Yum China has established a sustainability governance structure that extends from the Board of Directors to our operational teams. At the Board level, the Board and its Food Safety and Sustainability Committee consider matters related to sustainability at least annually in connection with our strategic plan. In 2023, the Food Safety and Sustainability Committee held two meetings to discuss food safety and sustainability-related matters. At the management level, we have established a Sustainability Committee, which is composed of selected leadership team members, the sustainability officer, and cross-functional teams. The Sustainability Committee members meet quarterly to track the implementation of material initiatives, evaluate sustainability risks, and develop risk management strategies and measures.
In order to further incentivize and assess performance with respect to specific ESG and sustainability initiatives, beginning with the 2021 annual incentive program, ESG measures have been incorporated into the key performance indicators that are used to determine the individual performance factor for each Leadership Team member. In 2022, more brand teams were involved in our sustainability development, further facilitating the execution of key initiatives. In addition, we incorporated ESG targets into the performance metrics of the 2023 and 2024 annual Performance Share Unit (PSU) awards granted to our leadership team members.

Board of Directors The Food Safety
and Sustainability Committee

Oversee practices, policies, procedures, strategies, and initiatives relating to sustainability (including environmental, supply chain, and food nutrition and health)

Management Team The Sustainability Committee

Track the implementation of material issues, evaluate sustainability risks, develop risk management strategies and measures, and supervise the implementation of the key initiatives

Sustainability Task Force Sustainability Team
and cross-functional teams

Focus on internal and external stakeholder communication, responsible for taking actions to achieve our sustainability goals, including those related to GHG emissions, energy efficiency, water efficiency, green buildings and sustainable packaging. The Sustainability Task Force tracks current and emerging climate-related regulations, formulates sustainability action plans, and promotes the execution of key sustainability projects.

Operations Teams

Implement sustainability-related projects and measures pertaining to climate, supply chain sustainability, nutrition and food safety across three major areas: sustainable restaurants, sustainable supply chains, and sustainable communities in support of Yum China's sustainability strategy and objectives.