Pioneering a low-carbon path — Luxshare's innovative exploration of climate actions

Abstract: Amid the escalating climate crisis, Luxshare has independently charted a scientifically sound path toward corporate carbon reduction. Through comprehensive analysis and by leveraging its management resources and technological strengths, the company has significantly reduced its operational carbon footprint. It actively engages in clean technology and product development and encourages suppliers to take action. These efforts contribute to the private sector's participation in global climate action, promote green and low-carbon transformation, and establish a replicable model for others to follow.

Challenge

According to the IPCC, without decisive control of global carbon emissions and their growth rate, the carbon budget for limiting warming to 1.5°C will be exhausted ahead of schedule, with irreversible consequences. As a leading precision manufacturer providing one-stop core components, modules, and system solutions to world-renowned brands across various sectors, Luxshare carries substantial carbon emissions across its value chain due to its business model — and with continued business growth, total emissions are projected to keep rising in the near term. Facing this urgent imperative, Luxshare has independently charted a science-based decarbonization pathway, offering a replicable model for private-sector climate engagement and green transition.

Solution

Luxshare has adopted a three-phase climate roadmap: Carbon Inventory — Carbon Reduction — Carbon Neutrality. 

In governance, the Board is deeply engaged in climate oversight, with the Strategy Committee reviewing climate-related topics to ensure alignment between climate response and corporate strategy. Following TCFD recommendations, the company assessed 43 risks and opportunities across its upstream, downstream, and own operations, identifying six high-priority risks and six opportunity areas.

For target-setting, Luxshare publicly committed on January 5, 2022, to science-based targets aligned with the SBTi 1.5°C pathway, aiming for carbon neutrality no later than 2050 — among the first Chinese mainland companies to set SBTs.

To drive decarbonization, the IOE smart energy management platform is developed, targeting 20% factory energy savings by 2025, with 2022 already achieving about 9% electricity savings and nearly 300% year-on-year carbon reduction. In clean energy adoption, through rooftop solar, direct green power purchases, and green electricity certificates, the company aims for 50% clean energy usage by 2025. In 2022, its low-carbon energy transition reduced emissions by nearly 400,000 tCO2e, a 120%+ year-on-year improvement.

In green manufacturing, 11 factories hold UL2799 Platinum certification with an average waste diversion rate of 83.15%; 11 factories are certified green factories, seven at national level. Its clean-tech R&D investment reached nearly RMB 260 million in 2022, yielding six granted patents. On the supply chain front, Luxshare launched a green supply chain initiative, helping 66 suppliers resolve environmental violation records and 162 suppliers complete PRTR disclosures. Thanks to these efforts, it ranks 4th in IPE's CITI index for the electronics sector.

Impact & Value

In 2022, energy efficiency retrofits and low-carbon energy transition reduced greenhouse gas emissions by over 500,000 tons, exceeding one-third of the company's Scope 1 and 2 emissions for the year, equivalent to the annual carbon absorption of nearly 28 million trees.

Economically, rooftop solar generation reached 41,022 MWh, yielding approximately RMB 24.61 million in value at industrial electricity rates. Six clean-tech patents opened new sustainable business avenues.

Environmentally and socially, 11 factories achieved UL2799 Platinum certification with over 83% waste conversion, two factories earned AWS Gold certification, and one was designated a near-zero carbon factory. Luxshare's three-phase pathway — inventory, reduction, neutrality — is inherently scalable, providing a replicable template for private-sector decarbonization.

The company has maintained a BB MSCI ESG rating, and received CDP's Climate Action Progress Award and Environmental Leap Forward Award for two consecutive years. It has achieved a bronze rating from EcoVadis, and ranked ahead of 86% of industry peers on environmental performance.