ZTO Express Cayman : 2023 ESG Report

2023

Environmental, Social and Governance Report

ZTO Express (Cayman) Inc.

Bringing Happiness to More

People through Our Services

NYSE: ZTO SEHK: 2057.HK

About the Report	2	Chairman's message	4
Introduction	2	About ZTO Express	5
References	2	Honors & Awards 2023	8
Scope and boundary	2	ESG Management	9
Data source and reliability commitment	2	ESG Management Structure	9
Confirmation and approval	2	Stakeholder Engagement	9
Access and contact information	2	Assessment of Materiality Issues	11

		Topic One
		Promoting High-Quality Development to Fulfill the	13
		Mission of the Times
		Learning the Thoughts and Grasping the Pulse of the Times	13
		Shouldering Responsibilities and Being a Pioneer of the Times	15
		Topic Two
		Responding to Climate Change, Establishing a Green	17
		Postal Route
		Responding to Climate Change	19
		Energy Conservation and Carbon Reduction	24
		Packaging Material Usage	27

ZTO Express

www.zto.com

		Linking the World	30
		Uniting All，Reaching Beyond
		Continuing the Gene of Innovation	31
		Prioritizing Customer Experience	37
		Creating a Chain of Responsibility	47
		Contributing to the Development of the Industry	51
		Uniting Hearts	54
		Sharing Warmth
		Ensuring Employees' Rights and Interests	55
		Empowering Employee Development	65
		Co-building Prosperous and Beautiful Villages	74
		Community Welfare Enthusiast	76
		Sincerity and Trust
		In Search of Long-Term Stability	80
		and Harmony
		Laying a Solid Foundation for Business Operations	81
		Strengthening Environmental Management	87
		Appendix I: Summary of Key Performance	91
		Appendix II: Index of ESG Indicators	95

About the report

Bringing Happiness to More People through Our Services

ZTO Express

www.zto.com

About the report

Introduction

This report is the seventh Environmental, Social and Governance Report (hereinafter referred to as "this report" or "ESG report") released by ZTO Express (Cayman) Inc. As used in this report, "ZTO Express", "the Company" and "we" refers to ZTO Express (Cayman) Inc. and its subsidiaries. The purpose of this report is to provide factual disclosure of the Company's ESG performance and fulfillment practices with respect to shareholders, customers, partners, employees, the environment, communities and other key stakeholders. Unless otherwise stated, this report covers the financial year from January 1, 2023 to December 31, 2023 (the "reporting period").

References

This report is prepared with reference to the Appendix C2: (Environmental, Social and Governance Reporting Guide) to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (hereinafter referred to as "the ESG Guide of HKEX"), the GRI Sustainability Reporting Standards released by the Global Sustainability Standards Board (hereinaf- ter referred to as "the GRI Standards"), the China Guidelines for Corporate Social Responsibility Reports (CASS-ESG5.0) issued by the Chinese Academy of Social Sciences, and the SDG Compass. The preparation of this report is subject to the following principles:

Materiality: The materiality of the ESG issues is determined by the Board, and stakeholder communication, identification of materiality issues, and materiality issues matrix have all been disclosed in this report.

Quantitative: The measurement standards, methodologies, assumptions and/or calculation tools of the key performance indicators in this report, as well as the source of the conversion factors used, have been explained in the report's explanatory notes.

Balance: This report presents the Company's performance during the reporting period in an unbiased manner, avoiding selections, omissions, or presentation formats that might improperly influence the decisions or judgments of readers of the report.

Consistency: Unless otherwise stated, the statistical methods and scope used in the disclosure of data in this report are consistent with those used in previous years.

To facilitate readers' reference, an index of ESG indicators is provided in Appendix II of this report.

Scope and boundary

Unless otherwise stated, the scope of the policies and data provided in this report are consistent with those referred to in the annual report.

Data source and reliability commitment

The data and cases in the report are mainly obtained from the statistical reports and relevant files of the Company, and reviewed by various departments. The Board undertakes that the report does not contain any false records or misleading statements and that Board is responsible for the authenticity, accuracy and completeness of the report.

Confirmation and approval

This report was approved by the ESG Committee and the Board of Directors of the Company.

Access and contact information

Readers may access the electronic version of this report on the "Investor Relationship" section of the Company's official website at www.zto.com. If you have any comments or suggestions on the Company's environmental, social and governance disclosures and performance, please contact us through the following means:

Address of ZTO headquarters: 1685 Huazhi Road, Huaxin Town, Qingpu District, Shanghai

01 2023 ESG Report

Postal Code : 201708

Tel：95311

E-mail：[e-mail]

02

ZTO Express

www.zto.com

Chairman's Message

The year 2023 marked the commencement of a brand-new phase in the second twenty-year development of ZTO Express. This year was also crucial for the strategic layout and development process of the Company. Standing on the new starting point forged by common efforts, we shoulder more significant responsibilities and tasks, embracing more ambitious mission and ideal. For this reason, we can only be more enthusiastic, down-to-earth and perseverant; strive our best to bring ZTO Express to new heights and live up to the ardent expectations of our customers and all walks of life.

As we move forward, we are deeply aware that ESG is not only a part of corporate social responsibility, but also a strategic direction and core driving force to ensure long-term sound and sustainable development. In 2023, we actively put ESG concepts into practice. On the basis of solid corporate governance, we will continue to foster green transformation and safeguard the development of our employees. We also seek to give back to society with efficient services and caring humanistic care, continuously improve our ESG performance.

In terms of adhering to the leadership of the Party, we recognize the fundamental significance of political leadership for the long-termdevelopment of our enterprise. In this regard, we have been promoting harmony and integration within the enterprise through in-depthpromotion of Party building activities, education and publicity, rigorous promotion of constructing a clean Party, strengthening of the ideological education of employees, and giving full play to the pioneering role of Party members. All of these have promoted internal harmony and integration within the enterprise and provided a solid guarantee for the enterprise's healthy development.

Chairman of the Board of Directors and Chief

Executive Officer

Lai Meisong

In response to global climate change, we are well aware of the far-reachingimpact of climate change on society and the economy. Therefore, in 2023, we strived to reduce the carbon footprint of ZTO Express and build a more sustainable logistics system through numerous means. We proactively identified and responded to the risks of climate change, built a green logistics model, strengthened energy efficiency and greenhouse gas emission management, and continuously optimized the green packaging system. We are committed to building a more sustainable logistics ecosystem.

In terms of product innovation, we are determined to develop more intelligent, convenient, safe and reliable logistics solutions to enhance user experience. Through the introduction of advanced technologies such as artificial intelligence and big data analysis, we optimized the logistics operation process and improved delivery speed and accura- cy. This is not only a response to changes in market demand, but also a way for us to leverage our highly efficient logistics operation model and seek to maximize the use of resources for achieving our long-termgoal of sustainable development.

In terms of employee care, we have further strengthened the protection of employees' rights and interests, paying more attention to the spiritual needs of employees and enhancing their sense of achievement and happiness. By constant enrichment and improvement of the system that protects employees' rights and interests, provision of diversi- fied vocational skills training and clear and unimpeded career advancement paths, we seek to create an attractive work environment that capitalizes on the growth of our employees. In addition, we actively participate in public welfare activities,

such as fulfilling our corporate social responsibilities and make active contributions to society through supporting education in remote areas and assisting disadvantaged groups.

In terms of corporate and environmental governance, we have strengthened the level of corporate governance to ensure the rationality of corporate decision-makingand compliance of corporate operations. This was done by enhancing the diversity of the board, optimizing the risk management process and strengthening the construction of a code of business ethics. At the same time, we continue to improve the level of green development by introducing more advanced eco-protectiontechnologies and building a green office environment to put the concept of sustainable development into practice.

We will strive to live up to our reputation. In the future, we will follow the development trend of the industry, continue to deepen the practice of ESG in all aspects, and work hand in hand with all employees, users as well as all walks of life to promote high-quality development of the enterprise, and to take practical action to fulfill our social responsibility.

03		2023 ESG Report	Chairman's Message

04

About ZTO Express

Founded on May 8 2002, ZTO Express has since evolved into a large logistics conglomerate integrating multiple services including domestic and international express delivery, less-than-truckload (LTL), cloud warehousing, cold chain, finance, and commerce (Tuxi). On October 27, 2016, ZTO Express was listed on the New York Stock Exchange (NYSE). On September 29, 2020, the Company was listed on the Main Board of The Stock Exchange of Hong Kong Limited (HKEX) under chapter 19C of the Hong Kong Listing Rules, becoming the first Chinese express delivery company listed in both the United States and Hong Kong, China. On May 1, 2023, the Company's voluntary conversion of its secondary listing status to primary listing on the Main Board of HKEX became a dual primary-listed on the HKEX and the NYSE.

Automated sorting equipment 464 sets

Parcel volume 30.2billion

YoY growth rate 23.8%

中通快 上海某递 某网点

ZTO Express

www.zto.com

Direct network partners

~6,000

ZTO Express is the world's largest express delivery company in terms of parcel volume. In 2023, ZTO Express handled 30.2 billion parcels, representing a year-on-year growth of 23.8%. The Company's market share reached 22.9%, maintaining its position as the industry leader for eight consecutive years. ZTO Express has the largest network with the most extensive, the most intensive and the deepest coverage among the private operators in China. As of the end of 2023, ZTO Express operated more than 31,000 outlets, 99 domestic sorting hubs, 464 sets of automated sorting equipment, approximately 6,000 direct network partners, over 10,000 line-haul vehicles, including about 9,200 high-capacity trailer trucks, and more than 3,900 line-haul routes, as well as a network reaching more than 99% of the county-level cities, and covering over 96% of the village-level cities.

Parcel volume	ZTO service outlets	County-level cities coverage
302 billion	31,000+	99%+
Domestic sorting hubs	Direct network partners	Self owned line-haul vehicles
99	~6,000	10,000+

Domestic sorting hubs

99

Line-haul vehicles

10,000+

~9,200 High-capacity trailer trucks

Last-mile posts

~110,000

Network coverage

ZTO service outlets 31,000+

99%+ of the county-level cities

Village-level cities coverage rate 96%+

05 2023 ESG Report

About ZTO Express 06

Core Philosophy

Corporate mission

Bringing Happiness to More People

through Our Services

ZTO Express

www.zto.com

Honors & Awards 2023

During the reporting period, the Company received the following awards:

Name of Honor (incomplete list)	Award institution
2018-2019 National Civilized Unit of Transportation Industry	MinistryofTransportationandCommunications
(Review)

Corporate vision

Become a sustainable century-old enterprise with dignity and respect

Management philosophy Fair, efficiency and results-oriented

Talent philosophy Talents are the driving force

Core values

Shared Success, Trust and Accountabili- ty, Innovation and Entrepreneurship

Operation philosophy

Integrity, transparency and win-win

results

Safety philosophy

Safety is benefit

Corporate spirit

Persistence, focus and perseverance

Development philosophy

Stable, strong, ambitious and

change-seeking

Service philosophy

All for outlets, and all for customers

The 21st National Youth Civilization	StatePostBureau
2022 National Postal Express Industry Youth Production Safety
StatePostBureau
Demonstration Post
2022 Top Ten Public Welfare Enterprises of the Year of "Public	Shanghai Municipal Civil Affairs Bureau, Shanghai
Welfare Shanghai"	Public Welfare New Media Center, etc.
2022 Shanghai Safety Demonstration Unit	PingAnShanghaiConstructionCoordinationGroup
2023 Exemplary Case of "Deep Integration and Development of
Shanghai Municipal Commission of Economy and Informa-
Supply Chain Management Service and Manufacturing Industry"	tion Technology, Shanghai Municipal Postal Administration
2022 Qingpu District Service Industry Top Ten	ShanghaiQingpuDistrictPeople'sGovernment
2022 Outstanding Talent Team Award for Innovation and
ShanghaiQingpuDistrictTalentWorkLeadingGroup
Entrepreneurship in Qingpu District	Shanghai Municipal Office of Learning Society Construction
2023 Shanghai Excellent Learning Enterprise and Institution
and Lifelong Education Promotion Committee
The First Hangzhou Charity Award for Institutional Donations	People'sGovernmentofHangzhou,ZhejiangProvince
Top 500 Private Enterprises in China in 2023 (341st)	All-ChinaFederationofIndustryandCommerce
Top 100 Private Enterprises in China's Service Industry in 2023 (80th)	All-ChinaFederationofIndustryandCommerce
2022 Contribution Award for Keeping Traffic Safe and Smooth	ChinaExpressAssociation
2022 Special Contribution Award for Express Industry of CITES	ChinaExpressAssociation
2022 National Advanced Logistics Enterprise	ChinaCommunicationsandTransportationAssociation
2022 National Advanced Logistics Enterprise Innovation and	ChinaCommunicationsandTransportationAssociation
Growth Award
Science and Technology Progress Award of CFLP in 2023	ChinaFederationofLogisticsandPurchasing
2023 Top 50 Logistics Enterprises in China (9th)	ChinaFederationofLogisticsandPurchasing
2023 Shanghai May Day Labor Award
ShanghaiFederationofTradeUnions
2023 Leading Enterprise of Shanghai Productive Service Industry	ShanghaiProductiveServiceIndustryPromotionAssociation
Honor of "Charity Donation and Love for Humanity"	ShanghaiCharityFoundation
2022 Hurun Brand List (70th)	HurunResearchInstitute
2023 China's Top 500 Brand Value (196th)	BrandFinance

07		2023 ESG Report	Core Philosophy / Honors & Awards 2023

08

ESG Management

We firmly believe that a sound Environmental, Social and Governance (ESG) management system is the internal foundation for the Company to effectively fulfill our environmental and social responsibilities. ZTO Express is committed to continuously improving its ESG governance system, promoting the long-term and sustainable development of its business, and creating lasting value for all stakeholders.

ESG Management Structure

The Company continues to improve its ESG governance by establishing a top-down ESG governance structure and management mechanism. The Board of Directors, as the highest decision-making body for ESG governance at ZTO Express, holds ultimate responsibility for the Company's ESG initiatives. Under the Board of Directors, the ESG Committee1 is responsible for assisting the Board in formulating and reviewing the Company's ESG management policies, governance structures, operational management, and performance evaluation. It also regularly reports on the performance of ESG-related initiatives to the Board and provides recommendations while overseeing the implementation of corresponding improvement plans.

The ESG Committee establishes an ESG working group as a comprehensive coordination body, responsible for preparing preliminary work for ESG Committee decisions. The group collaborates with various departments, units, and subsidiaries of the Company to fully implement ESG initiatives. It regularly reviews and summarizes the progress and effectiveness of ESG-related efforts and report to the ESG Committee.

Decision-	Board of Directors
ESG Committee
marking	Supervision and management of ESG strategy, policy formulation
		ESG Working Group
Organization	Implementation and coordination of specific ESG actions,
facilitating the implementation of related ESG initiatives
Execution	Relevant Functional Departments
Implementation of ESG policies and objectives

ZTO Express ESG Governance Structure

Stakeholder Engagement

Understanding the concerns of stakeholders helps us to develop sustainable development plans and future business policies. We adhere to the principles of openness, transparency, and collaboration, actively engage in stakeholder communication, and maintain close relationships with all parties through diverse channels to ensure that their demands are fully understood and effectively addressed. By engaging with stakeholders, we seek to understand their priorities and expectations regarding ESG issues and gather feedback and suggestions on the Company's ESG performance.

1For more information on the functions of the ESG Committee, please refer to the "Revised and Restated Authority Scope of the ESG Committee".

ZTO Express

www.zto.com

Stakeholder Category	Topics of Interest	Communication Channels
	• Compliance	• Submission of official documents
	• Rural revitalization	• Thematic session
Government and	• Green development	• Regular announcement
• Support for community development	• Reception of government research team
regulatory agencies
	• Operational risk management	• Shareholders' meeting
	• Regulating corporate governance	• Release of corporate earnings
Shareholders and investors	• Data privacy and security	• Press release, announcement and road show
• Investor rights and interests
	• Secure delivery and transportation	• Satisfaction survey
Customers and consumers	• Product and service optimization	• Regular communication and talks
• Data privacy and security	• Customer survey
	• Compensation and benefits	• Employee communication
	• Secure delivery	• Staff training
Employees	• Health and safety	• Employee activity
• Career development
	• Customer satisfaction	• Outlet assessment
Franchise Outlets	• Support for outlet development	• Outlet visit
	• Supply chain ESG management	• Supplier assessment
Suppliers and Contractors	• Supplier visits
	• Progress of industry	• Open and transparent bidding process
	• Industry exchange
	• Business integrity
Partners	• Field survey
	• Community development	• Charity campaign
Communities	• Rural revitalization	• Volunteer service
	• Support for community development	• Press release
Media	• Rural revitalization	• Media communication
• Technology innovation	• Social responsibility and sustainability disclosure

09		2023 ESG Report	ESG Management

10

Assessment of Materiality Issues

ZTO Express regularly evaluates ESG issues related to its sustainability from two dimensions: the importance to ZTO's sustainable development and the importance to stakeholders, based on feedback from stakeholders and global sustainability trends. In accordance with the Hong Kong Stock Exchange's "Environmental, Social, and Governance Reporting Guide", combined with GRI standards, SASB, capital market rating agencies, and industry peers' focus issues, and considering industry characteristics and corporate culture, we have identified 21 important issues highly relevant to the Company.

Identifying Potential Materiality Issues

01 We identified 21 material topics for the Comapny's business based on regulartoy requirements, peer practices, media analysis, and capital market concerns

Skaeholder Engagement

We formulated a stakeholder engagement plan under which we conducted

02 in-depth interviews and distributed ESG materiality surveys to governments and regulators, shareholders and investors, employees, consumers, and the public to understand key ESG topics of concern to stakeholers

Materiality Issues Matrix

03 We scored and ranked all topics in terms of their materiality for the Company and for stakeholders and formed our materiality matrix

ZTO Express

www.zto.com

During the reporting period, we reviewed and evaluated the material topics. We continued to monitor and allocate resources to manage all issues that affect the Company and stakeholders. The specific material topics matrix is as follows.

High

Importance to stakeholders
Low		High
Importance to the sustainable development of ZTO

Confirmation of Materiality Issues

04 We then submitted the materiality matrix to management for confirmation of the identified topics and their degree of materiality

Process of Identification and Assessment of Material Issues

Occupational health and safety Diversity and inclusion

Data and privacy safety Delivery safety

Compliance and business ethics Energy management and GHG emission Reduction of pollution

Use of packaging materials Response to climate change Staff training and development Employee rights, interests and benefits Supply chain management

Quality customer service

Rural revitalization and common prosperity

ZTO Express Materiality Issues Matrix

Product service and innovatio Win-win cooperation Corporate governance

Risk management

Water resources management Waste management Community participation

11		2023 ESG Report	ESG Management

12

01	Promoting High-Quality Development
TOPIC	to Fulfill the Mission of the Times
	ZTO Express firmly believes that Party building is a cornerstone for enterprises to effectively exert the political
	and organizational advantages of the Party organization and achieve steady forward development. Over the
	years, we have innovatively cultivated the "Happy ZTO Express" Party building brand to use political leader-
	ship and the power of trust to irrigate the growth of the enterprise. We have always adhered to the Party's
	leadership in our work. In the new era, we have been modifying our thinking, taking up responsibilities, and
	cultivating a good corporate culture. We strive our best to maintain a high degree of ideological consistency
	with the CPC Central Committee, in the action of the unity of knowledge and practice, the courage to
	innovate, the courage to take responsibility, to hand over new answers of the times.

Learning the Thoughts and Grasping the Pulse of the Times

The Party Committee of ZTO Express insists on in-depth study and implementation of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the spirit of the 20th National Congress of the CPC. Through thematic education, Party members and cadres were encouraged to deeply understand the decisive significance of the "Two Establishments", consciously enhance the "Four Awareness", firmly establish the "Four Matters of Confidence", achieve the "Two Safeguards", and always maintain a high degree of consistency with the CPC Central Committee in ideology, politics, and actions.

Through the development of "three meetings and one lesson", each branch of our Party committee carries out the theme of the Party day and other forms of learning plans and Party building activities. The participants learned to inherit and carry forward the Party's fine traditions and good style, actively organize various types of voluntary activities such as people's services, civilization publicity, environmental remediation, and carry out activities such as fire drills, distribution of cold wave warming materials, "open day" for elementary school students to experience the new technology of logistics in ZTO Express and "a Party branch taking concrete actions". The general requirements of thematic education ‒ "learning ideas, strengthening the Party's characters, emphasizing application and achieving new contributions" ‒ ensuring that the overall requirements are truly comprehended and effectively implemented.

ZTO Express

www.zto.com

April 2023, the Party Congress of the Party Committee of ZTO Express was held at the headquarters

13

2023 ESG Report	Topic One: Promoting High-Quality Development to Fulfill the Mission of the Times		14

Shouldering Responsibilities and Being a Pioneer of the Times

As an industry leader, ZTO Express strives to take action and take responsibilities in the development of the industry. Led by a high sense of responsibility and mission, ZTO constantly works on self-improvement in quality and ability, sets a good example for the industry, strives to become a global first-class integrated logistics service provider, provides practical solutions to problems in the industry, and acts as a real pioneer of the times.

"Loyalty and Dedication to the Party, Responsibility and Bearing to ZTO Express" July 1st Party Day Activity at ZTO Express Headquarters

2023 Shaanxi Management Center "Warmth in Winter" Campaign

ZTO Express

www.zto.com

The "ZTO Express Series of Red Lessons" was named by the Shanghai Zhejiang Chamber of Commerce as the second excellent Party building brand "best practice cases". Meanwhile, the Party building brand project "Innovative Cultiva- tion: To pass the voices of the Party to the nerve endings" won the Ten Characteristic Programs for Grassroots Party Building, "One Branch One Brand", of Qingpu District, Huaxin Town.

15

2023 ESG Report	Topic One: Promoting High-Quality Development to Fulfill the Mission of the Times		16