On April 29, 2025, Sichuan Swellfun Co., Ltd. (hereinafter referred to as "Sichuan Swellfun") officially released the "2024 Environmental, Social, and Corporate Governance (ESG) Report", systematically disclosing the company's strategic planning, practical results, and future goals in the areas of environmental responsibility, social responsibility, and corporate governance. As a listed company in China's Baijiu Industry, this is the fourth ESG report released by Sichuan Swellfun since it first disclosed an ESG report in 2022. In this report, Sichuan Swellfun actively responds to the national "Double Carbon" strategy, officially clarifying its carbon reduction targets for 2030; and for the first time, it organizes ESG issues using the "Dual Materiality" framework, comprehensively upgrading its low-carbon transformation path, demonstrating its firm commitment to driving long-term value through sustainable development.
For the first time, the carbon reduction target is clearly defined, and actions across the entire value chain accelerate the process of Carbon Neutrality.
In the context of global climate change response, Sichuan Swellfun has taken a key step forward—completing the full value chain greenhouse gas inventory covering Scope 1, Scope 2, and Scope 3 for the first time, and releasing carbon reduction targets aimed at 2030. According to the report, Sichuan Swellfun plans to reduce Scope 1 (direct emissions) and Scope 2 (indirect emissions) greenhouse gases by at least 0.06 million tons of CO2 equivalent cumulatively from 2024 to 2030; at the same time, through deepening collaboration with upstream and downstream partners, it will promote comprehensive low-carbon transformation of Scope 3 (value chain-related emissions). This target not only aligns with international climate action trends but also signifies that Sichuan Swellfun extends its emission reduction responsibilities from its own operations to the entire industry chain.
To achieve this goal, Sichuan Swellfun has constructed a full lifecycle low-carbon transformation plan "from a grain of seed to a drop of liquor." At the raw material end, the company promotes 100% original grain order planting, expands the scale of green food certification, and reduces the carbon footprint of the planting process through regenerative agriculture practices; at the production end, the Qionglai factory and the Tuqiao factory significantly reduce carbon emissions through equipment upgrades, energy structure optimization, and waste recycling. In 2024, the Tuqiao factory effectively reduces electricity consumption by replacing old high-energy-consuming liquor pumps; the Qionglai factory uses biogas generation technology to convert biogas generated from Sewerage into clean energy, with annual electricity generation sufficient to meet part of the plant's electricity needs. In addition, Sichuan Swellfun continues to expand its use of renewable energy, and from July 2023 to June 2024, it offset electricity carbon emissions by purchasing International Renewable Energy Certificates (I-REC), equivalent to reducing greenhouse gas emissions by 11,773.54 tons of CO2 equivalent.
At the logistics and consumer end, Sichuan Swellfun promotes an increase in the share of new energy transportation vehicles, optimizes transportation routes, and advocates for eco-friendly packaging and low-carbon consumption. By simplifying packaging design, the company has reduced the use of ABS Plastics by nearly 70 tons and PE Plastics by about 1.7 tons throughout the year, while planning to achieve a comprehensive upgrade in packaging reduction, material substitution, and recycling by 2035.
"Dual Materiality" framework guides the upgrade of ESG strategy, balancing compliance and innovation.
"Guidelines No. 4 for Self-Discipline Supervision of Listed Companies on the Shanghai Stock Exchange—Preparation of Sustainable Development Reports" is an important document for promoting ESG (Environmental, Social, Corporate Governance) information disclosure in China's Capital Markets, where the "Dual Materiality" disclosure requirement marks the transition of ESG information disclosure in China from "formal compliance" to "substantive management."
In the 2024 ESG report, Sichuan Swellfun first employs the "Dual Materiality" analysis framework to outline the issue matrix, identifying 31 core ESG issues from the perspectives of "financial importance" and "impact importance", covering key areas such as product quality and safety, supply chain management, and water resource protection. This initiative not only responds to the latest requirements for sustainable development information disclosure of listed companies from the Shanghai Stock Exchange but also provides a scientific basis for strategic decision-making by quantitatively assessing the dual impact of issues on corporate financial performance and the social environment. As a pioneer in the Baijiu industry, Sichuan Swellfun’s practices will provide important references for its peers.
ESG practices have gained international authoritative recognition, and the results in social responsibility are substantial.
Sichuan Swellfun's sustainable development practices continue to receive high recognition from Global investment institutions and social responsibility rating agencies. The company has been selected for the S&P Global "Sustainability Yearbook (China Edition)" for the third consecutive year and again recognized as the "Best Progress Company in the Industry"; MSCI ESG rating has been raised to BBB grade, placing it at the forefront of China's Baijiu industry. Its ESG case study "From History to the Future: Sichuan Swellfun's ESG Exploration" has been included in the case database of the China Europe International Business School, becoming the first in the industry to explore ESG management through experiential teaching.
In the field of social responsibility, Sichuan Swellfun gives back to the Community through various actions. In 2024, the total amount of corporate public donations reached 1.88 million yuan, and jointly with industry associations released the "Group Standard Management Guidelines for Quality and Famous Old Cellars of Strong Aroma Type Baijiu Production Area in Chengdu", promoting the protection of industry cultural heritage. Meanwhile, the "Little Liquor Flower" volunteer team has accumulated over 759 hours of service, covering various fields such as eco-friendly advocacy and community assistance.
In terms of water resource management, Sichuan Swellfun has set a target of "increasing water efficiency by 30% compared to 2020 by 2030" in response to the high water consumption characteristics of the Baijiu industry. In 2024, the Qionglai factory achieved 100% recycling of cooling water in the brewing workshop, with an annual recycling volume of 0.821 million tons; the Tujiao factory reused 50% of the bottle washing water in the sewerage treatment process, significantly reducing freshwater consumption. Additionally, the company has established a reclaimed water reuse system, transforming treated wastewater into water for office and daily use, further practicing the concept of resource recycling.
Long-termism drives high-quality development, creating a sustainable future.
General Manager Hu Tingzhou stated: Sichuan Swellfun is unwaveringly focused on the core goal of "ultimate consumer experience and expanding growth momentum", adhering to the business philosophy of "long-termism", solidly implementing various strategic plans, including ESG, and committed to achieving the company's "healthy and leapfrogging development", making Sichuan Swellfun a company with greater long-term investment value.
ESG is not just a compliance requirement; it is also the core driving force for achieving healthy and leapfrogging development for companies. By integrating ESG into strategic planning, operation management, and cultural genes, Sichuan Swellfun is gradually building a sustainable development ecosystem covering product innovation, consumer experience, partner win-win, and social contribution. In the future, Sichuan Swellfun will continue to deepen the low-carbon transformation of the entire value chain, strengthen the ESG governance system, and respond to climate change challenges with technological innovation and industry collaboration. While pursuing economic benefits, the company will continue to practice the ESG vision of "Respecting a more beautiful landscape, more efficient governance, more successful partners, a better life, and a more inclusive society", injecting green momentum into high-quality industry development and creating long-term shared value for stakeholders.
