While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards

 PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
 PS 2 - Labor and Working Conditions

The Company provides on-line tutoring and has no physical facilities or assets rather than leased office spaces in urban locations. In case new office is to be developed through acquisition, the Company will reply on willing-buy-willing-sell market transactions for the acquisition. Pollution aspects are minimal as these are basic office setting and any element will be addressed under PS1; therefore PS3: Resource Efficiency and Pollution control does not apply. The Project is anticipated to not arise issues covered in PS4: Community, Health, Safety and Security; PS5: Land Acquisition and Involuntary Resettlement; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources; PS7: Indigenous Peoples; and PS8: Cultural Heritage.

The investment has been classified as Category B according to IFC’s Policy on Social and Environmental Sustainability as adverse environmental and social risks and impacts arising from the Projects are limited, generally site specific and could be addressed through the implementation of Good International Industry Practice (GIIP). Key issues and impacts identified during appraisal, discussed in more detail in the following paragraphs, include labor and working conditions and emergency preparedness and response at offices.

ZE has no physical facilities or asset except for the leased office spaces. All tutoring classes, typically lasting 1 or 1.5 hours, are taught online through the Company’s own platform and follow the Company defined schedule, curriculum and course material and tools. All tutoring classes are closely monitored and can be accessed by parents to engage and monitor the leaning process.                              

The key considerations under the PS1 relate to: i) policies/procedures and organizational capacity and competency to manage labor and working conditions; ii) fire emergency preparedness and response at the offices; and iii) electricity use efficiency in the office activities.

The Company has documented its labor and working conditions management through corporate human resources policies and procedures and has designated two separate departments to oversee the human resources aspects for general staff and teachers. Fire emergency preparedness and response is mainly a responsibility of property management of the building the company leased. More details on the Company’s labor and working condition management and fire emergency preparedness and response are described in the PS2 Section below.

Electricity at ZE’s offices is supplied from the grid and the total consumption is approximately 25kWh/m2 per year.  The Company promotes energy saving through technologies such as energy efficient equipment and lighting and raising staff’s awareness. The Project’s annual greenhouse gas emissions are approximately 1,009 tons CO2 equivalent, attributable to consumption of grid electricity.

Given the Company’s business nature, other energy, water and paper consumptions are expected to be minor for the Company.

As of November 2018, the Company has about a total of 12,820 full time employees, where the male and female ratio is about 0.6. ZE hires also part time staff around 32,200, mostly part time teachers from university students or graduates.

Human resources management:

The Company has an open recruitment system where candidate is selected based on education, experience and teaching skill (for teacher). All employees including part time teachers are signed written employment contracts in line with local labor law requirements. Pre-job training is given to all employees. All teachers full time and part time are provided with intensive training including on-the-job training.

Apart from normal office hours for the general staff, the teachers are scheduled for tutoring classes in the afternoons, evenings and over the weekends. Salary and benefits are determined by labor market rates at comparable educational institutions and full time staff is provided with mandatory benefits including paid annual leave, maternity leave, sick leave, marriage leave and paternity leave. The Company observes national labor laws including provisions on minimum wage, working and overtime hours, mandatory social security enrolment, etc. in all material aspects.

The Company has documented human resource policies and procedures developed separately for general staff and teachers and have shared these documents with IFC.  All staff has written employment contracts with the key terms of employment (e.g. working hours, working location, pay and applicable benefits) are included to communicate to the staff. Currently there is no worker’s union and the Company does not prohibit staff to form a union. Internal grievance mechanism is established, including complaint handling procedures and various communication channels accessible by staff full time and part time to raise issues including anonymous complaints.

There is no retrenchment anticipated by the Company given the need of intensive hiring to meet the business growth. IFC’s review did not find any signs of the use of child or forced labor or discrimination in the Company’s employment practices; nevertheless the company needs to develop a policy regarding non-discrimination and equal opportunity. Under this Project, the Company will develop and implement a corporate non-discrimination and equal opportunity policy inclusive of that related to anti-harassment (including sexual harassment) in line with IFC requirements. Such policy will be applicable to all staff and will ensure protection of students and teachers as well.

Emergency Preparedness and Response:

Given the Company’s business nature, occupation health and safety risks of the Company activities are expected to be very limited. Emergency preparedness and response is mainly related to fire safety at the offices. Since the Company rents office spaces, it is expected that the fire emergency preparedness and response is mainly a responsibility of property management of the building leased. As informed by the Company, the property managements organize regular fire and emergency training and drills for all tenants which are participated by the Company’s office staff. The Company promotes good behaviors including for fire prevention in the office to the office staff.  There has been no fire incident in the past for the Company. Under this project, the Company will be required to ensure adequate human resources to be dedicated at each office to support emergency response situations.

Key stakeholder groups for the Project are the students, parents, teachers and non-teacher staff members. Engagement of the Company with the communities is limited as there is no impact expected.  The Company uses the website and designated telephone number as mean of external communication and this ESRS will be disclosed.  Students, parents or public can send comments to the Company or can reach via phone to submit any queries.  To date, there have been no known grievances or issues of public concern associated with the Company activities.

Yan Huijiao

SHANGHAI ZHANGMEN EDUCATION TECHNOLOGY CO., LTD.

Block D, Financial Street (Hailun) Central Office Building, No. 82, Tongjia Road, Hongkou District, Shanghai, PRC 

law@zhangmen.com