Huluwa Pharmaceutical Releases ESG Report, Reinforcing Commitment to Building a National Children’s Medicine Brand

Huluwa Pharmaceutical (605119.SH) has released its 2022 annual report along with its Environmental, Social, and Governance (ESG) report. In 2022, Huluwa Pharmaceutical achieved a revenue of 1.515 billion yuan, marking an 11.91% year-on-year increase, while its net profit attributable to shareholders reached 86 million yuan, reflecting an 18.78% year-on-year growth. The ESG report outlines the company’s initiatives in corporate governance, sustainable development, public welfare, and innovation, all aimed at establishing a brand image that sets an industry benchmark.

ESG: A Growing Force in Production and Operations, with the Pharmaceutical Industry Leading the Way in Sustainable Transformation

As China advances its “carbon peak and neutrality” goals, embracing the ESG (Environmental, Social, and Corporate Governance) framework and driving low-carbon transformation have become highly essential tasks for businesses. Originally an evaluation system used by investment firms to assess the sustainability potential of companies, ESG is now a widely recognized approach that guides the enterprises in shaping their long-term development strategies. Today, the principles of ESG-based management are being adopted across various industries, with the pharmaceutical sector leveraging these concepts to unlock greater potential and drive industry-wide sustainability.

ESG principles have now become an integral element across industries, with the pharmaceutical manufacturing sector leveraging these frameworks to unlock greater potential and drive impactful change. Upstream and downstream players in the pharmaceutical industry are empowering the society to reach carbon neutrality by leveraging their unique advantages, fostering a collective industry-wide commitment to carbon peak and neutrality goals. ESG has become a crucial driver in building a green supply chain and advancing carbon peak and neutrality goals. In the pharmaceutical industry, ESG transformation is embedded throughout the entire supply chain, from operations and R&D to manufacturing, packaging, logistics, and recycling. This holistic approach supports green production and demonstrates the sector’s commitment to social responsibility across all strategic goals.

Huluwa Pharmaceutical: Setting a Benchmark in Innovative R&D, Energy Efficiency, and Emission Reduction

Since its inception, Huluwa Pharmaceutical has remained committed to innovation, establishing a robust Science and Technology Association and implementing key management systems such as the Technology Innovation Management System, R&D Funding Management Measures, and R&D Project Performance Evaluation and Reward System. The company has developed an independent drug development system, complemented by collaborative partnerships with leading domestic research institutions. This integrated approach ensures the successful execution of R&D projects and new product developments.

Currently, Huluwa Pharmaceutical boasts an innovative R&D framework that includes 1 corporate collaborative innovation platform, 3 provincial and ministerial innovation carriers, 1 small and medium-sized enterprise platform, 1 internal R&D center, and 3 intellectual property system platforms. In 2022, the company significantly increased its investment in innovative drug R&D, totaling 138 million yuan. This investment primarily focused on the development of innovative children’s medications and traditional Chinese medicine. Huluwa Pharmaceutical is currently advancing the development of 120 products, including 63 children’s medicines targeting common health concerns such as respiratory, digestive, and nervous system disorders in children.

In addition to its substantial R&D efforts, Huluwa is also proactively addressing energy efficiency and carbon reduction by embracing lean production practices, aligning with national policies to reduce energy consumption and minimize carbon emissions. To drive more effective carbon reduction, the company conducted an analysis of its main sources of carbon emissions in 2022. This analysis took into account the company’s business development and energy consumption structure. Based on the findings in the analysis, Huluwa Pharmaceutical implemented various energy-saving and carbon reduction initiatives aimed at improving energy efficiency and reducing consumption at the source. Key measures included the adoption of clean energy, the use of energy-efficient equipment, the implementation of “World-Class Manufacturing” (WCM) management practices, and the promotion of green office initiatives. These steps were employed to further refine operations and achieve the strategic goal of energy conservation and emission reduction. According to the ESG report, Huluwa Pharmaceutical invested a total of 1.7116 million yuan in environmental protection in 2022. The company also maintained a clean record, with no incidents of violating the Environmental Protection Law throughout the year.

Huluwa Prioritizes Children’s Health and Actively Embraces Social Responsibility

Beyond its continuous efforts on innovative R&D and energy conservation, Huluwa Pharmaceutical also demonstrates a strong sense of social responsibility through its contributions to public welfare and charity. The company has maintained a long-standing partnership with the Xuri Dongsheng Charity Foundation, which was founded by Liu Jingping, Chairman of Huluwa Pharmaceutical. The foundation focuses on medical health for vulnerable groups and children’s health education services in grassroots communities, actively supporting social welfare initiatives.

Notably, Huluwa Pharmaceutical and the Charity Foundation have stayed true to their mission, leveraging their social responsibilities to complete two major projects, launched over a thousand charity events, and donated more than 2 million yuan in total. The “Healthy Chinese Children” public welfare lecture on safe medication for children, organized by the foundation, has attracted more than ten thousand participants. Additionally, the foundation has been honored with a commendation banner from the Qiongzhong Heping Town Government and a charity award from the Hainan Children’s Welfare Association.

In 2022, Huluwa Pharmaceutical, in partnership with the charity foundation, focused on supporting the “Care” project at the Haikou Social Welfare Institute, as well as grassroots children’s health education and public health events. The total public welfare donations for the year amounted to 608,500 yuan. In 2022, through the foundation’s grassroots children’s health education initiatives, Huluwa Pharmaceutical visited the Haikou Social Welfare Institute on many occasions to carry out the “Care for Growth, Warmth Together” public welfare donation and outreach activity.

Though this is only the second ESG report released by Huluwa Pharmaceutical, the company’s commitment to ESG principles has been unwavering. In addition to achieving energy conservation and reducing consumption in its production and research processes, the company has remained dedicated to its social responsibility efforts. For many years, Huluwa Pharmaceutical has embraced the business philosophy of “Caring for Children’s Health, Sharing Social Responsibility”. The company strives to become a leading force in the field of children’s health in China, ensuring the healthy growth of Chinese children and establishing a national brand for children’s medicine in the country.