We have developed a diversified renewable energy strategy centered on reliable, affordable, and scalable renewable sources. Through systematic deployment and innovative multi-party collaborations, we continue to expand renewable energy adoption across our restaurants and logistics centers, further optimizing our overall energy mix.

To systematically procure green power for our restaurants, we use a two-track approach: For restaurants eligible for independent green power trading, we tailor our approach to align with provincial policy variations, ensuring green power trading at no additional cost. For restaurants without direct green power market access, we pioneered collaborative models with landlords to facilitate green power trading on our behalf. Furthermore, we are partnering with local governments to explore innovative green power trading models.

In parallel, we continue to optimize the energy mix of our logistics centers. We deploy rooftop DPV systems at our own logistics centers and participate in green power trading. Concurrently, we partner with landlords of leased logistics centers to explore joint green power trading, shared rooftop DPV, and other collaborative models to increase the renewable energy percentage in our logistics centers.For logistics and transportation, we have accelerated new energy vehicle application. As of the end of 2025, nearly 100 units of 3–5 ton electric refrigerated trucks were in service across our nationwide logistics centers. These vehicles significantly reduce GHG and pollutant emissions while improving operational efficiency through optimized logistics modes. Several logistics centers have also launched pilot programs for medium-sized electric refrigerated trucks, providing strong support for the continued transformation of our fleet's energy mix and the deeper implementation of Yum China's renewable energy strategy.

The majority of Yum China's GHG emissions are from Scope 3, with more than two-thirds coming from purchased goods. We recognize that supply chain decarbonization is central to achieving our emissions reduction targets. Guided by our 3E strategy (Engage—Educate—Empower), we maintain close collaboration with suppliers. Over the years, we have provided guidance and support to help suppliers steadily enhance their GHG emissions management capabilities, laying a solid foundation for achieving our GHG emissions goals.
Expanding Scope & Setting Targets :
In 2023, we established the Yum China DPV & VPPA Alliance to accelerate suppliers' transition to renewable energy. By sharing our own experience and resources, we have driven substantial growth in green power procurement among our supplier partners over the past two years. In 2024, we conducted our first systematic inventory of FLAG-related GHG emissions, identifying six key categories: poultry, beef, pork, dairy, potato products, and paper packaging. This enables us to focus on reduction efforts where they matter most. Building on the achievements of previous years, we identified more than 40 suppliers as key emission sources in our value chain in 2025. We established the Yum China Value Chain Green & Low-Carbon Alliance with these suppliers and jointly signed the "Value Chain Emissions Reduction Commitment". This expands suppliers' GHG emissions management from energy-related emissions to a broader scope that includes FLAG GHG emissions. We provided detailed guidance to these key suppliers on calculating GHG emissions, setting targets aligned with Yum China's goals, and developing emissions reduction plan. As of the end of 2025, all selected key suppliers have established their own emissions reduction targets. Percentage of GHG emissions accounted for by suppliers that have set emissions reduction targets and developed reduction plans (calculated based on 2020 baseline emission factors database) accounts for ~70% of GHG emissions in the poultry and beef categories，accounting for ~50% of GHG emissions from all purchased goods of Yum China.
Building Platforms for Data-Driven Management:
To enable standardized and traceable emissions management, while suppliers are setting targets and developing plans, we have also developed the Supplier Greenhouse Gas Emissions Digital Management Platform. This platform integrates tailored GHG emissions calculation tools for different procurement categories, emissions reduction progress tracking, and data analysis and benchmarking capabilities. We also provide training to ensure that suppliers can effectively use the platform for reporting. Starting in 2026, selected key suppliers will report their annual GHG emissions and reduction progress through this digital platform. With this data we can closely track individual supplier progress as well as the overall emissions status of Yum China's value chain. The platform also enables deeper analysis, such as benchmarking emissions intensity, renewable energy usage rates, and implementation of reduction measures, helping us identify continuous improvement opportunities. We plan to gradually expand the number of participating suppliers, encouraging more suppliers to set targets, develop emissions reduction plans, and report progress. We believe that this will strengthen emissions management across the supply chain, rally more suppliers on the path to low-carbon development, and better support Yum China in achieving our emissions reduction goals.
Tracking Progress & Driving Implementation:
Beyond our unified digital platform, we actively support suppliers in implementing reduction measures, including renewable energy transition and regenerative agriculture practices. In 2024, we developed the Yum China Nature-based Solutions Framework, which harnesses leading domestic and international emissions-reduction techniques across categories to guide suppliers in effective agricultural and production-related reduction activities. In 2025, we collaborated with suppliers to implement regenerative agriculture practices covering planting management, livestock management, energy use, and waste management. We are committed to fostering an open, collaborative platform with our suppliers. Beyond sharing our own emissions reduction experience and recognizing high-performing suppliers, Yum China actively encourages knowledge and best-practice sharing among suppliers. Our aim is to motivate more suppliers to join us on a shared low-carbon journey, turning emissions-reduction challenges into opportunities and continuously driving breakthroughs in our path toward sustainable transformation.