Hazardous Chemical Management and Control
The Group manages and controls substances with hazardous characteristics or listed in the Catalogue of Hazardous Chemicals (《危險化學品目錄》) of China. Four subsidiaries have formulated relevant regulations on hazardous chemicals management, which will be updated according to the actual business operation and the requirements of relevant laws and regulations. We have clarified the specific responsibilities of each department in each process in order to standardize the procurement, transportation, storage, use, and disposal of chemicals and prevented adverse effects of chemicals on personnel and environment.
Management and control process:
1. The department applying for procurement shall fill in the Chemical Purchase Application Form according to the needs；
2. The procurement personnel shall make unified procurement, and confirm the chemicals' information and management requirements, including quality certificate, MSDS, hazard and warning signs, production date and other safety information;
3. When loading, unloading or transporting them, handle them gently to prevent hitting, dragging or dumping;
4. Check whether the packaging and labeling of chemicals meet the requirements during the acceptance inspection, and register them in the inventory after confirming that they are qualified;
5. The storage areas or containers of hazardous chemicals shall be posted with labels, and shall meet the requirements on the prevention of fire, explosion, static electricity, lightning and leakage and shall be managed by professional technicians; no one shall enter the warehouses at will without the consent of the storekeeper;
6. The chemical requisitioner shall issue a material requisition, and the chemicals to be requisitioned shall be used in one day and night at most, and the warehouse keeper shall issue the chemicals based on the material requisition;
7. Personnel using hazardous chemicals shall receive relevant training and wear protective equipment as required. The containers of chemicals after use must be placed in the designated place, and then classified according to the regulations and handed over to the relevant qualified parties for disposal;
8. Dangerous chemicals beyond the expiration date or sluggish materials caused by other reasons shall be replaced, sold, scrapped and processed otherwise in not more than 45 days.
In addition, we formulated the Emergency Plan on Chemical Leakage (《化学品泄漏应急预案》) to enable employees to take the most effective methods to rescue trapped persons and goods, minimize economic losses, and ensure personnel safety in case of oil and hazardous chemicals leakage. In 2024, Sunny SmartLead Technologies updated the Chemicals Control Management Regulations (《化学品控制管理规定》) , adding storage standards for explosion-proof cabinets.
Management of Hazardous Substances
The Group strictly abides by international norms including the Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (《關於限制在電子電氣設備中使用某些有害成分的指令》) (the “RoHS”) of the European Union, the Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (《化學品的註冊、評估、授權和限制規則》) (the “REACH”) of the European Union and the Regulation on Persistent Organic Pollutants (《持久性有機污染物法規》) (the “POPs”), as well as the national standards such as the Limit of Volatile Organic Compounds Content in Adhesive (《膠粘劑揮發性有機化合物限量》). In addition, Sunny Automotive Optech complies with the requirements of the Global Automotive Declarable Substance List (《全球汽車申報物質清單》) (the “GADSL”), and complies with the agreement on the End-of-Life Vehicles (《報廢車輛指令》) (the “ELV”) in accordance with customers’ requirements. Sunny Opotech and Sunny Optical Intelligence (Yuyao) comply with the provisions on the Waste Electrical and Electronic Equipment (《報廢電子電氣設備指令》) (the “WEEE”). Our professional team is responsible for the monitoring on laws and regulations, standards and other requirements, regularly reviewing the compliance with regulations on chemicals, confirming and updating current materials based on the updates to regulations in a timely manner and conveying relevant laws and regulations and other requirements to employees at all levels through trainings, meetings, announcements, blackboard newspapers, internal network and other forms. In addition, the Group also actively responds to customers’ higher demands on chemical substance management compared with the requirements of laws and regulations to ensure that the products meet the requirements of customers.
The Group has identified 100.0% of the chemicals used and classified chemicals into categories such as forbidden immediately, forbidden in stages and recommended as inappropriate substances. In addition, the Group takes the initiative to manage chemicals and reduce the use of certain chemicals in advance. We formulated the Administration of Green Substance (《绿色物质管理规定》)，the Substance Standards on Environmental Management of Products (《产品环境管理物质标准》) and other regulations, and establish hazardous substance free ("HSF") management process for suppliers.
1. Suppliers sign the relevant warranties for not using hazardous substances;
2. Suppliers provide credential materials such as Precision Analysis Report on Hazardous Substances, and Material Safety Data Sheet ("MSDS"), etc.;
3. Conducting RoHS test by means of X-ray fluorescence analysis ("XRF") or entrusting to the outside according to the actual situation; the RoHS mark will be affixed to the product certification of qualified products.
Completion of HSF management targets in 2024:
• Sunny Opotech: 100.0% completion rate for HSF order reviews, 100.0% completion rate for raw material HSF sample inspection, zero pollution incident in manufacturing process, 100.0% qualification rate of reverse verification, 100.0% pass rate for finished product HSF sample inspection, zero complaint from customers related to HSF.
• Sunny Zhejiang Optics: 100.0% products of conforming to the HSF requirements proposed by customers, zero HSF non-conformity incident.
• Sunny Automotive Optech: Conduct new supplier introduction audits according to the Guideline on HSF Risk Appraisal for Suppliers (《供应商HSF风险评估指南》) and achieve a 100.0% new supplier induction compliance rate.
• Sunny Optical Intelligence (Yuyao)：• 100.0% pass rate for green products，• 100.0% safe disposal rate for hazardous solid waste，• Zero environmental complaint from related parties.
• Sunny SmartLead：Zero HSF non-compliance complaints,100% qualified rate of HSF material inspection,100% traceability rate of HSF product batch number, 100% identification rate of HSF materials.
Sunny Opotech: All materials meet the requirements of RoHS and REACH. Sunny Opotech has formulated the Substance Standards on Environmental Management of Products (《产品环境管理物质标准》) to conduct effective management on environmental management substances, and prepared the hazardous substance reduction plan to control the consumption of 195 chemical substances such as lead, cadmium and mercury. Meanwhile, Sunny Opotech has RoHS specialists to deal with HSF related customer complaints. If HSF unqualified products are found, they shall be recalled or destroyed in accordance with the Abnormality Handling Control Procedure (《异常处理控制程序》) to prevent the spread of toxic and hazardous substances.
Sunny Zhejiang Optics: All materials meet the requirements of RoHS and REACH, and the HSF Management Manual (《HSF管理手册》) was formulated according to the requirements of IECQ QC 080000 hazardous substance process management system. The HSF organizational structure has been established base on HSF Management Manual, led by the general manager, and has specified the control procedures for the identification, recording, isolation and disposal of HSF unqualified products, clarified the reporting channel and handling methods of HSF unqualified products through HSF Unqualified Product Management Standard (《HSF不合格品管理标准》) to ensure that HSF unqualified products do not flow into the next process or leave the factory. Sunny Zhejiang Optics has also designated a management representative as the chairman of the Standardization Committee to orally report to the customer within 3 hours after discovering the HSF unqualified products, and submit a formal written report to the customer within 24 hours.
Sunny Automotive Optech: All materials meet RoHS and REACH requirements, and the general manager is responsible for formulating green substance management targets and policies. Sunny Automotive Optech has formulated the Administration of Green Substance and Technology (《绿色物质技术管理规定》) and transmitted relevant requirements to suppliers, and has conducted risk analysis on suppliers' materials, scale, HSF performance, HSF-related information and system through the HSF Risk Appraisal (《HSF风险评估指南》). Individual suppliers will log in the chemSHERPA platform (Note) according to the specific requirements of customers and submit questionnaires concerning chemical substances, so as to assist customers in better managing the chemical substances. Sunny Automotive Optech also discloses chemical substance information to customers through the International Material Data System (the "IMDS"), the China Automotive Material Data System (the "CAMDS") and other platforms or customer platforms.
Sunny Optical Intelligence (Yuyao):All materials meet the requirements of RoHS and REACH. Sunny Optical Intelligence (Yuyao) has formulated the Substance Standards on Environmental Management of Products (《產品環境管理物質標準》) to conduct effective management on environmental management substances, and to control 247 chemical substances such as anthracene, sodium chromate and boric acid. In order to better manage its suppliers, Sunny Optical Intelligence (Yuyao) has investigated the environmental management system, product design, material usage, supplier control, defective product handling, production process management and delivery process of such suppliers through the HSF Audit Form (《HSF稽核表》).
Sunny SmartLead：All materials comply with RoHS, ELV and REACH requirements, and Sunny SmartLead passes the IECQ QC 080000 hazardous substance process management review every year. The company has formulated the Hazardous Substances Management Standards (《有害物质管理规范》) and the Identification List of Prohibited and Restricted Substances (《禁限物质识别清单》) , and signed the Commitment Letter of Not Using Prohibited and Restricted Substances in Relevant Environmental Regulations (《不使用有关环境法规中禁用限用物质承诺书》) with suppliers and transmitted relevant requirements to suppliers through the SOR end of each project. In terms of HSF non-conforming products, they shall be handled in accordance with the Hazardous Substances Management Standards (《有害物质管理规范》) and the Nonconforming Product Control Procedure (《不合格品控制程序》) . Sunny SmartLead will also disclose the material information of products to customers through platforms such as the International Material Data System (the "IMDS") and the China Automotive Material Data System (the "CAMDS") .
Disclosure Chanel of Chemicals
We provide customers with the list of chemical components through products labeling, customers’ platforms, the International Material Data System (the “IMDS”) and other third-party platforms. Meanwhile, our professional team is responsible for the monitoring on laws and regulations, standards and other requirements, regularly reviewing the compliance with regulations on chemicals, confirming and updating current materials based on the updates to regulations in a timely manner and conveying relevant laws and regulations and other requirements to employees at all levels through trainings, meetings, announcements, blackboard newspapers, in-house network and other forms.
Hazardous Substances Reduction
For identified restrictive substances, the group actively seeks more environmental materials as substitutes and strives to reduce the content of hazardous substances in products. In 2024, Sunny SmartLead introduced more environmentally friendly A543 to replace isopropanol, in order to reduce the related impacts on the environment. Meanwhile, Sunny Zhejiang Optics replaced Per- and Polyfluoroalkyl Substances (PFAS) materials with no-PFAS materials.
