugmentedandvirtualrealityexperienceswithschoolchildrenfortheirLoveon31project.822019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYUniqueEmployeeEngagementThroughLoveonRunning•EmployeesinChinaleveragetheirpassionforrunningtodogoodandspreadLenovo’smissiontoLoveonthroughtheLoveonRunningClub.EmployeescreatedtheLenovoRunningAssociation,andloggedmilestoraisefundsatarateofoneRMBforeachkilometer.EmployeesraisedmorethanUS$17,000throughtheeffort,benefittingchildrenlivinginpoverty,withdisabilities,orsufferingfromseriousillness.GrantfundinginChinahasempoweredSTEMeducation,includingLenovo35Grantfunding.LenovoChairmanandChiefExecutiveOfficer,Mr.YangYuanqingcrossesthefinishlineduringaLoveonRunningevent.ASIAPACIFICIndigenousReadingProjectLenovorecognizesthattechnologyhasthepowertocatalyzelearning,especiallyatanindividual’suniquepace.Toaidinstudents’learning,LenovoprovidestabletstotheIndigenousReadingProject.Theirmissionistoenhanceandstrengthenstudents’joyofreadingbyunleashingtheircuriosityandbuildontheirnaturalmotivationtolearn.IndigenousReadingProjectfocusesitsworkwithAboriginalandTorresStraitIslanderkids.Theyareworkingtoclosetheachievementgapbetweentheindigenouspopulationandtheirpeersbyprovidingresourcesandchangefortheirunderservedcommunities.LenovoorMotorolaSkillsAcademyInordertoaddresstherisingdemandforfieldtechniciansandskilledlabourinthesmartphoneandcomputerrepairmarket,LenovoandMotoroladevelopedaSkillsAcademyforindividualsacrossIndiainTierI,II,andIIIcities.TheprogramprovidesaccesstotrainingandimprovesopportunitiesforbetterincomeforunemployedyouthandwomeninIndia.LenovoIndiaphilanthropyhasinvestedUS$100,000intheprogram,whichofferscounseling,training,skillassessments,andplacementforcandidateswhocompletetheprogram.Theprogramtrained2,988studentsinthefield,positivelyimpactingcommunitiesandthetechnologyindustrywithaspecialfocusonfemalecandidates.Overthelasttwoyears,1,525graduatestudentsfromtheLenovoMotorolaSkillsAcademyhavebeenplacedinjobsacrossmultiplecompaniesandindustries.832019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYChildren’sLoveCastlesTrust(CLTIndia)Asarecipientofthe2019grantroundcelebratingLenovo’s35thBirthday,CLTIndiaaddressesthechallengesofteachershortagesandlackofsubjectmatterexpertiseinruralIndiabydesigningdigitalSTEMtoolsforstudentsandteachers.Theirresourcesincludearepositoryof15,000videosinEnglishandthreeregionallanguages,andanadditional2000digitalresourcesforteachers.Throughtheseaccessibleresources,61,000teachershavebeentrainedandupskilledtoimpact1.8millionstudentsin12,000classrooms.WhenCOVID-19struck,CLTIndiarepurposedtheirserviceofferingbyredevelopingtheJigiTeacherAppandJigi-JigiStudentAppformobilephones.Thesespecialsoftwareofferingswereprovidedforfreetoenablegreaterstudyingfromhome,aninitiativesupportedbyLenovo.FromMarchtoMay2020,CLTIndiareachedmorethan4,000studentsandparentstoinitiatehomebasedlearning.MeghshalaTrustMeghshalaTrustbelievesthatteachersshapethefutureoftheirstudentseveryday.TheirfocusonteacherscreatesthedesiredmultipliereffecttoaddresstheproblemofeducationinIndia.Lenovo’ssupportforMeghshalahashelpedtheirjourneyintransformingtheeducationalecosysteminIndiathroughsupportinggovernmentschoolteacherstoprovideexcellenteducationtothousandsofchildren.WithLenovo’ssupport(investmentofUS$80k),Meghshalaimplementede-learningclassroomsinKarnatakaandManipur.Today,Meghshalahasreached2,300schoolsinManipurandKarnatakaandboastsof18,000downloadsontheirfreeMeghshalaapp.EUROPE,MIDDLEEASTANDAFRICA(EMEA)InFY2019/20,LenovoinvestedmorethanUS$400,000initsEurope,MiddleEastandAfrica(EMEA)geography.Lenovo’smajorEMEA-basedpartnershipsarehighlightedbelow.JangalaJangalaisaUK-basednotforprofitorganizationwhichenablesInternetaccessforpeopleinneed.LenovostartedanewpartnershipwithJangalainFY2019/20byprovidingWiFiaccesstodisconnectedstudentsandeducatorsinremoteareasthroughJangala’sinnovativeBigBoxtechnology.WhilefundingdeploymentsofWiFiconnectivityinrefugeecampsandeducationalcentersinKenya,SouthAfrica,Eswatini,CambodiaandAfghanistan,LenovocoupledtheconnectivitywithLenovohardwaretoensurestudentshadthetechnologytheyneededtomakethemostoftheirWiFiconnection.OneoftheLenovo35grantrecipientinIndiawasDoorstepSchool,providingeducationtoimpoverishedchildren.842019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYUnitedWayEuropeandMiddleEastRegionFY2019/20wasthefifthyearofLenovo’sregionalpartnershipwiththeUnitedWay,enablingstrategiccharitablepartnershipsinFrance,Israel,Romania,Poland,SpainandRussia.Lenovo’spartnershipwiththeUnitedWaytargetsdisadvantagedchildrenandyoungpeopletoprovidetechnologyandeducationwhichtheywouldotherwisenothavehadaccessto.Itprovidescomputerequipmentandvolunteerresourcestothesevulnerablepopulationsfordigitalskilldevelopment.In2019,thepartnershipincreasedaccessfor7,000peopleacrosstheregionthrough5,000workshops/classes,184Lenovodevices,and74Lenovoemployeeswhofacilitatedprogramming.Women’sForumfortheEconomyandSocietySince2006,LenovohasbeenthetechnologysponsorforWomen’sForumfortheEconomyandSociety,aleadingplatformthathighlightswomen’svoicesandperspectivesonpressingglobalissuesrangingfromsustainabledevelopmentandeconomytocultureandmedia.Throughthispartnership,LenovosupportstheForum’sannualseriesofglobaleventsandmeetingswhosepurposeistoelevatethevoicesandperspectivesofwomen.InFY2019/20,LenovocontinueditsglobalpartnershipthroughsupportforeventsinMexicoCity,Singapore,andParisaswellasparticipationintheForum’sRisingTalent,DarinCirclesandCEOChampionsinitiatives.PartneringwiththeForumbringsimportantopportunitiesforthoughtleadershiparoundgenderequality,whichareleveragedastalentdevelopmentopportunitiesforwomeninLenovo.TheannualglobalmeetinginParisinNovember2019drewLenovo’slargesteverdelegationof46Lenovoattendees.VolunteersacrossEurope,MiddleEast,andAfricajoinedintoactivitiesthatstrengthenededucationduringLoveon31,includingthisactivitywithschoolchildreninSouthAfrica.Lenovo’sWomen’sForum2019DelegationattheGlobalEventinPariswasthelargestinLenovo’spartnershiphistory,with46Lenovoattendees.LATINAMERICALenovoentitiesinvestedmorethanUS$2.5millioninLatinAmericainFY2019/20,includingLenovo’sfirstcommercialco-brandingpartnershipwithInstitutoAyrtonSenna.852019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYLaboratoriaLenovoisproudtopartnerwithLaboratoria’sPeru,Chile,andMexicoofficestosupporttechnologydonationsanddigitalskillstrainingforwomeninordertodiversifytheworkforce.InFY2019/20,LenovophilanthropyprovidedUS$35,000insupportforLaboratoria’sprogramming,specificallyinsupportofcareerfairswithjobplacementopportunitiesforLaboratoriagraduates.Laboratoria’scurriculumhasbeenproven,as80percentoftheir1,000graduateshavegoneontocareersintechnology.InstitutoAyrtonSennaIn2019,LenovobeganapartnershipwithInstitutoAyrtonSennatosupporteducationforstudentsinBrazil.Throughacommercialco-brandingeffort,LenovochampionedthegoodwillandspiritofthelegendaryFormulaOneracecardriver,AyrtonSenna,whiledonatingUS$1,010,744tosupporteducationforstudentsinBrazil’spublicschools.LenovoengageditsBrazilianemployeesintheeffortbyprovidingamatchinggiftcampaignwithInstitutoAyrtonSenna,andhascontinueditscommitmentdespiteCOVID-19.ANoteontheLenovoFoundationTheLenovoFoundationiscommittedtounitingLenovo’sglobalworkforcearoundthefocusareasofaccesstoSTEMeducationandempoweringdiverseandunderresourcedpopulations.Byunitingteamsaroundtheworldthroughthesecommonthemes,theLenovoFoundationprovidestangibleevidenceofLenovo’scommitmenttothe“DifferentisBetter”culture.TheLenovoFoundationisbasedinChicago,Illinois,USAandisgovernedbyaboardofdirectorscomprisedofglobalLenovoexecutives.FormoreinformationabouttheLenovoFoundation,visitwww.lenovofoundation.com.YolandaConyers,PresidentofLenovoFoundation,enjoysinspiringandsupportingvolunteerprojectsduringherglobaltravel.DuringFY2019/20,shetraveledtoBuenosAires,Argentinaandvolunteeredwithemployeesatalocalcenterforunderprivilegedchildren.Laboratoria,along-timerecipientofLenovosupport,wasalsotherecipientofaLenovo35Birthdaygrant,providingdigitalskillstrainingandjobplacementforwomeninChile.862019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYTheLenovoFoundationBoardofDirectorsasofMarch31,2020:YolandaLeeConyers,PresidentBarryAu,TreasurerLenovoChiefDiversityOfficer,PresidentLenovoFoundation&VPHRPartnerLenovoSVPandChiefDigitalTransformationOfficerJohnCerretani,SecretaryTorodNeptune,DirectorLenovoVP,DeputyGeneralCounsel,andChiefCorporateResponsibilityOfficerLenovoVPGlobalCorporateCommunicationsXiaolinLiu,DirectorCatherineLadousse,DirectorLenovoVP,Foundation,ICACLenovoExecutiveDirector,EMEACommunicationsASMARTERRESPONSETOCOVID-19Asadiverse,globalcompany,Lenovoisuniquelyplacedtorespondtocomplex,globalcrises.WhenCOVID-19wasidentifiedasanovelvirusinWinter2020,devastatingChinaandeventuallyspreadingtobecomeaglobalpandemic,Lenovorosetotheoccasionwithitsstrengths:smartertechnologyandaglobalfootprintthatenabledafocusedresponseineachmarket.ALenovoemployeevolunteerstoensurehospitalsinWuhan,ChinahaveITcapabilitiesattheepicenteroftheCOVID-19outbreak.HealthcareworkersinFrancethankLenovoforaproductdonationthatenablesbetterpatientcarewithsocialdistancing.AsLenovo’sChairmanandCEO,Mr.YangYuanqing,putit:“Atchallengingtimessuchasthese,ithelpstorememberthatweallwantthesamething:forthepeoplewecareabouttostayhealthy,thevirus’impacttodiminish,fortreatmentstobedevelopedandforlifetoreturntonormal”.872019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY•US$2.4millioninequipmentandITinfrastructuretosupporthospitalsinWuhan,includingmorethan1200computers,280tablets,660printers,softwareandsupport•US$400,000inpersonalprotectiveequipmentdonationsintheU.S.,Italy,Spain,India,andBrazil•US$1millionindonatedproductandfundstosupporthealthcaresystemsinEuropeandLatinAmericaLenovoisuniquelycapableofmeetingtheurgenteducationandhealthcareneedscommunitieshaveexperiencedduringtheCOVID-19pandemic,butalsocontributedsignificantresourcestoresearcharoundthenovelcoronavirus,providingUS$2millionintechnologytoBGIGenomicsinpartnershipwithInteltolearnmoreaboutthevirus,andUS$145,000totheChinaFoundationforHealthPromotiontostudyearlysurvivorsofCOVID-19inWuhan.TheeffectsofCOVID-19willcontinuetobefeltincommunitiesaroundtheworld,andLenovoisworkingtoaddressthoseneedsoutsideofourcorestrategy.TheresponseprovidednearlyUS$1millioninsupportforbasiccommunityneedsandmatchingforemployeegivingasCOVID-19disruptedmarketsandeconomiesaroundtheworld.Inadditiontoourbusinessresponse,Lenovo’sChairmanandCEO,Mr.YangYuanqing,alsomadeapersonaldonationofnearlyUS$1.5milliontotheChineseUniversityofScienceandTechnologytosupporttheirongoingresearchonthenovelcoronavirus.Tobettersupportcustomers,Lenovoofferedafreeglobalwarrantyextensionforupto75daysthroughMay31,2020forallLenovo/MotorolasmartphonesandLenovoconsumerPCs,tablets,smarthomedevices,consumeraugmented/virtualrealitydevices,monitorsandaccessorieswithwarrantiesthatendedbetweenMarch15andApril30,2020.ByApril2020,Lenovo’sphilanthropicresponsetotheCOVID-19crisishadrisentomorethanUS$13million.Usingsmartertechnologyandourglobalfootprint,ourresponsefocusedonthreecrucialareas:supportingdistanceeducation,providingtechnologyandpersonalprotectiveequipmenttohospitals,andprovidinggeneralcommunitysupportintheareaswhereouremployeesliveandwork.ThemajorityofLenovo’sresponse(60percent)focusedongivingstudentsandeducatorsthehardwaretheyneedtoconnectandcontinuelearningwhileschoolsareclosed.Majorexamplesinclude:•US$1.3millioninsoftwareandservicesdonationstoenabledistanceeducationandsecurityforthoselearningandworkingfromhome.ClickheretoseeifyouareeligibleforafreeLanSchoolAirlicense.•US$2.4millioninhardwaredonationstosupportdistancelearningeducationinNorthAmerica•US$1.4millionindistancelearningsupportfocusedonChina’sHubeiprovince,inpartnershipwithChinaFoundationforPovertyAlleviationLenovotechnologyhasalsomadeanimpactintheurgentneedsoffrontlineworkers.LenovohasprovidedITequipmenttooptimizehospitaloperationsandconnectpatientswithlovedones,easingthestressofisolationduringhospitalization.Infact,attheoutbreakofthevirus,LenovofullyoutfittedthenewlybuilthospitalsatthecenteroftheoutbreakinWuhan.Inadditiontotechnology,Lenovodonatedpersonalprotectiveequipmenttohospitalsandfront-lineworkers.Lenovo’scontributionstohealthcareeffortsrepresentapproximately30percentofourglobalresponse.Majoreffortsinclude:882019/20LenovoEnvironmental,SocialandGovernanceReport7.0Planet90Lenovo’sEnvironmentalCommitment94EnvironmentalImpactofLenovoOperations98LenovoEmissionsReductionTargets106EnvironmentallyConsciousProducts119ProductEnd-of-lifeManagement(PELM)121SupportingaTransitionfromaLineartoaCircularEconomy892019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY902019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYLENOVO’SENVIRONMENTALCOMMITMENTLENOVO’SENVIRONMENTALMANAGEMENTSYSTEMLenovomanagestheenvironmentalelementsofitsoperationsthroughaglobalenvironmentalmanagementsystem(EMS)thatcoversLenovo’sworldwideproductdesign,developmentandmanufacturingoperations(includingdistribution,fulfillmentandinternalrepairoperations)forcomputerproductsanddevices,datacenterproducts,mobiledevices,smartdevicesandaccessories.Thescopeencompassesthesesameactivitieswhenperformedbyoursubsidiaryand/oraffiliatecompanies.AllLenovositesintheEMSscopeareISO14001:2015certified.ClickheretoviewLenovo’sGlobalISO14001registrationcertificates.DevelopmentManufacturingandFulfillmentCenterManufacturingEnvironmentalcommitment912019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYISO14001RegisteredManufacturingandDevelopmentFacilitiesThebelowsitesmighthavemultiplefunctionsbutarelistedbytheprimaryfunction.Development•BuildingNo.1&2,No.CourtYard,XibeiwangEastRoad,Beijing,China•No.2Building,No.8ChuangyeRoad,Beijing,China1•No.696SongtaoRoad,PudongNewDistrict,Shanghai,China•7A,9A,10A,11A,ZhangjiangBuilding,No.289ChuanxiaoRoad,ZhangjiangTechnologyZone,Shanghai,China•4–11F,No.16NanyiRoad,NanshanDistrict,Shenzhen,China•No.999QishanNorth2ndRoad,Xiamen,China•3–6–1Minatomirai,Nishi-ku,Yokohama,Japan•ShinkawasakiMitsuiBldg.,1–1–2Kashimada,Saiwai-ku,Kawasaki,Kanagawa,Japan•AmZehnthof77,Essen,Germany,45307•4F,5F,8F,No.66,SanChongRoad,NangangDistrict,TaipeiCity,Taiwan•222WMerchandiseMartPlaza,Chicago,IL,U.S.•8001DevelopmentDrive,Morrisville,N.C.,U.S.1Development—AdministrationManufacturingandFulfillmentCenter•6540FranzWarnerParkway,Whitsett,N.C.,U.S.Manufacturing•EstradaMunicipalJoseCostadeMesquita,200—ChacaraAlvorada—Indaiatuba/SP,Brazil•B1,B2andofficebuilding,No.88TianjianRoad,WestGaoxinDistrict,Chengdu,China•No.3188–1YunguRoad,Hefei,AnhuiProvince,China•LenovoScience&TechnologyPark,Huiyang,China•No.30TaoHuaRoad,Shenzhen,China•No.19Gaoxin4thRoad,Wuhan,China•No.316BoulevardEscobedo,Apodaca,NL,Mexico•No.19/1A&2ACuddaloreMainRd.,EdayarPalayamVillage,Pondicherry,India•32Nishiyajima-cho,Ohta-shi,Gunma,Japan•6–80,Shimohanazawa2-Chome,Yonezawa,Japan922019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYWithintheframeworkofourEMS,Lenovoannuallyidentifiesandevaluatestheaspectsofouroperationsthathaveactualorpotentialsignificantimpactsontheenvironment.Metricsandcontrolsareestablishedforthesesignificantenvironmentalaspects.Performancerelativetothesemetricsistrackedandreportedonanongoingbasis.Performanceimprovementtargetsareestablishedforselectenvironmentalaspectsannually,takingintoconsiderationperformancerelativetotheenvironmentalmetrics,theEnvironmentalAffairsPolicy,regulatoryrequirements,customerrequirements,stakeholderinput,environmentalandfinancialimpact,andmanagementdirectives.DuringFY2019/20,oursignificantglobalenvironmentalaspectsincluded:•Productmaterials—includinguseofrecycledplasticsandenvironmentallypreferablematerials•Productpackaging•Productenergyuse•Productend-of-lifemanagement•Siteairemissions•Siteenergyconsumption•Supplierenvironmentalperformance•Producttransportation•Wastemanagement•WatermanagementLenovo’sFY2019/20globalenvironmentalperformanceagainstitsobjectivesandtargetsareavailableintheSection8.0ConsolidatedMetrics.Lenovo’senergy,GHGemission(Scope1and2),wasteandwaterdataisexternallyverifiedtoareasonablelevelofassurance.Lenovo’sGHGemission(Scope3)dataisexternallyverifiedtoalimitedlevelofassurance.ClickheretoseetheFY2019/20GHGandEnergyVerificationStatements,theFY2019/20WasteVerificationStatementandtheFY2019/20WaterVerificationStatement.ENGAGINGWITHSTAKEHOLDERSONCOMPLIANCELenovo’scommitmenttoenvironmentalstewardshipisbasedonafoundationofacommitmenttocompliance.ThisincludescompliancewithbothregulatoryrequirementsandvoluntarystandardsestablishedbyassociationsandstandardsorganizationstowhichLenovosubscribes.Lenovoactivelyengageswithawidevarietyofstakeholdersaspartofitsprocessesformanagingenvironmentalrisk,drivingimprovementsinenvironmentalperformance,ensuringcomplianceandmeetingcustomerexpectations.Examplesinclude:Associations•DIGITALEUROPE•ResponsibleBusinessAlliance(RBA,formerlyElectronicIndustryCitizenshipCoalition(EICC))•InformationTechnologyIndustryCouncil(ITI)•ConsumerTechnologyAssociation(CTA)•PRBA-TheRechargeableBatteryAssociation•Mobile&WirelessForum(MWF)GreenPrograms(Eco-Labels)•IEEE1680.1StandardforEnvironmentalAssessmentofPersonalComputerProducts•NSF/ANSI426EnvironmentalLeadershipandCorporateSocialResponsibilityofServers•ENERGYSTAR®•TCOCertified•TCOCertifiedEdge932019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYPrograms,WorkgroupsandInitiatives•Call2Recycle•CDP(formerlyCarbonDisclosureProject)•ECMA-370—TheEcoDeclarationStandard•EcoVadis•ElectronicProductStewardshipCanada•GlobalReportingInitiative(GRI)•GreenFreightAsia(GFA)InternationalStandards•ISO14001,EnvironmentalManagementSystems•ISO50001,EnergyManagement•LeadershipinEnergyandEnvironmentalDesign(LEED)•ProductAttributetoImpactAlgorithm(PAIA)Project•R2•UnitedNationsGlobalCompact•WorldResourcesInstitute(WRI)•WorldBusinessCouncilforSustainableDevelopment(WBCSD)LenovorecognizestheimportanceofenvironmentalleadershipinChinaandhasparticipatedinnumerousenvironmentalinitiativesinthecountry,including:•ChinaEnergyConservationProgram(CECP)•ChinaEnvironmentalLabelingProduct(CELP)•PC+ChinaEnergyLabel(CEL)•EnergySavingWorkAssociationoftheChineseInstituteofElectronics•ChinaRoHSStandardWorkingGroup•ChinaWEEEWorkingGroup•ChinaMIITEPR(extendedproducerresponsibility)RecyclingPilotProject•ChinaePCFProject•ChinaMIITEco-DesignDemonstrationEnterprisesProgram•GreenManufacturingAssociationofChina•ChinaMIITGreenManufacturingSystemProject•ChinaMEEGEFPOPsProject•ChinaMediumandLowTemperatureSolderAssociation•AllianceforHighQualityandGreenDevelopmentofInformationandCommunicationTechnologyIndustry•ChinaElectronicEnergySavingTechnologyAssociation942019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYENVIRONMENTALIMPACTOFLENOVOOPERATIONSENERGYANDCLIMATECHANGELenovorecognizesthathumanactivitiesarecontributingtoclimatechangeandconcurswiththefindingsofcurrentclimatescienceasdescribedinthelatestassessmentreportfromtheIntergovernmentalPanelonClimateChange(IPCC).Lenovoalsorecognizesthatifleftunchecked,currenttrendsinclimatechangepresentseriouseconomicandsocietalrisksandagreesthatspecificactionsareneededtostabilizeatmosphericgreenhousegaslevelsandholdglobalaveragetemperaturestoacceptableincreases.Weareworkingbothinternallyandexternallytominimizeandmitigateclimaterisks.Lenovoiscommittedtocontinuallyreducingtheglobalcarbonfootprintofallofitsbusinessactivities.Lenovohasdemonstrateditscommitmentby:•ImplementingacorporateClimateandEnergyPolicy•Executingalong-termcomprehensiveClimateChangeStrategy•Settingcorporate-wideobjectivesandtargetswhichsupporttheabovePolicyandStrategy•Showingcontinualyear-to-yearprogressinachievingtheEMSobjectivesandtargetsTodriveclimateactionsexternaltoLenovo’soperations,wemonitor,supportandinsomecasesparticipateinthedevelopmentofvoluntarycarbonreductionprograms,climatechangeregulations,renewableenergyportfoliostandardsandproductcarbonfootprintandlabelingrequirementsbothgloballyandregionally.Reducingenergyconsumptionandassociatedcarbonemissionsistheprimaryfocusofourclimatechangeprogramsandstrategy.ThemanagementofenergyandcarbonemissionsreductionactivitiesandprogramsarecarriedoutwithinthescopeofLenovo’sglobalEMSandbeyond.Lenovoisachievingitsenergyandcarbonmanagementobjectivesandtargetsthroughimprovementsinoperationalandlogisticalenergyefficiency,reductionsinenergyconsumption,switchingtorenewableenergysourceswherepracticable,supportinganincreaseinrenewableenergyavailableviathegrid,andpurchasingrenewableenergycommoditiesandcarbonoffsets.Overthepastseveralyears,Lenovohasexperiencedorganicgrowthinconjunctionwithoperationalconsolidation.Inaddition,significantstructuralchangesandexternalmarketfactorshavepresenteduniquechallengestostayingonthecourseofachievingourclimatechangegoals.Weovercamethesechallengesbyengaginginternalteamsandexternalpartnerstoidentifyopportunitiestoreduceenergyconsumptionandcarbonemissions.Theidentifiedopportunitieswerethensubjectedtoaprojectapprovalhierarchythatfavorsenergyefficiencyfirst,useofrenewableenergysecondandfinally,thepurchaseofrenewableenergycommoditiesorcarbonoffsets.ThisprocesscontinuestoleadtotheidentificationandimplementationofprojectsthatsupportLenovo’sgoalofmaintainingasustainablebalanceamongsocial,economicandenvironmentalimpacts.952019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYVisitwww.lenovo.com/climateformoreinformationonLenovo’sClimateandEnergyPolicy,strategy,objectivesandtargets.OPERATIONALENERGYEFFICIENCYGiventhatoneofLenovo’smostsignificantenvironmentalaspectsisemissionsassociatedwithenergyconsumption,Lenovo’sgoalistocontinuallyimprovetheenergyefficiencyofitsoperations.Lenovoinitiativesforenergyreductionincludeactivitiessuchasinstallationoflow-energylightingandrelatedelectricalequipment,energy-efficiencyimprovementstoHVACsystems,eliminatingorimprovingusageoftransformersandaircompressors,manufacturingareaoptimization,manufacturing-lineoptimization,improvingcomputerserverroomenergyefficiency,consolidationofoperations,andemployeeeducation.Formoreinformationonourperformancerelativetoenergyefficiency,pleaseseetheEnergyReductionsinOperationssection.RENEWABLEENERGYPhotovoltaicSolarPanelsLenovoiscommittedinreducingourglobalcarbonfootprintbymeetingourtargetsforabsolutereductionsofGHGemissionsfromouroperationsandbydrivingsimilarreductionsinLenovo’ssupplychainandproductusage.Insupportofthiscommitment,wecontinuetoexpandouruseofsolarenergy.Lenovo’srenewableenergyinstallationsincludesolarhotwatergenerationfacilitiesinBeijingandsolarelectricgenerationplantsinHefeiandWuhan,ChinaaswellasWhitsettandourheadquartersinMorrisville,NC,USA.Bytheendofthefiscalyear,thecurrentsolarcapacityofalltheseprojectswasapproximately16megawatts(MW).Tocontinueexpansioninthisarea,wehavebegunthepre-engineeringworktostartsolarinstallationsatourfacilitiesinJaguariuna,BrazilandMonterrey,Mexico.Thesetwoprojectswilladdapproximately14MWofnewsolarelectricgenerationcapacity.Lenovohasatargetofachieving30MWofownedorleasedrenewableenergygenerationcapacityglobally.Atthetimeofthisprinting,theimpactofCOVID-19mayimpacttheconstructionoftheseprojectsontheschedulewehadoriginallyset.Uponcompletionofthesetwoprojects,wewillhavetheabilitytogenerate30MWofon-siterenewableenergy.In2019,LenovowasagainrecognizedbytheU.S.EnvironmentalProtectionAgency(EPA)asaTop30Tech&TelecomGreenPowerPartnerforitspurchaseofrenewableenergy.Pleaseclickhereformoreinformation.RENEWABLEENERGYCOMMODITIESANDCARBONOFFSETSWhereactualdirectenergyreductionsoruseofrenewableenergysourcesarenottechnicallyoreconomicallyfeasible,LenovochoosestopurchaseRenewableEnergyCredits(REC),InternationalRenewableEnergyCredits(I-REC),GuaranteesofOrigin(GO)andcarbonoffsets.ForFY2019/20Lenovopurchasedrenewablecommoditiesthatsupported100percentrenewableenergyprojectsinBrazil(wind),China(wind),India(wind),Mexico(wind),Europe(hydro)andtheUnitedStates(wind).Also,LenovoacquiredcarbonoffsetsfromawindfarmprojectinChina.962019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYCLIMATECHANGERISKS/OPPORTUNITIESMANAGEMENTClimatechangerisksandopportunitiesareidentifiedandevaluatedaspartoftwomainprocesseswithinLenovo’sbusinessmanagementsystems.Theseincludeourglobalriskregistrationprocessandourannualenvironmentalsignificantaspectevaluation.Thesetwoprocessesareconnected,meaningthatifclimatechangerisksareidentifiedintheglobalriskregistration,theyareconsideredintheenvironmentalaspectsanalysis—andviceversa.1.Lenovo’sformalriskmanagementprocessincludes,amongothersustainabilityfactors:environmentalriskcategoriessuchasenvironmentalincidents,catastrophicweatherconditions,supplychaindisruptionsandotherelements.EachmajorbusinessunitandfunctionisrequiredtoidentifyrisksandassesstheirimpactsonLenovo’sstrategyexecution,thendevelopmitigationplansforselectidentifiedrisks.ThisprocessismanagedbyLenovo’sEnterpriseRiskManagementteam.2.Energyconsumption,theassociatedgreenhousegasemissionsandclimatechangeareidentifiedassignificantenvironmentalaspectsandimpactsforLenovo.Assuch,associatedrisksandopportunitiesareevaluatedandprioritizedannuallybasedonLenovo’ssignificantaspectmethodologyinaccordancewiththerequirementsofourenvironmentalmanagementsystem.Pertheserequirements,climatechangeisevaluatedrelativetoitsactualandpotentialinfluenceontheenvironmentandthebusiness.ThisprocessismanagedbyLenovo’sGlobalEnvironmentalAffairsteam.Theresultsofthisevaluationareconsideredintheriskregistrationprocessdescribedabove.Scope3Upstream•Purchasedgoodsandservices•Capitalgoods•FuelandenergyrelatedactivitiesnotincludedinScope1and2•Transportationanddistribution•Wastegeneratedinoperations•Businesstravel•Employeecommuting•Leasedassets•InvestmentsScope3Downstream•Transportationanddistribution•Processingofsoldproducts•Useofsoldproducts•End-of-lifetreatmentofsoldproducts•Leasedassets•FranchisesReductionby40%Viaenergyefficiency,renewableenergy,renewableenergycommoditiesandcarbonoffsetsFY2009/10toFY2019/20N2OCH4CO2SF6HFCsNF3PFCsNotes:Scope3categoriesinboldblackaretrackedandevaluatedandinsomecasesactionsarebeingtakentodriveemissionsreductionsScope3categoriesinbluearenotrelevanttoLenovoScope1—directemissionsfromoperationsthatareownedorcontrolledbyLenovoScope2—indirectemissionsfromthegenerationofpurchasedoracquiredelectricity,steam,heatingorcoolingconsumedbyLenovoLenovoGHGEmissions972019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYAdditionally,Lenovo’sESGmaterialityassessmentidentifiesenergyandemissionsasmaterialtopicsthatLenovoshouldprioritizeandfocusoninourenvironmentalprograms.Also,insupportofUNSustainableDevelopmentGoal(SDG)13—ClimateAction;oneofLenovo’sESGpillarsincludesaclimateactiongoal.MoredetailsaboutourmaterialityassessmentandhowourgoalsalignwiththeSDGsareavailableinSection2.0.AsademonstrationofLenovo’slong-termapproachtoriskmanagementinthisarea,inMay2014,Lenovo’sBoardofDirectors(BOD)andExecutiveCommittee(LEC)actedtoincreaseLenovo’sGHGemissionsreductioncommitmentfrom20percentto40percentbyFY2019/20,relativetoFY2009/10.Wemetthiscommitmentthroughinvestmentinenergyefficiency,on-siterenewablegeneration,andrenewableenergycommodities.Scope1&2GHGEmissionsTargetAchievedviaahierarchicalapproachofenergyefficiency,renewableenergy,renewableenergycommodities.FY2009/10FY2019/20ReductionWehaveidentifiedanddevelopedourthird-generationtargetsforafter2020.WereviewedandevaluatedScienceBasedTargetsInitiative’s(SBTi)methodologytodeterminethebestapproachforLenovothatwillalignwiththescience-basedreductionpathwaysforlimitingglobaltemperaturerise.InAugust2018,wesubmittedLenovo’sscience-basedtargetscommitmentlettertotheScienceBasedTargetsinitiativewhichindicatedthatwewouldworktosetascience-basedemissionsreductiontargetinthenext24months.Lenovo’scommitmentwasrecognizedonwww.sciencebasedtargets.org.WecommittedtosubmitLenovo’sscience-basedtargetsproposalofemissionsreductiontargetsforScope1,2and3forofficialevaluationbytheScienceBasedTargetinitiativebyDecember31,2019.Wepartiallyaccomplishedthatbysubmittingourproposalforanunofficialvalidation.40%982019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYInJune2020,followingthecloseofFY2019/20,LenovoreceivedformalapprovalofournextgenerationofclimatechangegoalsfromtheSBTi.WhilethesegoalswerenotreleaseduntilFY2020/21,wefeltitwasimportanttoincludetheminthisreportasmuchoftheworktoestablishthesetargetswasdoneinFY2019/20.Thefinalapprovedtargetsareasfollows:Baseyear:FY2018/19Targetyear:FY2029/30LENOVOEMISSIONSREDUCTIONTARGETSReduceabsoluteScope1+Scope2GHGemissions50%ReduceScope3GHGemissionsfromuseofsoldproducts25%percomparableproduct(fornotebooks,desktopsandservers)ReduceScope3GHGemissionsfrompurchasedgoodsandservices25%permillionUS$procurementspendReduceScope3GHGemissionsfromupstreamtransportationanddistribution25%pertonne-kmoftransportedproduct992019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYInadditiontoLenovo’slong-termGHGemissionstarget,Lenovosetandachievedthreeyear-to-yearenergytargetsinFY2019/20.Thethreeenergytargetsaresummarizedbelow.GlobalEnergyTargetsStatus:Allthreewereachieved.EnergypurchasesfromrenewableenergysourcesFY2018/19FY2019/20IncreaseEnergyintensityindexatmanufacturingsitesFY2018/19FY2019/20DecreaseElectricityintensityatR&DandofficesitesFY2018/19FY2019/20DecreaseLenovo’scommitmenttoaddressingclimatechangeextendstosupportingglobalinitiativessuchasWeMeanBusiness,acoalitionofbusinessesandinvestorssupportingatransitiontoalowcarboneconomy.Lenovo’scasestudyonourclimatechangeactionshasbeenfeaturedontheWeMeanBusinesswebsite.1002019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYMINIMIZINGTHEENVIRONMENTALIMPACTOFLENOVO’SLOGISTICSLenovo’sGlobalLogisticsteamrecognizesthatbyenhancingfreightmanagementpracticesandconsideringtheenvironmentalimpactoftheirdecisions,significantopportunitiesexisttoreducecarbonemissions.Thekeytothisprincipleisreduction,notjustoff-setting.OptimizationisafundamentalelementofLenovo’slogisticsstrategy.Aswegrowandadoptsustainablefreightpractices,wesetaggressivetargetsthatchallengetheinternalpracticesofourpartners.Bydevelopinglighterandsmallerproducts,morecompactandre-usablepackagingmaterials,bulkshippingalternatives,andregionaldistributionfacilitiesthatallowforlighterloads,loadconsolidationandfulltruckloadshipments,weenableourlogisticspartnerstoshipourproductsresponsibly.Lenovo’slogisticsfocusoverthelastyearandinto2020include:•Modeoftransport•Consolidationandutilization•Networkoptimization•Packaging(size,weight,dimensions,recyclable)•Technologyandautomation•RewardandrecognitionforourpartnersOuraccomplishmentsinFY2019/20includedthefollowing:•LenovousestheGLECFrameworkandpartnerswithEcoTransittocalculateandreportemissionsfromproducttransportationinitsESGreportandtoCDP.Thereportingscopeincludesallinternationalair,oceanandrailtransportationgloballyaswellasdomestictransportation.•FollowingthecloseofFY2019/20inJune2020,LenovoreceivedformalapprovalofournextgenerationofclimatechangegoalsfromtheSBTithatincludedatargetforlogisticstoreduceourScope3producttransportationGHGemissionsby25percentpertonoftransportedproductbyFY2029/30fromaFY2018/19baseline.•Lenovorequiresallglobaltier-onecarrierstoreportmonthlyonemissionsrelevanttoactualsandtobaseline,reductiontargetsandcorrespondingactionplansforimprovement.•InChina,logisticsimplemented100percentelectricforkliftsincentraldistributioncenters,andtheuseofelectricforkliftsinregionaldistributioncentersandwarehousesincreasedfrom11to14percentcomparedwithFY2018/19.TheusageofelectrictrucksforfinalmiledeliveryinChinafromregionaldistributioncentersincreasedfrom14to18percentcomparedwithFY2018/19;fordomesticlong-haulshippinginChina,approximately67,467cubicmeters(8.5percentofLenovo’sthetotaltransportationvolumeinChina)wereshippedbyrailwhichrepresentedanincreaseof1.5percentcomparedwithFY2018/19.1012019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY•TheGlobalLogisticsteamproactivelyfavoredrailtransportationforshipmentsfromChinatoEurope,shippingover3,300containerstoEuropebyrail,whichisapproximatelyan18percentincreasecomparedwithFY2018/19.•Createdclosedloopsforrecyclablepackagingandintroducedenhancedin-transitmeasurementofemissionsthroughGPS.•Lenovo’slogisticspartnershavecontractualrequirementsembeddedintotheiraccreditationandprocurementprocesseswhichincludeademandtoreportandreduceemissions,aswellasarequirementtojoinandactivelyparticipateinglobalorregionalprogramsmanagedbyorganizationssuchasSmartFreightCentre,GreenFreightAsia,USEPASmartWayandothers.•LenovoearnedaleadingroleintheSmartFreightAllianceChina,anindustrybodymadeupofmultinationalsandkeystakeholdersanddedicatedtodrivingsustainabilitypolicyandactioninChina.•Pilotedtheuseofplywoodpalletswhichimprovedspaceutilizationandresultedincontainerutilizationrateimprovementfrom74percentto83percentonaverage.Lenovowillfurtherexploreotheropportunitiesforplywoodpallets.LenovoisafoundingboardmemberofGreenFreightAsia(GFA),anon-profitorganizationfocusedonreducingfuelcostsandemissionsfromfreightinAsia.InJanuary2020,LenovoChinawasthefirstshippertoeverearnthe3-LeafCertificationbyGFA,andLenovoIndiaearnedthe2-LeafCertification.LenovoisanapprovedpartneroftheU.S.EPASmartWayprogram,whosemissionistoprotecthumanhealthandtheenvironment.SmartWayhelpsLenovodemonstrateitscommitmenttoreducingtheenvironmentalimpactsoffreighttransportation.InDecember2019,LenovowasrecognizedasaSmartWay2019HighPerformer.Thisinformationisavailableat:https://www.smartfreightcentre.org/en/news/lenovo/1428/.1022019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYFY2019/20ENVIRONMENTALPERFORMANCEEnergyReductionsinOperationsImprovingoperationalenergyefficiencyisafundamentalelementofLenovo’sstrategytomeetitsGHGreductiontargets.Sinceestablishingclimatechangeobjectivesandtargets,Lenovohasimplementedmorethan190operationalenergy-efficiencyprojectsworldwide.Allsitescontinuetostrivetoidentifyandimplementenergy-efficiencyprojectsandevaluatetheopportunitytoemploytheuseofrenewableenergy.Throughouttheorganization,theseactivitiesaredrivenbysiteenergychampionswholeadenergyteamsthathelpimplementenergyreductionprojects.Someoftheprojectsimplementedduringthefiscalyearincluded:•EnergyefficientlightingsystemsinBeijing,ShenzhenandXiamen,China,andinGunmaandYonezawa,Japan•RetrocommissioninginNorthCarolina,USA•ImprovementsinHVACandaircompressorefficiencyinShenzhen,China,Taipei,Taiwan,andGunma,Japan•InstallationoftimeandtemperaturecontrolsinBeijing,ChinaandTaipei,TaiwanDuringFY2019/20,weexpandedourEnergyManagementSystem(EnMS)totheEastpartofourheadquartersinBeijing,ChinaandmanufacturingplantinHefei,ChinaandobtainedISO50001certifications.WedevelopedagloballeveltargetforLenovo’sISO50001certifiedlocationsasfollows:Reducetotalenergyconsumptionbyatleast1.5percentinnextthreefiscalyears,relativetotheFY2019/20energybaseline.Additionally,weareplanningtoimplementEnMSatourmanufacturingplantinWuhan,Chinaduringtheupcomingyear.Lenovo’senergyconsumptionforthelasttwofiscalyearsisdetailedbelow.PleaseseeSection8.0ConsolidatedMetricsforhistoricalenergyconsumptiondata.EnergyConsumption(gigajoules—GJ)FY2018/19FY2019/20Total1,243,9991,180,071A.Lenovo’sGlobalScope1,2,3GHGEmissionsLenovo’sScope1and2(location-andmarket-based)CO2eemissionsinventoryfromthelasttwofiscalyearsisdetailedbelow.Lenovo’sScope3CO2eEmissionsInventoryfromourlasttwofiscalyearsisalsobelow.PleaseseeSection8.0ConsolidatedMetricsforScope1,2(location-andmarket-based)and3emissionsforLenovo’sglobaloperationsandvaluechain.GHGEmissions(metrictonneCO2equivalent—MTCO2e)FY2018/19FY2019/20Scope16,0317,766Scope2(location-based)201,321162,597Scope2(market-based)26,02923,852Scope1&2(location-based)207,352170,363Scope315,805,12017,531,1791032019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYLenovo’sscope1absoluteemissionsincreased,whileLenovo’sscope2absoluteemissionsdecreasedduringFY2019/20period.Lenovo’semissionsinventory,normalizedbytotalrevenue,employeepopulation,floorareaandunitofproductiondecreasedincomparisonwiththepreviousfiscalyear.B.Lenovo’sGHGEmissionsObjectivesandTargetsDuringFY2019/20,Lenovoachieveda92percentemissionsreductionrelativetoFY2009/10.TheScope1andScope2reductionswereaccomplishedbyimplementingenergyefficiencyprojects,usingsolarsourcesatsitesandpurchasingrenewableenergycertificatesfromrenewableprojectsintheUnitedStates,internationalrenewableenergycertificatesfromrenewableprojectsinBrazil,China,IndiaandMexico,GuaranteesofOrigininEuropeandcarbonoffsetsinChina.EnergyandGHGemissionsdataforallelevenyearsincludedinourreporting(beginningwiththebaselineyearFY2009/10)wasthird-partyverified.ClickheretoseetheFY2019/20GHGandEnergyVerificationStatements.LenovobegandisclosingGHGemissions,climatechangestrategiesandclimatechangerisksandopportunitiesassessmentsthroughthevoluntarypublicreportingsystemCDP(formerlyCarbonDisclosureProject)in2009.Basedonour2019CDPClimateChangequestionnaire,LenovowasratedattheLeadershipLevelwithascoreofA-.Additionally,wereceivedascoreofAonthe2019CDPSupplyChainsurveyreachingtheLeadershipLevelinSupplierEngagementRating,alongwithbeingfeaturedontheSupplierEngagementLeaderBoard.Lenovo’sannualGHGdisclosuresarepubliclyavailableatwww.cdp.net/reports.C.EmissionsTradingSystemLenovowasselectedforapilotemissiontradingsystem(ETS)inBeijing,China.ItwasdeterminedbytheBeijingMunicipalauthorityin2013thatLenovoBeijingisasignificantenergyconsumptionenterprisesinceweconsumedmorethan5,000metrictonnes(MT)coal-equivalentelectricity(CO2emissionsover10,000MT/year)andassuchmustmeetanemissionstradingrequirementforourBeijingsites.OurserverplantinShenzhenisalsolistedasasignificantcarbonemissionenterprisebutreleasedemissionsdonotexceedtheallocatedallowancesoreductionsarenotrequired.LenovoiscloselymonitoringotherprovinceswherethispilotprogramhasbeenimposedsinceoursitesinShanghai,Huiyang,Xiamen,ChengduandWuhancouldbeimpactedinthefuture.ThenewlyimplementedChinanationalETScovershighenergyconsumptionindustriessuchaspower,cementandsteel.BecauseLenovoisclassifiedasanITindustry,theChinanationalETSrequirementshavenotbeenimposedonoursitesinChinaatthistime.LenovohasaclimateandenergypolicyandstrategyinplaceandisworkingonreducingourcarbonemissionsgloballyaswellasatourBeijingsites.Primaryactivitiesinsupportofthisgoalincludeestablishingacomprehensiveenergy/carbonsystemforBeijingsitesincludingenergyefficiencyandrenewableprojectidentificationandimplementation(e.g.,optimizingequipmentcontrolsystems,installingenergy-efficientlightingsystems,andinstallingsolarhotwatersystems),implementingenergyverificationandenergymanagementauditandpurchasingcarbonoffsets.ThisisthesixthyearforLenovotobeapartofthisschemeandsinceourbusinessisdevelopingconstantly,weareexpectinganeedtopurchaseallowances.Theaboveimplementedenergyefficiencyandrenewableenergyprojectswillhelpusmeettheemissionsreductionsrequirements.1042019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYNonHazardousWasteTargetTarget:Recyclingrate>90%(+/–5%)Actual:88.6%Status:TargetwasachievedManagingHazardousWasteLenovooperationsgenerateminimalquantitiesofhazardouswaste.Hazardouswastegeneratedatoperationalfacilitiesincludesoils,coolants,organicsolvents,batteries,fluorescentlightbulbsandballasts.AllaredisposedofinaccordancewithlocalenvironmentalregulationswithreputablevendorsthatareapprovedthroughastringentLenovoauditprocess.DuringFY2019/20,Lenovoneitherimportednorexportedanyhazardouswaste.Duringthisreportingyear,therewerenosignificantspills.Lenovo’shazardouswastegenerationisincludedbelowforthepasttwofiscalyears.OperationalHazardousWasteGenerationFY2019/2074MTFY2018/1966MTClickherefortheFY2019/20WasteVerificationStatement.PleaseseeSection8.0ConsolidatedMetricsforhistoricalnonhazardousandhazardouswastedata.FuelSpillTherewasanaccidentalreleaseattheLenovofacilityinEssen,Germany.Theincidentinvolvedthespillofapproximately0.5litersoffuelonapavedparkinglot.Thespillwascontainedandcapturedwithoutoffsiteimpact.Duetothenatureandsizeofthespilltherewasnorequirementtonotifyaregulatoryauthority.OTHERAIREMISSIONSLenovoprohibitstheuseofozone-depletingsubstancesinourproductsandmanufacturingprocessesexceptinHVACandfire-suppressionequipmentaspermittedbylaw.Ozone-depletingsubstancesusedinHVACandfire-suppressionequipmentaremanagedinaccordancewithlocalregulations,andintentionalreleasesareprohibited.Lenovorequiresthereportingofreleasesofchemicalsubstancesasanenvironmentalincident,includingunintentionalreleases.DuringFY2019/20,therewerenoincidentsofrefrigerantreleases.Lenovodoesnothavesignificantdirectairemissionssuchasnitrogenoxides(NOx)andsulfuroxides(SOx).Inaddition,Lenovohasnowetchemicalorindustrialprocessesthatusevolatileorganiccompounds(VOC)andthushasnopointsourcesofVOC.HouseholdandcleaningproductsthatcontainsmallquantitiesofVOCareusedatsomeofourfacilitiesbutassociatedfugitiveemissionsareminimalandarenotquantified.OPERATIONALWASTEMANAGEMENTManagingNonHazardousSolidWasteOneofLenovo’sprimaryenvironmentalobjectivesforoperationalfacilitiesinvolvesminimizingsolidwasteandmaximizingrecyclingandreuse.LenovomanufacturingandR&Dfacilities,andsomelargeofficelocationsworldwide,hadatargettorecycleover90percent(+/-5%)andachievedthistargetwithareuse/recyclingrateof88.6percentduringFY2019/20.Lenovo’stotalnon-hazardoussolidwastegenerationisincludedbelowforthepasttwofiscalyearsalongwiththedispositionbreakdownforFY2019/20.OperationalNonHazardousSolidWasteGenerationFY2019/2043,023MTFY2018/1943,439MT1052019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYWaterResourceLenovorecognizesthatwaterisavital,sharedresourceandacceptsthatwaterriskstocommunitiesandbusinesseswillcontinuetoincreaseastheglobalpopulationgrowsandclimatechangeaffectsthedistributionandavailabilityofwater.Giventhis,Lenovoisdedicatedtomaintainingoperationalcontrolofwaterusewhiledevelopingnewwaterstewardshippracticestonavigatethechanginglandscapeofwaterrisks.ThisincludesstrivingtobetterunderstandLenovo’sdirectwateruseinthecontextofthelocalriverbasinswhereweoperate,wateruseandriskwithinthecompany’svaluechain,andwaystominimizeourimpactsto,andultimatelyimprove,thewatersecurityoftheriverbasinsinwhichweoperate.Asafirststep,inFY2019/20,Lenovoanalyzedwaterrisksacrossourfootprintusingpubliclyavailablewaterrisktools(WorldResourcesInstitute’sAqueductandWWF’sWaterRiskFilterTool)andsupportedtheresultswithactualexperiencesthroughasurveyoftheEnvironmentalFocalPointsatthemanufacturinganddevelopmentfacilitiesaboutwaterrisksandopportunities.Lenovohasundertakentheseactivestobetterpositionthecompanytonavigatethegrowingwatercrisisandpromotecleanwateraccessforall.WithinLenovo’sdirectoperations,theprimaryuseofwaterisforwateraccess,sanitation,andhygiene(WASH)servicesfortheapproximately60,000employeesworkinginLenovofacilitiesaroundtheglobe.Waterusevarieswithemployeeheadcountfromlocationtolocationwiththecompany’slargestfacilitiesusuallywithdrawinganddischargingthemostwater.Thevastmajorityofwaterissuppliedbythirdpartiesanddischargedbacktothirdpartiestobetreatedtolocalstandards.AspartofLenovo’sEMS,waterwithdrawalanddischargearetrackedforthemostcriticalandintensivelocations.Thisincludesallourmanufacturinganddevelopmentfacilitiesandmostlargeofficesites.Wheneverfeasible,directmeasurementsaretracked.Whendirectmeasurementsarenotavailable,calculationsandestimationsofwithdrawalanddischargevolumesareused.ClickheretoseetheFY2019/20WaterVerificationStatement.PleaseseeSection8.0ConsolidatedMetricsforhistoricalwaterusedata.GlobalWaterUse(megaliters—Ml)FY2018/19FY2019/20Withdrawal1,3911,307Discharge1,2561,183Consumption135124UnderLenovo’sEMS,anannualglobalwatertargetisalwayssetandmonitored.Inaddition,individualfacilitiesoftensetfacility-specificwatertargets.InFY2019/20,theglobaltargetwastomaintainoperationalcontrolofwaterbykeepingtotalwaterwithdrawalanddischargevolumeswithin+/-5percentofthepreviousyear.Weachievedthistargetwithwaterwithdrawalvolumeof94percentandwaterdischargevolumeof94percentofthepreviousyear.InFY2019/20,sevenfacilitiessetfacility-specifictargetsforeithertotalvolumeorintensity(volumeperperson).Allsevenfacility-specifictargetsweremetorexceededinFY2019/20.FY2019/20WaterUseTargetsTargetFY2018/19FY2018/19+/–5%–6%FY2019/20ActualWithdrawalDischargeFY2018/19–6%Status:TargetwasachievedFY2019/20FY2019/20WhileLenovohasminimalwetprocesses,Lenovoappreciatestheimportanceofadequatequantitiesofsufficientqualitywatertooursupplychainpartnerswithwetprocesses,particularlythesemiconductorindustry.Lenovocurrentlycollectswaterusedatafromourkeysupplierstobetterunderstandwaterusewithinourvaluechain.1062019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYENVIRONMENTALLYCONSCIOUSPRODUCTSLenovohaslongbeencommittedtodesigningandbuildingdurable,energy-efficientproductsthatareenvironmentallyconscious.OurcomprehensiveEnvironmentallyConsciousProductsProgram,launchedin2005,supportsLenovo’sgoaltodriveleadershipingreenproductsyearafteryear.Asweexpandourtransitiontoacirculareconomy,theEnvironmentallyConsciousProductsProgramisanimportantaspectofourcirculardesignstrategy.SupportedbyLenovo’sGlobalEnvironmentalAffairsteam,theprogramisimplementedbyanetworkofEnvironmentallyConsciousProductengineersandgreenproductteamswithineachbusinessunit.GREENCERTIFICATIONFROMAROUNDTHEGLOBEProductMaterialsLenovo’sproductdevelopmentprocessisfocusedonintegratingenvironmentallypreferredmaterialsintoourproducts.Incorporatingpost-industrialrecycledcontent(PIC)plastics,post-consumerrecycledcontent(PCC)plasticsandclosedlooppost-consumerrecycledplastics(CLPCR)continuestobeinstrumentaltoourdevelopmentstrategyandtransitiontoacirculareconomy.Usingtheseengineeredplasticsnotonlysavesthenaturalresourcesandenergythatwouldhavegoneintomanufacturingnewplastics,butalsodivertsthesematerialsfromlandfills.OurincreaseduseofCLPCRishelpingtosustainthedemandandkeepplasticmaterialsfromITproductsincirculation.TheseenvironmentalbenefitsareachievedwhilestillcreatingaproductthatmeetsLenovo’shighperformancestandards.1072019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYRecycledPlasticsStartingin2007,asnewgradesofrecycledplasticswithPCCbecameavailable,Lenovo’sproductdevelopmentteamsbegantousetheseenvironmentallypreferredmaterialstosatisfycorporateenvironmentalobjectivesandtargetsandmeetnewcustomerrequirements.Wecurrentlyusepost-consumerrecycledcontentinlaptops,desktops,workstations,monitors,andaccessoriesandareintroducingclosed-loopprocessinmoreproductseachyear.In2019,LenovoexpandedtheuseofCLPCRto66products,upfrom21productsthepreviousyear.ThisyearLenovoalsousedCLPCRinaLenovonotebookapplicationforthefirsttimeinourX1Carbon7thgenerationnotebook.UsingPCCinITproductspresentssignificantchallengesduetotheuniquestructural,performanceandcosmeticrequirementsassociatedwiththeseapplications.Toovercomethecontinuingchallengesofusingrecycledcontentin2016201720182019•AllproductBusinessUnits(BUs)requiredtousePCCineveryproduct•Allnewlyreleasedproductsshallcontainminimumof2%or10%PCC•BeganusingCLPCRintwoproducts(displayandAll-in-Onedesktop)•QualifiednewgradesofCLPCRforadditionalresinchemistriesandsuppliers•ExpandeduseofCLPCRto21products(addedkeyboards)•ExpandeduseofCLPCRto66additionalproducts•1stUseofCLPCRinLenovonotebookapplication(X1Carbon7thGeneration)•Desktopandvisualmodelswith>25%CLPCRbytotalproductweightthedesignandmanufactureofsmartconnecteddevices,especiallynotebooks,tabletsandsmartphones,Lenovo’steamofengineersworkscloselywithoursupplierstodevelopandqualifynewgradesofplasticresinspreviouslyunavailabletotheITindustry.ThesematerialsreceiveenvironmentalandperformancequalificationspriortotheirapprovalanduseinLenovoproductapplications.ForCLPCR,Lenovo’sresearchanddevelopmentteamsworkwithmaterialsuppliersandathirdpartycertificationbodytobuildLenovo’sCLPCRsupplierandmaterialprocess,includingthe“ApprovedRecyclingStandard”,the“QualityAssuranceOperationRequirements”,andthe“RecoveryRatio”tovalidatetheirsourcesofwasteandcontrolprocessesusingahierarchicalwaste-producttraceabilityscheme.MilestonesforLenovofromthepastfouryearsinPCCusageincludes:1082019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYUsageofPCCinProductsReleasedinFY2019/20RecycledContentUsagetoDateSinceearly2005,Lenovo’stotaluseofrecycledplasticsinproductshasbeenover240millionpounds(gross)containingPIC,PCCand/orCL-PCR,withnetPCCofover110millionpoundsandnetCL-PCRofmorethan12millionpounds.In2019,Lenovo’suseofplasticscontainingrecycledcontentwasnearly17millionpounds(gross)withnetCL-PCRofover12millionpounds.ThesenumbersindicateadeclinethatreflectsLenovo’sdecreasinguseofplasticsoverall,whichisresultingfromsuccessfuleffortstomakeproductsthinnerandlighter.ForLenovo’srecycledcontentusagetargetsforFY2020/21,pleaseseeObjectivesandTargetswithinSection8.0.UseofPlasticsContainingRecycledContentCY201917,022,768lbsCY201817,102,170lbsUseofRecycledPlasticsinProductsCY201912,876,734lbsCY201812,207,609lbs1–10%PCCSelectNotebooksDesktopsAIOAccessories>30%PCCThinkCentreM720e>50%PCCThinkVisionT34w-20ThinkVisionT25d-10/P25d10ThinkVisionQ24h-10ThinkVisionG24-10ThinkVisionT2054p1092019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSupportingaPrecautionaryApproachLenovo’scompany-wideenvironmentalstandardsandspecificationsrequirethedesignersofallLenovoITproductstoconsidercertainenvironmentallyconsciousdesignpracticestofacilitateandencouragerecyclingandminimizeresourceconsumption.Ourapproachistouseenvironmentallypreferablematerialswheneverapplicable.Inadheringtothisprecautionaryapproach,Lenovorestrictstheintentionaladditionofmaterialsthatarepotentiallyconcerningwheneconomicallyandtechnicallyviablealternativesexist.Theserestrictionsmayalsoincludeimplementingconcentrationlimitsforincidentaloccurrences.Formaterialswhereeconomicallyandtechnicallyviablealternativesdonotexist,Lenovocollectsdataonusageabovethedefinedconcentrationlimitforreportingtocustomersandstakeholderswhileactivelysearchingforenvironmentallypreferablesubstitutes.Wealsoexpectourpartnersandsupplierstodemonstratethesamecommitmenttoenvironmentallysoundpractices.Clickhereforoursupplierspecifications.Lenovorestrictstheuseofenvironmentallysensitivematerialsinourproducts.Thisincludestheprohibitionofozone-depletingsubstancesinallapplications;therestrictionontheuseofpersistentorganicpollutants(POPs)undertheStockholmConvention;andtheeliminationofmaterialscoveredunderEuropeanUnion(EU)RestrictiononHazardousSubstances(RoHS)andRegistration,Evaluation,AuthorizationandRestrictionofChemicals(REACH),evenbeyondthosejurisdictionswhereregulatoryrequirementsexist.Lenovo’simplementationstrategyandrequirementsareconsistentwiththerequirementsspecifiedintheEU’sRoHSDirectiveandREACHRegulation.Lenovosupportsphasingoutbrominatedflameretardants(BFRs)andPVCandiscommittedtodrivingitssupplychaintowardthisgoal.LenovohasmadesignificantprogresstowardtheeliminationofBFRandPVCfromoursystems.Wecontinuetofocusoneliminatinghalogenfromourtop-sellingproductsandacrossasmanycommoditiesaspossible.Amongourachievements:•Lenovohasalsomadesignificantprogressinphasingouthalogeninmanycommoditiesacrossseveralproductlines,includingallplasticenclosures,mostcomponentsandconnectors(withtheexceptionofprintedboardlaminates);allmechanicalplasticpartssuchasproductcovers,housingsandbezels;manyharddiskdrives,opticaldiskdrives,solidstatedrives;LCDscreens;memory,CPUs,chipsets,andcommunicationcards;andothercommoditieswithofferingsthatmeettheiNEMIdefinitionoflowhalogen.•Plasticcomponentsover25gramsmeetlowhalogenrequirements(Br<1000ppm,Cl<1000ppm),excludingprintedcircuitboards,cables,wiring,fans,andelectroniccomponents.•EliminationofmostBFRandPVCfromThinkPadnotebooks.BFRsareusedinpowercords,cables,ACadapters,planarASMs,subcards,connectorsandsomemodularparts.PVCisonlyusedinpowercordsandcables.Inaddition,allThinkPadnotebookshavelowhalogenprintedcircuitboards.•AllLenovocommercialmonitorsmeettheiNEMIdefinitionoflowhalogenexceptfortheirPCBAandexternalcablesthatarelessthan25grams.1102019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYLenovohascompletelyphasedouttheuseofBFR/PVCinallmechanicalplasticparts(suchasexternalcovers,housings)acrossallLenovoproductlines.LenovocurrentlyprohibitsthefollowingfromintentionaladditiontoanyLenovoparts:•PolybrominatedBiphenyls(PBBs)•PolybrominatedDiphenylEthers(PBDEs)•Deca-BrominatedDiphenylEthersLenovoplanstouseadditionalBFR-freeandPVC-freepartsandmaterialsacrosstheThinkandIdeafamilyofproductsasacceptablealternativematerialsbecomeavailable,workingtowardthegoaltophaseouttheuseofthesematerialsacrossallnewlyintroducedproducts.WecontinuetoworkwithoursupplierstopilotnewBFR-andPVC-freeapplications.Lenovorecognizesthatthephase-outofthesematerialsisdependentupontheavailabilityofsuitablealternativesthatmeetLenovo’stechnological,quality,environmental,healthandsafetyrequirements.Lenovohasidentifiedalistofmaterialsandsubstancesofenvironmentalinterest.Thesesubstancesmaybecandidatesforfurtherrestrictionsinthefuture.LenovoholdssuppliersaccountableforreportingtheuseofthesematerialsthroughSupplierMaterialDeclarations.AnindustrystandardIPC1752AXMLFullMaterialDisclosure(FMD)form,submittedviatheGreenDataExchange(GDX),isthepreferredformatforconfirmationofcompliancetotherestrictionsandforreportingwhensubstancesinquestionareabovethespecifiedconcentrationlevels.BigDataSetforMaterialsandSubstancesAsoftheendofFY2019/20,Lenovo’sFMDsystemhasaccumulatedmorethan50,000partswithfullmaterialinformation,formingabigdatasetformaterialsandsubstances.Thisbigdatasetisatoolthatcanaidstructuraldesignandoptimization,analyzingmaterialsandmechanicalpropertiesandimprovingproductreliability.Only2.4percentofcomponentsuppliersdonotprovidefullmaterialdisclosure,usuallyforsecurityorintellectualpropertyreasons.Lenovodoesnotexemptanyofitssuppliers;thoughwedoallowconsiderationsforconfidentialinformation.Wewillcontinuetheprogressonfullmaterialdisclosure.Thosewhodonotprovidefullmaterialdisclosurearerequestedtoensuretheircomponents’compliancewithitsownformatofmaterialdisclosure,IEC62474declaration,testreportorself-declaration.Lenovo’sbigdatasetisanimportantbasisforLenovo’sdesignandR&Dwork,especiallyfortheanalysisofmaterialenvironmentalhealthandsafety,becausemanyLenovoproductsarecomprisedof200to300componentseachwiththeirownFMDandthedatasetallowsforquickandaccuratecompilingofcomponentsFMDs.InFY2019/20,Lenovocontinuedaglobaleco-designprogramtoreducePOPsforpersonalcomputerproducts.Theprogramincludesconductingjointresearchwithinstitutionsandindustryassociations,makingourmaterialsandsubstancesbigdatasetanimportanttoolforthem.WeinformourcustomersabouttheenvironmentalattributesofourproductsandcompliancewithapplicablelawsandregulationsthroughanindustrystandardITEcoDeclarationform.DeclarationsfornewlyreleasedproductsarepostedonLenovo’senvironmentalwebsiteat:www.lenovo.com/ecodeclaration.Consistentwithourprecautionaryapproach,wecontinuouslyanalyzetheregulatoryenvironmentandconsiderinputfromourcustomers,regulatorsandotherstakeholdersinevaluatingthepotentialhealthandenvironmentalimpactsofourproducts.Weweightheseinputstodeterminetherestrictedsubstances,aswellasthesubstancesofinteresttobetrackedforreportingandforconsiderationoffuturerestrictions.1112019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYPRODUCTENERGYEFFICIENCYProductenergyefficiencyremainsacorefocusforLenovo.Throughcollaborationwithotheroriginalequipmentmanufacturers(OEM),aswellasindustrystakeholderworkgroups,existingandproposedglobalITproductenergyefficiencypolicies,regulationsandrequirementsarevettedagainstcurrentandfuturetechnology.Theresultsofthiseffortareleveragedtodevelopleadingedgeproductswithmuchimprovedoperatingefficiencies.OngoingregulatoryactivitiesincludeupdatestotheENERGYSTAR®programspecifications,U.S.DepartmentofEnergy(DOE)ApplianceandEquipmentstandards,CaliforniaApplianceEfficiencyProgramrequirements,ChinaCELandCECPstandards,EUEcodesign(ErP)requirementsandmanyotheremergingprotocolsandregulations.In2020,ENERGYSTARimplementedanewComputerSpecification,Version8.0,whichrepresentsimprovementstoDesktopandAIOenergyefficiencyandperformancemetricsderivedusingselectperformanceindicatorsreflectiveofthetop25percentofthePCproductsavailableonthemarketunderthepreviousspecification(Version7.0/7.1).Keyspecificationupdatesfocusonenhancementsandincentivesrelativetofullnetworkconnectivity,internalpowersupply(IPS)efficiencyandEnergyEfficientEthernet(EEE).Tofurtherimproveproductenergyefficiencyfordesktops,workstationsandservers,LenovocertifiesinternalpowersuppliestoCLEAResultPlugLoadSolutions’80Plusprogramforpowersupplyefficiency.80Pluscertifiedpowersuppliesareindependentlytestedandverifiedtotheprogram’sratedefficiencycriteria;i.e.,Bronze,Silver,GoldandPlatinum.Lenovodesktop,workstationandserverproductsequippedwith80Pluspowersuppliesaresignificantlymoreenergyefficientthansystemsequippedwithtypicalpowersupplies.TheenergyconsumptionandperformanceofLenovoproductsmeettheefficiencyrequirementsofChina,Japan,theUnitedStates,Europeandotherjurisdictions.ManyLenovonotebook,desktop,serverandmonitorproductssatisfyandevenexceedthecurrentENERGYSTAR®requirements.TheENERGYSTAR®qualifiedmodelsarelistedatwww.energystar.gov.FormoreinformationaboutLenovo’senergy-efficientproducts,goto:www.lenovo.com/energy.ENERGYSTAR®CertifiedLenovoProductsAvailability(%ofproduct)CY2019NotebookPlatforms93%DesktopPlatforms97%WorkstationPlatforms90%ServerPlatforms94%Monitors94%1122019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYProductEnergyManagementFeaturesLenovooffersinnovativetoolsthatallowcustomerstotakecontrolofPCandserverpowerconsumption,determineenergysavingsandreportontheenergyperformanceofbuildingmanagement,equipmentandITdevices.PCToolBenefit“LenovoSettings”appinWindowsProvidespowermanagementfeaturesfortheuser(i.e.,ConnectedStandby)AdaptiveThermalManagementAdjustssystempowerandfanspeedsbasedonambientlevelsActiveDirectoryandLANDesk®SupportsremotedeploymentofpowerschemesandglobalsettingstoallowadministratorstheabilitytocontrolandenforceThinkPad®energysavingscompany-wideLenovoEasyResumeGivesquickrecoveryfromcomputerlidclose,balancinglowpowerstatebysuppressingCPUusageatlidcloseIntelligentCoolingBalancesthermalperformancetoadjustsettingstoprovideacoolersurfaceforcomfortwhileoptimizingproductenergyperformanceEnergySavingPowerSupplyUnitWhenthesystemdetectsthepowerloadingislow,PSUturnsofftheinternalfantosaveenergyconsumption.1132019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYServerToolBenefitThe“NewCustomerWebUI”app[ThinkServermanagementmodel]ProvidespowermanagementfeaturesfortheuserSupportsremotedeploymentofpowerschemesandglobalsettings[ThinkServermanagementmodel]Allowsadministratorstheabilitytocontrolandenforceenergysavingscompany-wideLenovoASHRAEManagementAdjustsprocessorandfanspeedsbasedonambientlevelsRackPlannerHelpsusersbetterplanforrackefficiencybyincreasingrackdensityandcalculatingpowerconsumptionbasedonspecificconfigurationsSmartGridHelpsusersmonitorandmanagethepowerconsumptionandtemperatureofThinkServerswithIntelNodeManager.SmartGridcansavepower,increaserackdensityandavoiddatacenterhotspotsPSUsmart-onWhenthesystemdetectsthatthepowerloadingislowinredundantPSUconfiguration,itcantransfertheloadingfrom2PSUto1PSUtogethigherpowerefficiencyandsavepowerDiagnosticsCapabilitiesandEasyOSinstallation(LEPT)embedded80PLUSTitanium™serverpowersuppliesorPSUs[availableforselectSystemxservers]ByimprovingtheefficiencyoftheserverPSUs,energyefficiencyimprovementscanbecascadedupthroughthedatacenterforbothpowerandcoolingLiquidcoolingsolutionsCanreducethefacilitydemandsfordatacenterchillers,resultinginfacilityinfrastructuresavingsLenovoEfficiencyMode™(LEM)Worksincooperationwiththeoperatingsystemtofinetunetheoperatingefficiencyoftheserver.LEMcanboostperformanceperwattefficiencybyupto11percentcomparedtoaserverthatisnotusingLEMIntelligentlymanagingpowerconsumptionUnuseddevicesembeddedinSystemxserversareeitherpowereddownorplacedintoverylowpowerstateautomaticallyduringboottimeand/ordynamicallyatruntime.DevicesincludeCPUcores,memorychannelsandDIMMs,PCIexpressports,QPIlinks,SATAandSASstoragecontrollers,networkcontrollers,serialports,USBcontrollersandvoltageregulatorydevices(VRDs)1142019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYManyLenovoPCandServerproductsareregisteredtoEPEAT(theElectronicProductEnvironmentalAssessmentTool).EPEATisaprogrammanagedbytheGreenElectronicsCouncil,aUS501c(4)non-profitorganization.Throughtheprogram,manufacturersregisterproductstoasetofrequiredandoptionalcriteriadefinedbyunderlyingstandards(IEEE1680.1forPCsandNSF426forservers).Productscanberegisteredatthebronze,silverorgoldleveldependinguponthenumberofoptionalcriteriaachieved.ForafulldescriptionoftheprogramandacurrentlistofLenovo’sregisteredproducts,pleasevisitwww.epeat.net.LenovohasparticipatedintheEPEATforPCprogramforover10years.DuringFY2019/20,LenovobeganregisteringproductsforthefirsttimeundertheEPEATforserversprogram.Inaddition,thePCprogramchangedsignificantlyduetoanewversionoftheIEEE1680.1standardreleasedin2018.Lenovo’scorporate,globalsupplychain,productdevelopment,andotherlocalandglobalresourcesmobilizedtoupdateourprocessesanddocumentationtomeetthenewrequirementsoftheprogramandassuchwewereabletocontinuetoregisterLenovoPCproductsatthegoldandsilverlevel.PRODUCTCARBONFOOTPRINTTherearenumerousandsubstantialchallengestocalculatinganaccuratecarbonfootprintforinformationandcommunicationstechnology(ICT)products,especiallyiftheintentistousethedataforproduct-to-productcomparisons.Thesechallengesinclude:•Collectingandcompilingdependableemissionsdataacrossalongandcomplicatedsupplychain,•Accuratelyallocatingemissionsfromfacilitiesacrossdifferentgeographiesprovidingnumerousproductsandservicestomultiplecustomers,•MaintainingcurrentdatawithacontinuouslyevolvingandrapidlychangingICTproductportfolio,and•Ensuringconsistencyofresultsinanenvironmentwheremultipleandvaryingcalculationmethodologiesareavailable.Lenovocontinuestosearchforanefficientandcrediblewaytocalculateourproductfootprints,andwealsowanttounderstandtheimpactsandbeabletocrediblydiscloseenvironmentalinformationaboutourproducts.Withthesechallengesandgoals,wejoinedtheProductAttributetoImpactAlgorithm(PAIA)Project,anICTsector-widepre-competitivecollaborationledbyQuantisandtheMassachusettsInstituteofTechnology(MIT),tostreamlinefootprintsforICTproducts.Tohelpaddressthesechallenges,QuantisandMITdevelopedPAIA,aneasy-to-useonlineplatformthatallowscompanies,likeLenovo,tosignificantlyreducethetimeandcostofenvironmentalimpactcalculations.Withasuiteofsimplifiedonlinetools,PAIAdeliveredamethodologyforICTproductfootprintswhichoriginatedfromamulti-stakeholderinitiativeofICTcompaniesthatsharedinsightsandbestpractices.Lenovo’sparticipationinPAIAishelpingtodriveasector-widestreamlinedmethodologythatwillbekeytotransformingICTcompaniesintosustainablebusinesses.TolearnmoreaboutthisstudyandPAIA,clickhere.1152019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYThePAIAToolshelptomoreefficientlycalculateproductcarbonfootprint(PCF)forawiderangeofproductsandconfigurations.Lenovo’sproductdevelopmentgroupscurrentlyusethePAIAPCFcalculationtoolsfornotebooks,desktops,monitors,all-in-ones,tablets,thinclients,servers,networkswitchesandstorageproductsandareengagedinoptimizationoftheon-lineplatform.UsingPAIAtocalculateproductfootprintshassignificantlyreducedthetimeandcostofcalculatingenvironmentalfootprintsforourproducts.Thequalityandaccuracyofthecalculationsallowsustoconfidentlycommunicatethisinformationwithcustomersandotherstakeholders.ThecompanysharestheseresultswithenterprisecustomersandpublishesthempubliclyasPCFinformationsheets.TodownloadPCFsheetsforspecificLenovoproducts,visitwww.lenovo.com/ecodeclaration.TheseinformationsheetsaregeneratedusingthestreamlinedPAIAlifecycleanalysisandincludemanufacturing,transportation,useandend-of-life.FormoreinformationaboutLenovo’sworkoncalculatingPCF,visitwww.lenovo.com/climate.WhilethereareothervoluntarystandardsavailabletoguidepractitionersincompilingPCF,thesestandardsarenotdesignedtoestablishcomparativevaluesbetweenproducts.Thedegreeofflexibilitywrittenintothestandardscanproducevariationsinresultsforthesameproductswhenthesamestandardisappliedbydifferentpractitioners.CompilingPCFusingthesestandardsisalsoaverylengthyandresourceintensiveprocess.OthercommonlyusedstandardsincludeBritishStandardsInstitute’sPAS2050,WRI/WBCSD’sGHGProtocolProductLifecycleAccountingandReportingStandardandInternationalStandardsOrganization’sISO14040andISO14044—LifeCycleAssessment,andISO14067—CarbonFootprintofProducts.DURABLEPRODUCTSAREENVIRONMENTALLYRESPONSIBLEThelongeraproductlasts,thelongeritstaysoutofthewastestream.Lenovodesignsitsproductstomaximizetheirproductlifecycleandoffersthree-yearstandardwarrantiesandfiveyearsofreplacementpartsavailabilityonmanyofourtopsellingcommercialPCproductstosupportthisextendedlifecycle.Three-yearwarrantiesareofferedasthebasewarrantyonmanytop-sellingThink-brandedproducts,includingallcommercialmonitors,notebooks,desktopsandothers.Inaddition,customerscanpurchasewarrantyupgradestoextendthebasewarrantybyoneortwoyearsformanyproducts.BasewarrantiesforLenovoconsumer(Idea)productsvarybyproducttypeandgeography,buttypicallystartatonetotwoyearsforthebasewarrantywiththeoptionformanyproductstopurchaseanextendedwarranty.FormoredetailsonLenovo’swarranties,pleaseclickhere.Lenovoiscontinuouslydesigninginnovativefeaturesforourproductstohelpextendtheirusefullife.Forexample,Lenovo’sLongevityBatteryTechnologyextendsnotebookbatterycyclelifethroughkeytechnologies,including:•Increaseduseoflithiumpolymercells:Usedinnotebooksandtabletswithembeddedbatteries,thesecellstypicallyprovidelongerlifecyclesthanlithiumioncylindricalcells.•Longerlifespanbatteries:ManyLenovoembeddedbatteriesaredesignedtolasttwotothreetimeslongerthanstandardbatteries.LenovoServicesoffersthree-yearwarrantyupgradesonmanyembeddedbatteries.Thelongerlifespanismadepossiblewithcarefullyselectedcellsandchargealgorithms.1162019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY•Dynamicchargingalgorithms:Thesetechnologiesareusedonmostnotebookbatteriesandprolongthebattery’slifespanbyadjustingchargevoltageandcurrentovertime.Thefeatureisimplementedinthehardwareaspartofthebatteryfirmware,soitisnotoperatingsystemorapplicationdependentandworkswithanysoftwareload.•Fieldupdateablebatteryfirmware:Customerscandownloadafirmwareupdateutilitywhichallowsthemtoapplyfirmwarefixestobatteriesinservice,eliminatingtheneedtoreplacebatteriesduetofirmwareproblems.Thisprogramallowscustomerstoapplyfixesquicklyandatnocost,evenonbatteriesoutsideofwarranty.PRODUCTPACKAGINGPackaginghasbeenidentifiedasasignificantenvironmentaspectunderLenovo’sEMS.Lenovoisfocusedonincreasingtheuseofrecycledandrecyclablematerialsinpackaging,increasingtheuseofbio-basedmaterials,reducingthesizeofpackaging,andexpandingtheuseofbulkandreusablepackagingsolutionsallinanefforttoreduceourpackagingconsumption,waste,andcarbonemissionslevels.InFY2019/20,Lenovo’spackagingobjectivewasto“minimizetheconsumptionofpackagingmaterialwhiledrivingtheuseofenvironmentallysustainablematerials.”Lenovoisintentonreducingthesizeofourpackagingtominimizetheamountofmaterialsused,whilemaintainingadequateprotectionforourproducts.Thisjourneyalsoincludesincreasingtheuseofrecycledcontentmaterialsinproductpackagingby10percent—basedonshippingvolumesrelativetoFY2018/19.LenovosupportedthisobjectivebytransitioningallThinkPadseriesto100percentrecycledcushioningmaterials.Thematerialis100percentbiodegradable,lighterthanpreviouspackaging,andhasdesigncharacteristicsthatreduceoverallpackagesize.Forexample,a0.4percentreductioninanindividualcartonsizeisequivalentto18percentincreaseinpalletdensity,whichcanenablea6.7percentefficiencyimprovementintransportationCO2emissions.ThinkPadproductshippingboxesarealsocertifiedtocontainaminimumof70percentpost-consumerfibercontentandarerequiredtousethemaximumavailablePCCwhereadequatesuppliesexistwithoutcompromisingrequiredpackagingperformancecharacteristics,whiletheprintingonboxesisdoneviaflexographywithwater-based,non-toxic,RoHS-compliantinks.Since2008,Lenovohaseliminated3,100tonsofpackagingconsumptionbyweight.InFY2019/20alone,thepackagingteamreducedpackagingconsumptionby560tons.Othersuccessfulpackagingobjectivesincludetheimplementationofusingpackagingmadefrom70percentrecycledcontentratiowithallnewphoneproductsandachievinga5percentweightreductioninvolumeforatleastoneproductinotherbusinessunits.1172019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYTheuseofbamboofiberinselectproductsmarksthelaunchofaneweraofeco-friendlypackagingofferingsforLenovo,whilealsoenhancingcustomerexperience.Bamboofiberhasmanyfavorablefeatures,including:•Sleekandrobustdesign•Lightweight•100percentrapidlyrenewable•100percentcompostable•Apure‘closed-loop’ecosystemInourownoperations,Lenovousesreusablebulkpackagingforthetransportationofchassistomanufacturinglocations.Lenovo’sThinkPadpackagingteamisalwayslookingforenvironmentallyfriendlysolutionswhichmayimprovetheirpackagingengineeringefforts.InFY2019/20,theteamwasquiteproudofasuccessfulachievementthatdemonstratedtheirdedicationtopackaginginnovation.TheteamrevampedX1Carbon/Yogaretailpackagingtoreduce1.4kgofpackagingmaterialsperboxandincreasednumberofunitsonpalletfrom48to96.ThisdroveatotalcostsavingsofoverUS$2.6millionperyearandeliminatedmorethan400tonsofpackaging.1182019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYTheThinkPadpackagingteamdevelopedaningeniouslydesignedboxthateliminatedtheneedforsealingtape.Withthecurrenteliminationofthepackagingsealingtape,theteamestimatesthefollowingenvironmentalbenefitstodate:•Tapeconsumptionsavingperyearbylength:3.3kilometers•Plasticfilmconsumptionsavingperyearbyweight:9tonsAstheteamphasesinthenewtapelessdesigntomoreproducts,theestimatedenvironmentalbenefitsare:•Tapeconsumptionsavingperyearbylength:19,500kilometers•Plasticfilmconsumptionsavingperyearbyweight:53.6tonsLenovodiscouragestheuseofpolystyrenepackagingwhereverpossible,andencouragestheuseofmoldedpulp,fiberandlow-densitypolyethylene(LDPE).FormoreinformationabouttheprocessformakingandrecyclingLDPEthermoformedcushions,clickhere.PleaseseetheConsolidatedMetrics,ObjectivesandTargetssectionforLenovo’sperformanceagainstitsFY2019/20packagingtargets.ReuseInselectgeographies,Lenovoprovidestheendcustomeranoptionalreturnablepackagingservice,wherethepackagingmaterialscanbesentbacktoLenovoafterreceivingtheproductsandreusedfornewshipmentsbyLenovo.Lenovoisalsodevotedtothereuseofincomingcomponentpackaging,especiallyinthereturnofchassispackaging.PackagingSpecificationsLenovohasenvironmentallyfocusedrequirementsforpackagingsuppliers.Thesespecificationsincluderequirementsforminimumamountsofrecycledcontent,markingforproperrecycling,bannedmaterials,andotherrequirements.Allcorrugatedcontainer(box)packagingshoulduseaminimumof50percentpost-consumerrecycledfiberandallpaperboardpackagingshouldcontainaminimumof45percentpost-consumerrecycledfiberand100percentrecoveredfiber.Inadditiontomeetingthesespecifications,manyLenovopackagingsuppliersprovideForestStewardshipCouncil(FSC)certifiedproductsforLenovopackaging.LenovoiscurrentlyintheprocessofassessingtheglobalavailabilityofFSCcertifiedpackagingtosupportmanufacturingfacilitiesinallgeographies.1192019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYPRODUCTEND-OF-LIFEMANAGEMENT(PELM)Lenovosupportseffortstoreducethevolumeofend-of-lifeelectronicproductsbeingdisposedofinlandfills,aswellaseffortstoreducetheneedfornewrawmaterialsbyincreasingthebeneficialreuseofproductsandparts,orrecyclingofmaterials.TheseactivitiesareimportantinthetransitiontoacirculareconomyandthefoundationofLenovo’sPELMprogram.AtLenovo,PELMincludesthereuse,refurbishing,de-manufacturing,dismantling,reclamation,shredding,recycling,treatmentanddisposalofproducts,partsandperipheralswhentheyaretakenoutofservice,reachend-of-lifeorarescrapped.Thisincludestherecoveryandreuseofproducts,parts,sub-assembliesandcomponents.Lenovo-brandedandnon-brandedproductsownedoracceptedbyLenovo(includingcustomerreturnsortakeback)areincludedinthisdefinition.AsapartofoureffortstoimproveLenovo’ssupplierbasearoundtheglobe,wehavemadeavailableour“LenovoEnvironmentalElectronicsEndofLifeStandard.”ThisdocumentdetailswhatisrequiredtobecomeaLenovoend-of-lifepartner.Whereavailable,wecontinuetorequireourglobalsupplierbasetohaveR2ore-Stewardscertificationorencouragethemtostarttheprocesstoobtaincertification.PRODUCTTAKE-BACKPROGRAMSAsaglobalcompany,Lenovooffersend-of-liferecyclingandmanagementprogramsforbothconsumerandbusinesscustomersinmanycountriesaroundtheworld.Theseproducttake-backprograms(PTB)aretailoredtothespecificlocationandbusinessneedandincludeprogramsforrecyclingproductsaswellaspackagingandbatteriesinmanygeographies.CustomerscanobtaininformationaboutLenovo’srecyclingprogramsanddetailsonofferingsbycountryat:www.lenovo.com/recycling.Forourbusinesscustomers,LenovooffersAssetRecoveryServices(ARS)innumerouscountries.Customer-accessinformationfortheseprogramsintheAmericas,AsiaPacificandEMEAcanalsobeobtainedat:www.lenovo.com/recycling.PRODUCTANDPARTSMANAGEMENTLenovostrivestomaximizethevalueandpotentialuseofexcess,returned,andobsoleteproductsandpartsacrossourbusinessandmanufacturingoperations,repairnetwork,andchannelpartners.Throughreversesupplychains,theseproductsandpartsarekeptincirculationas-isorafterrepairandrefurbishing,ratherthanimmediaterecycling.Thereisapositiveenvironmentalandeconomicbenefittothisreintegrationofproductsandpartsbyavoidingtheneedtomanufacturenewparts.MANAGEMENTOFLENOVO’SPELMSUPPLIERSLenovomaintainsaprogramforensuringthatrecycling,disposal,anddispositionofend-of-lifeproductsownedbyLenovoorreturnedbycustomersareaccomplishedinanenvironmentallyconsciousandlegallycompliantmanner.ThisprogramincludesLenovoonsiteenvironmentalevaluationsandapprovalsinaccordancewithLenovo’sstringentauditingprotocol.Someofthecriticalevaluationrequirementsinclude:•SuppliercompletionofLenovo’sinitialsupplierevaluationformdeclaringtheirprocessingcapabilitiesandcontrols,environmental,healthandsafetymanagementsystems,andlegalcompliance.1202019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY•Supplierdownstreamdisclosureoffacilitiesinvolvedwithreceivingequipmentorwaste;reusingequipmentasaproduct,partormaterial;anddisposingofwasteandensuringallfacilitiesmaintaincompliance.•SuccessfulLenovoonsiteenvironmentalandserviceauditsoffacilitiesandprocessespriortotheiruse,anddocumentationofauditfindingsandrecommendationsinafinalreport.•ReviewingofallauditdocumentationandrecommendationsbyLenovo’sGeographicEnvironmentalManagers,andfinalapprovalbyLenovo’sDirectorofEnvironmental,SustainabilityandCompliance.•MaintainingLenovoCorporateApprovedSupplierFacilitylistingbygeographyandapprovedservicesforusebyallLenovoorganizations,sitesandprogramsworldwideinLenovo’sinternaldatabase.•EstablishingLenovocontractwithsupplierswithspecificenvironmentaltermsandconditionsrelatedtoexpectedenvironmentalperformanceandreporting.Suppliersincludeassetrecoveryservicesuppliers,legalandvoluntaryproducttake-backproviders,dismantlers,recyclers,disposalandotherrelatedvendors.Allrecoveredproductsandpartsarerequiredtobedatawiped,refurbished,testedforfunction,labeledasrefurbishedandresoldwheretheywillbeusedasoriginallyintendedwithoutfurtherrefurbishingbeforeuse.SuppliersarerequiredtouseLenovo-approvedrecyclersforthedispositionofnon-workingproductsandpartsandwastegeneratedfromtheirrefurbishingprocesses.Lenovoprohibitstheshipmentofhazardouswastetonon-OECDcountries.Additionally,LenovoincorporatesspecificenvironmentaltermsandconditionsintocontractsandagreementswithallPELMsuppliers.Approvedandcontractedfacilitiesarerequiredtosubmitregularenvironmentalreportsdocumentingthetotalquantitiesofequipmentande-wastecollectedandprocessedonbehalfofLenovoandLenovocustomers,includingtheidentificationofmethodsofdispositionandtheirpercentages.Periodicfollow-upauditsarealsocompletedtoensurecontinuedcompliancetolegalandLenovoenvironmentalrequirements.RECOVERYANDRECYCLINGTRENDSSinceitslaunchasaglobalcompanyinMay2005,Lenovohasprocessedmorethan257,766metrictonsofcomputerequipmentthroughourcontractedserviceproviders.Duringthe2019calendaryear,Lenovofinancedormanagedtheprocessingof28,685metrictonsofLenovo-ownedandcustomer-returnedcomputerequipment.Ofthistotal,fivepercentwasreusedasproductsorparts,87percentwasrecycledasmaterials,threepercentwasincineratedwithwaste-to-energyrecovery,fourpercentwasincineratedasdisposaltreatment,andonepercentwasdisposedofbylandfill.Ourcustomershaveshownconsiderableinterestinourrecyclingprograms.Our2019performanceincludesdatafromLenovo’sAssetRecoveryServicesofferedtolargeenterprises,alongwithdatafromLenovo’sothervoluntaryandlegallyrequiredproducttake-backprogramsforconsumersandbusinesses.Thesecustomerprogramsresultedinmorethan27,306metrictonsofproductscollectedforrecyclingandreusein2019.Forhistoricalannualvolumesandbreakdownbydispositionmethod,pleaseseethetablesrelatedtoPTBandPELMinSection8.0ConsolidatedMetrics.AspartofLenovo’scontinualimprovementactivities,welookforopportunitiestomaximizereuseandrecycling.1212019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSUPPORTINGATRANSITIONFROMALINEARTOACIRCULARECONOMYItismoreimportantthanevertoshifttheeconomyfroma“take,make,waste”lineareconomicmodeltoa“circular”economicmodel.Consumersareincreasinglyawareoftheimpactoftheirconsumptionandlifestylechoices,whileorganizationsarefacedwithascarcityofresources,increasingregulationsandconsumerdemandsforinnovativeproductsandsolutions.Fortunately,theopportunitiestoenableacirculareconomyexistinawaytheyhaven’tbeforewiththedevelopmentoftechnologicalsolutionsandresourcesthatarerevolutionizingsupplychains,productdesignandmaterials.LinearEconomyTakenaturalresourcesMakeproductsCreateWASTEAcirculareconomyisacomplexsystemsapproachthatrequiresareorientationofalltheeconomicsystemsaffectingconsumers,productproducers,globalsupplychainsandgovernments.AccordingtotheEllenMacArthurFoundation,acirculareconomyisbasedontheprinciplesofdesigningoutwasteandpollution,whilekeepingproductsandresourcesinuse.Inacirculareconomy,productsaremadewithgreenmaterialsanddesignedinawaythatuseslessenergyandresources.Theproductsaredurableandrepairabletokeeptheminuseforlongerperiodsandsystemsexisttoextractandrecirculatepartsandresourcesfromproductsattheend-of-life.CircularthinkinghasbeenapartofLenovo’scultureforyearswithafocusonqualityandenvironmentallyconsciousproducts.TheinnovativedesignofLenovo’sproductsandpackagingandthedevelopmentofbreak-throughmanufacturingandbusinessmodelshavetransformedtheindustryandreducedtheenvironmentalimpactofourproducts.CircularEconomyDESIGNoutwaste&pollutioninproducts&systemsRETURNtheresourcesbackintotheproductionsystemsUSEofproducts&resourcesisoptimizedAtLenovo,webelievethatsmartertechnologycansolveproblems,createopportunitiesandtransformthewaywealllive,learn,workandheal.Lenovo’scommitmenttoprovidingSmarterTechnologyforAllextendstoourtransitionfromalineartocirculareconomythroughSmarterCircularDesign,SmarterCircularUse,andSmarterCircularReturn.1222019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYDesignUseReturnSMARTERCIRCULARDESIGNDesigningoutwasteandpollutionSMARTERCIRCULARRETURNCapturingresources&valueSMARTERCIRCULARUSEOptimizinguseofproductsandresources1232019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSMARTERCIRCULARDESIGNDesigningoutwasteandpollutionEnvironmentallyConsciousProductsLaunchedin2005,Lenovo’sEnvironmentallyConsciousProductsprogramisthehallmarkprogramforLenovo’scirculardesignthinking.Lenovo’snetworkofEnvironmentallyConsciousProductengineersandgreenproductteamshavefocusedonpioneeringmaterialsuseandthedesignfordurabilityandrecyclability.InFY2019/20,Lenovoproudlyexpandedtheuseofclosedlooppost-consumerrecycledplasticsto66products,a214percentincreaseinthenumberofproductsoverthepreviousfiscalyear.Since2005,Lenovohasusedover240millionpounds(gross)ofrecycledplasticand12millionpoundsofclosed-loopplasticsince2018.Lenovo’steamofengineersworkscloselywithoursupplierstodevelopandqualifynewgradesofrecycledandpost-consumerplasticsresinspreviouslyunavailabletotheITindustry.ThesematerialsreceiveenvironmentalandperformancequalificationspriortotheirapprovalanduseinLenovoproductapplications.Thedurabilityofaproductiscriticaltoenablingacirculareconomy,soproductsarekeptinuselonger,limitingresourceuseinnewproducts.Designdecisionsincludeafocusonquality,durability,anduserexperience.Designingaproductforrecyclabilityallowstheparts,componentsandmaterialswithinLenovo’sproductstobecapturedforreuseandrecyclingattheproduct’sendoflife.ProductenergyefficiencyIncludesdevelopingandofferingtoolssuchasLenovoEfficiencyMode(LEM),whichhelpsserversoperateatpeakefficiencywhentheOSisrunningProductcarbonfootprintIncludesidentifyinghotspotsfortargetedemissionsreductionsonhigh-volumemainstreamproductsineachbusinessunitProductpackagingIncludesrefiningpackagingdesigntoincreasepalletdensityEnvironmentallypreferredmaterialsIncludeseffortstosteadilyincreasethepercentageofrecycledplasticusedinmanufacturingLenovoproducts1242019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYPurposefulPackagingLenovo’spackaginginnovationanddesignisakeycirculareconomyinitiativetoreduceunnecessarywaste.PackagingengineersatLenovohavemadesignificantdesignandmaterialchangestoreducewasteandminimizeresourceuse.Since2008,Lenovohaseliminatedover3,100tonsofpackagingconsumptionbyweight.InFY2019/20,wereducedpackagingconsumptionby560tons.Afewofthedesigninnovationsinclude:•Self-lockingboxbottom(eliminatingtheneedforplastictape)•Customizeduniversalandreusablepackagingforreshippinguse•Compostablebambooandsugarcanefiberpackaging•PackagingsizereductiontoreducewasteandimproveshippingefficiencyManufacturingInnovationsLenovo’sglobalmanufacturingbusinessmodelcombinesJVpartnerships,Company-ownedoperations,alongwithODMcapacity.Thisallowsustodirectlycontroloursustainabilityfootprintandimprovecirculardesignwithinourownoperations.AtLenovo,weimplementtheResponsibleBusinessAlliance(RBA)CodeofConductatouroperationsandwithoursuppliers.Weperformrigoroushealth,safetyandenvironmentalassessmentsatallinternalglobalmanufacturinglocationsandkeyoutsourcedmanufacturingsuppliers.Ninety-eightpercentofourprocurementiswithfewerthan100largesupplierswithastrongfocusonESGmanagementand90percentofoursuppliersissuepublicsustainabilityreports.Lenovoimplementedabreak-throughlowtemperaturesolder(LTS)manufacturingprocessusedinourPCmanufacturingoperationsin2017.TheLTSprocessreducesCO2emissionsbyusinglessenergyandheatintheprocess,reducesmanufacturingfalloutandimprovesthelong-termproductreliability.AsofJune2019,Lenovohadshippedover4millionnotebooksmanufacturedonLTSlinesandtransitioned100percentofThinkPadand90percentofIdeaPadnotebookstotheseprocesses.We’realsoexpandingthistechnologytomoreparts,includingthemainboardplanarcards,memory,wireless,fingerprintcards,SSDandcameralines.Lenovocontinuesitsdrivetowardsmanufacturinginnovationtosupportacirculareconomyandwearelookingforopportunitiestoexpandourlowtemperaturesolderlinestoadditionalplatforms,whichmayincludedisplay,servers,desktop,andworkstationproducts.Inaddition,inNovember2019,weannouncedastrategicpartnershipwithSchneiderElectrictocreatesmartgreenmanufacturingsolutions.1252019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSMARTERCIRCULARUSEOptimizinguseofproducts&resourcesCircularServicesInnovativecircularbusinessmodelsareanimportantpartofthetransitiontoacirculareconomy.Lenovoofferscustomersservicemodelsandoptionstoextendthelifeoftheirdevices.Whendevicescontinuetobeusedbytheoriginalownerorsubsequentowners,resources,energy,andpollutionaresaved.Customersneedtohaveaccesstoservicesthatenablesmartercircularuse,andLenovohasinnovativecircularbusinessmodelstoofferconsumers.LenovoDeviceasaService(DaaS)allowsLenovoPCcustomerstopayfordevicesastheyneedthem.Theservicemodelenablesthecustomertopauseorreturndevicesthatarenotbeingused.Lenovomanagesthedispositionofthedevicesattheendoftheservicelife,whichincludesrefurbishingforresale,partsharvestingforreuseorrecycling.Motorola’sstrategicpartnershipwithiFixitgivesconsumersanoptiontoself-repairtheirdevicestoextendthelifeofthedevice.In2018,MotorolabeganofferingreplacementpartsthroughiFixit,thefirstmajorsmartphonemanufacturertodoso.MotorolaandiFixitexpandedtheavailabilityofreplacementpartstoEuropeancustomersin2019.Energy-EfficientProductsCustomerswantenergy-efficientproductstohelpthemsavemoneyandlessentheimpactofenergyconsumptionontheclimateandenvironment.InadditiontoLenovo-uniqueenergyefficiencyinnovations,LenovocollaborateswithotherOEMs,aswellasindustrystakeholderworkgroupstodevelopstandardstosupportthedevelopmentofmoreenergy-efficientproducts.Bydesigningourproductstouselessenergy,wearepreventingnegativeenvironmentalandclimatechangeimpacts.Lenovo’sproductsmeetenergyefficiencyrequirementsintheUnitedStates,China,Japan,Europeandotherjurisdictions.LenovoparticipatesintheUS-basedENERGYSTARcertificationprogramwithover90percentofournotebookplatformsandmonitorsmeetingthisenergyefficiencystandard.Lenovo’sNeptune™technologiesutilizesliquid-basedcoolinginourdatacenterproducts.LenovoNeptunealsoemployssoftwareandmonitoringtoolstoeffectivelymanageandcontrolthecoolingenvironment.1262019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYGreenPackagingSolutionsLenovo’scircularpackaginginitiativesextendtoitsmanufacturingandoperations.Packagingeliminationandkeepingpackagingincirculationsavesresources,energyandeliminateswaste.Whenreuseisnotanoption,Lenovo’sfacilitiesrecyclepackagingmaterials.Lenovodesignedreusable,universalpackagingthatallowedacustomertouseastandardboxformultiplesizesofnotebooks.Theboxwasdesignedforacustomerwhowasreceivingnotebooksatacentrallocationandsendingthemouttothefield.Thecustomerneededauniversalpackagethatcouldaccommodatetheshipmentofanysizednotebookbacktothecentrallocation.Thisdesigneliminatedtheneedforthecustomertokeepmultiplesizesofnotebookpackagingonhandandallowedforthesamepackagingtobereusedforrepeatshipments.TheX1Carbonnotebookretailpackagingwasredesignedtoreducethesizeoftheboxandasaresultweareabletoincreasethenumberofsystemsthatcanfitonapalletfrom48to96.Lenovo’spackagingengineersdesignedanewnotebookcartondesignthateliminatestheneedtotapethebottomofthecarton.Thisresultsinamaterialssavingsofover19kilometersofplastictapeayearandsavestimeinthemanufacturingprocess.OperatingEfficienciesAkeypartofLenovo’scirculareconomyactivitiesisourcommitmenttoreducingourglobalcarbonfootprintandimprovingoperatingefficienciesthatreduceourresourceuse,includingenergyandwater.Lenovo’sclimatechangeprogramsandstrategiesfocusonenergyandemissionsreductionsfromouroperationsandfacilitiesaswellasoursupplychain.InFY2019/20,weachieveda92percentemissionsreductionrelativetoFY2009/2010.Thesereductionswereachievedthroughenergy-efficientprojects,solarinstallationsatourfacilitiesandpurchasingrenewableenergycertificatesfromprojectsintheUnitedStates,Brazil,China,IndiaandMexico.Ourcurrentsolarcapacitythroughsolarinstallationsinourfacilitiesis16MW.Thispastfiscalyear,weexpandedenergy-efficientlightingsystems,installedtimeandtemperaturecontrols,andimprovedHVACandaircompressorefficiencyintwofacilities.Lenovo’sgloballogisticsteamcontinuestodriveoptimizationinourlogisticsprogramsandstrivestoshipproductsinthemostenvironmentallyresponsiblemanner.InFY2019/20,weexpandedtheuseofelectricpoweredtrucksforfinalmiledeliveryandequipmentinourdistributioncentersinChina.Wecreatedclosedloopsforrecyclablepackagingandintroducedenhancedin-transitmeasurementofemissionsthroughGPS.Eachyear,Lenovohasanannualtargetofmaintainingglobalwaterusewithin+/-5percentofthepreviousyearwhilethecompanycontinuestoexperienceorganicemployeegrowth.OvertimeLenovohasmadeefficiencyinvestmentsatfacilities,includingtheinstallationofawaterreusesysteminBrazil.InFY2019/20,Lenovobegantotrackwaterriskindicatorsfortheriverbasinswhereourfacilitiesarelocatedinordertobetterunderstandthewatershedsthecompanyoperateswithinandtoprioritizefuturewater-relatedinvestmentsbasedonriverbasincontext.1272019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSMARTERCIRCULARRETURNCapturingresources&valueGlobalCircularReturnKeepingproductsandpartsinsecondarymarketsafterrepairandrefurbishingorasrawmaterialsinmanufacturingisanimportantelementofaneffectivecirculareconomystrategyfortheITindustryandLenovo.Weofferproducttake-backprogramsforhouseholdconsumersandbusinesscustomersinmajormarkets.WithinouroperationsatLenovo,weareoptimizingparts,returnsandinventorycirculationtominimizetheneedfornewpartsandmaterialswithinourglobalsupplychain.Lastfiscalyear,Lenovoreachedamilestoneofprocessingoverhalfabillionpoundsofcomputerequipmentsince2005inourglobalProductEndofLifeManagement(PELM)programs.Lenovo’sPELMprogramisgrowingwithover63millionpoundsprocessedinFY2019/20(28,685metrictonnesprocessed).500,000,000poundsofcomputerequipmentprocessedthroughPELMprogramssince2005Inourassetrecoveryservicesprogramforbusinesscustomers,wearebuildingourpartnersandprocessestomaximizethereusepotentialofthecustomers’computerandserverassetsglobally.Lenovo’ssuppliersfollowthehierarchyofreusefirstthenrecycle.Computerequipmentthatcannotberepairedandresoldinsecondarymarketsisevaluatedforpotentialreuseofpartsandcomponents.Recyclingoftheproductsisthecriticalsteptogettingtherawmaterialsbackintocirculationinthemanufacturingofnewproducts.Lenovoisgrowingourownuseofclosed-looprecycledplasticswith66productscontainingthismaterialinFY2019/20.1282019/20LenovoEnvironmental,SocialandGovernanceReport8.0Consolidatedmetrics,objectivesandtargets130FY2019/20ConsolidatedMetrics138FY2019/20Performance143FY2020/21ObjectivesandTargets1292019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY1302019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYFY2019/20CONSOLIDATEDMETRICSGeneralDataFY2015/16FY2016/17FY2017/18FY2018/19FY2019/20Revenue(MillionsUSD)$44,911$43,035$45,350$51,038$50,716FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20RevenuebyGeographyAmericas30%30%31%32%32%EMEA(Europe,MiddleEast,Africa)26%26%28%25%25%AsiaPacific(excludingChina)16%16%16%19%22%China28%28%25%24%21%FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20RevenuebyBusinessGroup1IDG—PCSD69%70%71%75%79%IDG—MBG19%18%16%13%10%DCG10%9%9%12%11%Others2%3%3%——FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20ResearchandDevelopmentExpenditures/Sales3.32%3.16%2.81%2.48%2.63%Consolidatedmetrics1312019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYEmployees,HealthandSafetyFY2015/16FY2016/17FY2017/18FY2018/192FY2019/202NumberofEmployeesTotal48,97546,16345,75457,00063,000FY2015/16FY2016/17FY2017/18FY2018/193FY2019/20NumberofEmployeesbyRegionAmericas(NA,LAm)15%15%16%16%18%AsiaPacific(excludingChina)8%9%9%11%12%China69%66%66%65%62%EMEA(Europe,MiddleEast,Africa)8%9%8%8%8%FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20PercentageofEmployeesbyGenderMale66%65%65%64%64%Female34%35%35%36%36%CY2015CY2016CY2017CY2018CY2019Hoursoftrainingpermanufacturingemployee3535353535(includingpart-timeemployees)CY2015CY2016CY2017CY2018CY2019IncidentRates(work-related)RecordableRate0.10.070.090.030.03Lost-TimeRate2.690.51.50.030.03Numberofemployeefatalities00000Numberofcontractorfatalities00000CY2015CY2016CY2017CY2018CY20194NumberofOHSAS18001registeredfacilities10101014111322019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYCommunitiesandPhilanthropyFY2015/16FY2016/17FY2017/18FY2018/19FY2019/205CorporateCashandProductDonationsLenovoFoundationandDonoradvisedfunds$404,000$75,000$819,000$799,372$482,887China6$411,000$300,000$378,516$308,274$5,440,440NorthAmerica$1,080,000$1,852,000$1,375,000$1,319,070$4,648,665LatinAmerica7$319,000$15,000$111,000$155,674$2,507,863EMEA(Europe,MiddleEast,Africa)$205,000$114,000$107,000$159,621$407,535AsiaPacific(excludingChina)8$222,000$126,000$570,709$148,500$855,386GlobalDisasterResponse00$1,714,000$260,350$140,000FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20EmployeeVolunteeringHours(througheffortssponsoredbyLenovo)NorthAmerica>5,0001,26619,29628,2429,838.49RestofWorld19,00026,20510,7049,07217,046EstimatedValueofEmployeeVolunteerHours9——$1,300,000$1,616,794$1,156,022FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20EmployeeGivingLenovoMatchofNorthAmericaEmployeeDonations$281,778$352,654$339,000$380,854$963,435LenovoMatchofChinaandEMEAcampaigns(LenovoandLenovoFoundation)———$59,775$380,650TotalContributiontoCommunities10$14,482,776Estimatedvalueofcommunityimpactthroughphilanthropyandvolunteerism$16,982,8831332019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYEnvironmentalDataFY2015/16FY2016/17FY2017/18FY2018/19FY2019/20GHGEmissions(metrictonsCO2equivalent—MTCO2e)Scope17,0688,2946,3716,0317,766Scope2(location-based)228,493213,637193,760201,321162,597FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20TotalScope1andScope2(location-based)235,561221,931200,131207,352170,363Scope2(market-based)203,041185,400176,80026,02923,852Scope3FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20BusinessTravel39,00058,00049,00053,50046,900ProductTransportation11326,840351,100359,000633,000716,384EmissionsfromWaste122,1492,3901,7001,9202,110EmployeeCommuting26,30023,80020,10023,60024,900PurchasedGoodsandServices131,646,1412,054,9001,855,0002,000,8742,341,000Fuel-and-EnergyRelatedActivities(notincludedinScope1or2)1414,66412,30011,90012,10010,385UseofSoldProducts1512,000,00011,600,00011,847,00012,885,00013,669,000EndofLifeTreatmentofSoldProducts15290,000280,000271,000273,500274,000CapitalGoods16227,700101,000246,000127,500446,500Total14,572,79414,483,49014,660,70015,805,12017,531,179EmissionsIntensity:GHGEmissions—Scope1andScope2(location-based)FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20(metrictonsperUS$millionrevenue)5.255.164.414.063.36OperationalEnergyIntensityUse—Scope1andScope2(location-based)FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20(MWhperUS$millionrevenue)FuelCombustion0.740.940.770.610.69PurchasedEnergy(electricity,steam,cooling)6.976.746.576.205.77OperationalEnergyUse—Scope1andScope2(location-based)(MWh)FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20FuelCombustion33,363.1640,257.9434,733.5530,904.8235,152.32PurchasedEnergy(electricity,steam,cooling)17313,027.41290,112.63298,019.77316,482.68292,645.181342019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYEnvironmentalDataFY2015/16FY2016/17FY2017/18FY2018/19FY2019/20EnergyConsumptionbyPrimaryEnergySource(gigajoules)Fuel120,107.39144,929125,041111,257126,548Electricity1,035,664.26969,914955,624979,486979,740Steam83,097.0464,290108,649144,24066,051Cooling8,137.3710,2028,5999,0167,731Total1,247,006.061,189,3351,197,9131,243,9991,180,071FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20DirectEnergyConsumptionbySource(FuelDetail)(gigajoules)Gas/dieseloil(stationarycombustion)3,95933,3505,46110,3216,442Naturalgas(stationarycombustion)106,018102,950113,47094,476115,375Liquefiedpetroleumgas(LPG)(stationarycombustion)5,6614,6963,0872,5501,628Onroaddieselfuel(mobilecombustion)1,0151,088948955801Gasoline/petrol(mobilecombustion)1,9621,8381,8351,7031,112Liquefiedpetroleumgas(LPG)(mobilecombustion)534273240188260Compressednaturalgas(CNG)(mobilecombustion)1————JetKerosene(mobilecombustion)956734—1,064930Total120,107144,929125,041111,257126,548FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20GlobalGHGEmissionsbyMarkets(location-based)(MTCO2e)Scope1Brazil474.142,442.7713.1420340China3,904.163,275.323,765.293,8603,190Germany441.60459.70667.351,047652India81.9762.2654.064584Japan324.05325.32322.30268191Mexico101.7173.3273.3980625Taiwan0001770UnitedStates1,278.681,210.761,129.802542,484RestoftheWorld18461.33444.54345.542792001352019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYEnvironmentalDataFY2015/16FY2016/17FY2017/18FY2018/19FY2019/20Scope2(location-based)Brazil2,111.051,767.912,089.961,9971,566China175,102.84169,055.32153,233.45161,087124,336Germany1,764.501,784.781,684.901,7611,612India4,399.983,929.033,435.423,0582,914Japan5,982.485,660.415,298.895,0475,754Mexico3,436.613,990.513,273.103,4625,029Taiwan1,906.531,714.772,167.492,2312,091UnitedStates29,090.3120,973.7418,297.6318,61515,220RestoftheWorld184,698.774,760.804,279.264,0624,075FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20RenewableEnergySolarEnergy(MWh)2211,6073,7133,9384,226GenerationCapacity(MW)190.35.55.512.4216FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20Water(Megaliters)20Withdrawal211,366.831,429.611,385.081,391.301,307WithdrawalfromAreaswithWaterStress22n/an/an/an/a322Discharge1,298.431,351.411,260.991,256.401,183DischargefromAreaswithWaterStress22n/an/an/an/a298Consumption68.40278.205124.094134.9124ConsumptionfromAreaswithWaterStress22n/an/an/an/a24WastewaterExceedances00000FY2015/16FY2016/17FY2017/18FY2018/19FY2019/20Waste(MetricTons)23Reused/Recycled/Resold34,81038,34939,09338,21736,375WastetoEnergy(WTE)921641,4551,5861,745Incinerate6113743122,1562,576Landfill4,5295,1463,5173,4812,327TotalNon-HazardousWaste40,04244,03344,37745,43943,023TotalHazardousWaste7968756674CY2015CY2016CY201725CY201825CY2019ProductEnd-of-LifeManagement(PELM)Disposition(MetricTons)24Reused257787109186521,557Recycled2514,62026,56922,80818,91924,856WastetoEnergy(WTE)507907826845987Incinerate8042332843381,126Landfill1,891656336255159Total18,60029,07525,17121,01028,6851362019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYEnvironmentalDataFY2015/16FY2016/17FY2017/18FY2018/19FY2019/20ProductTakeBack(PTB)Disposition(MetricTons)24Reused3751642993091,023Recycled14,12825,44522,19418,58924,112WastetoEnergy(WTE)502906826845987Incinerate1342332703381041Landfill348644318254143Total15,48727,39223,90720,33427,306UseofRecycledPlasticsinProducts(pounds)CY2015CY2016CY2017CY201826CY2019PlasticsContainingRecycledContent(PCRC)20,597,60615,802,97913,994,67817,102,17017,022,768NetPostConsumerRecycledContent(PCC)11,622,36410,204,4699,112,36712,207,60912,876,734NetPostIndustrialRecycledContent(PIC)6,7240000ENERGYSTAR®CertifiedProductsAvailability(%ofproduct)CY2015CY2016CY2017CY2018CY2019NotebookPlatforms100%98%100%92%93%DesktopPlatforms90%94%99%97%97%WorkstationPlatforms76%78%78%80%90%ServerPlatforms92%91%91%90%94%Monitors2797%98%100%98%94%FOOTNOTES:1.IntheSpringof2018,theIntelligentDevicesGroup(IDG)wascreatedthroughacombinationofthePC&SmartDevicesGroup(PCSD)andMobileBusinessGroup(MBG).Asaresultofthischange,theintelligentDevicesGroup(IDG),DataCenterGroup(DCG)nowcomprisethecompany’sthreemajorbusinessunits.2.TotalnumberofemployeesincludesLenovoemployees(regularandsupplemental)andcontractors.RestatingtotalnumberofemployeesreportedinFY18/19duetocorrection.3.RestatingtotalnumberofemployeesbyregionreportedinFY18/19duetocorrection.4.Lenovomanufacturingwentthroughaconsolidationperiodin2018.ThisresultedintheclosureoftwocertifiedChinalocationsreportedin2019.5.AllGeographiesin-regionandcorporatebudgetsincludegivingtowardsCOVID-19reliefefforts.TotalcontributioninFY19/20fromLenovowas$6,656,490.50.6.TotalFY2019/20contributionfromChinaregionreflectsthecreationofLenovoFoundationBeijing.7.FY2019/20increaseinLatinAmericagivingreflectstrackingoftheMotorolaBraziltaxincentiveprogram.8.TotalcontributioninAsiaPacificincludesLenovo’scommitmenttotheIndiaCompaniesAct.9.EstimatedvalueofemployeevolunteerhoursinFY2019/20iscalculatedbasedoffanentrylevelhourlywageof$43perhour.10.TotalFY2019/20contributiontocommunitiesthroughcashcontributionsandmatches,andproductdonationsreferstoemployeedonations.Whileestimatedvalueofcommunityimpactthroughphilanthropyandvolunteerismreferstothecostofemployee’stimebeingspentonvolunteering.11.Producttransportationemissionsincludekeyupstreamsuppliersrepresentingmajorityofgloballogisticsspend.Note:UponlookingintoGHGProtocolstandardwedecidedtore-categorizethistoupstreamfromdownstreamtransportation(fromFY2016/17,previousyearswereadjustedaccordingly).12.Emissionsfromwasteincludenon-hazardouswaste,hazardouswasteandwastewaterfromallmanufacturing,R&Dlocationsandsomelargeoffices.Noproductwasteisincluded.1372019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY13.Purchasedgoodsandservicesincludesupplierscovering93%ofdirectglobalsuppliersspend.TheRBACarbonandWaterReportingToolwasusedforcollectionofsupplierdata.Datawasallocatedbasedonrevenue.RestatingFY2018/19figurestoreconcileresultidentifiedthroughaninternalsupplieraudit.14.Fuel-andenergy-relatedactivities(notincludedinScope1or2)includetransmission&distribution(T&D)lossesfromLenovo’sworldwidepurchasedelectricityandnaturalgas.AWorldBankdatabaseandEnergyStarPerformanceRatingdocumentwereusedfordeterminingT&Dlossrates.15.LenovousedthecurrentProductAttributeImpactAlgorithm(PAIA)notebook,desktop,monitor,tablet,all-in-one,thinclientandservertoolforcalculatingemissionsofLenovo’stypicalnotebook,desktop,monitor,tablet,all-in-one,thinclientandserver.Thecalculatedresultsshowemissionsdistributionbydifferentpartsandalsoforuse,packaging,transportation,andend-of-lifetreatmentcategories.Theemissionsassociatedwithuseandend-of-lifetreatmentofsoldproductswereestimatedona“narrow”baselineforthetypicalnotebook,desktop,monitor,tablet,all-in-one,thinclientandservermultipliedbysold/shippedproductvolumes.16.Emissionsfromcapitalgoodsarebasedonpurchasedcapitalgoodsinagivenyear.The2012GuidelinestoDefraGHGConversionFactorsforCompanyReporting,Annex13wasusedforemissionfactorsfordifferenttypeofcapitalgoodsadjustedforinflationrateandexchangerate.17.Approximatelylessthan1%ofpurchasedenergy(electricity)isestimatedbaseduponenergyuseatsimilarLenovofacilitieswithmeteredusage.18.Brazil,China,Germany,India,Japan,Mexico,TaiwanandUnitedStatesrepresentmanufacturingandR&Dsitesinthesemarkets.“RestofWorld”representsallsitesmanagedbyLenovo’sRealEstateorganization(non-manufacturing)acrosstheworld(smallandlarge—excepttheonesinregionslistedabove).19.RenewableenergygenerationcapacityincludeselectricsolarpanelsinHefeiandWuhanChina;MorrisvilleandWhitsett,NC,USAandhotwatersolarpanelsinBeijing,China.20.Waterdataincludesmanufacturing,research&developmentsitesandsomelargeoffices.21.InFY2017/18,theterm“wateruse”wasreplacedwith“waterwithdrawal”,however,whatisbeingmeasuredisunchanged.InFY2019/20,themajorityofwaterwithdrawalswerefromthird-partysourceswithasmallamountsourceddirectlyfromgroundwater.Anyrainwatercollectionisminorandthusnotincludedinthesenumbers.22.AreaswithwaterstressareareaswithhighorextremelyhighbaselinewaterstressaccordingtoWorldResourcesInstitute’sAqueductWaterRiskAtlas.Withdrawal,dischargeandconsumptionvaluesreportedforareaswithwaterstressareasubsetofthewithdrawal,dischargeandconsumptionvaluesreportedinthepreviousrows.23.Wastedataincludessitewastefrommanufacturing,processesandoperations,research&developmentsites,andsomelargeoffices.Wastefromproductsisreportedseparately.24.Lenovo’sProductEnd-of-LifeManagement(PELM)andProductTakeBack(PTB)includesmaterialsfromcustomersandLenovo-ownedcountryreturns,manufacturingandR&Dscrap,andemployeeequipmentfromrealestatesites.25.Duetonewavailabledata,thetotalmetrictonsreportedforcalendaryears2017and2018havebeenrestatedfromthetotalsreportedinpreviousreports.Therevisedtotalprocessedvolumein2017is25,170.63metrictonsandin2018thetotalprocessedis21,009.86metrictons.26.RestatingtotalsduetomiscalculationerrorinCY2018.27.The2019decreaseintotalformonitorscanbeattributedtoafewhighendgamingdisplaysthatcouldnotmeettheEnergyStarrequirementsandLenovo’sdecisiontonottocertifysomeselectlowcostdisplays.1382019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYFY2019/20PERFORMANCEProductAspectsTargetTypeObjectivesKeyPerformanceIndicator(s)Target(s)StatusPackagingMinimizepackagingmaterialconsumptionwhiledrivingtheuseofenvironmentallysustainablematerials.AvailabilityofbulkpackagingSupportbulkpackagingforDCGproductsand/oroptions.TargetmetWeightorvolumereductionAchieve5%reductioninweightorvolumeforatleastoneproduct.TargetpartiallymetIncreasemoreeco-friendlycontentofpackaging.%RecycledcontentMovepackagingcorrugatedboxmaterialrecycledcontenttomorethan50%inMTYMX.TargetmetIntroducingHRC(highrecycledcontent)PE1.7PCFmaterialtomoreproductsandoptionsworldwide.TargetmetIncreaseuseof100%PCCcushionby10%basedonshippingvolumesrelativetopreviousyear.TargetpartiallymetPackagingboxmaterialrecycledcontentmustbeatleast60%orgreaterforallnewphoneproductsreleasedinFY19/20.TargetmetBiodegradable/compostablepackagingIdentifyonenewLenovoproductforwhichtoimplementuseof100%biodegradable/compostablepackaging.Targetmet1392019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYTargetTypeObjectivesKeyPerformanceIndicator(s)Target(s)StatusProductenergyconsumptionDrivereductioninproductenergyuse.EnergyefficiencyNewproductsmustshowimprovedenergyefficiencyrelativetothepreviousgenerationoftheproduct.1TargetmetEnableindustrybestpracticestoreduceenergywasteandimproveefficiencyonnewproductswheretechnicallyandfinanciallyfeasible.TargetmetFinalizeScope3(useofsoldproducts)sciencebasedtargetsforsubmissionbySeptember30,2019insupportofestablishmentofLenovo’ssciencebasedtargets.TargetmetRegulatoryandvoluntaryenergystandardcomplianceEnsureallproductsarecompliantwithregulatoryrequirementsandselectproductsarecompliantwithpreferredenergystandards.TargetmetLowestPowerModelimitsForproductsrequiringIEEE1680.1registration,ensureapplicableproductmeetsLowestPowerModelimitspertherequirementsandexceptionsallowedintheIEEE1680.1standard.TargetmetQuantifylifecycleCO2eemissionsassociatedwiththeuseofLenovoproducts.PCF(kgCO2e)ContinuetosupportexternaldevelopmentofPCFmethodologiesandstandardsthroughmembershipandparticipationinkeyorganizations.TargetmetEnsureproductcarbonfootprintispublishedforallnewLenovoproducts.2TargetmetBegincalculatingPCFfornewlyreleasedserversbyApril1,2019.3TargetmetPerformLCA(life-cycleassessment)foroneLenovoselectedproductbySeptember1,2019.Targetmet1402019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYTargetTypeObjectivesKeyPerformanceIndicator(s)Target(s)StatusProductmaterials1,4,5,6AllproductsacrossallbusinessunitsshallcontainsomePostConsumerRecycledContent(PCC)Plastic.PCCinproduct/externalenclosureAllnewlyreleasedDT,AIO,workstation,notebook,tablet,visualandaccessoryproductsshallcontainaminimumof2%PCCinproduct.TargetmetExploreopportunitiesforPCCusageforMBGproducts.TargetNOTmetAllnewlyreleasedserverproductsshallcontainminimumof10%PCCinexternalenclosure.7TargetmetClosed-loopPCCsupplier,material,usageinproductsEachBU8toimplementuseofclosedloopPCCinatleastoneproductbyMarch31,2020.TargetmetSustaintechnologicaladvancesandmaintainportfoliorelativetolowhalogenproducts.Monitorandrespondtomarketrequirementsinthisarea.LowhalogenpartsForproductsrequiringIEEE1680.1registration,ensureeachplasticpartintheproductexceeding25gshallnotcontaingreaterthan1000ppmchlorineorgreaterthan1000ppmbromineatthehomogeneouslevelpertherequirementsandexceptionsallowedintheIEEE1680.1standard.TargetmetUponcustomerrequestmakeavailableexternalPVC-freecable.TargetmetSiteLocationSiteairemissionsAbsolutereductioninCO2eemissionsfromLenovooperationsworldwide.MetrictonsCO2eReduceLenovo’sglobalScope1+Scope2GHGemissionsby40%byMarch31,2020,relativetoFY2009/109.TargetexceededLME,GRE,LCREandGEAwillestablishglobalactionplanstoreducecombinedScope1andScope2GHGemissionsby40%byMarch31,2020,relativetoFY2009/10.Theplanwillbereviewedandupdatedannually,ataminimum.9TargetmetScience-basedtargetscriteriaevaluationSubmitLenovo’sscience-basedtargetsproposalforofficialevaluationbyScienceBasedTargetinitiativesbyDecember31,2019.Targetpartiallymet1412019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYTargetTypeObjectivesKeyPerformanceIndicator(s)Target(s)StatusSiteenergyconsumptionMaximizeenergyefficiencyandminimizeCO2eemissionsassociatedwiththedevelopment,manufactureanddeliveryofLenovoproducts.Renewableenergygenerationcapacity(MW)Achieve30MWofLenovoownedorleasedrenewableenergygenerationcapacitygloballyby2020.Targetpartiallymet—Progressbeingmadebutsignificantchallengesexisttoachieve2020target.%totalenergyfromREsourcesAchieveaYTYincreaseinenergypurchasedfromrenewablegenerationsourcesglobally,relativetothepreviousFY.10TargetmetEnergyconsumptioninkWhpermillionUS$revenueAchieveYTYimprovedenergyintensity11indexatmanufacturingsitesglobally,relativetothepreviousFY.TargetmetElectricityconsumptioninkWhperemployeeAchieveYTYimprovedelectricityintensity12atR&Dandofficesitesglobally,relativetothepreviousFY.TargetmetWastemanagementMinimizeenvironmentalimpactsassociatedwithsolidwastegeneratedfromLenovooperationsandproducts.%nonhazardoussolidwasterecycledMaintainaglobalnonhazardouswasterecyclingrate>90%(+/-5%).13TargetmetWatermanagementMinimizeenvironmentalimpactsassociatedwithwateruseandwaterdischargefromLenovooperationsandproducts.m3waterTotalglobalwaterwithdrawalwillbe+/-5%ofFY2018/19.Targetmetm3wastewaterTotalglobalwaterwithdrawalwillbe+/-5%ofFY2018/19.TargetmetSupplyChainProductendoflifemanagementProvideproductrecyclingprogramsandrecyclingrelatedinformationthatmeetsorexceedslocallegalrequirementswhereverwedobusiness.GeoreadinessforregistrationtonewIEEE1680.1standardForgeosrequiring1680.1productregistration,ensurerequirementsforend-of-lifeprocessingaremetwithrequireddocumentationinplace.Targetmet1422019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYTargetTypeObjectivesKeyPerformanceIndicator(s)Target(s)StatusSupplierenvironmentalperformanceMonitoranddriveenvironmentalimpactreductionsintheLenovosupplychain.ClimatechangereductiontargetsRequireclimatechangereductiontargetsforatleast85%ofLenovodirectsuppliersbasedonprocurementspend.TargetmetEmissions(Scope1+2)permillionUS$procurementspendReducethesupplieremissionintensity25%by2025relativetoa2015baseyear.TargetresetIEEE1680.1(EPEAT)pointsDriveimprovementsinsupplierISO14001,ISO50001andEMSreportingtosupportBUsinobtainingoptionalIEEE1680.1points.TargetmetMinimizepotentialenvironmentalimpactofLenovo’ssuppliers.CompletionontimeCompleteRBAandCat3environmentalauditsontimeperLenovorequirements.TargetpartiallymetTransportationDrivecollaborativeenvironmentaleffortsinLenovo’sgloballogisticsVariesEnhancelogisticsglobalGHGemissionmeasurementtohavetrackableachievements.TargetmetDriveinternaldecisionmaking&externalcarrierengagementtobuildLenovologisticsgreenleadership.TargetmetDrivenetworkoptimizationandtechnicalsolutionsfrompackaging&recyclingtoreduceemissions.TargetmetFOOTNOTES:Note1:AnexemptionfromtargetsinthisareamayberequestedwheretheBUcanclearlydemonstrateachievingthetargetplacestheLenovoproductatalargepricedisadvantageagainstitscompetitionorisnottechnicallyfeasible.Note2:ForproductsforwhichaPAIAtoolexists.Note3:Forgeneralpurposeproducts.Hyperscaleproductshaveexemption.Note4:AvailabilityofPCCplasticscanbedeterminedthroughconsultationwithenvironmentalaffairsand/orsuppliersontheLenovoApprovedPCCSupplierlist.Note5:TodriveincreasedusageofPCCallBUsshallincludearequirementfortheidentificationofapplicationsfortheuseofPCCinMRDandRFI/RFQ.PCCshallbeusedwhentechnicalspecificationsandcostparityaremet.Note6:PCCpercentageiscalculatedusingEPEATmethodology.Note7:IfproductnotbeingregisteredtoEPEAT,PM2isN/A.IfproductisbeingregisteredtoEPEAT,exemptionsallowedperEPEATrequirements.Note8:Optionalforserversandphones.Note9:Thesegoalsmaybeaccomplishedthroughenergyefficiency,installationofonsiterenewablegeneration,entryintopowerpurchaseagreements(PPA)withpowerproviders,and/orthepurchaseofrenewableenergycreditsandcarbonoffsets.Note10:Thisgoalmaybeaccomplishedthrough,installationofonsiterenewableenergygeneration,entryintopowerpurchaseagreements(PPA)withpowerprovidersand/orthepurchaseofrenewableenergycredits.Note11:EnergyintensityindexisenergyconsumptioninkWhperproductionvolume.Note12:ElectricityintensityiselectricityconsumptioninkWhperemployee.Note13:Percentofnonhazardoussolidwastedisposedofthroughreuse,recycleorincinerationwithenergyrecovery.1432019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYFY2020/21OBJECTIVESANDTARGETSProductAspectsTargetTypeObjectivesTarget(s)PackagingMinimizepackagingmaterialconsumptionwhiledrivingtheuseofenvironmentallysustainablematerials.SupportbulkpackagingforDCGproductsand/oroptions.Achieve5%reductioninweightorvolumeforatleastoneproduct.Increasemoreeco-friendlycontentofpackaging.Movepackagingcorrugatedboxmaterialrecycledcontenttomorethan50%inMTYMX.IntroducingHRC(highrecycledcontent)PE1.7PCFmaterialtomoreproductsandoptionsWW.MeetBronzelevelpackagingrecycledcontentrequirementsofNSF/ANSI426forThinkSystemSR630.Increaseuseof100%PCCcushionby10%basedonshippingvolumesrelativetopreviousyear.Packagingboxmaterialrecycledcontentmustbeatleast60%orgreaterforallnewphoneproductsreleasedinFY20/21.IdentifyonenewLenovoproductforwhichtoimplementuseof100%biodegradable/compostablepackaging.ProductEnergyDrivereductioninproductenergyuse.Newproductsmustshowimprovedenergyefficiencyrelativetothepreviousgenerationoftheproduct.1Enableindustrybestpracticestoreduceenergywasteandimproveefficiencyonnewproductswheretechnicallyandfinanciallyfeasible.ForproductswithpreferredenergystandardssuchasENERGYSTAR®listedinthemarketingrequirementsdocument(MRD),ensurethatallrequirementsaremetpriortoproductannouncement.Driveproductemissionsreductionsfromuseofsoldproducts.Reducescope3GHGemissionsfromuseofsoldproducts25%percomparableproduct(fornotebooks,desktopsandservers)byFY2029/30fromaFY2018/19baseyear.QuantifylifecycleCO2eemissionsassociatedwiththeuseofLenovoproducts.EnsureproductcarbonfootprintispublishedforallnewLenovoproducts.2DevelopandestablishLenovointernalLCAplatformbeforeMarch31,2021.3PerformLCA(life-cycleassessment)foratleastoneLenovoselectedproductbyMarch31,2021.4ProductsMaterials1,5,6,7AllproductsacrossallbusinessunitsshallcontainsomePost-ConsumerRecycledContent(PCC)Plastic.NewDT,AIO,workstation,notebook,tablet,visualandaccessoryproductsshallcontainaminimumof2%ormorePCCinproduct.ExploreopportunitiesforPCCusageforMBGproducts.Newserverproductsshallcontainminimumof10%ormorePCCinexternalenclosure.8ImplementuseofclosedloopPCCinDT,AIO,workstation,notebook,tablet,visual,accessory,serverandphoneproducts.Sustaintechnologicaladvancesandmaintainportfoliorelativetolowhalogenproducts.Monitorandrespondtomarketrequirementsinthisarea.ForproductsrequiringIEEE1680.1registration,ensureeachplasticpartintheproductexceeding25gshallnotcontaingreaterthan1000ppmchlorineorgreaterthan1000ppmbromineatthehomogeneouslevelpertherequirementsandexceptionsallowedintheIEEE1680.1standard.Uponcustomerrequest,makeavailableexternalPVC-freecable.1442019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYTargetTypeObjectivesTarget(s)LocationAspectsSiteAirEmissionsAbsolutereductioninCO2eemissionsfromLenovooperationsworldwide.SAE1—Reduceabsolutescope1and2GHGemissions50%byFY2029/30fromaFY2018/19baseyear.9SiteEnergyConsumptionMaximizeenergyefficiencyandminimizeCO2eemissionsassociatedwiththedevelopment,manufactureanddeliveryofLenovoproducts.Achieve30MWofLenovoownedorleasedrenewableenergygenerationcapacitygloballyby2020.10AchieveaYTYincreaseinenergypurchasedfromrenewablegenerationsourcesglobally,relativetothepreviousFY.11AchieveYTYimprovedenergyintensity12indexatmanufacturingsitesglobally,relativetothepreviousFY.AchieveYTYimprovedelectricityintensity13atR&Dandofficesitesglobally,relativetothepreviousFY.ReducetotalenergyconsumptionatISO50001certifiedlocationsbyatleast1.5%innext3years,relativetotheFY2019/20energybaseline.14WasteManagementMinimizeenvironmentalimpactsassociatedwithsolidwastegeneratedfromLenovooperationsandproducts.Maintainaglobalnon-hazardouswasterecyclingrate>90%(+/-5%).15WaterManagementMinimizeenvironmentalimpactsassociatedwithwaterwithdrawalandwaterdischargefromLenovooperationsandproducts.Totalglobalwaterwithdrawalwillbe+/-5%ofFY2019/20.Totalglobalwastewatergenerationwillbe+/-5%ofFY2019/20.SupplyChainAspectsProductEndofLifeManagementMinimizetheenvironmentalimpactofLenovoproductsatendoflife.Forgeosrequiring1680.1andNSF/ANSI426productregistration,ensurerequirementsforend-of-lifeprocessingaremetwithrequireddocumentationinplace.TransitionCategory3supplierauditstoapprovedthirdpartyauditorsinappropriategeos.SupplierEnvironmentalPerformanceMonitor,driveandminimizeenvironmentalimpactintheLenovosupplychain.Requirewaterandwastepublicgoalsforatleast85%ofLenovodirectsuppliersbasedonprocurementspend.ReduceScope3GHGemissionsfrompurchasedgoodsandservices25%permillionUS$procurementspendbyFY2029/30fromaFY2018/19baseyear.Achieve65%ofLenovodirectsuppliersbasedonprocurementspendtobeISO50001certified(atleastonesuppliers’manufacturinglocation).Achieve85%ofLenovodirectsuppliersbasedonprocurementspendtoreporttotheCDPclimatechangequestionnaire.TransportationDrivecollaborativeenvironmentaleffortsinLenovo’sgloballogistics.Strengthenemissionmeasurement&tracking.DeliverGreenLeadershipthroughinternal&externalengagement.Developtechnicalsolutionsandexpandoptimizationeffortstomoreregions.ReduceScope3GHGemissionsfromupstreamtransportationanddistribution25%pertonne-kmoftransportedproductbyFY2029/30fromaFY2018/19baseyear.1452019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYTargetTypeObjectivesTarget(s)Product,LocationandSupplyChainAspectsCircularEconomyPreparednessforincreasedcircularmaterialandproductflowapproachincludingreuse,reduce,recycle,refurbish,recovery,repair,remanufacture,redistributeandmaintain.Evaluatecirculareconomyconceptreadiness.FOOTNOTES:Note1:AnexemptionfromtargetsinthisareamayberequestedwheretheBUcanclearlydemonstrateachievingthetargetplacestheLenovoproductatalargepricedisadvantageagainstitscompetitionorisnottechnicallyfeasible.Note2:ForproductsforwhichaPAIAtoolexists.IfrequestedbyGEOsalesor/andcustomers,provideatailoredPCFevaluationbasedonthespecificproductconfiguration.Note3:Readytouseforallproductcategories.Note4:Notebookandaccessoriesasappropriate.Note5:AvailabilityofPCCplasticscanbedeterminedthroughconsultationwithenvironmentalaffairsand/orsuppliersontheLenovoApprovedPCCSupplierlist.Note6:TodriveincreasedusageofPCCallBUsshallincludearequirementfortheidentificationofapplicationsfortheuseofPCCinMRDandRFI/RFQ.PCCshallbeusedwhentechnicalspecificationsandcostparityaremet.Note7:PCCpercentageiscalculatedusingEPEATmethodology.Note8:IfproductnotbeingregisteredtoEPEAT,PM3isnotapplicableforserverproduct.IfproductisbeingregisteredtoEPEAT,exemptionsallowedperEPEATrequirements.Note9:Thisgoalmaybeaccomplishedthroughenergyefficiency,installationofonsiterenewablegeneration,entryintopowerpurchaseagreements(PPA)withpowerproviders,and/orthepurchaseofrenewableenergycommodities.Note10:Committedisacceptable.Note11:Thisgoalmaybeaccomplishedthrough,installationofonsiterenewableenergygeneration,entryintopowerpurchaseagreements(PPA)withpowerprovidersand/orthepurchaseofrenewableenergycredits.Note12:EnergyintensityindexisenergyconsumptioninkWhperproductionvolume.Note13:ElectricityintensityiselectricityconsumptioninkWhperemployee.Note14:ApplicabletoLenovo’sISO50001certifiedlocationsasofMarch31,2020.Note15:Percentofnonhazardoussolidwastedisposedofthroughreuse,recycleorincinerationwithenergyrecovery.1462019/20LenovoEnvironmental,SocialandGovernanceReport9.0Appendix148Lenovo’sGlobalESGRecognition150ReferenceDocumentation153MaterialTopicBoundaries154TheU.N.GlobalCompactCommunicationonProgress155GRIContentIndex160HongKongStockExchangeESGReportingGuideContentIndex1472019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY1482019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYLENOVO’SGLOBALESGRECOGNITION2020WORLD’SMOSTADMIREDCOMPANIESFORTUNE2019GOLDRATINGINCSREcoVadis2020GENDER-EQUALITYINDEXBloomberg2019CONSTITUENTFTSE4GoodIndexSeries2020CARBONCLEAN200™Clean2001492019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITY20202019RATING:AAHangSengCorporateSustainabilityIndexPLATINUMAWARDINCORPORATEGOVERNANCESUSTAINABILITYANDSOCIALRESPONSIBILITYREPORTINGAWARDHongKongInstituteofCertifiedPublicAccountants2020BESTPLACESTOWORKHumanRightsCampaignFoundation2019OVERALLESGSCORE:LEADERSUSTAINALYTICS2020MOSTSUSTAINABLECORPORATIONSINTHEWORLDGLOBAL100PLATINUMAWARDLENOVO1502019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYREFERENCEDOCUMENTATIONThelistbelowcontainshyperlinkstothewebpagesandotherreferencesincludedthroughoutthisreport.Ifyouarereadingthisasaprinteddocument,youmaygettotheselinksbyopeningthisESGReportonLenovo’swebsiteat:https://investor.lenovo.com/en/sustainability/sustainability_reports.php.Lenovomaintainsthepolicies,certifications,verificationstatementsandotherdocumentsmentionedinthisreportontheESGwebsite.Toaccesstheseresources,pleasevisithttps://www.lenovo.com/us/en/sustainability-resources.SECTION1.0OurglobalresponsetoCOVID-19SprintingtoBringTechtoEmergencyHospitalsinWuhan,China:https://news.lenovo.com/sprinting-to-bring-tech-to-emergency-hospitals-in-wuhan-covid-19/Supercomputers,GenomeSequencing,andtheRacetoDecodeCoronavirus:https://news.lenovo.com/supercomputers-genome-sequencing-race-to-decode-coronavirus-bgi/LenovoDonates$1.4MilliontoProvideOnlineEducationforStudentsinHubei:https://news.lenovo.com/lenovo-donates-1–4-million-to-provide-online-education-for-students-in-hubei-china/ZeroExclusion:LenovoAnswersItalianAppealforStudentPCs:https://news.lenovo.com/zero-exclusion-lenovo-answers-italian-appeal-for-student-pcs/DonatedPCsHelpRefugee&ImmigrantStudentsAdaptandFinishSchoolYearStrong:https://news.lenovo.com/donated-pcs-help-refugee-immigrant-students-adapt-finish-school-year-strong/TheLenovoFoundation:https://www.motorola.com/us/about/motorola-mobility-foundationLenovo’sResponsetoCOVID-19:https://news.lenovo.com/lenovo-responds-to-covid-19-message-from-ceo-yuanqing-yang/TransformingGlobalManufacturingtoProtectWorkersandServeCustomersDuringCOVID-19:https://news.lenovo.com/transforming-global-manufacturing-to-protect-workers-and-serve-customers-during-covid-19/LogisticsintheTimeofCoronavirus:HowLenovoAdaptstoanEver-ChangingLandscape:https://news.lenovo.com/logistics-in-the-time-of-coronavirus-how-lenovo-adapts-to-an-ever-changing-landscape/BuildingadiverseandinclusiveorganizationSmarterEmbracesDifferent:LenovoBuildsMomentuminDiversityandInclusion:https://news.lenovo.com/smarter-embraces-different-lenovo-builds-momentum-in-diversity-and-inclusion/LenovoFeaturedonBloombergandHumanRightsCampaignFoundationEqualityIndexes:https://news.lenovo.com/pressroom/press-releases/lenovo-featured-on-bloomberg-and-human-rights-campaign-foundation-equality-indexes/ForbesChina:50TopWomenInTech:https://www.forbes.com/sites/russellflannery/2020/07/06/forbes-china-50-top-women-in-tech/#3daf59864c05InnovatingasmarterfutureforallIntroducingLenovo’sFirstAccessibilityandInclusionAdvisor:https://news.lenovo.com/pressroom/press-releases/introducing-lenovos-first-accessibility-and-inclusion-advisor-haben-girma/LenovoSignsuptoTheValuable500CommitmentandPledgestoPutDisabilityInclusionontheBusinessAgenda:https://news.lenovo.com/pressroom/press-releases/lenovo-signs-valuable-500-commitment-pledges-disability-inclusion-on-business-agenda/1512019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYDigitalDeclarationsignatories:companies’responsetoCOVID-19:https://www.digitaldeclaration.com/#signatoriesLenovoTransformsTraditionalFormFactorsThatEmbraceAFoldableFutureandLaunchesWorld’sFirst5GPC:https://news.lenovo.com/pressroom/press-releases/lenovo-transforms-traditional-form-factors-that-embrace-a-foldable-future-and-launches-worlds-first-5g-pc/LenovoUnveilsPreviewoftheWorld’sFirstFoldablePCinThinkPadX1Family:https://news.lenovo.com/pressroom/press-releases/worlds-first-foldable-pc-thinkpad-x1-fold-ushers-in-a-new-era-of-mobile-computing/AI-DrivenAnalysisRevolutionizesEarly-StageTumorRemoval:https://news.lenovo.com/ai-analysis-revolutionizes-early-stage-tumor-removal-techsomed/SmarterDataHelpsFarmersRapidlyAdapttoClimateChange:https://news.lenovo.com/nc-state-smarter-data-helps-farmers-rapidly-adapt-to-climate-change/ScienceBasedTargetInitiative:https://sciencebasedtargets.org/ShapingLenovo’stechnologytocreateabetterworld:CDPSustainabilityRanking:LenovoRecognizedatLeadershipLevel:https://news.lenovo.com/pressroom/press-releases/cdp-sustainability-ranking-lenovo-recognized-at-leadership-level/Portable,PowerfulThinkPadsEnableMarineScienceandConservation:https://news.lenovo.com/portable-powerful-thinkpads-enable-marine-science-conservation-hydrous/HowDisruptiveTechnologyisRevolutionizingHealthcare:https://news.lenovo.com/how-disruptive-technology-is-revolutionizing-healthcare/SECTION2.0FY2019/20AnnualReport:https://investor.lenovo.com/en/publications/reports.phpUnitedNationsGlobalCompact:https://www.unglobalcompact.org/UnitedNationsSustainableDevelopmentGoals:https://www.unglobalcompact.org/sdgsSECTION3.0MotorolaMobilityLLC(Motorola):https://www.motorola.com/us/aboutISO27001:https://www.lenovo.com/us/en/compliance/iso-27001LenovoEmployeeCodeofConduct:https://static.lenovo.com/ww/docs/sustainability/lenovo-code-english-final-v7.pdfLenovoInvestorRelationswebsite:https://investor.lenovo.com/en/global/home.phpSECTION4.0ISO9001:https://www.lenovo.com/us/en/compliance/iso-9001LenovoQualityPolicy:https://www.lenovo.com/us/en/lenovo/about/qualityLenovo’sProductSafetyandErgonomicsPolicyisavailableat:https://www.lenovo.com/us/en/social_responsibility/Lenovo-Policy-Product-Safety-and-Ergonomics.pdfLenovo’saccessibilitypolicy:https://www.lenovo.com/us/en/compliance/accessibility-conformanceLenovoCompliancedocuments:https://www.lenovo.com/us/en/sustainability-resources#res4Lenovo’s“EyeCareMode”tool:www.lenovo.com/us/en/blue-light1522019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSECTION5.0ISO14001EnvironmentalManagementSystemscertification:https://www.lenovo.com/us/en/compliance/iso-14001ISO50001EnergyManagementSystemscertification:https://www.lenovo.com/us/en/compliance/iso-50001ChinaMinistryofIndustryandInformationTechnologyannouncement:https://news.lenovo.com/pressroom/press-releases/top-companies-going-green-in-china-for-manufacturing-supply-chain-innovation/ConflictMineralsReport:https://static.lenovo.com/ww/docs/sustainability/lenovo_responsible_minerals_sourcing_updates%20%20cy2019_final.pdfGartnerTop25announcement:https://www.gartner.com/en/newsroom/press-releases/2020-05-20-gartner-announces-rankings-of-the-2020-supply-chain-top-25LenovoSupplierandManufacturinglocationlist:https://static.lenovo.com/ww/docs/sustainability/lenovo-list-mfg-sites-and-suppliers.pdfSupplierDiversitywebsite:Formoreinformation,pleasevisitourSupplierDiversitywebpageat:https://www.lenovo.com/us/en/sustainability-supplier-diversityLenovoandSchneiderElectricpartnershipannouncement:https://news.lenovo.com/pressroom/press-releases/lenovo-and-schneider-electric-announce-strategic-partnership-to-work-on-smart-green-manufacturing/SECTION6.0DIVERSITYANDINCLUSION:2019DiversityandInclusionReport:https://www.lenovo.com/us/en/about/diversityGROWINGOURTALENTLenovo’sEarlyCareerDevelopmentprograms:https://www.lenovo.com/us/en/about/diversity/programsSOCIALIMPACT:Jangala:https://www.janga.la/BigBox:https://www.janga.la/big-boxWomen’sForumfortheEconomyandSociety:http://www.womens-forum.com/LenovoFoundation:https://www.motorola.com/us/about/motorola-mobility-foundationASmarterResponsetoCOVID-19ComplimentaryLanSchoolAirlicensestohelplessentheimpactofCoronavirusclosures:https://lanschool.com/lp/complimentary_lsa_covid19/LenovoAnnouncesStrategicPartnershipwithSentinelOne:https://news.lenovo.com/pressroom/press-releases/partnership-with-sentinelone-enhancing-thinkshield-ai-powered-endpoint-security/LenovoDonates$1.4MilliontoProvideOnlineEducationforStudentsinHubeiProvince:https://news.lenovo.com/lenovo-donates-1–4-million-to-provide-online-education-for-students-in-hubei-china/SprintingtoBringTechtoEmergencyHospitalsinWuhan,China:https://news.lenovo.com/sprinting-to-bring-tech-to-emergency-hospitals-in-wuhan-covid-19/Supercomputers,GenomeSequencing,andtheRacetoDecodeCoronavirus:https://news.lenovo.com/supercomputers-genome-sequencing-race-to-decode-coronavirus-bgi/1532019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYSECTION7.0ISO14001:https://www.lenovo.com/us/en/compliance/iso-14001ISO50001:https://www.lenovo.com/us/en/compliance/iso-50001GHGandEnergyVerificationStatement:https://www.lenovo.com/us/en/sustainability-resources#res3WaterVerificationStatement:https://www.lenovo.com/us/en/sustainability-resources#res3WasteVerificationStatement:https://www.lenovo.com/us/en/sustainability-resources#res3ClimateChangeStrategy,ObjectivesandTargets:https://www.lenovo.com/us/en/sustainability-climate-changeUSEPATop30Tech&TelecomGreenPowerPartner:https://www.epa.gov/greenpower/green-power-partnership-top-30-tech-telecom-0ScienceBasedTargetsInitiative:www.sciencebasedtargets.orgWeMeanBusiness:https://www.wemeanbusinesscoalition.org/GreenFreightAlliance:https://www.smartfreightcentre.org/en/news/lenovo/1428/MATERIALTOPICBOUNDARIESSeepage10forscopeofcoveragedetails.ProductDevelopmentSupplyChainManufacturingSales&MarketingDistributionUse/EndofLifeCommunitiesESGReportScopeofCoverageEnvironmentalEmissions/ClimateChangeLenovo,Motorola,LCFC,Medion,NECPC,FCCLEnergyLenovo,Motorola,LCFC,Medion,NECPC,FCCLProductPackagingandMaterialsLenovo,Motorola,LCFC,Medion,NECPC,FCCLWaste/RecyclingLenovo,Motorola,LCFC,Medion,NECPC,FCCLWaterLenovo,Motorola,LCFC,Medion,NECPC,FCCLSocialCommunity/PhilanthropyLenovo,MotorolaDiversityandInclusionLenovo,MotorolaHumanRightsLenovoandMotorolaarefullyincorporatedintoLenovo’scorporateprogramsinthisarea.SafetyLenovo,Motorola,NECPCGovernanceEconomicPerformanceSeepages4–5:FY2019/20AnnualReportEthics/IntegrityLenovoandMotorolaarefullyincorporatedintoLenovo’scorporateprogramsinthisarea.DataPrivacy/SecurityLenovo,Motorola,othersubsidiarieshaveuniqueprogramsalignedwithLenovo’sprogram.ProductQualityLenovo,MotorolaRegulatory/ComplianceLenovo,MotorolaTechnologyandInnovationLenovo,Motorola1542019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYTHEU.N.GLOBALCOMPACTCOMMUNICATIONONPROGRESSTheU.N.GlobalCompactisapublic-privatestrategicpolicyinitiativeforbusinessescommittedtoaligningoperationsandstrategieswithtenuniversallyacceptedprinciplesintheareasofhumanrights,labour,environment,andanti-corruption.LenovobecameasignatorytotheU.N.GlobalCompactin2009andourChairmanandCEO,Mr.YangYuanqing,continuestofullyendorseandsupportitsprinciples.ThisreportservesasLenovo’s2019/20CommunicationonProgress.HUMANRIGHTSPrinciple1:Businessesshouldsupportandrespecttheprotectionofinternationallyproclaimedhumanrights;Seepages:5,7,14–15,50,53–54,64–65Principle2:makesurethattheyarenotcomplicitinhumanrightsabuses.Seepages:5,7,14–15,50,53–54,64–65LABOURPrinciple3:Businessesshouldupholdthefreedomofassociationandtheeffectiverecognitionoftherighttocollectivebargaining;Seepages14–15,65,75Principle4:theeliminationofallformsofforcedandcompulsorylabour;Seepages:14–15,56,64–65Principle5:theeffectiveabolitionofchildlabour;andSeepages:14–15,56,64–65Principle6:theeliminationofdiscriminationinrespectofemploymentandoccupation.Seepages:14–15,24,52,54,69ENVIRONMENTPrinciple7:Businessesshouldsupportaprecautionaryapproachtoenvironmentalchallenges;Seepages:14–15,50–59,109–110Principle8:undertakeinitiativestopromotegreaterenvironmentalresponsibility;andSeepages:14–15,50–59,90–127Principle9:encouragethedevelopmentanddiffusionofenvironmentallyfriendlytechnologies.Seepages:14–15,106–118ANTI-CORRUPTIONPrinciple10:Businessesshouldworkagainstcorruptioninallitsforms,includingextortionandbribery.Seepages:14–15,23–24,54–59,64–651552019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYGRICONTENTINDEXGRIStandardDisclosurePagenumber(s)and/orreferencematerial(s)URLand/orreferencematerial(s)GRI101:Foundation2016GeneralDisclosuresGRI102:GeneralDisclosures2016Organizationalprofile102–1NameoftheorganizationCoverpage,10,18102–2Activities,brands,products,andservices18102–3Locationofheadquarters10102–4Locationofoperations10,90–91102–5OwnershipandlegalformFY2019/20AnnualReport:67,124https://investor.lenovo.com/en/publications/reports.php102–6Marketsserved18102–7Scaleoftheorganization18,130–131102–8Informationonemployeesandotherworkers131102–9Supplychain50–61102–10Significantchangestotheorganizationanditssupplychain50–61102–11PrecautionaryPrincipleorapproach109–110102–12Externalinitiatives14,92–93102–13Membershipofassociations92–93Strategy102–14Statementfromseniordecision-maker4–7Ethicsandintegrity102–16Values,principles,standards,andnormsofbehavior22–23Governance102–18Governancestructure20–21,FY2019/20AnnualReport:58–106https://investor.lenovo.com/en/publications/reports.php102–20Executive-levelresponsibilityforeconomic,environmental,andsocialtopics20–21,FY2019/20AnnualReport:125https://investor.lenovo.com/en/publications/reports.php102–21Consultingstakeholdersoneconomic,environmental,andsocialtopics11–13102–23ChairofthehighestgovernancebodyFY2019/20AnnualReport:59https://investor.lenovo.com/en/publications/reports.php102–24NominatingandselectingthehighestgovernancebodyFY2019/20AnnualReport:62–63https://investor.lenovo.com/en/publications/reports.php102–25ConflictsofinterestFY2019/20AnnualReport:66https://investor.lenovo.com/en/publications/reports.phpStakeholderengagement102–40Listofstakeholdergroups12–13102–41Collectivebargainingagreements75102–42Identifyingandselectingstakeholders12–13102–43Approachtostakeholderengagement12–13102–44Keytopicsandconcernsraised12–13Reportingpractice102–45EntitiesincludedintheconsolidatedfinancialstatementsFY2019/20AnnualReport:282–291https://investor.lenovo.com/en/publications/reports.php102–46DefiningreportcontentandtopicBoundaries10–12102–47Listofmaterialtopics10–13102–48Restatementsofinformation136–137102–49Changesinreporting136–137102–50Reportingperiod10102–51Dateofmostrecentreport10102–52Reportingcycle10102–53Contactpointforquestionsregardingthereport10102–54ClaimsofreportinginaccordancewiththeGRIStandards10102–55GRIcontentindex155102–56Externalassurance93,103–1051562019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYGRIStandardDisclosurePagenumber(s)and/orreferencematerial(s)URLand/orreferencematerial(s)MaterialTopics200series(Economictopics)EconomicPerformanceGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary16–22https://investor.lenovo.com/en/publications/reports.php103–2ThemanagementapproachanditscomponentsFY2019/20AnnualReport:16https://investor.lenovo.com/en/publications/reports.php103–3EvaluationofthemanagementapproachFY2019/20AnnualReport:16–55https://investor.lenovo.com/en/publications/reports.phpGRI201:EconomicPerformance2016201–2FinancialimplicationsandotherrisksandopportunitiesduetoclimatechangeFY2019/20AnnualReport:16–55https://investor.lenovo.com/en/publications/reports.phpProcurementPracticesGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary50–61103–2Themanagementapproachanditscomponents50–61103–3Evaluationofthemanagementapproach50–61GRI204:ProcurementPractices2016204–1Proportionofspendingonlocalsuppliers50–61Anti-corruptionGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary22–24103–2Themanagementapproachanditscomponents22–24103–3Evaluationofthemanagementapproach22–24GRI205:Anti-corruption2016205–2Communicationandtrainingaboutanti-corruptionpoliciesandprocedures22–24Anti-competitiveBehaviorGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary23103–2Themanagementapproachanditscomponents23103–3Evaluationofthemanagementapproach23GRI206:Anti-competitiveBehavior2016206–1Legalactionsforanti-competitivebehavior,anti-trust,andmonopolypractices23300series(Environmentaltopics)MaterialsGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary90–92,106–110103–2Themanagementapproachanditscomponents90–92,106–110103–3Evaluationofthemanagementapproach90–92,106–110,136,138,140GRI301:Materials2016301–2Recycledinputmaterialsused106–127,135–136301–3Reclaimedproductsandtheirpackagingmaterials106–127,135–1361572019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYGRIStandardDisclosurePagenumber(s)and/orreferencematerial(s)URLand/orreferencematerial(s)EnergyGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary90–92,94–103103–2Themanagementapproachanditscomponents90–92,94–103103–3Evaluationofthemanagementapproach90–92,94–103,133–134,139,141GRI302:Energy2016302–1Energyconsumptionwithintheorganization102,133–135302–3Energyintensity133302–4Reductionofenergyconsumption102,133–135302–5Reductionsinenergyrequirementsofproductsandservices111–114,136LenovoreportscurrentandhistoricalpercentofproductthatareEnergyStarcertifiedasametricindicativeofproductenergyefficiency.WaterGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary90–92,105103–2Themanagementapproachanditscomponents90–92,105103–3Evaluationofthemanagementapproach90–92,105,135,141GRI303:WaterandEffluents2018303–1Interactionswithwaterasasharedresource105303–3Waterwithdrawal135303–4Waterdischarge135303–5Waterconsumption135EmissionsGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary90–92,94–104103–2Themanagementapproachanditscomponents90–92,94–104103–3Evaluationofthemanagementapproach94–104,133–135,139–140GRI305:Emissions2016305–1Direct(Scope1)GHGemissions96,102,133,136–137305–2Energyindirect(Scope2)GHGemissions96,102,133,136–137305–3Otherindirect(Scope3)GHGemissions96,102,133,136–137305–4GHGemissionsintensity133305–5ReductionofGHGemissions94–104,133–135,139–140Rationaleforbaselineyearisnotincluded.BaselineyearwasselectedtocoincidewithLenovo’sfiscalyearwhenourclimatechangeinitiativebegan.EffluentsandWasteGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary90–92,104103–2Themanagementapproachanditscomponents90–92,104103–3Evaluationofthemanagementapproach90–92,104,135,141GRI306:Waste2020306–1Wastegenerationandsignificantwaste-relatedimpacts104,115–127306–2Managementofsignificantwaste-relatedimpacts104,115–127306–3Wastegenerated104,135306–4Wastedivertedfromdisposal104,135306–5Wastedirectedtodisposal104,135EnvironmentalComplianceGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary90–93103–2Themanagementapproachanditscomponents90–93103–3Evaluationofthemanagementapproach90–93,LenovoFY2019/20AnnualReport:37https://doc.irasia.com/listco/hk/lenovo/annual/2020/ar2020.pdfGRI307:EnvironmentalCompliance2016307–1Non-compliancewithenvironmentallawsandregulationsLenovoFY2019/20AnnualReport:37https://doc.irasia.com/listco/hk/lenovo/annual/2020/ar2020.pdf1582019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYGRIStandardDisclosurePagenumber(s)and/orreferencematerial(s)URLand/orreferencematerial(s)SupplierEnvironmentalAssessmentGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary50–58103–2Themanagementapproachanditscomponents50–58103–3Evaluationofthemanagementapproach50–58GRI308:SupplierEnvironmentalAssessment2016308–1Newsuppliersthatwerescreenedusingenvironmentalcriteria57Lenovoannuallysurveysandtracksenvironmentaldatafor95%ofourprocurementspend.Lenovodoesnotreportwhatpercentageofnewsuppliersthisincludes.308–2Negativeenvironmentalimpactsinthesupplychainandactionstaken57–58400series(Socialtopics)OccupationalHealthandSafetyGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary37–43103–2Themanagementapproachanditscomponents37–43103–3Evaluationofthemanagementapproach37–43GRI403:OccupationalHealthandSafety2018403–1Occupationalhealthandsafetymanagementsystem37–43403–2Hazardidentification,riskassessment,andincidentinvestigation37–43403–4Workerparticipation,consultation,andcommunicationonoccupationalhealthandsafety37–43403–5Workertrainingonoccupationalhealthandsafety37–43403–6Promotionofworkerhealth37–43403–9Work-relatedinjuries127403–10Work-relatedillhealth127DiversityandEqualOpportunityGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary62–64,2019D&IReporthttps://static.lenovo.com/ww/docs/ww-report-lenovo-diversity-and-inclusion-2019.pdf103–2Themanagementapproachanditscomponents62–64,2019D&IReporthttps://static.lenovo.com/ww/docs/ww-report-lenovo-diversity-and-inclusion-2019.pdf103–3Evaluationofthemanagementapproach62–64,2019D&IReporthttps://static.lenovo.com/ww/docs/ww-report-lenovo-diversity-and-inclusion-2019.pdfGRI405:DiversityandEqualOpportunity2016405–1Diversityofgovernancebodiesandemployees62–64,2019D&IReporthttps://static.lenovo.com/ww/docs/ww-report-lenovo-diversity-and-inclusion-2019.pdfForcedorCompulsoryLabourGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary47–56,61–62103–2Themanagementapproachanditscomponents47–56,61–62103–3Evaluationofthemanagementapproach47–56,61–62GRI409:ForcedorCompulsoryLabour2016409–1Operationsandsuppliersatsignificantriskforincidentsofforcedorcompulsorylabour47–56,61–621592019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYGRIStandardDisclosurePagenumber(s)and/orreferencematerial(s)URLand/orreferencematerial(s)HumanRightsAssessmentGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary47–56,61–62103–2Themanagementapproachanditscomponents47–56,61–63103–3Evaluationofthemanagementapproach47–56,61–64412–2Employeetrainingonhumanrightspoliciesorprocedures47–56,61–64LocalCommunitiesGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary73–84103–2Themanagementapproachanditscomponents73-84103–3Evaluationofthemanagementapproach73-84GRI413:LocalCommunities2016413–1Operationswithlocalcommunityengagement,impactassessments,anddevelopmentprograms73-84CustomerPrivacyGRI103:ManagementApproach2016103–1ExplanationofthematerialtopicanditsBoundary23103–2Themanagementapproachanditscomponents23103–3Evaluationofthemanagementapproach23GRI418:CustomerPrivacy2016418–1Substantiatedcomplaintsconcerningbreachesofcustomerprivacyandlossesofcustomerdata23Lenovodoesnotreportthenumberofsubstantiatedcomplaintsorlossofcustomerdatasincethisinformationisnotrolleduptoagloballevel.1602019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYHONGKONGSTOCKEXCHANGEESGREPORTINGGUIDECONTENTINDEXIndicatesthatdisclosure/KPIwillcomeintoeffectas“complyorexplain”provisionforfinancialyearscommencingonorafter1July2020.GeneralDisclosuresandKPIsPageNumber(s)References/AdditionalInformationSubjectAreaA.EnvironmentalAspectA1:EmissionsGeneralDisclosureInformationon:(a)thepolicies;and(b)compliancewithrelevantlawsandregulationsthathaveasignificantimpactontheissuerrelatingtoairandgreenhousegasemissions,dischargesintowaterandland,andgenerationofhazardousandnon-hazardouswaste.Note:AiremissionsincludeNOx,SOx,andotherpollutantsregulatedundernationallawsandregulations.Greenhousegasesincludecarbondioxide,methane,nitrousoxide,hydrofluorocarbons,perfluorocarbonsandsulphurhexafluoride.Hazardouswastesarethosedefinedbynationalregulations.96,102–104,133–134Seealso:https://www.lenovo.com/us/en/social_responsibility/environmental_policy/https://www.lenovo.com/us/en/social_responsibility/climate_policy/KPIA1.1Thetypesofemissionsandrespectiveemissionsdata.96,102–104,133–135KPIA1.2Direct(Scope1)andenergyindirect(Scope2)greenhousegasemissionsintotal(intonnes)and,whereappropriate,intensity(e.g.perunitofproductionvolume,perfacility).102–104,133–135—Scope1emissions102–104,133–135—Scope2emissions102–104,133–135KPIA1.3Totalhazardouswasteproduced(intonnes)and,whereappropriate,intensity(e.g.perunitofproductionvolume,perfacility).104,135KPIA1.4Totalnon-hazardouswasteproduced(intonnes)and,whereappropriate,intensity(e.g.perunitofproductionvolume,perfacility).104,135KPIA1.5Descriptionofemissiontarget(s)setandstepstakentoachievethem.95–99,102–105,138–144KPIA1.6Descriptionofhowhazardousandnon-hazardouswastesarehandled,andadescriptionofreductiontarget(s)setandstepstakentoachievethem.104–107,115–116,120–1271612019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYGeneralDisclosuresandKPIsPageNumber(s)References/AdditionalInformationAspectA2:UseofResourcesGeneraldisclosurePoliciesontheefficientuseofresources,includingenergy,waterandotherrawmaterials.Note:Resourcesmaybeusedinproduction,instorage,transportation,inbuildings,electronicequipment,etc.94–127Seealso:https://www.lenovo.com/us/en/social_responsibility/environmental_policy/https://www.lenovo.com/us/en/social_responsibility/climate_policy/KPIA2.1Directand/orindirectenergyconsumptionbytype(e.g.electricity,gasoroil)intotal(kWhin’000s)andintensity(e.g.perunitofproductionvolume,perfacility).102,133–134LenovoreportsenergyconsumptioningigajoulesandMWh/US$millionrevenue.KPIA2.2Waterconsumptionintotalandintensity(e.g.perunitofproductionvolume,perfacility).105,135Lenovoisunabletoreportwaterintensityduetothelargevarianceofconsumptionthatexistsbetweenfacilities.KPIA2.3Descriptionofenergyuseefficiencytarget(s)setandstepstakentoachievethem.102,111–114Lenovostrivestoimproveoperationalenergyeffiencyaswellastheenergyefficiencyofourproducts.KPIA2.4Descriptionofwhetherthereisanyissueinsourcingwaterthatisfitforpurpose,waterefficiencytarget(s)setandstepstakentoachievethem.105Lenovohasnothadanyissuestodatewithsourcingwaterthatisfitforpurpose.KPIA2.5Totalpackagingmaterialusedforfinishedproducts(intonnes)and,ifapplicable,withreferencetoperunitproduced.116–118Lenovodoesnotreporttotalpackagingmaterialsusedforfinishedproducts,ratherLenovotrackspackagingonaperproductbasisandreportsexamplesofaccomplishments.TrackingonaperproductbasisallowsLenovotodriveimprovementsingeneration-to-generationproductpackagingdesignsresultinginquantifiableenvironmentalbenefits.Theamountoftotalpackagingusedwouldbemainlydependentonsalesvolumes,soitisnotthemostappropriatemetricforLenovotousetodriverealimprovementsinpackagingdesign.Bysettingourpackagingimprovementgoalsattheproductlevel,weareabletodriveandmeasureimprovementsindesignthatarenotdependentonoverallproductsalesvolumes.AspectA3:TheEnvironmentandNaturalResourcesGeneraldisclosurePoliciesonminimisingtheissuer’ssignificantimpactsontheenvironmentandnaturalresources.94–127Seealso:https://www.lenovo.com/us/en/social_responsibility/environmental_policy/KPIA3.1Descriptionofthesignificantimpactsofactivitiesontheenvironmentandnaturalresourcesandtheactionstakentomanagethem.94–127AspectA4:ClimateChangeGeneraldisclosurePoliciesonidentificationandmitigationofsignificantclimate-relatedissueswhichhaveimpacted,andthosewhichmayimpact,theissuer.94–118Seealso:https://www.lenovo.com/us/en/social_responsibility/climate_policy/KPIA4.1Descriptionofthesignificantclimate-relatedissueswhichhaveimpacted,andthosewhichmayimpacttheissuer,andtheactionstakentomanagethem.94–118Seealso:Lenovo’sCDPClimateResponseforamoredetaileddisclosureonclimate-relatedimpactsandactionstakentomanagethem.1622019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYGeneralDisclosuresandKPIsPageNumber(s)References/AdditionalInformationSubjectAreaB.SocialEmploymentandLabourPracticesAspectB1:EmploymentGeneralDisclosureInformationon:(a)thepolicies;and(b)compliancewithrelevantlawsandregulationsthathaveasignificantimpactontheissuerrelatingtocompensationanddismissal,recruitmentandpromotion,workinghours,restperiods,equalopportunity,diversity,anti-discrimination,andotherbenefitsandwelfare.53–54,64–65Seealso:2019D&IReport:https://static.lenovo.com/ww/docs/ww-report-lenovo-diversity-and-inclusion-2019.pdfKPIB1.1Totalworkforcebygender,employmenttype(forexample,full-orpart-time),agegroupandgeographicalregion.66,131Seealso:2019D&IReport—pg10https://static.lenovo.com/ww/docs/ww-report-lenovo-diversity-and-inclusion-2019.pdfKPIB1.2Employeeturnoverratebygender,agegroupandgeographicalregion.Seealso:2019D&IReport—pg11https://static.lenovo.com/ww/docs/ww-report-lenovo-diversity-and-inclusion-2019.pdfAspectB2:HealthandSafetyGeneralDisclosureInformationon:(a)thepolicies;and(b)compliancewithrelevantlawsandregulationsthathaveasignificantimpactontheissuerrelatingtoprovidingasafeworkingenvironmentandprotectingemployeesfromoccupationalhazards.40–46Seealso:https://www.lenovo.com/us/en/social_responsibility/Lenovo_Employee_Welfare.pdfKPIB2.1Numberandrateofwork-relatedfatalitiesoccurredineachofthepastthreeyearsincludingthereportingyear.131KPIB2.2Lostdaysduetoworkinjury.131KPIB2.3Descriptionofoccupationalhealthandsafetymeasuresadopted,howtheyareimplementedandmonitored.40–48AspectB3:DevelopmentandTrainingGeneraldisclosurePoliciesonimprovingemployees’knowledgeandskillsfordischargingdutiesatwork.Descriptionoftrainingactivities.Note:Trainingreferstovocationaltraining.Itmayincludeinternalandexternalcoursespaidbytheemployer.66–70KPIB3.1Thepercentageofemployeestrainedbygenderandemployeecategory(e.g.seniormanagement,middlemanagement).Lenovocapturesthenumberofemployeeswhocompletedtraining,butthisinformationisnotbrokendownbygenderoremployeecategory.KPIB3.2Theaveragetraininghourscompletedperemployeebygenderandemployeecategory.Lenovocapturestotaltraininghoursrecordedforallemployees,butthisinformationisnotbrokendownbygenderoremployeecategory.1632019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYGeneralDisclosuresandKPIsPageNumber(s)References/AdditionalInformationAspectB4:LabourStandardsGeneraldisclosureInformationon:(a)thepolicies;and(b)compliancewithrelevantlawsandregulationsthathaveasignificantimpactontheissuerrelatingtopreventingchildandforcedlabour.64–65KPIB4.1Descriptionofmeasurestoreviewemploymentpracticestoavoidchildandforcedlabour.56KPIB4.2Descriptionofstepstakentoeliminatesuchpracticeswhendiscovered.56,64–65OperatingPracticesAspectB5:SupplyChainManagementGeneralDisclosurePoliciesonmanagingenvironmentalandsocialrisksofthesupplychain.50–61KPIB5.1Numberofsuppliersbygeographicalregion.51Seealso:https://static.lenovo.com/ww/docs/sustainability/lenovo-list-mfg-sites-and-suppliers.pdfKPIB5.2Descriptionofpracticesrelatingtoengagingsuppliers,numberofsupplierswherethepracticesarebeingimplemented,howtheyareimplementedandmonitored.50–61KPIB5.3Descriptionofpracticesusedtoidentifyenvironmentalandsocialrisksalongthesupplychain,andhowtheyareimplementedandmonitored.57–59KPIB5.4Descriptionofpracticesusedtopromoteenvironmentallypreferableproductsandserviceswhenselectingsuppliers,andhowtheyareimplementedandmonitored.50–61AspectB6:ProductResponsibilityGeneralDisclosureInformationon:(a)thepolicies;and(b)compliancewithrelevantlawsandregulationsthathaveasignificantimpactontheissuerrelatingtohealthandsafety,advertising,labellingandprivacymattersrelatingtoproductsandservicesprovidedandmethodsofredress.28–31KPIB6.1Percentageoftotalproductssoldorshippedsubjecttorecallsforsafetyandhealthreasons.30–31KPIB6.2Numberofproductsandservicerelatedcomplaintsreceivedandhowtheyaredealtwith.Lenovocapturesproductandservicerelatedcomplaintsusingvarioussystemsforthedifferentbusinessunitsthroughoutallmarkets.Atthetimeofreporting,weareunabletoconsolidatethisinformationintoonereportingmetric.KPIB6.3Descriptionofpracticesrelatingtoobservingandprotectingintellectualpropertyrights.23KPIB6.4Descriptionofqualityassuranceprocessandrecallprocedures.29KPIB6.5Descriptionofconsumerdataprotectionandprivacypolicies,howtheyareimplementedandmonitored.251642019/20LenovoEnvironmental,SocialandGovernanceReportCONSOLIDATEDMETRICS,OBJECTIVESANDTARGETSPRACTICINGETHICALBUSINESSPRODUCTRESPONSIBILITYMANUFACTURINGANDSUPPLYCHAINOPERATIONSPEOPLEPLANETAPPENDIXEXECUTIVELETTERSINTEGRATINGSUSTAINABILITYGeneralDisclosuresandKPIsPageNumber(s)References/AdditionalInformationAspectB7:Anti-corruptionGeneralDisclosureInformationon:(a)thepolicies;and(b)compliancewithrelevantlawsandregulationsthathaveasignificantimpactontheissuerrelatingtobribery,extortion,fraudandmoneylaundering.23–24KPIB7.1Numberofconcludedlegalcasesregardingcorruptpracticesbroughtagainsttheissueroritsemployeesduringthereportingperiodandtheoutcomesofthecases.Lenovodoesnotdiscloseinformationaboutanyongoingorconcludedlegalmatters.KPIB7.2Descriptionofpreventivemeasuresandwhistle-blowingprocedures,andhowtheyareimplementedandmonitored.23–24KPIB7.3Descriptionofanti-corruptiontrainingprovidedtodirectorsandstaff.22,FY2019/20AnnualReport68UponjoiningtheCompany,directorsareprovidedwithabespokeinductionprogramtofurthertheirunderstandingoftheCompany,includingtheCompany’sgovernancepolicies.Seealso:https://investor.lenovo.com/en/publications/reports.phpCommunityAspectB8:CommunityInvestmentGeneralDisclosurePoliciesoncommunityengagementtounderstandtheneedsofthecommunitieswheretheissueroperatesandtoensureitsactivitiestakeintoconsiderationthecommunities’interests.76–87KPIB8.1Focusareasofcontribution(e.g.education,environmentalconcerns,labourneeds,health,culture,sport).76–87KPIB8.2Resourcescontributed(e.g.moneyortime)tothefocusarea.76–87www.lenovo.comThisreportisprintedonenvironmentallyfriendlypapermanufacturedfromelementalchlorine-freepulpPrintedonchemistryfreeplatesystemandsoyink

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