Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Social Responsibility
• Governance

Environmental Achievements

• Invested more than 30 million RMB in technological transformation for the production line, increasing capacity and reducing energy consumption.
• Switched to energy-saving bulbs and motion/sound sensors to reduce energy waste.
• Established a policy to reduce business travel through video conferencing and public transport.
• Prioritized local suppliers to reduce transportation emissions.
• Optimized explosive dosage to prevent overuse and reduce hazardous gas production.
• Switched to more energy-saving vehicles and drilling rigs.
• Improved air quality through ventilation and smoking bans.
• Installed water reduction equipment to monitor and reduce water wastage.
• Encouraged wastewater recycling.
• Reduced solid waste through employee education and waste reduction initiatives.
• No environmental law violations during the reporting period.

Social Achievements

• Established a merit-based recruitment policy promoting diversity and equal opportunities.
• Provided above-average salary packages and overtime compensation.
• Participated in social insurance programs for employees.
• Offered financial compensation to employees made redundant due to corporate reorganization.
• Provided recreational facilities and organized activities to enrich staff life.
• No reported staff discrimination during the reporting period.
• Implemented comprehensive safety training programs for employees.
• Established a Safety and Environmental Department to oversee occupational safety.
• Provided personal protective equipment and periodic health check-ups.
• No prosecutions related to occupational health and safety during the reporting period.
• Implemented employee development and training programs, including mentoring.
• Adhered to local labor regulations and minimum working age requirements.
• No child labor or forced labor during the reporting period.
• Established a code of practice for suppliers focusing on environmental and safety standards.
• Conducted regular supplier performance reviews.
• Ensured product quality through testing and inspection.
• Implemented a customer satisfaction survey program.
• Established an anti-fraud management system and conflict of interest declaration policy.
• Implemented an open tender policy for procurement to prevent corruption.
• No prosecutions related to anti-corruption regulations during the reporting period.
• Supported socially vulnerable groups through the Sheng'an Foundation for Poverty Alleviation.
• Participated in community activities and volunteer work.

Governance Achievements

• Established safety production, pricing, and quality control committees for better operational monitoring.
• Implemented an anti-corruption policy and business ethics guidelines.
• Implemented an open tender policy for major procurement projects.

Climate Goals & Targets

Environmental Challenges

• Reducing greenhouse gas emissions and other wastes from operations.
• Maintaining workplace safety in a hazardous materials industry.
• Ensuring ethical and responsible supply chain management.
• Preventing corruption and bribery.

Mitigation Strategies

• Technological investments in production lines to increase efficiency and reduce energy consumption.
• Comprehensive safety training programs, safety inspections, and a dedicated safety department.
• Supplier code of practice and regular performance reviews.
• Anti-fraud management system, conflict of interest declaration policy, and open tender policy.

Supply Chain Management

Responsible Procurement

• Suppliers provide quality assurance certificates.
• Code of practice for suppliers regarding packaging and transportation.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: HKEx Environmental, Social and Governance Reporting Guide

Certifications: Quality, Environmental, Occupational Health & Safety Management System Authentication Certificate

Sustainable Products & Innovation

• Colloidal emulsion explosives (environmentally friendly)

Awards & Recognition

• Inner Mongolia Engineering Blasting Grade AAAA Enterprise
• Harmonious Labor Relations Grade A Taxpaying Enterprise

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced pollutants and greenhouse gases through various initiatives including using high-quality clean coal, installing desulfurization facilities (95% efficiency), dust removal facilities, and promoting energy-efficient practices.
• Complied with relevant environmental protection laws with no violations.

Social Achievements

• Maintained a stable workforce with low turnover rates (1.09% for males and 0.74% for females).
• Implemented occupational health and safety management systems, obtaining OHSAS18001 certification, and achieving zero major work-related injuries or deaths.
• Provided various employee benefits including paid leave, accommodation, and healthcare services.
• Complied with labor laws with no complaints regarding discrimination or recruitment.
• Donated 1 million RMB for drought relief and implemented community assistance programs.

Governance Achievements

• Established an internal audit team and a whistle-blowing system to prevent corruption.
• Implemented a clear open tender policy for procurement.
• Provided anti-corruption training for employees.
• Complied with anti-corruption laws with no violations.

Climate Goals & Targets

Environmental Challenges

• Reducing the environmental impact of exhaust gases and dust during production and transportation.
• Managing occupational health hazards associated with handling explosives and operating heavy machinery.

Mitigation Strategies

• Implemented various emission control measures, including using clean coal, desulfurization and dust removal facilities, and promoting energy-efficient transportation.
• Established occupational health and safety management systems, provided personal protective equipment, and conducted regular safety training.

Supply Chain Management

Supplier Audits: Annual review and assessment of qualified suppliers.

Responsible Procurement

• Strict supplier selection criteria, including quality, environmental, and occupational health and safety certifications.
• Code of conduct for suppliers, including requirements for packaging and transportation.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: HKEx Environmental, Social and Governance Reporting Guide

Certifications: ISO 14001 (Environmental Management System), OHSAS 18001 (Occupational Health and Safety Management System), ISO 9001 (Quality Management System)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Colloidal emulsion explosives (environmentally friendly)

Awards & Recognition

• Endless Love Rescuers Banner
• Ankang Cup Knowledge Competition
• Advanced Grassroots Party Organization
• Advanced Party Organization
• Urad Rear Banner 2018 3rd “Yili Cup” Company Staff Basketball Competition
• National Unity and Progressive Creation Event Model Unit
• Citywide Advanced Collective for Flood Control and Rescue Work

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced NOx emissions from 53,018.46 kg to 9,124.28 kg; reduced SO2 emissions from 17,754.59 kg to 18,286.81 kg; reduced PM emissions from 7,895.87 kg to 523.32 kg; reduced total GHG emissions from 21,659.38 tonnes of CO2e to 5,607.85 tonnes of CO2e; implemented energy saving initiatives such as using solar energy, energy-saving lamps, and energy-efficient vehicles; implemented waste reduction initiatives such as double-sided printing and reuse of stationery; installed desulfurization facilities with 95% efficiency; installed dust removal facilities and hardened coal yards with walls and regular water spraying.

Social Achievements

• Established occupational health and safety management systems and obtained OHSAS18001 certification; provided safety training and education; implemented a “Safety Training Management System”; provided internal and external training programs for employees; established human resources management policies in accordance with PRC and Hong Kong laws; provided equal employment opportunities; provided wages higher than the local minimum wage and various social insurances and benefits; established a “Prohibition of Child Labour Recruitment and Remedies Procedures”; developed standard procurement and tendering procedures; established a code of conduct for suppliers; implemented quality control and safety management systems and obtained ISO9001 certification; established a “Corporate Investment Policy” and actively participated in local community activities; donated approximately RMB1.76 million to different charities and organisations in the PRC.

Governance Achievements

• Established an “Anti-corruption Management System”; provided anti-corruption training for employees; established various communication channels for reporting suspected misconduct; established a clear open tender policy to prevent corruption and bribery in procurement activities; clarified the approval authority of personnel at all levels in the Company’s contract management system.

Climate Goals & Targets

Environmental Challenges

• Reducing emissions, waste generation, and resource consumption; managing occupational health and safety; ensuring compliance with environmental, labor, and anti-corruption laws and regulations; maintaining high standards of business ethics and integrity; engaging suppliers committed to social responsibility; managing product quality and safety; protecting customer data and privacy.

Mitigation Strategies

• Implemented various emission reduction and energy saving initiatives; established relevant policies and procedures for managing environmental, social, and governance risks; conducted regular monitoring and management of occupational health and safety; provided training and education to employees; established communication channels for reporting non-compliance; developed standard procurement and tendering procedures; established a code of conduct for suppliers; implemented quality control and safety management systems; established a confidentiality policy; actively participated in local community activities.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Established a set of standard procurement and tendering procedures; selected suppliers based on strict criteria; requested suppliers to provide quality, environmental, and occupational health and safety certifications; established a code of conduct for suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI

Certifications: OHSAS 18001, ISO 9001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Endless Love Rescuers Banner
• Ankang Cup Knowledge Competition
• Advanced Grassroots Party Organization
• Advanced Party Organization
• Urad Rear Banner 2018 3rd “Yili Cup” Company Staff Basketball Competition
• National Unity and Progressive Creation Event Model Unit
• 2018 Citywide Advanced Collective for Flood Control and Rescue Work

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced sulfur dioxide emissions by 33.5% (from 29,506.21 kg to 18,520.62 kg)
• Installed desulfurization facilities with 95% efficiency
• Implemented waste reduction initiatives resulting in decreased hazardous and non-hazardous waste generation

Social Achievements

• Established occupational health and safety management systems, obtaining OHSAS18001 certification
• Provided training to 96% of employees
• No work-related fatalities or lost days due to work injury

Governance Achievements

• Established an ESG Working Group with 21 members
• Implemented an anti-corruption management system
• No legal cases related to corruption

Climate Goals & Targets

Environmental Challenges

• Increased severity and frequency of extreme weather events
• Increased likelihood of drought and wildfire
• More stringent environmental and safety regulations
• Transition to a low-carbon economy
• Public attention to climate change affecting demand for products

Mitigation Strategies

• Elevated dwells in mines and installed floodgates
• Scenario analysis to disclose planning under future scenarios
• Monitored climate data and issued early warnings
• Strengthened HSE management
• Installed cooling and warming facilities
• Monitored updates of environmental laws and regulations
• Increased investment in technological innovation and low-carbon technologies
• Focused on clean production, unit cost reduction, and efficiency enhancement

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Standard procurement and tendering procedures
• Strict supplier selection criteria
• Request for quality, environmental, and occupational health and safety certifications
• Code of conduct for suppliers (including environmentally friendly vehicle use)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (cyclones, floods)
• Drought
• Wildfire

Transition Risks

• Stringent environmental regulations
• International treaties restricting emissions
• Transition to low-carbon economy
• Market preference for low-carbon products
• Competition from alternative energy sources

Opportunities

• Resource efficiency gains
• Use of lower-emission energy sources
• Development of climate adaptation solutions
• Access to new markets

Reporting Standards

Frameworks Used: GRI

Certifications: OHSAS 18001, ISO 9001

Third-party Assurance: APAC Compliance Consultancy and Internal Control Services Limited

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Advanced Grassroots Party Organization
• May 1st Labor Award
• 2021 Tax Contributing Enterprise

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced air pollutants emission (Nitrogen oxides, Sulfur dioxide, Particulate matter)
• Implemented energy saving initiatives (solar energy, energy-saving lamps, sound and light-controlled bulbs, energy-efficient vehicles and rigs)
• Implemented water saving policy
• Implemented waste reduction initiatives (double-sided printing, reuse of stationery, electronic communication, recycling)

Social Achievements

• Established human resources management policies in accordance with PRC and Hong Kong laws
• Provided equal employment opportunities
• Established occupational health and safety management systems (OHSAS18001 certification)
• Provided safety training and education
• Provided internal and external trainings for employees
• Established a code of conduct for suppliers
• Established a comprehensive production management system (ISO 9001 certification)
• Established Measures for Management of Product Quality Accidents
• Established a confidentiality policy to protect customer data
• Adopted a policy of “Anti-corruption Management System”, provided anti-corruption training

Governance Achievements

• Established an ESG Working Group
• Established mechanisms to ensure independent views from Directors
• Established an audit committee, remuneration committee and nomination committee
• Implemented an information disclosure policy to handle inside information
• Established whistleblowing procedures
• Adopted a board diversity policy

Climate Goals & Targets

Environmental Challenges

• Significant decline in blasting and mine engineering business revenue due to mine owner’s reasons and governance of the downstream coal industry
• Intense competition in the civil explosives industry in Mainland China
• Decline of the coal market in Mainland China
• Climate change related risks (extreme weather events, drought, wildfire, variability in weather patterns)
• Transition risks (policy risk, legal risk, technology risk, market risk, reputational risk)

Mitigation Strategies

• Adjusted sales strategy to increase the sales price of civil explosive products
• Developed alternative sourcing strategies
• Implemented emission reduction and energy saving initiatives
• Implemented water saving policy
• Implemented waste reduction initiatives
• Strengthened HSE management
• Monitored and updated climate data closely and regularly, issued early warnings
• Planned improvements, retrofits, relocations, or other changes to facilities
• Installed cooling and warming facilities
• Paid close attention to the latest policies, regulations and treaties
• Monitored the updates of environmental laws and regulations
• Increased investment in technological innovation and low-carbon technologies
• Vigorously developing strategies to save energy and reduce consumptions
• Incorporated climate-related considerations into investment decision-making process
• Accelerated low-carbon transition, enterprise standardization
• Improved level and transparency of ESG information disclosure
• Extended external communication and participation

Supply Chain Management

Supplier Audits: 155 suppliers audited/year

Responsible Procurement

• Standard procurement and tendering procedures
• Strict supplier selection criteria
• Request for quality, environmental, and occupational health and safety certifications
• Code of conduct for suppliers (environmentally friendly vehicles, intact packaging)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (cyclones, floods)
• Drought
• Wildfire
• Extreme variability in weather patterns

Transition Risks

• Policy risk
• Legal risk
• Technology risk
• Market risk
• Reputational risk

Opportunities

• Resource efficiency
• Energy source diversification
• Development of climate adaptation and insurance risk solutions
• Access to new markets
• Resilience

Reporting Standards

Frameworks Used: GRI

Certifications: OHSAS18001, ISO 9001