The investigative report issued by IPE and Lüse Jiangnan on May 21st highlighted that Xiaomi has long avoided addressing pollution along its supply chain for the past four year. The report also drew attention to one of its suppliers Ichia, which was found with suspected violation. According to the Taiwanese media, Ichia Technologies, Inc.(Code: 2402) has been suspended for trading on June 29th following an announcement that the production of Ichia Suzhou has been put on halt.

On June 21st 2018, Xiaomi Corporation released Post Hearing Information Pack (1st submission) (full version) via Hong Kong Exchanges and Clearing Limited website. Xiaomi admitted that ‘certain current suppliers of the Group have experienced historical environmental non-compliance incidents’ and that ‘non-compliance of our suppliers with relevant environmental laws and regulations may cause disruptions to our product supply to users, increase our cost of sales and have a material and adverse impact on our business operations and financial results.’

On June 14th 2018, Xiaomi Corporation Draft prospectus for Depository Receipt Public Offerings was published via China Securities Regulatory Commission website. In the prospectus, Xiaomi admitted for the first time that its current suppliers have experienced historical environmental non-compliance incidents.

In May 2018, environmental groups IPE and Lüse Jiangnan completed another round of investigations into pollution in Xiaomi’s supply chain, finding that pollution has become even more severe. Groups once again raised these issues to Xiaomi, but still only received silence and avoidance in response. Meanwhile, the Hong Kong Stock Exchange (HKEX) – where Xiaomi is seeking its IPO – has made clear requirements for ESG-related disclosure. We believe that Xiaomi is in violation of HKEX's relevant requirements for information disclosure.

The Institute of Public & Environmental Affairs (IPE) and the International POPs Elimination Network (IPEN) jointly released in May 2018 the report, “PRTR: Establishing a Pollutant Release and Transfer Register in China”, which discusses using a PRTR disclosure system to strengthen the management of hazardous chemicals. The report recommends to learn from the best practices of international experience and mechanisms developed in China, and to leverage strong legislation as support for establishing China’s PRTR system.

In 2017, Lvse Jiangnan received complaints from a number of residents in Danyang, Jiangsu. The residents complained that enterprises in Daya Wood Industrial Park in Danyang Economic Development Zone gave off pollution during the production of Power Dekor floorboards, affecting the livelihoods of the neighboring residents. In 2018, environmental group Lvse Jiangnan and IPE conducted an investigation into the environmental pollution issues caused by the production of Power Dekor floorboards.

IPE began conducting an environmental impact analysis on beer supply chains at the end of 2017. The investigation revealed that wastewater from breweries and air emissions from glass factories often exceeds emissions standards, including at subsidiaries and suspected suppliers to Snow, Tsingtao, Yanjing, AbInBev and Calsberg. The beer market is currently undergoing a massive transformation. To become winners in the high-end market, big brands should implement green supply chain management and provide green products to consumers.