Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced carbon emissions at Shenzhen Tencent Computer System Co., Ltd. from 3,758.08 tons to 3,510.87 tons; maintained relatively stable emission levels at Tencent Technology (Shenzhen) Co., Ltd. despite operational expansion.
• Tencent’s Guangming data center received a 5A rating (highest possible) in the Data Centre Green Rating system.

Social Achievements

• Launched over 100 anti-pandemic Mini Programs within two months, addressing various needs.
• WeCounty served more than 15,000 villages and 2.5 million villagers.
• Launched the Charity and CSR Award, recognizing seven projects including WeCounty and 9.9 Giving Day.
• 9.9 Giving Day received over 48 million donations, totaling RMB1,783 million.

Governance Achievements

• Established a dedicated department to oversee CSR implementation.
• Designated CSR liaison officers in all departments and regions.
• Appointed the first female independent non-executive director.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to COVID-19 pandemic
• Maintaining a healthy internet environment for minors
• Cybersecurity threats in the Industrial Internet era

Mitigation Strategies

• Launched more than 100 Mini Programs to support business continuity and resumption of work and production during the COVID-19 pandemic.
• Implemented Parental Guardian Platform, Healthy Gameplay System, and Payment Notification and Online Consumption System to protect minors online.
• Upgraded security solutions, established seven laboratories, and formed a team of over 3,000 professionals to address cybersecurity challenges.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: CASS-CSR4.0, GRI, Hong Kong Exchange and Clearing Limited's Environmental, Social and Government Reporting Guide

Awards & Recognition

• No. 7 on the Top 500 Socially Responsible Chinese Enterprises in 2019
• No. 1 on the China CSR Index in 2020

Environmental Metrics

ESG Focus Areas

• Scientific Research
• Digital Infrastructure Development
• Data Rights Protection
• Digital Innovation for various sectors (medicine, education, tourism, transportation, retail, energy)
• Digital Culture
• Philanthropy
• Rural Revitalization
• Digital Inclusion
• Environmental Protection and Carbon Emission Reduction
• Corporate Governance
• Employee Growth and Development

Environmental Achievements

• Reduced water usage by 50-70% at Shenzhen headquarters through water recycling.
• Achieved PUE (Power Usage Effectiveness) lower than 1.25 in fourth-generation data centers, exceeding industry average.
• Implemented waste-heat recovery program in Tianjin Data Center, reducing CO2 emissions and providing heating for households.
• Launched carbon-neutral program and explored technological solutions for emission reduction in various sectors.

Social Achievements

• Established RMB1.5 billion (US$211 million) anti-pandemic fund in China and a US$100 million global fund.
• Provided digital health services and solutions to medical institutions.
• Supported digital education initiatives, including Tencent Classrooms and Tencent Smart Campus, reaching millions of students.
• Launched initiatives to promote digital inclusion for vulnerable populations, including the elderly and disabled.
• Supported rural revitalization through technology and online platforms.
• Helped create approximately 2.9 million jobs through Weixin ecosystem.
• Launched various programs to support digital transformation of SMEs.

Governance Achievements

• Optimized corporate governance mechanisms and strengthened internal risk management.
• Implemented strict anti-fraud measures and supplier management practices.
• Established a comprehensive code of conduct (Sunshine Code) with zero-tolerance policy for violations.
• Improved data privacy protection measures and adhered to relevant laws and regulations.

Climate Goals & Targets

Environmental Challenges

• Global pandemic impacting various sectors and employment.
• Challenges in protecting intellectual property rights in the digital age.
• Need to address the digital divide for vulnerable populations.
• Need to reduce carbon emissions and promote sustainable development.

Mitigation Strategies

• Launched various initiatives to support businesses and individuals during the pandemic.
• Established dedicated IP protection team and platform.
• Developed inclusive product designs and digital literacy programs.
• Implemented low-carbon operations and carbon-neutral initiatives.

Supply Chain Management

Supplier Audits: Evaluated approximately 400 suppliers in 2020.

Responsible Procurement

• Established a code of conduct for procurement staff.
• Implemented strict supplier management mechanisms.
• Required 100% of suppliers to abide by business ethics and anti-corruption requirements.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: CASS-CSR4.0, GRI Standards

UN Sustainable Development Goals

• No Poverty
• Zero Hunger
• Good Health and Well-being
• Quality Education
• Gender Equality
• Clean Water and Sanitation
• Affordable and Clean Energy
• Decent Work and Economic Growth
• Industry, Innovation and Infrastructure
• Reduced Inequalities
• Sustainable Cities and Communities
• Responsible Consumption and Production
• Climate Action
• Life Below Water
• Life On Land
• Peace, Justice and Strong Institutions
• Partnerships for the Goals

Tencent's initiatives align with various UN SDGs through philanthropy, digital inclusion, environmental protection, and sustainable development efforts.

Sustainable Products & Innovation

• AI-driven drug discovery platform (iDrug)
• AI planting solution (iGrow)
• Smart energy solutions
• Smart building solutions

Environmental Metrics

ESG Focus Areas

• Climate Change & Greenhouse Gas Emissions
• Waste Management
• Water Management
• Energy Use
• Environmental Impact of Products & Services
• Employee Rights & Benefits
• Employee Career Development
• Diversity and Equal Opportunity
• Employee Health and Safety
• Labour Standards
• Supply Chain Management
• Social Impact of Products & Services
• Responsibility of Content
• Data Privacy and Cyber Security
• Protection of Minors
• Digital Inclusion and Digital Literacy
• Community Investment
• Support Common Prosperity
• Anti-trust
• Intellectual Property
• Anti-corruption
• Corporate Governance
• Active Stakeholder Engagement

Environmental Achievements

• Announced commitment to achieve carbon neutrality in own operations and supply chain, and to use green power for 100% of all electricity consumed by 2030
• Joined the Science-Based Carbon Targets initiative (SBTi)
• Tencent Tianjin Data Centre earned a LEED Platinum certification

Social Achievements

• Established the Sustainable Social Value (SSV) Organisation and announced commitment to common prosperity initiatives
• Upgraded charitable fundraising platform, engaging 69 million donations and 12,000 enterprises
• Built a public emergency response platform
• Adapted many apps to provide elderly-oriented and barrier-free services
• Set up dedicated funds to support basic scientific research, as well as critical healthcare and environmental technologies
• Collaborated with the United Nation Development Programme (UNDP) to produce videos and articles promoting women leadership in the technology industry
• Received the annual China’s Best Employer Award and the Most Caring Employer for Women Award

Governance Achievements

• Enhanced internal antitrust compliance system, including establishing a dedicated compliance department, updating guidelines, and strengthening staff training
• Updated policies on anti-money laundering and sanctions compliance

Climate Goals & Targets

Environmental Challenges

• Challenging year with measures reinforcing long-term sustainability slowing revenue growth
• Financial headwinds
• Structurally shifting China Internet industry
• Regulatory changes and evolving macroeconomic environment impacting online advertising
• Increased competition for talent
• Increased investments in community retail initiatives by certain associates, and losses recognised from an associate in the transportation services vertical
• Regulatory limitations restricting foreign investment in businesses providing value-added telecommunications services in China

Mitigation Strategies

• Managing costs and increasing efficiency
• Sharpening focus on key strategic areas
• Repositioning for sustainable long-term growth
• Cost optimisation process to reduce financial losses at Tencent Video
• Adapting to the new economic and regulatory environment and upgrading advertising solutions
• Investing more resources in continuous improvement of risk management and internal control systems
• Conducting some business in the PRC through OPCOs (Operating Companies) with contractual arrangements

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Tencent Supplier Management Policy; Supplier Management System; Corporate Social Responsibility Commitment; Anti-Commercial Bribery Declaration

Climate-Related Risks & Opportunities

Physical Risks

• Acute climate events (typhoons, rainstorms), chronic risks (high temperatures, droughts), rising sea levels

Transition Risks

• Failure to effectively control carbon emissions, reputational damage, loss of users or market share

Opportunities

• Improving energy efficiency, developing low-carbon technologies and climate-resilient products and services, optimising operating costs

Reporting Standards

Frameworks Used: ESG Reporting Guide, TCFD, GRI standards, SASB standards

Certifications: LEED Gold or Platinum certifications (Tencent Binhai Towers, Tencent Beijing Headquarters, Chengdu Tencent Towers A and B), LEED Platinum certification (Tencent Tianjin Data Centre), ISO 14001 environmental management system certification (property management companies of self-owned office buildings)

Third-party Assurance: PricewaterhouseCoopers (limited assurance on selected ESG KPIs)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• WeCom, Tencent Meeting, Tencent Cloud

Awards & Recognition

• China’s Best Employer Award, Most Caring Employer for Women Award

Environmental Metrics

ESG Focus Areas

• Climate Change and Carbon Neutrality
• Diversity, Equity, and Inclusion
• Data Privacy and Cyber Security
• Protection and Development of Underaged Users
• Sustainable Social Value

Environmental Achievements

• Refined decarbonisation pathways and set absolute GHG emissions reduction targets for Scopes 1, 2, and 3, aligned with the Paris Agreement and SBTi.
• Published a biodiversity statement outlining strategies for protecting biodiversity and ecosystems.
• Purchased more than 336,419.5 MWh of green power, avoiding 241,952.9 tonnes of carbon emissions.
• Built distributed renewable energy facilities with an installed capacity exceeding 19.6 MW.

Social Achievements

• Increased the ratio of female directors to 22.2% and intends to raise it to 30% by 2030.
• Established a special committee on DEI under the ESG Working Group and published 'Our Commitment to Diversity, Equity, and Inclusion'.
• Launched the New Cornerstone Investigator Programme, committing RMB10 billion over ten years to support basic sciences research.
• Upgraded the digital philanthropy platform and introduced the 'One Flower, One Dream' interactive mechanism.
• Supported rural revitalisation through the Cultivator Programme and Rural CEO Programme.

Governance Achievements

• Collaborated with partners to define business ethics and code of conduct.
• Initiated a Scope 3 emissions reduction program, assessing carbon reduction potential across procurement and downstream leasing premises.
• Expanded the 2022 ESG report scope to include two publicly listed subsidiaries, Tencent Music Entertainment Group and China Literature Limited.

Climate Goals & Targets

Environmental Challenges

• Challenging macroeconomic conditions and structural changes in the industry.
• Managing climate-related risks and opportunities (physical and transition risks).
• Ensuring data privacy and cybersecurity in a rapidly evolving digital landscape.
• Protecting underaged users from harmful online content and promoting their healthy development.

Mitigation Strategies

• Optimising organisational structures, consolidating resources, and focusing on core strategic areas.
• Conducting climate scenario analysis to quantify potential climate-related risks and opportunities.
• Building a company-level data security capability platform and implementing Privacy Impact Assessments (PIAs).
• Establishing a cross-departmental virtual organisation for the protection of underaged users and implementing stringent anti-addiction measures.

Supply Chain Management

Responsible Procurement

• Environmental Protection Management Policy
• Internal guidelines for prioritizing green procurement
• Requirement for suppliers to abide by local laws and regulations and adopt ESG standards.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme heat
• Flooding
• Tropical cyclones
• Wildfires
• Water stress and drought

Transition Risks

• Enhanced regulatory requirements of energy efficiency standards
• Increased requirements on climate change action and disclosure
• Implementation of carbon emission reduction policies
• Uncertainty around the procurement of renewable energy
• Electricity price fluctuations
• Shift in market preference towards low-carbon products
• Potential greenwashing risk

Opportunities

• Onsite renewable energy generation
• Adoption of energy-efficiency measures
• Climate investment and financing in renewable energy and low-carbon solutions
• Opportunity to sell low-carbon products

Reporting Standards

Frameworks Used: HKEx ESG Reporting Guide, GRI Standards, SASB Standards, TCFD

Certifications: ISO 9001, ISO 14001, ISO 45001, LEED

Third-party Assurance: PricewaterhouseCoopers (limited assurance on selected ESG KPIs)

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation, and Infrastructure)
• Goal 13 (Climate Action)
• Goal 17 (Partnerships for the Goals)

Tencent's initiatives contribute to these goals through various programs and technologies related to renewable energy, digital transformation, climate change mitigation, and collaborations with various stakeholders.

Sustainable Products & Innovation

• Tencent Docs (reducing carbon emissions)
• Tencent Meeting (reducing carbon emissions)
• Waterless fluorine pump air conditioners
• AI-powered quality inspection algorithms

Awards & Recognition

• No. 1 ESG performer in Asia-Pacific (excluding Japan) by Institutional Investor (2022)
• Eighth most transparent company globally by Global ESG Monitor (2022)
• Industry mover in S&P Sustainability Yearbook (2023)
• Zero Project Awardee 2023 (braille keyboard solution)
• 2022 CCF excellent case of technology for good (braille keyboard solution)
• Best Consumer Credit Technology in China by The Asian Banker (T-Sec, 2022)
• Global World Heritage Education Innovation Case Award (Digital Great Wall, 2022)

Environmental Metrics

ESG Focus Areas

• Digital Philanthropy
• Decarbonization
• Sustainable Development Goals

Environmental Achievements

• Made progress in decarbonisation journey by applying fourth-generation data centre technology to reduce emissions and increasing the adoption of renewable energy

Social Achievements

• Digital philanthropy platform helped raise a record RMB3.8 billion in public donations during the 99 Giving Day campaign, up 15% year-on-year.
• New Cornerstone Investigator Program supported 104 scientists, contributing to the development of basic science research.

Governance Achievements

• Joined the United Nations Global Compact in August 2023

Climate Goals & Targets

Environmental Challenges

• Ongoing challenges in the business environment
• Macroeconomic risks impacting consumption and investment
• Regulatory and compliance risks in domestic and international operations
• Information security risks related to user and client data
• Crisis management, public relations, and reputational risks
• Business continuity risks from IT system issues and external factors
• M&A and investment management risks in a complex global environment
• ToB business risks related to Industrial Internet development
• Social responsibility and environmental sustainability risks
• Fraud risks in the Internet and technology industry

Mitigation Strategies

• Adjusting business development strategy to address macroeconomic risks
• Investing in product innovation and user experience
• Devoting substantial resources to regulatory compliance
• Strengthening information security management and obtaining certifications
• Establishing a crisis response mechanism and public relations management
• Investing in network infrastructure and business recovery mechanisms
• Establishing an Investment Committee and professional investment teams
• Accumulating experience in ToB business and enhancing collaboration
• Establishing an ESG team and incorporating ESG issues into risk assessment
• Establishing effective internal control systems and promoting integrity

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UNGC