As a core pillar of the equipment manufacturing industry, the construction machinery industry is not only the main force in national infrastructure construction, but also an important tool in serving major development strategies. However, it also faces sustainable development issues such as energy consumption, carbon emission control, and production safety guarantees.
The recently released A-share ESG active rating results show that a number of high-rated ESG benchmark companies, such as Xugong Machinery and Anhui Heli, have emerged in the industry, setting practical examples in areas such as green manufacturing upgrades and intelligent technology iterations.
The industry is standing at a new starting point for green, intelligent, and international development, and ESG management capabilities have become the core competitiveness of hard-core equipment to compete in the market and demonstrate responsibility.
In terms of industry performance, Greenfa Credit Rating’s active rating results show that among the 34 construction machinery companies, many companies have received high ratings.
Among them, XCMG Machinery and Anhui Heli are at the forefront of the industry with their AAApi ratings, becoming benchmark companies for ESG management in the field of construction machinery.
Following closely, Liugong, Zhejiang Dingli and Sany Heavy Industry received AA+pi ratings, and five companies, Nanfang Road Machinery, Hangcha Group, Zoomlion, Shantui Co., Ltd. and Sunward Intelligent, received AApi ratings and performed well.
China Railway Construction Heavy Industry, Handler, Vantone Hydraulics, and Tietuo Machinery were rated A+pi; Zhongji United was rated Api; Nuoli Co., Ltd. was rated A-pi; Hengli Hydraulics was rated BBBpi.
In addition, 17 companies received ratings of BB-pi and below, accounting for 50%.
The level distribution reflects the significant differences in ESG management among companies in the industry. Although leading companies have set industry benchmarks through green manufacturing and intelligent transformation, overall, nearly half of the companies have ESG ratings at a low level. Practice and information disclosure in environmental and social dimensions still need to be strengthened to gradually narrow the ESG management gap among companies.
In terms of focusing on key issues, from the environmental dimension, green transformation under the goal of carbon peak and carbon neutrality has become a core issue in the industry.
Environmental management in the construction machinery industry focuses on greenhouse gas emission control, clean energy application, new energy product research and development, etc.
Enterprises need to establish a complete carbon emission monitoring and accounting system, promote the use of renewable energy such as photovoltaic power generation, increase the research and development of electrification, hybridization, and hydrogen energy products, while optimizing production processes, reducing energy consumption, and achieving low-carbon transformation through technological innovation and management upgrades.
The control of pollutant emissions such as wastewater, exhaust gas, and hazardous waste is also critical. Emission standards must be strictly implemented and environmental protection facilities must be improved to ensure compliance with emission standards.
From the social dimension, production safety, employee rights protection and product responsibility are the core concerns.
Construction machinery manufacturing involves the operation of large equipment and the processing of heavy components, which poses high occupational health and safety risks. Enterprises need to establish a comprehensive safety production management system, strengthen safety training and emergency drills, and ensure the safety of employees.
In terms of protecting employees’ rights and interests, the salary and welfare system should be improved, diversified training and development opportunities should be provided, and an inclusive and open corporate culture should be created.
In terms of product responsibility, it is necessary to ensure product quality and safety, establish and improve a customer service system, promptly respond to customer needs and complaints, and at the same time strengthen research and development innovation to provide customers with more efficient, smarter, and more environmentally friendly product solutions.
In the governance dimension, standardizing corporate governance, risk management and control, and building an ESG management structure are key.
Enterprises need to establish a sound governance structure, strengthen internal control and risk management, and prevent operating risks and compliance risks; build an ESG management organizational structure, integrate ESG concepts into strategic planning and daily operations, regularly disclose ESG reports, and respond to the concerns of stakeholders.
In terms of industry practice benchmarks, Anhui Heli continues to adopt and expand green power trading, photovoltaic power station construction, green factory certification, equipment optimization and other measures to reduce energy consumption in green factory construction; it also achieves dynamic management of green factories through the industrial energy conservation and green development management platform.
In terms of green production, in order to reduce exhaust emissions, a new powder process upgrade project for the forklift mast coating line was implemented.
Zhejiang Dingli has gradually improved its management system in response to climate change and carbon reduction, established an energy conservation and carbon reduction management mechanism, conducted climate change risk and opportunity analysis, and continued to improve climate management levels.
On the design side, we promote modular design to ensure that all series of products are suitable for standard container transportation, improve transportation efficiency, and reduce transportation energy consumption; on the transportation side, we gradually phase out high-emission transportation tools and give priority to new energy vehicles to reduce carbon emissions during transportation.
LiuGong has established an efficient and collaborative new product R&D process in terms of technological innovation and product responsibility, strengthened the concept of product collaborative development, achieved a seamless process from customer needs to satisfactory product delivery, and effectively improved R&D quality and efficiency.
In 2024, LiuGong will launch more than 130 new product development projects; 29 new electric products will be launched, 21 of which will be put on the market, covering 11 product lines.
Sany Heavy Industry has built an employee welfare system to protect employees’ rights and interests, strengthens employee care and communication, and creates a warm and harmonious working environment through rich cultural and sports activities, a complete welfare system, and an efficient communication platform; it focuses on building diversified employee homes, “work stations” for front-line workers, and other positions to provide employees with a more convenient and comfortable working environment.
At the same time, we actively carry out a variety of cultural and sports activities, such as fun sports games, socializing, female employee salons, psychological classes, etc.
In terms of social welfare, LiuGong encourages employees to actively participate in charity, assume social responsibilities, and use practical actions to convey the positive energy of the company.
Give full play to resource advantages, help promote the revitalization of rural industries with targeted assistance, develop rural industries and take root and cultivate them, providing villagers with broad employment space and sources of income.
XCMG Machinery strictly abides by laws and regulations in the governance dimension, and timely revise and improve the system based on the actual operation of corporate governance to form a governance mechanism with transparent rights and responsibilities and coordinated operation; it has established a risk management committee with a risk management office under it, formulated a strategic path for the reform of the risk management system, and promoted comprehensive
Establish a risk management system and comprehensive risk digital operation management; continue to strengthen anti-corruption and anti-bribery management, add corresponding management policies during the supplier screening and due diligence process, and conduct irregular inspections; establish an effective reporting mechanism so that when supplier violations are discovered, violations can be reported conveniently and safely.
Currently, the construction machinery industry is in a critical period of transformation and upgrading, and the ESG concept plays a vital role in corporate strategic development.
Industry rating results show that leading companies have set examples in terms of green manufacturing and intelligent transformation, but nearly half of the companies still need to improve their information disclosure levels in environmental protection, social responsibility and other aspects.
In the future, ESG development in the construction machinery industry needs to focus on three major directions.
The first is to deepen green transformation and push carbon management from head-to-head demonstration to industry-wide practice.
Enterprises should establish a carbon emission monitoring and accounting system, formulate a carbon emission reduction roadmap, increase the research and development of new energy products, promote the application of clean energy such as photovoltaics, and optimize production processes to reduce energy consumption. Leading enterprises need to drive collaborative carbon reduction in the industrial chain through technology output and standard co-construction.
The second is to strengthen responsibility and make up for shortcomings in the social dimension.
Improve the production safety management system, strengthen occupational health training, and ensure the safety of employees; improve employee salary and welfare levels, smooth career development channels, and enhance employees’ sense of belonging; strengthen product quality control, establish a customer service response mechanism, and win market trust with high-quality products and services.
The third is to optimize the governance system and enhance ESG execution capabilities.
More companies need to establish an ESG management structure and incorporate ESG goals into strategic planning and performance appraisals; improve the quality of information disclosure, proactively publish ESG reports, and respond to the concerns of stakeholders; strengthen compliance management, prevent operating risks, and lay the foundation for sustainable development with standardized governance.
For the construction machinery industry, the iterative upgrade of every hard-core equipment and the advancement of every infrastructure project are inseparable from the infiltration of green development concepts and the support of responsibility.
Large enterprises should serve as industry benchmarks, continue to deeply integrate ESG into the entire process of equipment research and development, production and manufacturing, and industrial chain coordination, and use green smart manufacturing to polish their “important equipment” business cards; small and medium-sized enterprises need to anchor the bottom line of compliance and the direction of transformation, make steady efforts in basic areas such as green technology application and safety production guarantee, and gradually match the ESG practice level of leading enterprises.
Only by deeply binding hard-core equipment with green responsibilities and using ESG as the core to activate the transformation momentum of the entire industry can construction machinery, the main force in infrastructure construction, continue to rejuvenate in the “double carbon” wave, and use more warm and responsible sustainable development practices to write a new chapter in the industry of strengthening the country and rejuvenating the country through green.
