2012 Huawei Whitepaper for Saving Energy and Reducing Emissions

Save Energy and Reduce Emissions to Achieve Sustainable Development and Improve Corporate Competitiveness

Contents1 Overview ............................................................................... 1

2 Green Communications ......................................................... 3

2.1 Wireless Base Station Energy Efficiency ...............................................4

2.1.1 Urban Site Reconstruction Solution .............................................4

2.1.2 Integrated Outdoor Site Solution ................................................5

2.1.3 EasySite Solution .........................................................................5

2.2 Base Station Equipment Energy Efficiency ...........................................6

2.2.1 Huawei's Energy Saving Solutions for Base Station Equipment ...6

2.3 Base Station Auxiliary Equipment and New Energy System .................7

2.4 Fixed Broadband Network Energy Efficiency .......................................8

2.5 Cloud Application Energy Efficiency ...................................................10

3 Green Huawei ..................................................................... 12

3.1 Green Operations ...............................................................................13

3.1.1 Energy Management System .....................................................13

3.1.2 New Energy Sources ..................................................................16

3.1.3 Architecture ...............................................................................17

3.1.4 Laboratories ..............................................................................20

3.2 Green Industry Chain Construction ....................................................22

3.2.1 Green Raw Materials .................................................................22

3.2.2 Green Packaging .......................................................................22

3.2.3 Green Warehousing ...................................................................24

3.2.4 Green Logistics ..........................................................................25

3.2.5 Supplier Management ...............................................................26

4 Green World ........................................................................ 27

4.1 ICT's Contribution to Reduction of Energy Consumption Throughout

Society ...............................................................................................27

4.1.1 Smart Grid .................................................................................28

4.1.2 Smart Railway ...........................................................................28

4.1.3 Smart Logistics ..........................................................................29

4.1.4 Digital Healthcare ......................................................................29

4.1.5 IT-based Education ....................................................................30

4.1.6 Smart Vehicles ...........................................................................30

4.2 Contributions to Standards Organizations and Market Recognition ..31

5 Conclusions ......................................................................... 32

6 List of Terms ....................................................................... 33

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1 Overview

According to International Energy Agency (IEA) statistics, over the past three decades, global energy consumption has increased by more than 70%, and CO2 emissions have increased by about 80%. From 2010 to 2015, energy consumption and carbon emissions will continuously increase by 2.5% every year, especially from the use of fossil fuels. Mainstream scientists think that energy consumption has caused the greenhouse effect and led to a series of natural disasters. Protecting the environment and preventing climate change have become one of the great challenges of our time.

In addition, energy prices have been skyrocketing since the 1970s, which has put increasing pressure on the industrial and manufacturing sectors. Society as a whole is attaching more importance to conserving energy.

The development of telecom services has comprehensively reduced energy consumption and CO2 emissions. For example, telephone and video conferencing services have reduced enterprises' need for travel. The development of short message service (SMS) and Internet services enable people to interact with one another without using physical media such as postcards, greeting cards, or letters. The continuous development of all such services will continuously reduce the Carbon Footprint of individuals and enterprises.

To put it simply, telecom services have supported and contributed to the green Gross Domestic Product (GDP) and harmonious social development. Practices in recent years have proven that Information and Communications Technology (ICT) solutions can effectively reduce the industry's energy consumption. Take smart grids for example. Deploying smart grids in the electricity, transportation, and medical care industries in top energy-consuming countries such as China, the US, and India can help these countries reduce CO2 emissions by about 5%.

Telecom enterprises provide services to help society reduce its carbon emissions, but these enterprises should also work to continuously improve their Energy Efficiency and minimize their Carbon Footprint and energy consumption.

Huawei believes that a telecom enterprise's efforts to save energy and reduce emissions not only aim to achieve a Carbon Neutral status to ensure green GDP, but also serve as an important means for it to reduce costs in the future. Network design solutions for saving energy and reducing emissions must be evaluated based on the Total Cost of Ownership (TCO). Only those energy saving solutions that are economically feasible can be put into practice.

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To overcome this challenge, Huawei has developed the "Green Communications, Green Huawei, and Green World" strategy in the hopes of encouraging society to save energy and protect the environment while saving energy and reducing emissions during its business operations.

Internally, Huawei will continuously reduce the energy consumption of its products by introducing new technologies and will provide innovative low-energy consumption solutions to better serve its customers.

Externally, Huawei will work together with its suppliers and customers to control the impact of its product development and delivery on the environment. Huawei will choose high-quality raw materials and adopt new technologies to provide highly efficient solutions. It will also design recyclable product packages to reduce the energy consumption in logistics chains.

GreenCommunications

Green Huawei Green World

Innovative GreenNetwork Solutions

Green Supply ChainMgmt. (e.g.RoHS,

WEEE)

Protecting the earth by

innovative ICT solutions

2 Green Communications

To test the carbon emissions of telecom products throughout their life cycles, Huawei has conducted a Life Cycle Assessment (LCA) on its own equipment. Such equipment mainly includes base stations in the mobile network and broadband access products in the fixed network. After conducting this assessment, we reached the following conclusion: Carbon emissions in the network operation phase account for approximately 80% of the total emissions. Most of the carbon emissions result from the equipment's consumption of electricity, so the key to reducing carbon emissions is to develop energy-saving products.

After analyzing several customers' energy consumption patterns based on live network data, Huawei found that electricity was the main type of energy consumed by operators. Most electricity is consumed by equipment in the access network, including wireless sites and broadband and narrowband access sites. The energy consumption of many mobile operators' wireless sites has reached over 70%. Although the energy consumption of fixed operators in the access network is less than that of mobile operators, it is generally more than 40%. In addition, more and more industries and enterprises are adopting ICT solutions, so the energy consumption of cloud applications will put increasingly heavier pressure on operator, enterprise, and industry networks.

Ultimately, as we implement our "Green Communications" strategy, we should focus on reducing the energy consumption of access network sites and pay attention to cloud applications, as the "cloud" trend continues to develop. For similar packaging and transportation issues in the manufacturing industry, we can adopt new logistics technologies to save energy and reduce consumption. Since more and more governments and industries have recognized the function of ICT as a green enabler, we should also pay appropriate attention to the ICT industry.

This chapter describes the key points for improving the energy efficiency of wireless base stations, including base station auxiliary equipment, new energy systems, fixed broadband networks, and could applications.

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2.1 Wireless Base Station Energy Efficiency

In the mobile network, the energy consumption of wireless sites generally accounts for over 75% of the total energy consumption of the mobile network. To reduce the mobile network's energy consumption, we should first reduce each site's energy consumption. Huawei provides appropriate designs at the network topology and network element (NE) levels to reduce sites' energy consumption. At the network topology level, the primary methods for reducing sites' energy consumption are improving coverage efficiency and increasing the coverage capabilities of base station equipment. By implementing these strategies and adopting its self-developed key technologies, i.e. Transmitting Diversity, Adaptive MultiRate (AMR), and High Receive Sensitivity, Huawei has reduced its energy consumption by more than 25%. The main strategy for saving energy at the NE level is reducing the energy consumption of its base stations, cooling systems, and new energy systems.

Huawei has used multiple technologies to reduce waste and redundancy. For example, Huawei is the first company in the industry that provides the timeslot shutdown function. By using this function, the energy consumption of base stations can adapt to traffic load changes more accurately, thereby reducing waste. The base station based on the distributed architecture and the mini NodeB designed by Huawei have helped operators successfully minimize feeder loss. In actual network deployment, if the traditional macro base station is replaced by the distributed base station, power consumption can be reduced by more than 40% if the transmit power at the top of the base station cabinet remains unchanged. The distributed architecture can also reduce the energy consumption of leased shelters and auxiliary cooling systems. The most effective way for enterprises to minimize carbon emissions and save energy is to use new zero-emission and low-emission energy, such as solar power, wind power, and biomass energy, according to local climate conditions. In addition, Huawei has introduced its innovative EasyGSM solution, which supports rapid deployment with low costs and can achieve a high return on investment (ROI). The following sections introduce Huawei's solutions for wireless base stations and application scenarios of these solutions.

2.1.1 Urban Site Reconstruction Solution

By efficiently using existing site space, Huawei has customized a green reconstruction solution for urban sites.

This solution reconstructs sites according to the following components:

1. Communications equipment: Communications equipment is upgraded from GSM+UMTS equipment (three-band, two-mode) to GSM+UMTS+LTE equipment (five-band, three-mode) to reduce energy consumption by 30%.

2.1.2 Integrated Outdoor Site Solution

To provide a solution for operators as they face difficulties in acquiring sites, achieve rapid deployment, save energy, and reduce emissions, Huawei launches the Mini-shelter Solution for integrated outdoor sites. A single cabinet of the Mini-shelter occupies only 1 m2 and can be flexibly deployed in various locations such as rooftops, streets, suburbs, mountaintops, and high-speed railways. By adopting various temperature control systems such as heat exchangers, direct ventilation, and direct-current (DC) air conditioners, the Mini-shelter Solution can adapt to both high and low temperatures. It also houses main equipment, transmission equipment, telecom power supplies, storage batteries, and third-party equipment. As an industry-leading shelter-free site solution, Mini-shelter performs multiple functions and has a highly efficient temperature control system. It enables operators to reduce site setup and operational costs and reduce power consumption by 50% to 80%.

2.1.3 EasySite Solution

The "All-on-Pole" design ofHuawei's EasySite solution helps operators rapidly set up sites. This solution uses solar energy to achieve zero carbon emissions and a low-power-consumption design to save energy. The solution also supports automatic base station configuration, site antitheft measures, and intelligent site management, which exempts local site maintenance, reduces TCO, and helps increase operator profits.

Huawei's restructuring solution for urban sites, solution for integrated outdoor sites, and EasySite solution help operators rapidly deploy and expand services. Leading operators all over the world are using the solution for integrated outdoor sites. With this solution, cabinets can be flexibly deployed on hot or cold days in various locations such as rooftops, streets, suburbs, mountaintops, and high-speed railways. This solution plays a crucial role in achieving green site operations.

2. Power supplies: Traditional inefficient telecom power is replaced by efficient primary telecom power to cut energy consumption by 10% and save cabinet space by 80%. This extra cabinet space can be used for housing base band units (BBUs).

3. Temperature control systems: Air conditioners are replaced by an intelligent ventilation system, which reduces the energy consumption of the entire site by more than 50%.

4. Antenna systems: Single-band antennas are replaced by multi-band or ultra-wideband antennas, which greatly reduces antenna space and makes towers more lightweight. The Smart Operations Support System (SmartOSS), which integrates the M2000 and NetEco, is used to intelligently schedule and coordinate the main and auxiliary equipment based on communications service demands. This system reduces energy consumption by 30% and site maintenance workloads by 60%.

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2.2.1 Huawei's Energy Saving Solutions for Base Station Equipment

Huawei's SingleRAN solution for base station equipment uses the unified fourth-generation base station, base station controller, transmission system, and network management system. This solution supports Long Term Evolution (LTE) and other wireless access technologies and enables GSM/UMTS to smoothly evolve into the future network. The SingleRAN solution makes technology selection and network evolution easier and avoids unnecessary investment in the construction of multiple wireless access networks. SingleRAN also greatly reduces the cost of expenses such as site acquisition, shelter construction, and transmission. The SingleRAN solution can be used to reconstruct the GSM network in an environmentally friendly manner and can use green energy to reduce greenhouse gas emissions. SingleRAN helps operators improve their network performance and reduce operation & maintenance (O&M) costs.

The SingleRAN solution uses intelligent shutdown technologies to optimize power distribution. In a typical dual-band GSM network, the most direct and effective shutdown technology is site shutdown. When traffic is low, the high-frequency network sites are powered off. After the traffic recovers to a certain threshold, the equipment is powered on again. This powering-off of the entire base station has significantly reduced the power consumption of the equipment. Shutdown technologies for base stations also include carrier shutdown and timeslot shutdown. The difference between these two technologies is that timeslot shutdown supports refined management of lower traffic and is more energy-efficient than carrier shutdown.

The SingleRAN solution can reduce feeder waste. Feeders consume little power but have great influence on base stations' coverage capabilities. Feeders significantly reduce the power of the tower top, therefore greatly reducing base station efficiency. In certain site scenarios, feeders can cause approximately 50% of power loss. The deployment of a base station based on distributed architecture and the mini NodeB can resolve this problem. When Huawei deployed the network, we discovered that if we replaced the traditional macro base station with a distributed base station, we could save more than 40% of power consumption if the transmission power at the top of the base station cabinet remained

2.3 Base Station Auxiliary Equipment and New Energy System

We not only need to continuously reduce the power consumption of base stations, but also develop new and innovative auxiliary equipment to implement superior solutions. Auxiliary equipment and new energy systems mainly include equipment power supply, site deployment, network management capability, etc.

First, the sites must support small-scale configuration. For small user groups, low-cost deployment is supported and capability expansion is convenient. "Low-cost" means the equipment capacity and size are small, the transmission solution cost and maintenance cost are low, and deployment is rapid.

Cooling systems consume more energy than other auxiliary equipment, so the key to saving energy for auxiliary equipment is finding out how to reduce the energy consumption of cooling systems at deployed sites. Smart direct ventilation systems can be used at indoor macro base stations, which use blowers to take in fresh air and push out hot air to reduce the number of air conditioners, thus greatly reducing the amount of power they consume. Outdoor cabinets with direct ventilation can be used at outdoor macro base stations to reduce the power consumption of their cooling systems. When the direct ventilation system is used, two problems typically occur. One is that the batteries have strict temperature requirements, and direct ventilation cannot bring the temperature to acceptable levels. The other problem is that the air tends to get stale. To address the first problem, Huawei has found that low-power-consumption battery cabinet air conditioners can be used to guarantee the required temperature. In areas with stale air, the direct ventilation system can be replaced with a heat exchanger to avoid the damage dust causes to the dust screen and equipment. The rationale for using the heat exchanger is similar to that of direct ventilation. Compared with direct ventilation, the heat exchanger does not enable outdoor air to enter the equipment space, which keeps the dust screen clean and reduces cleaning costs.

The most direct method of reducing carbon emissions is introducing new energy, such as solar power, wind power, and biomass energy. Choosing zero-emission and low-emission energy is the most effective method enterprises can use to reduce carbon emissions.

2.2 Base Station Equipment Energy Efficiency

Base station equipment consists of three components: the baseband, radio frequency, and feeder. The radio frequency consumes the most energy, exceeding 80% of the total energy consumption, and power amplification consumes approximately 50% of the total energy consumed by the radio frequency. Therefore, improving the power amplification efficiency is one of the keys to improve the energy efficiency of base station equipment. Based on the broadband Multi-Carrier Power Amplifier (MCPA) and various energy saving technologies, the radio frequency output power at different frequency bands, carriers, and other system resources are completely shared. They can be flexibly configured based on operator demands and the desire to develop new users to maximize resource utilization.

unchanged. The first distributed base station Huawei used featured a compact size, was lightweight, and dissipated heat naturally. It could also reduce the energy consumption of leased shelters and auxiliary cooling systems, thereby directly and indirectly reducing sites' power consumption. In general networks, either high-efficiency base station products or the distributed architecture can reduce the network TCO by approximately 10%.

All the performance indicators of Huawei's broadband RRU are much better than those of a traditional Radio Remote Unit (RRU) which supports multiple frequency bands. Through this solution, the number of components can be reduced by 40%, the fault rate declines by over 60%, the power consumption is cut by over 20%, and the size and weight are reduced by over 30%. Therefore, this solution has distinct advantages in saving energy and being deployed quickly.

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2.4 Fixed Broadband Network Energy Efficiency

Access equipment consumes more than 50% of the energy consumed by the entire fixed network.Different operators have different network architectures. For some operators, the energy consumption of the access layer reaches up to 70%. In addition, as the network evolves to broadband, traditional fixed voice services are declining, and the percentage of energy consumed by broadband access network equipment is increasing year by year. Therefore, it is very important that operators reduce the energy consumption of their broadband access equipment.

Digital Subscriber Line (DSL) technology is now a mainstream broadband access technology. The number of global xDSL subscribers has exceeded 300 million and will increase by 6% over the next five years. With copper wires being replaced by optical fibers, optical fiber technology is also developing rapidly. The number of Passive Optical Network (PON) subscribers has exceeded 20 million, and the compound annual growth rate over the next five years is expected to reach 33%. Therefore, xDSL and PON are the keys to saving energy in the broadband network.

Huawei believes that, with the continuous development of technologies and ongoing optimization of products and solutions, the energy consumption of the Fiber To The x (FTTx) network can be further reduced to save more energy and protect the environment. Therefore, during FTTx network construction, it is necessary to incorporate energy-saving and emission-reduction solution designs into the TCO evaluation. FTTx solutions that are economically feasible and consume low energy are preferred. Based on the experience Huawei has accumulated over the years, we have proposed a "layered green design concept", which involves fully incorporating the concept of saving energy into the designs of all of our components, boards, equipment, and even network solutions.

1. With regards to component design, chips that are more integrated can be used to reduce energy consumption. Therefore, the key to saving energy and reducing emissions is choosing industry-leading Application-Specific Integrated Circuits (ASICs).

2. The power consumption of boards can be reduced in the following two aspects: (1) Increase the density of the board port to reduce the energy consumption per port. (2) Actively use new technologies to optimize board designs and reduce the energy consumed by the board. We once made an experiment of modifying the multi-input combined power circuit by changing the diode to a Metal Oxide Semiconductor (MOS). This change has greatly reduced the loss of the combined circuit and cut energy consumption by 80%.

3. When designing the equipment, Huawei can increase the density of the board by optimizing the heat dissipation of the entire system, dynamically adjust the power output through layered power management, and save the energy consumption of cooling systems by using technologies such as smart fans and ground-source heat dissipation.

By dynamically managing the energy consumption of the equipment, Huawei can dynamically adjust the power consumption or even shut down the idle modules based on the data volume generated when the modules and interfaces of the equipment are in use. For example, PON terminals are always turned on, but they are only used for a short time each day. Huawei thinks the Optical Network Terminal (ONT) should be able to support multiple energy saving modes, including the normal mode, idle mode, and battery mode. When idle mode is used, idle components and modules can be turned off. For example, for multi-function home terminals, when it is detected that WiFi or data services are not in use, the service modules can be turned off or the power of these service modules can be reduced while only the Plain Old Telephone Service (POTS) is retained. In this manner, when the Optical Network Unit (ONU) is running and the data volume is low, energy consumption can be reduced by 70% to 85%.

• The speed adjustment technology in smart fans is effective for equipment that requires fans to dissipate heat. Variable-speed fans can automatically adjust their speed within a certain range based on cabinet temperature. Variable-speed fans generally use between 40% and 50% less energy than fixed-speed fans, which increases to more than 70% in temperate regions where fans are not required for most of the year.

• Huawei is currently evaluating ground-source heat dissipation cabinets. We have discovered the following: cooling systems for ground-source heat dissipation cabinets use around 70% less energy than conventional heat exchangers of the same heat dissipation power; the electricity saved annually by 1,000 FTTx cabinets totals 937,000 KWh; and each cabinet operates at less than 40 dBA in normal temperatures, which is below the limit specified for protected areas by ETSI 300753 (the highest noise level).

4. In addition to reducing the energy consumed by equipment, we must design green networks for different scenarios to minimize management costs. These designs include optimized network architecture and the Smart Power Management (SPM) solution. For example, as the remote distance of optical fibers exceeds copper wires, network architecture optimized by optical access can reduce energy consumption and the required site space. An aggregation Optical Line Terminal (OLT) has the following advantages: (1) Reduces equipment types by converging multiple devices; (2) Slashes the number of devices, which in turn reduces the quantity of auxiliary shelters, air conditioners, and the energy required for network operations. However, the SPM solution can monitor, adjust and output statistics for the energy used by the access network, metropolitan area network (MAN), and IP core network. It can also facilitate energy-saving solutions for applications (including dynamic traffic-aware technologies) by managing the energy consumption of network auxiliary equipment and terminal users.

Saving energy and reducing emissions is a gradual process. We should choose suitable reconstruction and evolution strategies after comprehensively considering costs and the current state and development trends of live networks.

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2.5 Cloud Application Energy Efficiency

Cloud computing uses far less energy than data centers in traditional solutions. Cloud computing integrates servers, storage, and network resources into a resource pool that gives each application computing capabilities, storage space, and various software services. This greatly improves resource utilization, which saves energy and reduces emissions.

For example, we have integrated the hardware platforms, application software, and virtual software of customer service products. We can centrally handle services and virtualize agent applications, which provides the following advantages: (1) A green agent uses 80% less energy than a traditional PC agent; (2) The service-processing server group intelligently controls the power supply to servers based on different service volumes to minimize energy use. In 2010, we applied distributed database and elastic computing solutions to Business Intelligence (BI) cloud computing systems as a precision marketing system in the network. Statistics show that the BI cloud computing system can lower energy consumption by 75% and cut OPEX and CAPEX by 60%.

Specifically, the energy efficiency features realized by cloud applications include dynamic energy-saving measures, energy consumption management, power supply management, precise control of server energy consumption, and shelter heat management.

Dynamic energy-saving: The system can dynamically adjust resource quantities based on traffic loads to optimize resource utilization and reduce maintenance costs. When the resource occupancy rate is low, traffic loads are distributed among a few servers. The rest are powered off until they are required when the resource occupancy rate rises. By dynamically controlling the power supply to system equipment, data centers use about 9% less energy each day.

Energy management in data shelters generally includes monitoring and controlling the energy used by equipment, and collecting and analyzing data about the energy used by all devices in shelters (including IT, cooling, and power supply equipment). Users can easily view electricity distribution, energy efficiency, and electricity fees. The system also suggests ways to optimize energy use for shelters.

As the loads on IT equipment with multiple power supply units (PSUs) always change, the quantity of active PSUs also changes, creating an on-demand power supply scenario. PSUs are rotated between powered-on and powered-off states at specified intervals to ensure equal idle times. This improves the work efficiency of PSUs and uses 8% less energy. Buckley Lab has verified that the fault rate of PSUs decreases by 40% and their lifetime is prolonged by 1.4 times. We have changed the traditional power supply mode for data centers from 220V AC to 440V DC. The inverter and rectifier in the traditional uninterruptible power supply (UPS) equipment receiving AC have been removed to reduce the links in the power supply system and improve reliability. This realizes a 10% efficiency increase compared with traditional modes.

By precisely controlling server energy consumption, we have reallocated the power supply and heat dissipation resources. Previously, power was distributed based on servers' nominal value. This meant that surplus power was often distributed, which wasted power supply modules and lowered efficiency. Conversely, power-capping technology distributes power based on servers' actual power consumption levels, enhancing data centers' power distribution capabilities by about 25%. We have removed unified UPS equipment from the traditional system and installed a mini-UPS component in servers so that UPS can be distributed on demand. For example, if a data center's power supply fails, the mini-UPS provides backup power for the server to reduce the impact of the initial failure on any other equipment. This technology also improves system power supply efficiency, reduces shelter power consumption by around 20%, requires less investment, and lowers TCO.

The power consumed by the cooling systems of shelters and data centers that house core telecom equipment accounts for 45% to 50% of overall power consumption. Improving cooling efficiency through shelter heat management is the key to reducing power consumption in shelters. In this case, design is vital for features such as air supply mode, cool and heat aisle distribution, and the layout of high-power equipment. If shelter conditions permit, under-floor cool air supply rooms are preferable as they realize 20% greater cooling efficiency than overhead rooms. Hot and cool aisles can be used in vent duct design by deploying cabinets face to face and back to back to improve cooling efficiency. After performing verification during actual network operations, we found that the power usage effectiveness (PUE) of shelters reconstructed with the above measures was greatly improved. PUE = Total power consumption of a shelter / Power consumption of IT equipment. Reconstructing a shelter using common measures that incur low workloads can decrease PUE from 1.95 to 1.8 and use 16% less energy for the cooling system. Solutions that require extensive reconstruction, such as precise upward air supply, reduce energy use by more than 30%.

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3 Green Huawei

By adopting energy-saving and highly efficient production technologies, Huawei has reduced its energy costs per US$10,000 of output by an annual average of 6.3%. As the air conditioner temperature is always set above 26°C in summer, almost 4 million KWh of electricity is saved each year – the same volume of electricity consumed annually by 5,000 Chinese households. Optically controlled lamps save more than 1.3 million KWh of electricity each year, and the recyclable chopsticks used in our cafeterias save 16,800 trees each year.

Every telecom equipment provider consumes energy and emits CO2 during equipment manufacturing and logistics processes. In recent years, Huawei has developed and implemented energy-saving and emission-reduction initiatives for its manufacturing processes. Key measures include: 1. Optimizing internal turnover tools and recycling packaging materials. 2. Reconstructing the air conditioning temperature control system and lighting system to optimize energy management during production. 3. Promoting intensive packaging for the raw materials and semi-finished products of Electronic Manufacturing Service (EMS) vendors, and reusing waste materials. 4. More effectively estimating goods' volume and container demands to optimally utilize transportation resources.

Huawei also applies advanced IT to improve the efficiency and utilization of internal communication, storage, and office systems. This enables us to provide more services with less materials and energy, which saves energy and reduces emissions.

Huawei's global operations have greatly increased data service volumes. We must now centrally manage our global IT resources to reduce information security risks and serve customers 24/7. Huawei's data center primarily comprises the command center, call center, server room, network room, and other support devices. The data center carries Huawei's major IT application systems, including the Integrated Supply Chain (ISC), Integrated Financial Services (IFS), Integrated Product Development (IPD), Product Data Management (PDM), Notes, and 800 Hotline systems. The data center provides services for all our offices in and outside of China, supports the automated system management, provides IT-based process management, reduces onsite support requirements by one-third, cuts carbon emissions, and improves efficiency for both Huawei and Huawei's customers.

Huawei employs 60,000 R&D staff, each of whom has a computer. Traditionally, resources cannot be shared and energy consumption is high. However, cloud computing-based thin terminals can provide computing and storage functions through a background server that shares resources between all R&D employees; for example, Huawei's Shanghai Research Center has been able to replace more than 8,000 computers. Resource utilization and maintenance efficiency has increased 10-fold, IT O&M staff have dropped from 80 to 8, power consumption is 71% lower, and the IT activation cycle has been slashed from 14 weeks to 10 minutes.

3.1 Green Operations

Huawei follows ISO14001 to reduce resource use during internal operations and management, and has implemented and optimized internal environment management systems for many years.

The IS014000 environment management system is the second management standard developed by the International Organization for Standardization (ISO) after IS09000. It aims to standardize the behaviors of enterprises and other organizations, save resources, reduce environment pollution, improve environment quality, and promote sustainable and healthy economic development. By enforcing IS014000, Huawei has achieved the following: 1. Integrated the sustainable development concept into our corporate strategy, developed environment guidelines, and set up a green management leadership team to develop and implement green management systems. 2. Incorporated the green management concept into organization management, and aligned the green management and quality management systems to form a cohesive whole that enables resource sharing. 3. Conducted environmental planning on production processes to inject the company's green management concept into the product lifecycle, promote the prevention of environment pollution, and enhance environmental protection achievements.

3.1.1 Energy Management System

Huawei has developed and optimized its energy management processes, rules, and ownership strategies. We have constructed a two-tier energy management organization and formulated energy measurement indicators for each department. Huawei implements end-to-end energy management in all its buildings and equipment from early design to operation management after delivery and technology upgrades. We have applied many energy-saving and emission-reduction measures to our central air conditioning system, green data centers, cloud computing applications, labs, and production equipment. These measures aim to improve energy efficiency, continuously optimize operation management and energy-saving technologies, promote energy efficiency in systems and equipment, and reduce emissions.

1. Energy Saving Designs

During the office design and construction process, Huawei strictly complies with China's energy saving standards and requirements. We adopt the latest energy-saving technologies for building structure, wall construction materials, doors and windows, heat preservation and isolation materials, breathable curtain walls, and the following air-conditioning systems and functions: chilled water (wide temperature range), variable air volume, variable water volume, variable fresh air ratio, refrigeration, exhaust heat recovery, ice storage, and solar water heating. We also use energy-saving transformers and energy-saving lights in our electrical systems.

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Huawei assesses and manages the lifecycle of all its production and laboratory equipment. We design and choose energy-efficient equipment after considering cost, business needs, energy consumption, and many other factors. We also replace old equipment as soon as possible.

2. Energy Saving Operations and Management

Huawei shows a strong awareness of energy management by fulfilling its social responsibilities and controlling its internal energy costs. Huawei's energy saving management efforts are focused on developing the energy management system, measuring and analyzing its energy consumption, and conducting awareness campaigns and audits on energy saving measures.

a) Development of the energy management system

An energy management system must include comprehensive energy management policies and responsibility systems as well as defined energy saving targets which are incorporated into the appraisal systems of all departments. Huawei has established a dedicated organization to manage its energy conservation and emissions reduction. This organization implements the Law of the People's Republic of China on Energy Conservation and other energy management policies, regulations, and standards. It formulates and implements energy management policies, processes, and regulations for Huawei, including the Energy Management Process, Energy Management Regulations, and Regulations on Air Conditioning and Illumination. It also develops energy saving targets and energy consumption baselines. In addition, this organization coordinates, organizes, monitors, and administers energy management efforts across the company to ensure the conservation of energy. Under this organization, employees are selected to form dedicated workgroups that are responsible for performing specific energy saving tasks. These workgroups ensure energy conservation for various equipment by establishing comprehensive systems and solutions, such as equipment operation specifications and debugging solutions, trainings on energy conservation during operations and maintenance (O&M), accountability systems based on positions, inspections, and maintenance systems. These workgroups are also responsible for executing all of the company's energy management regulations and policies, reaching energy consumption baselines, and achieving emission reduction targets.

b) Energy consumption measurement and analysis

Huawei fully recognizes that energy measurement management is the basis and an important means for implementing refined management, effective energy consumption, and high energy efficiency. Enhanced energy measurement management and an established and streamlined management system for measuring energy consumption are crucial to the reduction of unnecessary energy consumption and energy conservation. Therefore, Huawei has established standards for developing such measurement systems and has continuously optimized these standards based on energy management requirements. Until now, most Huawei bases have been equipped with electric power management systems that measure the energy consumption of all equipment and enable automatic meter reading. Huawei has initiated plans to renovate bases that are not equipped with these electric power management systems. In the future, Huawei will develop a national electric power management system that monitors and analyzes the energy consumption of all bases

across the country in real time, thereby achieving the refined management of energy consumption. Huawei gathers statistics and analyzes this energy data every month. In addition, Huawei analyzes each site's energy consumption to help save energy and track issues for improvement.

c) Awareness campaigns and audits on energy conservation

Huawei conducts energy conservation and emissions reduction awareness campaigns on a regular basis. During "Energy Saving Promotion Weeks", Huawei promotes knowledge about energy conservation and emissions reduction on TV, in internal newspapers, and on office bulletin boards to inform employees of these issues and create a climate where everyone is involved. In addition, each day, a special team inspects the energy saving measures taken by each department and publicizes those behaviors that waste energy.

3. Renovation of Energy Saving Technologies

Huawei has attached great importance to applying new energy saving technologies, techniques, equipment, and materials while continuously improving their existing techniques and eliminating technically outdated equipment. Huawei regularly conducts energy audits and energy saving diagnoses. Based on these audit and diagnosis results, Huawei performs technical renovations in areas where energy can be further conserved. For example, Huawei fixes solar films on glass curtain walls, equips dining halls with automatic doors, air curtain machines, and energy-saving gas stoves. In addition, water pumps are controlled by frequency converters, and water boilers are controlled with timers. All lights are energy-saving, and the building automation (BA) system has been deployed.

Huawei's Bantian base in Shenzhen saved 6,996 tons of standard coal, achieving the Chinese government's energy saving targets in the 11th Five-Year Plan. In 2011, the Bantian base in Shenzhen and the production base in Dongguan both exceeded the government's energy saving targets and passed the annual energy saving audits with high scores.

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3.1.3 Architecture3.1.2 New Energy Sources

An energy saving architecture requires the implementation of energy saving standards and adoption of energy saving technologies, techniques, equipment, materials, and products during building planning, design, construction (reconstruction and extension), renovation, and utilization. This type of architecture aims to enhance heat preservation and isolation, improve the efficiency of heating and cooling systems, and streamline the operations and management of buildings' energy consumption systems. With renewable energies, indoor heating can be guaranteed with less energy consumption of heating, air conditioning, lighting, and hot water supply systems.

Energy saving architecture is an important part of Huawei's energy saving management system. Electricity and gases and steam used for heating purposes make up the largest part of the energy consumed in Huawei buildings. Electricity accounts for 95% of the total energy consumption in Huawei's architecture. Specifically, public appliances, such as air conditioners, lights, and power equipment, consume approximately 65% of the total electric power. Laboratories, workshops, and devices in IT shelters consume about 35% of the total electric power. When constructing new buildings, Huawei will focus on the following aspects to save energy:

1. Building planning and design: Huawei will select a suitable location for each new building and will design the building's surroundings, for example, the arrangement of trees, flowers, ponds, rocks, and fences, in a way that makes people feel most comfortable. Huawei will appropriately design the shape of each building, taking into account the overall size and orientation. When planning and designing the Nanjing base, Huawei set a goal to reduce energy consumption by 18%. The designers analyzed and adopted energy saving measures in office buildings, laboratories, data centers, and dining halls at the Nanjing base using Huawei's list of energy saving strategies for new buildings. A variety of energy saving technologies and equipment were adopted, including eco-wells, outdoor shades, double-layer glass curtain walls, under-floor air supply, natural lighting, T5 illumination, induction units, ice storage air conditioning, variable-speed fans, and water pumps.

2. Building envelope structure: In new construction projects, Huawei adopts an outer and inner building envelope structure to preserve and isolate heat so that it cannot easily pass through walls. This diffusion could diminish the thermal transmission coefficient between the interior and exterior walls. Huawei uses new wall construction materials, energy saving doors and windows, energy-efficient heat preservation and isolation materials, and breathable curtain walls. Huawei appropriately designs the area proportions of windows and walls, uses windows with a small thermal transmission coefficient, and deploys sunshades for exterior windows in a transmeridional direction. All of these efforts ensure heat preservation and isolation of exterior windows. In South China, Huawei adopts concrete structures for its buildings. All exterior walls are block walls stuffed with heat preservation mortar, and all exterior windows are equipped with

Huawei diligently uses new energy sources in its operations. In 2011, Huawei invested CNY57.11 million in building a 4MW photovoltaic power station which uses the solar energy beside Songshan Lake in Dongguan. This project had been delivered and accepted before June 30, 2012. The construction of this power station has achieved the following results:

1. This power station has become a demo site and showcase of Huawei's new energy products.

2. During this project, Huawei quickly expanded its design ability and system integration capabilities in the photovoltaic field.

3. Huawei gained experience in delivering solar energy power stations and determined its own cost baselines.

4. This power station will produce a total of 1.05 million KWH electric power over the next 25 years.

5. Standard coal consumption has been reduced by 1,534 tons each year.

6. CO2 emissions have been reduced by 4,187 tons each year.

7. Emissions of nitrides and sulfides have been reduced by 63 tons and 126 tons each year.

Nanjing Base's natural lighting design

18 19

3. Selection of appliance designs for buildings: When selecting appliance designs for its new buildings, Huawei strictly complies with national energy saving standards and regulations, such as the Specifications on Thermodynamic Design of Civil Buildings, Design Specifications on Heating, Ventilation, and Air-conditioning, Specifications on Illumination Design of Civil Buildings, and Design Standards for Intelligent Buildings. Huawei manages air conditioning systems, power supply and distribution systems, lighting systems, air compressors, steam/hot water systems, elevators, and other appliances in a way that ensures low carbon emissions. The specific energy saving and emission reducing measures for each type of appliance are listed below:

Heating and ventilation:

• Chilled water air conditioning system featuring large temperature differences

• Refrigeration (water) air conditioning system

• Water chilling units with a high coefficient of performance (COP) and different capacities

• In kitchens of dining halls, ventilation is supplemented by air conditioners and by natural air flows in the summer without using air conditioners.

• Air conditioning system with a variable air volume

• Air conditioning system with a variable water volume (secondary pump frequency conversion system)

• Variable fresh air ratio system

• Exhaust heat recovery system for air conditioners

• Air conditioning duct systems, located in areas that are warm in the winter and cool in the summer, are divided into interior and exterior zones.

The research center's glass curtain wall with solar films

• Automatic control of air conditioning systems (CO2 fresh air sensors, variable air volume terminal units, temperature adjusters, etc.)

• Air conditioning system ducts and devices are made from cold insulation materials.

• Application of the frequency conversion and speed control technology (chilled water pumps and fans)

Electrical systems:

• Use reactive power compensators and install low-voltage static VAR compensators in electrical substations and distribution stations to maintain a reasonable power factor.

• Use low-consumption and energy-efficient transformers to reduce energy consumption.

• Appropriately use transformers with different capacities. For instance, use low-capacity transformers to support and supplement transformers that run throughout the year, and use high-efficient and energy saving transformers.

• Reduce power loss in electricity distribution cables. Supply transformers are installed in buildings with large power loads and are placed close to load centers to reduce the power loss of low-voltage distribution cables.

• Use energy efficient lights and electrical ballasts.

• Diminish voltage deviation by reducing system resistance, balancing three-phase loads, and other methods.

• Use digital smart meters and develop an energy consumption monitoring system to enable remote and automatic meter reading and centralized data collection and power analysis.

Illumination:

• Use energy efficient lights and fittings, such as LED, T5, compact fluorescent lamps, sensor lights, metal halide lamps, electrical ballasts, highly reflective reflector boards, and high-transmittance diffusers.

• Install illumination control systems, including sensor switches and automatic lighting adjustment systems, and appropriately adjust lighting control systems.

• Provide separate illumination for different zones.

• Make full use of natural light by using blinds and glass windows.

Others:

• Use frequency conversion control and joint control technologies for air compressors.

• Install energy saving devices, such as sensor controllers and energy feedback equipment, in the elevator system to schedule its operation zones, stops, and operation duration.

• Use frequency-conversion and constant-pressure water supply systems.

Low-e glass. All of Huawei's key R&D buildings have an atrium featuring automatic heat dissipation and preservation, breathable curtain walls, and automatic window blinds. The walls of Huawei's Dongguan factories employ solar photovoltaic electricity generation technology. The employee dormitory at Shenzhen's Lizhi Garden has solar energy collectors on its rooftop.

20 21

3.1.4 Laboratories

Huawei now has more than 1,400 laboratories, and has developed long-term effective monitoring mechanisms and regulatory measures to provide policy and technical support for energy conservation and emissions reduction.

1. Energy consumption monitoring

• In laboratories, equipment, illumination, and air conditioners consume the most power. You can monitor the input terminals of AC power distribution cabinets to obtain data about the amount of power consumed by equipment and lights. These input terminals are equipped with smart meters, which can remotely collect energy consumption data.

• Energy consumption data about laboratory air conditioning is obtained from the logistics management system. However, laboratories need to monitor their temperatures and humidity levels and report this data to the logistics management system for analysis. To reduce the amount of power air conditioners consume, staff members adjust the air conditioning system based on the differences between the actual and required temperatures and humidity levels.

2. Energy conservation

• Huawei promotes standard platform products. It now has developed many platform products with industry leading standards, such as mTCA and ATCA. These platform products generally improve business processing capabilities, greatly reduce the energy consumption per unit of business volume, and enable the self-management of energy consumption.

• Huawei promotes the application of new-type servers and virtualization technology. Huawei uses energy saving servers and server virtualization technology to strengthen its ability to save energy. For example, the Converged Communications Public Lab has deployed cloud-based virtual machines. A set of Tecal RH2285 can replace 30 PCs for 69% less material costs, 99% less space, and 97% less energy consumption.

• Huawei promotes environmental monitoring tools. For greater visibility, Huawei encourages R&D departments to use the life cycle management (LCM) tool, cloud platforms, and other tools to monitor the real-time usage of core resources such as central processing units (CPUs) and memories.

• Huawei uses energy saving lights for illumination. Single-tube energy saving lights are used in the equipment rooms of laboratories. Laboratories are divided into small zones, each of which has a separate switch. Ordinary lights and emergency lights are separately controlled by independent switches. Under normal conditions, general lighting is turned off and only emergency lighting is used.

• Dynamic energy consumption management: Power off the equipment at non-working hours to reduce energy consumption and improve energy efficiency.

3. Energy consumption planning

• Equipment lifecycle evaluation: Huawei manages equipment lifecycle after considering cost, business needs, energy consumption, and many other factors. Huawei replaces old equipment as appropriate to facilitate laboratory equipment upgrades.

• In the core network field, the key devices are the MSC server/MGW, HLR, and SGSN/GGSN, most of which are based on servers. Traditional servers have been deployed for many years. Despite their mature technologies and services, traditional servers have a greater total energy consumption and greater energy consumption per unit of business volume and occupy a larger area than blade servers. In addition, the software features of new products are conducive to further reducing energy consumption.

• Heat dissipation planning and design for laboratories: Planning and design are key to heat dissipation in laboratories, including the design of the air supply mode, cool and hot aisle distribution, and layout optimization of high-power equipment. If shelter conditions permit, under-floor cool air supply rooms are preferable as they realize 20% greater cooling efficiency than overhead rooms. Hot and cool aisles can be used in vent duct design by deploying cabinets face to face and back to back to improve cooling efficiency.

Overhead cooling air supply room Under-floor cooling air supply room

22 23

3.2 Green Industry Chain Construction

3.2.1 Green Raw Materials

Huawei is a global corporate citizen with a keen sense of responsibility. It complies with all laws and regulations on environmental protection. Considering that some chemical substances may damage the environment and harm people's health over time, Huawei is making every effort to discover alternative substances and take the initiative to reduce the use of harmful chemical substances in a sustaining manner.

Since 2005, all Huawei components have been free of the six poisonous and harmful substance categories prohibited by the EU's Restriction of Hazardous Substances (RoHS) Directive. Huawei's products had already satisfied the requirements of the RoHS Directive before it came into effect in March 2006.

In 2006, Huawei developed a list of controlled chemical substances (i.e. the Huawei Substance List ), which included 13 prohibited categories of poisonous and harmful substances. In 2008, the Huawei Substance List was updated. Currently, this list has 23 prohibited substance categories. It also lists 48 substance categories that should be reported before they are used. In this way, Huawei satisfies the requirements of EU regulations and environmental protection policies.

3.2.2 Green Packaging

Reduce Returnable

Right

Recovery

ReuseRecycle

Huawei's 6R Strategy for green logistics and packaging

• Right: Right design• Reduce: Reduction of consumption• Returnable: Returnable materials• Reuse: Reusable materials• Recovery: Recoverable materials• Recycle: Recyclable materials

Right & Reduce

• Reduce packaging material consumption through smaller and lighter packages; continue to develop reasonable and right packaging designs; and reduce the composite costs for packaging and logistics.

Recovery & Recycle

• Realize resource and energy reuse through promoting environmental protection and applying renewable materials.

Returnable & Reuse

• Extend the lifecycle of packaging products through establishing and improving an effective recycling system.

Huawei has developed the "6R1D" Strategy for green packaging. Centered on "right packaging", the "6R1D" means right, reduce, returnable, reuse, recycle, recovery, and degradable. Huawei has also organized the orderly development, application, and promotion of the core green package solution and green package evaluation criteria that focus on rotation shelves and rotation pallets. Lighter and smaller packages help to develop reasonable and right package designs, reduce packaging material consumption, and reduce the composite costs for packaging and logistics; promote the application of environment-friendly and renewable materials to increase the material reuse rate, including recycling and reuse at energy level; establish and improve an effective recycling system to recycle and reuse packing materials and extend the lifecycle of packaging products.

Green package quantity (unit: piece) Quantity of wood saved (unit: cubic meter)

In 2011, the total quantity of goods in Huawei's green packages was 47,600 pieces. In addition, Huawei saved about 5,300 cubic meters of wood and reduced CO2 emissions by 13,000 tons.

20080

10,000

29,800

40,100

47,57050,000

20,000

30,000

280

40,000

50,000

2009 2010 2011 2012 20080

1,000

4,080

5,120 5,3136,000

2,000

3,000

4,000

5,000

6,000

7,000

60

2009 2010 2011 2012

24 25

3.2.3 Green Warehousing

Traditional warehousing processes can create inaccurate rates, influence security, increase human resource costs, and cover a large floor area. The Huawei Automatic Logistics Center is Huawei's central warehouse, which stores purchased goods for production. This logistics center includes a three-dimensional warehouse, which covers 12,000 square meters. The warehousing capacity of such a three-dimensional warehouse is equal to a traditional plane warehouse covering 70,000 to 80,000 square meters.

In 2012 , Huawei established an automatic logistics center at Songshan Lake in Dongguan. This logistics center integrates storage, picking, and distribution and delivers raw materials to plants, EMSs, and outsourcing suppliers (OSs) efficiently.

3.2.4 Green Logistics

Greenhouse gas emissions during long-distance logistics are becoming an important issue. By developing green logistics, Huawei is taking the initiative to cope with climate changes while reducing costs and energy consumption.

With a sustainable growth of businesses outside China, Huawei continues to strengthen its direct delivery and supply services. The company also has increased local procurement and supply proportion and shortened the logistics cycle and shipment distance. In 2011, the proportion of materials delivered directly grew to 5.85% from 4.75% in 2010. The volume of the materials delivered directly reached 40,000 cubic meters. It is estimated that the proportion of materials delivered directly will reach 6.37% for 2012.

Huawei has taken the initiative to construct overseas supply centers and expand the coverage of these centers in order to greatly shorten the material shipment cycle and reduce costs. In 2011, the supply proportion (based on material costs) of overseas supply centers increased to 11.4% from 7.1% in 2010.

At the same time, Huawei keeps reducing the proportion of air transportation around the world. In 2011, the proportion of air transportation dropped to 10.7% from 12.4% in 2010. In 2012, the proportion is expected to drop to 7.5%.

Direct delivery proportion

Proportion of air transportation volume

0.00%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2008 2010 2011 2012

13.2% 12.4%

10.7%

7.5%

4.75%5.85%

6.37%

2.00%

2010

2011

20124.00%

6.00%

8.00%

Outbound1. An area that supports pallet online picking and buffers the picking on all

working platforms.2. An exclusive slide rail for carton delivery is available for each downstream

customer. A separate slide rail directly connecting to railway platforms is available for the network warehouse equipped with a kanban system.

Automated Storage and Retrieval System (AS/RS or ASRS)1. Track and manage the quality and batches of goods efficiently.2. AS/RS helps improve the storage space utilization.3. Level-2 material picking is finished in level-2 warehouses and

these materials are delivered to production lines at one stroke.4. Pallet storage area5. Work bin storage area

Incoming Quality Checking (IQC)1. Intelligent and paperless operations are realized in the IQC area.

Side picking1. Rapid picking operations and the high-speed

automatic supply of goods are realized.2. An online checking function in a U-shaped

transport system is available.

Carrousel1. Materials for rapid picking are managed.2. Stepped management of and response to mini-load

inventories are integrated.

Goods-to-person (GTP) picking area1. Low-speed and multifunctional goods-to-person

picking operations are realized.2. Sequential picking operations from GTP picking

to side picking can be realized.

Transformation of goods picking mode• Conduct stepped management based on requirements and frequency; divide different

picking areas according to material inbound and outbound frequencies and delivery places defined in the orders.

• Inventories in ASRS backup and complement each other. Every picking area has an inventory area. A maximum value and a minimum value can be set to indicate inventory status. In case that the inventory indication value is lower than the minimum value, replenishment tasks will be triggered. There are two ways to replenish goods: empty-carton replenishment and automatic system replenishment.

• The modes of PTL sequential picking and the PTL batch picking for several places specified in the orders change the traditional unitary picking operation mode based on radio frequency (RF) and paper and integrate radio frequency identification (RFID) and conveyors into the WMS system.

A wireless warehouse equipped with a kanban system and integrating a complete set of slide rails

1. Slide rails are put together in response to orders to ensure a complete set of necessary material supply for the production line.

2. High-value materials or emergency materials needed onsite are supplied and incorporated to the warehouse management system (WMS).

3. All operations are conducted based on indications of the picking to light (PTL) system.

Inbound1. The conditions under which goods are deemed to be delivered

from suppliers to Huawei are clear and definite.2. Stepped decanting operation distribution ensures flexibility

and efficiency.3. The automatic supply and delivery of pallets are available, and

no labor is required for transporting pallets.4. Material management rules on smallest packing units (SPUs)

are developed.

26 27

3.2.5 Supplier Management

Saving energy and reducing emissions make up an essential part of supplier management. Huawei integrates the requirements for saving energy and reducing emissions into its procurement processes and supplier life cycles, which reduces the overall impacts of products and business operations on the environment.

The procurement agreements developed by Huawei require suppliers to save energy and reduce emissions and to pass down these requirements to lower-level suppliers and subcontractors. This process creates energy savings and emission reductions throughout the entire supply chain. Such requirements are implemented immediately after the qualification of new suppliers. Huawei evaluates each supplier's performance in saving energy and reducing emissions. Suppliers that fail to satisfy these requirements shall rectify weaknesses and improve performance within a defined period. Otherwise, they will not qualify.

Every year, Huawei identifies suppliers that bring higher risks to the environment and conducts special management activities, such as on-site audits, for these suppliers. Huawei develops special improvement plans for these suppliers and requires them to rectify any weaknesses and improve their performance within a defined period. Huawei purchases larger shares from suppliers that perform well and gives them priority. For suppliers that perform poorly, Huawei reduces their purchasing shares or business support and requires these suppliers to rectify their weaknesses and improve their performance within a defined period. Such reductions in support and status will be maintained for the remainder of the business relationship.

Huawei takes part in the "green purchase" initiative launched by the Shenzhen Environmental Protection Bureau and has responded to the "green choice" proposal launched by IPE, an environmental protection organization. Huawei applies environmental protection performance data provided by third parties to manage suppliers, regularly examine their performance in environmental protection, identify potential suppliers getting out of line, and propel them to improve their performance.

In 2012, Huawei has continued to promote green partner qualification and encouraged suppliers to save energy and reduce emissions in innovative ways in order to construct a green supply chain. This qualification covers the key regulations, directives, standards, and requirements for environment-friendly products and ensures that products and components do not contain chemical substances that are restricted by laws and regulations or customers. Currently, 63 suppliers have passed Huawei's green partner qualification.

Huawei is committed to focusing on efficiency management rather than risk management regarding energy and emissions. By introducing new technologies and improving processes, Huawei will continue to optimize management, save energy, reduce emissions, and improve supply chain competitiveness.

4 Green World

Huawei has implemented its "Green World" strategy globally in each sector in which it is active, including governments. Huawei's green solutions have entered many fields, including energy, electric power, transportation, and finance.

In 2011, Huawei was selected as one of the Global Green Fortune 100 (Chinese) Enterprises evaluated by International Green Economy Association (IGEA). As the first system of its type, Green Fortune 100 recognizes companies that are economically successful and that have made outstanding contributions to the environment. It also acts as a benchmark for other companies' future development strategies.

4.1 ICT's Contribution to Reduction of Energy Consumption Throughout Society

Since becoming a member of GeSI in 2008, we have researched energy-saving and low-carbon ICT technologies in both Germany and China and assisted GeSI to produce a research report. At the beginning of 2010, the World Economic Forum recommended Huawei as a member of the Green Smart Grid Steering Committee, which aims to promote energy savings and emission reductions in the global power industry. Based on 90 more pilot projects, Huawei's "Smart Grid" Project Team produced the interim report, Successful Experiment on Accelerating the Smart Grid, which outlines current trends, definitions, industry chain features, business models, and measures and solutions for accelerating the development of the smart grid and realizing energy saving and emission reduction in the power industry. As the power industry consumes the most primary energy of any sector, smart grid has become a national-level strategy in many countries. Currently, Huawei has experimented extensively in China, the Asia-Pacific, and North America. In China, Huawei is working with the China Electric Power Research Institute to enhance power communications standards and explore multiple solutions, including wireless and wired distribution automation (DA). In Dalian, we have deployed wired access (optical network) and wireless network (WiMAX) solutions and assisted Liaoning Electric Power to implement DA. We are also cooperating with the China Electric Power Research Institute to establish xPON and a multiple network convergence testing platform for collecting electricity consumption data. Huawei is actively participating in smart grid pilot projects in and outside China, focusing on advanced metering infrastructure (AMI), DA, and other services. Huawei applies advanced and tailored communications patterns and methods to electric power services, and optimizes products and solutions based on industry-specific features; for example, smart grid significantly reduces unnecessary construction and production, and reduces carbon emissions by balancing electricity use. In Shenzhen, we have teamed up with electric power system experts to measure and calculate how smart grid can help reduce CAPEX by CNY0.6 billion, network OPEX by 10%, and carbon emissions by about 5%.

28 29

4.1.1 Smart Grid

For smart grid, Huawei has developed the smart meter and remote control system for substations and power transmission stations. Smart meters reduce labor requirements as electricity companies do not need to visit each house to read every meter; they can instead do so by remote control. The Internet of Things module enables remote control on substations, which improves efficiency and reduces the probability of human error and subsequent accidents due to manual control.

4.1.2 Smart Railway

Huawei's industry-specific GSM-Railway (GSM-R) solution intelligentizes the domestic railway network by integrating scheduling and communications systems based on GSM. GSM-R supports communications in high-speed railway networks and scheduling services for special purposes. Huawei's GSM-R has been successfully deployed by Europe's largest railway carrier Deutsche Bahn, and put into large-scale application in China such as the maglev railway in Shanghai.

4.1.3 Smart Logistics

Huawei provides a series of smart logistics solutions that use electronic bar code data collectors with inbuilt GSM wireless modules. This product can record goods receipt, signing, and delivery statuses in real time, and thus helping logistics companies deliver goods faster and more efficiently.

4.1.4 Digital Healthcare

As the goal of the sector's transformation process, digital healthcare is currently gathering momentum in the US and Europe, notably France. Due to insufficient medical resources, China boasts huge market potential for digital healthcare. In response, Huawei has developed a solution that builds M2M modules into peripheral devices such as portable sphygmomanometers and electrocardiogram machines. Already successfully piloted in Shanghai and Wuxi, Huawei's M2M modules enable users to measure blood pressure, blood oxygen levels, and electrocardio data at home or in their communities. Hospitals can then appoint experts to monitor the health status of patients based on these data and give appropriate advices.

30 31

4.1.5 IT-based Education

Huawei has developed an IT solution for education based on its extensive research, mature communications technologies, and years of practical experience in the education industry. The integrated Huawei solution includes interactive multimedia class platforms (e-Class), multimedia classrooms, voluntary learning and sharing management platforms (e-Course), mobile learning devices, digital libraries, unified communications, an all-in-one campus card, and campus surveillance. These solutions can be applied in any country by any education institution, school, or enterprise (for training). The features of e-education make the following targets achievable: remote education, resource sharing, interactive communication without time and space constraints, multiple teaching methods (e.g. multimedia teaching), and efficient management.

4.1.6 Smart Vehicles

Vehicles equipped with the Huawei WCDMA 3G modules support manual GPS navigation, web news, music downloads, call background control center, and automated emergency accident warnings. The one-key navigation function enables drivers to be connected to the customer service centers of auto vendors at any time. The customer service center can send destination information to the vehicle-mounted device for instant navigation without requiring any manual operations. The automated accident warning system automatically sends alarms to background systems when air bags inflate, and the real-time alarms sent to background systems improve emergency rescue operations, minimizing death rates from accidents. Huawei's vehicle-mounted wireless modules account for 50% of all products of this type in the Chinese market.

4.2 Contributions to Standards Organizations and Market Recognition

To date, Huawei has submitted more than 30 proposals relating to energy efficiency standards:

Some of the awards won by Huawei are listed below:

1. Huawei and Vodafone: GTB Green Base Station Innovation Award 2010.

2. Huawei won the 2009-2010 Award for Communications Technology Innovation in Energy Saving and Environmental Protection.

3. The Huawei Green Packaging Solution won the WPO Annual World Star Award (and many other awards).

4. Huawei won the 2010 Economist Annual Innovation Award for Enterprises.

TEE

Servers

Optical Networks

Routers

Direct Current Power Supply

Code of Conduct for Using Broadband

Code of Conduct for Using Data Centers

Code of Conduct for Energy Consumption

Code of Conduct for Using UPS

Code of Conduct for Using Digital Television

EE ATTM

Broadband

Base Stations

Life CycleAssessment

Sites

Data Centers

Core Networks

Access Networks

Users

TC207Product Environment ProtectionTC111

TC108

Guidance on Campus Design

Energy Efficiency Evaluation Principles

Environment and Security

ITU-T

SG15: GPON Energy Saving Agreement

SG5: Definition of and Methods for Energy Conservation, ICT, and Climate Changes

ST2

TC4

TC5

Standards for Environmental Protection

Power Supply Standards

Environment and Security Standards

TD-SCDMA Base Stations, WCDMA Base Stations, and GSM Base Stations

Energy Consumption, Total Quantity, and Volume

Wireless Networks, Core Networks, Optical Networks, Data Networks, and Application and Software

Huawei has submitted more than 30 proposals relating to energy efficiency standards.

TC9

Small-scale Network Equipment

Servers

Data Centers

International Standards Organization

North American Standards Organization European Standards Organization Chinese Standards Organization

32 33

5 Conclusions

The huge number of new mobile service users in developing markets coupled with extensive FTTx broadband construction in developed markets, and the continuous improvement of mobile broadband technologies have created massive network construction demands. In addition, ICT coverage in all industries around the world will increase on a large scale. Therefore, ICT equipment will bring continuous emission pressure. Service providers, equipment vendors, and other stakeholders must explore strategies to reduce emissions and cut costs in a sustainable way.

Huawei is committed to the following:

1. Enhancing product energy efficiency and cutting total cost of ownership (TCO) for customers while reducing carbon emissions.

2. Realizing closed-loop management in supply chains and controlling the environmental impact of manufacturing and transporting equipment.

3. Cooperating with customers to promote user-friendly ICT services that reduce unnecessary business travels and logistics; promoting clean energies and low carbon footprints throughout society.

6 List of Terms

AMR – Adaptive Multi-Rate

ATAE – Advanced Telecom Application Environment

BSS – Base Station Subsystem

BSS – Business Support System

CoC – Code of Conduct

CSR – Corporate Social Responsibility

DSLAM – Digital Subscriber Line Access Multiplexer

FTTx – Fiber to the x

IEA – International Energy Agency

ICT –Information and Communication Technologies

LCA – Lifecycle Assessment

NGN – Next Generation Network

OTU – Optical Transmit Unit

PBT – Power Boost Technology

POTS – Plain old telephone service

QTRU – Quadruple. Transceiver Unit

RRU – Remote Radio Unit

TCO – Total Cost of Ownership

Huawei Technologies Co., Ltd.Address: Huawei Industrial Base

Bantian, LonggangShenzhen 518219People's Republic of China

Website: http://www.huawei.comEmail: support@huawei.com

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NoticeThe product, service, or feature that you purchase should be restricted by the Huawei commercial contract and the clauses in the contract. All or a part of products, services, or features described in this document may not be purchased or used. Every effort has been made in the preparation of this document to ensure the accuracy of the contents, but the statements, information, and recommendations in this document do not constitute a warranty of any kind, expressed or implied.The information in this document is subject to change without notice. Every effort has been made in the preparation of this document to ensure the accuracy of the contents, but the statements, information, and recommendations in this document do not constitute a warranty of any kind, expressed or implied.