Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Emission concentrations of nitrogen oxides, sulphur dioxide and particulate matters were better than national standard limits.
• 16 mines included in provincial-level or autonomous regional-level green mines registers; 8 mines passed national-level green mine selection.
• 5 cement production plants were entitled national-level “Green Factories”; 6 were entitled provincial-level or autonomous regional-level “Green Factories”.
• Approximately 2,083.8 million kwh of electricity generated from residual heat, representing approximately 32.1% of the Company’s electricity consumption.
• Annual consumption of industrial wastes such as fly ash, coal slag, de-sulphur gypsum and shale exceeds 345,900 tons.

Social Achievements

• Launched comprehensive cooperation with Yunnan Construction and Investment Holding Group Co., Ltd. in cement, concrete and aggregate businesses.
• Total duration of online and offline training relating to staff development was approximately 254,900 hours; average training duration per employee was approximately 13 hours.
• Actively participated in community charitable service activities through donations of cement products and cash/kind to underprivileged regions and families.
• Handled over 800 insurance claims for employees and their family members; amount of insurance claims received was approximately RMB80 million.

Governance Achievements

• Formulated and amended 43 management systems.
• Held 1 Annual General Meeting, 7 Board meetings, 3 Corporate Governance Committee meetings, 1 Nomination Committee meeting, 30 Executive Committee meetings, 1 Remuneration Committee meeting, and 4 Audit Committee meetings.
• Conducted a total of approximately 190 investor conference calls, face-to-face meetings and roadshow meetings.

Climate Goals & Targets

Environmental Challenges

• Water inrush at mine pits in Pingnan Cement, increasing costs and safety hazards.
• Low liquidity of cement in construction slurry (addressed through customer training and communication).

Mitigation Strategies

• Joint scientific research with Shandong University to implement a comprehensive water treatment plan, successfully blocking water inrush.
• Organized an experiment of cement paste and slurry to solve customers’ problems and provide guidance on standard instruction of use.

Supply Chain Management

Supplier Audits: 9,074 suppliers under full-lifecycle management

Responsible Procurement

• Sunshine Procurement
• Supplier relationship management system (SRM)
• Compliance with laws and regulations, environmental protection, integrity operations and quality assurance.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, The Guide for Business Action on the United Nations Sustainable Development Goals (SDGs), GB/T36001-2015, Environmental, Social and Governance Reporting Guide of The Stock Exchange of Hong Kong Limited, Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises (CASS-CSR4.0), Guidance on Social Responsibility of Cement Enterprise, Guidance on Social Responsibility Reporting of Cement Enterprise, Social Responsibility Evaluation Index System of Cement Enterprise

Certifications: ISO 9001:2015, ISO 14001:2015, OHSAS 18001:2007

Third-party Assurance: Ernst & Young

Sustainable Products & Innovation

• Low-carbon cement
• Nuclear power cement
• Masonry cement M32.5
• PC42.5 grade cement

Awards & Recognition

• Five-star rating from the China Expert Committee on CSR Report Rating (two consecutive years)
• Best Innovation Grant Award - “Product Technology Type” (China Resources Group)
• Silver Award (China Resources Group)
• Best CEO (Rank 3), Best Corporate Governance (Rank 3), Best ESG/SRI Metrics (Rank 3), Honoured Companies (Rank 4) (Institutional Investor)
• Best ESG materiality reporting (small to mid-cap) (IR Magazine Awards – Greater China 2019)
• Bronze Award for the Manufacturing Sector (BOCHK Corporate Environmental Leadership Awards 2018)
• EcoChallenger (BOCHK Corporate Environmental Leadership Awards 2018)
• Hong Kong – Guangdong Cleaner Production Excellent Partner (Manufacturing) Commendation

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced standard coal consumption per ton of clinker by 0.6% compared to 2020
• Reduced consolidated energy consumption per RMB10,000 output by 19.6% compared to 2020
• Reduced total emissions of nitrogen oxides, sulphur dioxide, and particulate matters from main discharge outlets by 16.2%, 8.8%, and 22.3% respectively compared to 2020
• Achieved 100% coverage of preheater inner cylinder object anti-fall devices at all cement production plants
• 17 production plants included in registers of national-level, provincial-level or AR-level “Green Factories”

Social Achievements

• Launched the “Gratitude Fund” to support employees in need
• Organized various cultural and sports activities to enrich employees' lives
• Achieved 100% coverage of ISO 45001:2018 Occupational Health & Safety Management System and staff body checks
• Donated approximately RMB1,400,000 to the “China Resources Cement Gratitude Fund”
• Participated in community charity activities, donating approximately HK$6,416,000

Governance Achievements

• Established the “Leading Group for Corporate Management According to Laws, Risk Control and Compliance Management”,
• Formulated and issued several compliance management policies and guidelines
• Conducted compliance training for approximately 2,200 employees
• Improved the system of “Accountability for Violations” and strengthened its propagation
• No major risk events occurred throughout the year

Climate Goals & Targets

Environmental Challenges

• Complex and difficult international environment and domestic epidemic
• Challenges from dual carbon targets and dual control on energy consumption
• Potential secondary geological disasters caused by limestone mining (groundwater level drop, karst collapse)

Mitigation Strategies

• Optimized business portfolio, reorganized operating regions, and created four business segments
• Increased investment in environmental protection, enhanced environmental protection and risk prevention, formulated the “Strategic Plan for Control of Carbon Emissions”
• Implemented comprehensive water control model with high-velocity and large-flow karst pipelines to reduce groundwater inflow
• Implemented technological upgrade projects for energy saving and consumption reduction
• Actively promoted digital transformation and intelligent development

Supply Chain Management

Responsible Procurement

• Sunshine Procurement
• Sustainable index system for admission and evaluation of suppliers
• Safety Pre-Assessment on Counterparties
• Implementation of Mandatory Exit (blacklist system)
• Dynamic performance evaluation management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, GB/T36001-2015, HKEX ESG Guide, CASS-CSR4.0, Guidance on Social Responsibility of Cement Enterprise, Guidance on Social Responsibility Reporting of Cement Enterprise, Social Responsibility Evaluation Index System of Cement Enterprise

Certifications: ISO 14001:2015, ISO 9001:2015, ISO 45001:2018

Third-party Assurance: Ernst & Young

Sustainable Products & Innovation

• Low-clinker cement
• Carbon-absorbing cementitious materials
• High-performance inorganic engineered stone products
• Cement for nuclear power plants
• Cement for roads
• High-belite cement
• Low-calcium hydraulic cement
• Low-calcium air-entrained cementitious materials

Awards & Recognition

• 5-star rating by the Chinese Expert Committee on CSR Report Rating (2020)
• Certificate of Appreciation of the “United Nations Sustainable Development Goals Achievement Awards Hong Kong”,
• Second in the 2021 Chinese Corporate Social Responsibility Development Index (Building Materials Industry)
• Certificate of Excellence in Environmental, Social and Governance Reporting
• Leading Enterprise Award and Leading Environmental Initiative Awards
• Hong Kong Green Awards 2021 – Green Management Award – Corporate (Large Corporation) – Bronze
• One of “The Most Respected Enterprises” in Asia

Environmental Metrics

ESG Focus Areas

• Economic responsibilities
• Responsibilities to employees
• Responsibilities to customers
• Responsibilities to partners
• Responsibilities to the public
• Responsibilities to the environment

Environmental Achievements

• Reduced carbon intensity by 1.85% compared with 2021
• Reduced CO2 emissions (Scope 1) by an unspecified amount
• Reduced nitrogen oxides emissions by 6.3% against 2020
• Reduced sulphur dioxide emissions by 28.3% against 2020
• Reduced particulate matter emissions by 39.3% against 2020
• Increased restored vegetation area by 320,000 m2, reaching 3.16 million m2
• 25 mines granted green mine status at provincial level or above (10 national-level)
• Successfully used gangues to produce ultra-light functional aggregates and lightweight high-strength aggregates
• Implemented co-processing projects for municipal solid waste, urban sludge, and hazardous industrial waste, processing a total of 237,903 tons in 2022
• Achieved full coverage of ISO14000 environmental management system certification

Social Achievements

• Launched the "Runpeng Training Project" for outstanding young talents
• Achieved 100% coverage of ISO45001:2018 occupational health and safety management system
• 16 production plants passed municipal "healthy enterprise" evaluation
• Customer satisfaction rate of 97.6%
• Donated approximately HK$5.92 million in cash and other forms to charitable causes
• Improved employee wellbeing through various activities (birthday parties, sports events, etc.)

Governance Achievements

• Revised the Memorandum and Articles of Association
• Revised the terms of reference for each committee under the Board of Directors
• Issued new rules of procedure for Board and CEO meetings
• Improved the Board's six key functions and powers
• Improved risk management and internal control systems
• Strengthened legal compliance practices
• Organized compliance training for 440 trainees
• Implemented a three-prong compliance management structure
• Completed compliance audits with no violations found
• Improved investor relations management with zero administrative penalties for information disclosure violations

Climate Goals & Targets

Environmental Challenges

• Extreme weather events impacting construction costs and operations
• Stringent government policies and regulations related to carbon emissions and environmental protection
• Market and technical risks related to climate change
• Supply chain disruptions

Mitigation Strategies

• Disaster prevention and control measures
• Commercial insurance to reduce losses
• Diversified procurement channels
• Weather-dependent delivery strategies
• Optimization of energy-saving and environmental protection facilities
• Climate change publicity and education for employees
• Medium-and long-term planning objectives for carbon emissions
• R&D on alternative clinker, alternative fuels, carbon dioxide capture, and low-carbon products
• Carbon asset management
• Development of clean energy sources (PV power generation)

Supply Chain Management

Supplier Audits: 3,742 suppliers evaluated in 2022

Responsible Procurement

• Sunshine procurement
• Supplier code of conduct
• Environmental and social requirements for suppliers
• Open procurement (92.5% open procurement rate)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (rainstorms, floods, typhoons)
• Rainfall changes
• Temperature changes

Transition Risks

• Stringent government policies on carbon emissions
• Changes in carbon emission trading rules and carbon emission quota prices
• Increased compliance costs

Opportunities

• Government promotion of green factories and green mines
• Growing demand for low-carbon cement and green building materials
• Opportunities in prefabricated construction and construction waste recycling

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, HKEX ESG Reporting Guide, HKEX Guidance on Climate Disclosures, CASS-CSR 4.0, CASS-ESG 5.0, Guidance on Social Responsibility of Cement Enterprise, Guide for Corporate Social Responsibility Reporting of Cement Enterprise, Social Responsibility Evaluation Index System of Cement Enterprise

Certifications: ISO 14001, ISO 45001

Sustainable Products & Innovation

• Low-carbon cement
• High-carbon absorption concrete
• Environment-friendly admixture
• New type cement grinding aids
• Runpin engineered stone

Awards & Recognition

• 2022 Hong Kong Stock Best ESG Award
• SOEs ESG Pioneer 50 Index
• SOEs ESG Governance Pioneer 50 Index
• 2022 Responsibility Golden Bull Award (Responsible Product Prize)
• Top 3 in the Building Materials Industry in Terms of China's Corporate Social Responsibility Development Index 2022