Modern Dairy Sustainable Agriculture Commitment

1. Introduction

Modern Dairy is committed to integrating sustainable agriculture into forage cultivation, feed procurement and production, dairy cattle farming, and raw milk production. We strictly comply with applicable environmental protection laws and regulations and implement environmental impact assessment requirements and related management measures. Through resource conservation, pollution prevention and control, ecosystem protection, and integrated crop and livestock farming, we promote sustainable development across the dairy value chain.

2. Scope

This commitment applies to the own production operations and related procurement activities of Modern Dairy Group and its subsidiaries. We require relevant tier 1 suppliers to comply with this commitment and communicate equivalent requirements to their upstream, non-tier 1 suppliers.

3. Commitments

We commit to:

• Reduce water consumption: Maintain ongoing water conservation efforts, with the Group establishing water-saving measures and organizing inspections of water use across farms to identify and reduce unnecessary consumption. In line with environmental impact assessment requirements, we implement water-saving measures at source, optimize water use in spraying, cleaning and other processes, and promote water-saving equipment and water reuse. We also promote precision irrigation in applicable forage and feed crop cultivation activities to improve water use efficiency.
• Reduce environmental pollution: Implement the requirements set out in farm environmental impact assessment documents and approvals, and integrate pollution prevention and control measures into production and operations. We strengthen waste management throughout generation, collection, storage, transfer, recovery and disposal, and ensure the proper treatment of manure and wastewater to reduce pollution of the surrounding environment. We also promote appropriate fertilizer application and responsible pesticide use in forage and feed crop cultivation to reduce the environmental impacts of agricultural inputs.
• Protect soil health: Implement the soil protection measures specified in environmental impact assessment documents and prevent soil contamination associated with the storage, treatment and recovery of manure, wastewater and waste. We promote integrated crop and livestock farming and appropriate manure application based on crop nutrient requirements, manure nutrient content and land carrying capacity. We also undertake soil monitoring and nutrient management according to soil conditions to maintain soil fertility and reduce soil pollution and degradation.
• Prevent the destruction of ecosystems: Implement ecological and environmental protection requirements during project site selection, construction and operation, and strengthen the identification of ecological risks at farms and forage cultivation sites to avoid damage to forests and other important ecosystems resulting from business activities and agricultural land expansion. We promote source traceability and deforestation-free sourcing of relevant feed ingredients, including soybean meal, and strengthen biodiversity and natural habitat protection across the supply chain.
• Reduce GHG emissions: Reduce emissions associated with enteric fermentation in dairy cattle by optimizing feed formulations, improving feed utilization efficiency and enhancing herd health management. We strengthen manure management, promote biogas recovery and utilization and the use of manure as fertilizer, and reduce GHG emissions through energy efficiency improvements, renewable energy use and more efficient resource use in agricultural production.

We will support the effective implementation of these measures through environmental management inspections, supplier communication and assessments, and relevant training, continuously improving sustainable agriculture management across our own operations and supply chain.