Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Full compliance with relevant environmental laws and regulations regarding oil exploration, production, storage, and waste disposal.
• Adopted energy-saving measures in offices, resulting in a total electricity consumption of 22,228 kWh.
• Recycled 386 kg of paper.

Social Achievements

• Compliance with all relevant labor legislations, providing employees with appropriate holidays and paid leave.
• Established occupational safety and health guidelines, resulting in no reportable safety incidents.
• Compliance with regulations governing child and forced labor.
• Commitment to equal opportunities and anti-discrimination policies.
• Organized team-building activities for employees.

Governance Achievements

• Established a remuneration committee responsible for determining remuneration packages for employees and directors.
• Adopted a share option scheme.
• Established a nomination committee responsible for nominating appropriate persons for election as directors.
• Established an audit committee responsible for reviewing financial reporting and internal control systems.
• Adopted a board diversity policy.

Climate Goals & Targets

Environmental Challenges

• Sensitivity of revenue and results to changes in natural gas and oil prices.
• Significant capital investment required for exploration and development.
• Dependence on services provided by third parties.
• Decreasing gas prices.
• Financial difficulties since 2017, including outstanding borrowing and legal notice.

Mitigation Strategies

• Strict control of operating costs.
• Workover operations on oil wells to boost production.
• Evaluation of conditions of remaining wells for maintenance and repair.
• Exploration of drilling new wells after cost-benefit analysis.
• Consideration of new investors to expand business and explore new developments.
• Share subscription to improve financial condition and develop business.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Consideration of price, quality of service, location, productivity, and legal procedures during supplier selection.
• Attention to suppliers’ corporate responsibility performance, including social responsibility and environmental protection efforts.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix 27 to the Listing Rules on the Stock Exchange of Hong Kong Limited)

Third-party Assurance: Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Social responsibility
• Governance

Environmental Achievements

• Reduced total greenhouse gas emissions by 57% to 21.6 tonnes CO2e compared to the previous year.
• Reduced total energy consumption by 19% to 47,640 kWh compared to the previous year.
• Reduced total non-hazardous waste intensity by 64% to 0.41 kg per 1 million HKD of revenue compared to the previous year.
• Recycled 8.8 kg of paper.

Social Achievements

• Complied with all relevant labor legislations.
• No reportable safety incidents.
• Donated approximately HK$32,000 to the “Southern District Warm Winter Gold Ribbon Campaign 2020”.
• Provided training to 11 employees.

Governance Achievements

• Established a remuneration committee.
• Established a nomination committee.
• Established an audit committee.
• Adopted a board diversity policy.
• Adopted a policy on the disclosure of inside information.
• No cases of corruption reported.

Climate Goals & Targets

Environmental Challenges

• Significant fluctuations in oil and natural gas prices due to the COVID-19 pandemic and the Russia-Saudi Arabia oil price war.
• Increased drilling, labor, and production costs due to the pandemic.
• Difficulties in sending staff to oversee operations at the Utah Gas and Oil Field due to travel restrictions.
• Uncertainty in the growth of the global economy and the impact of COVID-19 on price fluctuations.

Mitigation Strategies

• Adapted business strategies by focusing on increasing trading volumes in China's domestic market.
• Postponed further exploitation of reserves in Utah until 2021.
• Focused on regular maintenance of existing facilities in Utah.
• Completed workover operations on several wells in Utah.
• Reviewed pricing policies and ensured contracts included price adjustment mechanisms.
• Actively sought alternative third-party service providers with reasonable costs.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Consideration of corporate responsibility performance of suppliers, including social responsibility and environmental protection efforts.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix 27 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited)

Third-party Assurance: Not disclosed

Environmental Metrics

ESG Focus Areas

• Corporate governance
• Environmental protection
• Employment practices
• Operating practices
• Community investment

Environmental Achievements

• Established "Energy Saving and Emission Reduction Procedures" and "Pollution Prevention and Waste Management Procedures"
• Set a target to replace all company vehicles with electric vehicles by 2025
• Set targets to gradually reduce the intensity of air emissions, GHG emissions, and non-hazardous wastes in the next five years

Social Achievements

• Zero reported incidents of work-related fatalities in the past three years
• Zero lost days due to work injury during the reporting period
• Implemented several infection preventive measures to protect employees during the COVID-19 pandemic
• Approximately 61% of employees received training, with an average of 7.08 hours per employee

Governance Achievements

• Established an ESG governance structure with a Task Force reporting to the Board
• Conducted a materiality assessment to identify and prioritize major ESG issues
• Implemented a "Climate Change and Environmental Protection Policy"
• Adopted a board diversity policy

Climate Goals & Targets

Environmental Challenges

• Price risk due to volatility in natural gas and oil prices and general economic conditions
• Cost risks and risks associated with hiring third-party service providers
• Uncertainty in the growth of the global economy and the Russia-Ukraine war impacting oil and gas prices
• Impact of COVID-19 on price fluctuations

Mitigation Strategies

• Reviewed pricing policies and ensured contracts included price adjustment mechanisms
• Actively sought alternative third-party service providers with reasonable costs and necessary licenses
• Regularly organised emergency drills and strictly complied with the emergency plan initiated by the local government

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• "Suppliers Management Requirements"

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (extreme cold, extreme heat, storms, rainstorms, typhoons) leading to power shortages, supply chain interruptions, asset damage, and business disruption

Transition Risks

• Failure to meet climate change compliance requirements leading to risks of claims, lawsuits, or reputational damage

Opportunities

• Transforming into an integrated energy enterprise, decarbonising operations, and increasing investment in renewables and lower-carbon alternatives

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix 27 of the Listing Rules)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Corporate governance
• Environmental protection
• Employment practices
• Operating practices
• Community investment

Environmental Achievements

• Actively adopted various green commuting options, such as carpooling and taking public transport in 2022 to reduce its air emissions.
• Switched its source of heating for its PRC offices from natural gas consumption to the municipal heating network in the second half of 2022.
• Implemented green commuting measures to reduce petrol consumption.
• Replaced all lighting in its offices with LED lights (on track for completion by 2025).
• Participated in Earth Hour to raise employee awareness of energy conservation.

Social Achievements

• Zero incidents of work-related fatalities in the past three years.
• Zero lost days due to work injury in 2022.
• Actively conducted training related to ESG and anti-corruption, resulting in an increase in the percentage of employees trained compared to 2021.
• Implemented several infection preventive measures to protect its employees during the COVID-19 pandemic.
• Participated in community welfare activities, including road cleaning and pandemic support. Donated to The Community Chest of Hong Kong and Caritas.

Governance Achievements

• Established a group-wide “Climate Change and Environmental Protection Policy”.
• Established the ESG Task Force to develop systematic management of ESG issues.
• Adopted a board diversity policy.
• Adopted a code of conduct regarding securities transactions by Directors.
• Established the “Whistleblowing Management Requirements”.

Climate Goals & Targets

Environmental Challenges

• Significant fluctuations in oil prices hindered plans to expand international trade.
• Strict pandemic prevention measures and travel restrictions in China caused significant disruption to transportation and reduced revenue.
• Uncertainties in relation to local oil and gas service providers in Utah prolonged the well overhaul schedule.
• COVID-19 pandemic imposed new challenges and difficulties for the energy industry.
• International political affairs (e.g., the Russia-Ukraine crisis) brought further uncertainties to the business.

Mitigation Strategies

• Reviewed pricing policies and ensured contracts included price adjustment mechanisms.
• Actively sought alternative third-party service providers with reasonable cost and necessary licenses.
• Conducted due diligence on counter-parties to mitigate risks associated with third-party service providers.
• Closely monitored the situation in the Utah Oil and Gas Field and adjusted development direction and strategy.
• Implemented various low-carbon strategies and considered investments in renewable and lower-carbon alternatives.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Established “Suppliers Management Requirements” to manage supplier selection process.
• Criteria for supplier selection include price, quality of service, location, productivity, legal procedures, social responsibility, and environmental protection efforts.
• Implemented “Anti-fraud and Anti-corruption Policy” and “Conflict of Interest Policy” to monitor procurement activities.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme cold, extreme heat, rainstorms, typhoons, power shortages, supply chain interruptions, damage to operation facilities.

Transition Risks

• Reorientation of China’s energy strategy, new demand for low-carbon energy products, risks of claims and lawsuits if failing to meet climate change compliance requirements.

Opportunities

• Investments in renewable and lower-carbon alternatives, transformation into an integrated energy enterprise.

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix 27 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Corporate governance
• Environmental protection
• Employment practices
• Operating practices
• Community investment

Environmental Achievements

• Decreased intensity of NOx, SOx, and PM emissions.
• Decreased total GHG emissions.
• Decreased total non-hazardous waste produced (though intensity increased due to revenue decline).
• Decreased total energy consumption intensity.
• Switched heating source in PRC offices to municipal heating network.
• Implemented various green commuting options.
• Implemented paper-saving measures.

Social Achievements

• Zero work-related fatalities in the past three years.
• Zero lost days due to work injury in 2023.
• Decreased employee turnover rate compared to 2022.
• 100% of employees received ESG and anti-corruption training in 2023.
• Participation in community welfare activities (weed removal, elderly assistance).

Governance Achievements

• Established a robust ESG governance structure.
• Established the ESG Task Force.
• Conducted a materiality assessment.
• Adopted a board diversity policy.
• Established a Policy on the Disclosure of Inside Information.
• Implemented anti-corruption training for directors and staff.

Climate Goals & Targets

Environmental Challenges

• Unfavorable price movements in 2023 impacting oil trading business.
• Thin margins or losses faced by some oil refineries, leading to scaled-down production.
• Uncertainties in Utah Gas and Oil Field (worker turnover, construction schedule, equipment procurement and transportation).
• Growing tensions in Sino-American relations.
• Fluctuations in global supply and demand impacting oil and natural gas prices.
• Material uncertainty related to going concern due to net loss and high short-term liabilities.

Mitigation Strategies

• Readjusted trading strategies and enhanced operational efficiency.
• Actively seeking alternative third-party service providers.
• Continuously evaluating the situation in the Utah Oil and Gas Field and adjusting development direction and strategy.
• Reviewed pricing policies and ensured contracts included price adjustment mechanisms.
• Proactively discussing with heavy industry customers and securing procurement contracts.
• Implementing measures to tighten cost controls and enhance profitability.
• Considering investments in renewable and lower-carbon alternatives.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier selection process considering price, quality, location, productivity, and legal procedures.
• Focus on suppliers with good business track records and compliance with environmental and social regulations.
• Implementation of anti-fraud and anti-corruption policies.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (extreme cold, extreme heat, rainstorms, typhoons) leading to power shortages, supply chain disruptions, and damage to facilities.
• Rising global average temperature increasing office refrigeration and equipment cooling demand.

Transition Risks

• PRC government's energy transition and reorientation of energy strategy.
• Risks of claims and lawsuits for non-compliance with climate change requirements.

Opportunities

• Investments in renewable and lower-carbon alternatives.

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix C2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed