Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Use of Resources
• Employment
• Product Responsibility
• Community Investment
• Health and Safety
• Training and Development
• Labour Standards
• Emissions control
• Supply Chain Management
• Anti-corruption

Environmental Achievements

• Coal-to-Gas and Combined Cooling, Heating and Power (CCHP) distributed energy projects
• Construction of natural gas infrastructure
• First 6KG-capacity gas dryer launched, utilizing heat temperature for drying and multiple safety measures.
• Defect rate of Bauhinia gas appliances at 0.02%, product recycling rate due to safety reasons at 0.05%
• Completed 260 km of rehabilitated pipeline network, contributing to an accumulated length of 2,573 km (92.8% rehabilitation rate).
• Implementation of prefabrication scheme for gas pipes, improving installation and project management quality.
• Participation in the compilation and vetting of national and industry standards related to gas safety.

Social Achievements

• Launched online customer service platform and “Ganghua Pay” mobile app.
• Organized “Quality Day” and “Star Officer of Politeness, Caring and Etiquette Competition” to enhance customer service.
• Implemented “Dandelion Scheme” to discover and nurture customer service talent.
• Launched “Master Craft” award to promote excellence in craftsmanship.
• “Gentle Breeze Movement” provided study materials and resources to students in various provinces.
• “Firefly Project” built multimedia classrooms in remote areas.
• “Rice Dumplings for the Community” event benefited over 7,000 people.
• Various training programs for staff, including “Career Development Scheme”, “Master of Engineering Management”, and “Engineering Graduates Training Scheme”.
• OHSAS 18001 certificates received by nine project companies.

Governance Achievements

• Amendments and publication of three manuals related to corporate governance.
• Implementation of “Corporate Risks Self-Assessment” mechanism.
• Establishment of “Risk Management Committee for Mainland Public Utilities” and “Risk Committee for Project Companies”.
• Establishment of a comprehensive legal risk assessment system and material risk reporting mechanism.
• Compilation and issuance of Towngas China Code of Conduct.
• No bribery, extortion, fraud, or corruption litigation occurred in 2016.

Climate Goals & Targets

Environmental Challenges

• Sluggish growth of China's GDP and difficult business environment.
• Plunge in the price of international crude oil impacting the natural gas market.

Mitigation Strategies

• Capturing new business opportunities, expanding new markets, and adapting to economic development.
• Investing in coal-to-gas and oil-to-gas conversion projects.
• Construction of natural gas transmission projects.
• Promoting clean energy usage and developing an integrated energy business through investment in distributed energy projects.

Supply Chain Management

Supplier Audits: Close to 70 self-evaluation reports received from key suppliers; random on-the-spot inspections conducted.

Responsible Procurement

• ISO9000 certification requirement
• Compliance with ethical, social, and environmental requirements in “Corporate Social Responsibilities of Suppliers” manual.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, Global Reporting Initiative (GRI) G4, Guidelines on Preparation of China Corporate Social Responsibility Report (CASS-CSR 3.0)

Sustainable Products & Innovation

• Bauhinia gas appliances
• First 6KG-capacity gas dryer

Awards & Recognition

• Grand Award of the 2016 HKMA Quality Award
• The 100 Best-Performing CEOs in the World in 2016 (Mr. Chan Wing Kin, Alfred)
• 5-Star Outstanding Corporate Citizen in China 2016
• Pioneer in Social Responsibility Performance Award in CSR China Education Awards 2016
• The 6th China Securities Golden Bauhinia Awards: Best Investment Value Award for Listed Companies
• CSR Brand Award 2016 of the 6th China Charity Festival

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Corporate Social Responsibility (CSR)
• Corporate governance

Environmental Achievements

• Not disclosed

Social Achievements

• Organized the first National forum on Corporate Social Responsibility in 2012
• Published ESG Reports in parallel with Annual Reports since 2013

Governance Achievements

• ESG Committee led by CEO and executive directors, reporting to the Board
• ESG Committee Accreditation and auditing ensure thoroughness and credibility of data
• Constituent of Hang Seng Corporate Sustainability Index Series since 2011
• Named ESG Leading Enterprise by Bloomberg Businessweek and Deloitte China

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Hong Kong Quality Assurance Agency

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Renewable Energy
• Carbon Neutrality
• Safety
• Community Investment

Environmental Achievements

• Committed to reach carbon neutral in GHG emissions (Scope 1 & 2) by 2040
• Replacing grey cast-iron pipes with anti-corrosion steel pipes and PE pipes reducing leakage
• Minimizing gas venting during live gas operations and encouraging the use of boil-off gas
• Investing in and operating 200 zero-carbon smart industrial parks by 2025
• Targeting 11 GW total distributed photovoltaic capacity by 2028

Social Achievements

• Established the “Gentle Breeze Movement” charity brand in 2013 for educational activities
• Providing support in poverty alleviation and infrastructure construction
• Investing over RMB 420 million in safety improvements in 2020

Governance Achievements

• Established an ESG Committee reporting directly to the Board of Directors
• Commissioned a third-party consultant to assess ESG risks, especially climate change-related risks
• Implemented Safety and Risk Management Audit regime since 2006

Climate Goals & Targets

Environmental Challenges

• Limited guidance on defining Scope 3 parameters for the midstream and downstream sectors
• Potential risks in the underground pipeline network related to moisture, corrosion, and external damage

Mitigation Strategies

• Started the study to measure and collect relevant data for Scope 3 emissions
• Using advanced equipment and monitoring technology for regular pipeline inspections
• Implementing leakage detection through “vehicle-canine partnership”

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and services
• Expansion of renewable energy sales

Reporting Standards

Frameworks Used: ICMA Sustainability-Linked Bond Principles, LSTA Sustainability-Linked Loan Principles

Certifications: ISO 45001

Third-party Assurance: DNV (Second Party Opinion), Independent third party (annual verification)

UN Sustainable Development Goals

• SDG 7: Affordable and Clean Energy
• SDG 11: Sustainable Cities and Communities
• SDG 13: Climate Action

Sustainable Products & Innovation

• Distributed energy systems
• Zero-carbon smart industrial parks

Environmental Metrics

ESG Focus Areas

• Safety
• Climate Change
• Environmental Protection
• Talent Cultivation
• Quality Management
• Social Welfare

Environmental Achievements

• Developed 124 zero-carbon smart industrial parks
• Self-generated and self-consumed renewable energy: 262,926.4 kWh
• Reduced carbon dioxide emissions by approximately 2,000,000 TONNES upon full operation and at full capacity of renewable energy projects
• 100% waste recycling rate

Social Achievements

• Overall customer satisfaction rate: 96%
• Zero work-related injury or loss of life of employees
• Average safety training hours per capita: 52.8 hours
• Organised various recreational activities for employees
• Launched Towngas Smart Energy Mental Health Hotline

Governance Achievements

• 100% of employees completed anti-corruption and anti-bribery courses
• 48 audit projects were undertaken by the internal audit department
• Updated Environmental Policy
• Established a Board ESG Committee

Climate Goals & Targets

Environmental Challenges

• Climate risks
• Information security
• Business environment
• Distribution network safety
• Health and safety
• Ethics and integrity
• Pressure on water resources
• Transition risks (regulatory changes, market shifts, technological advancements)
• Physical risks (extreme weather events)

Mitigation Strategies

• Established a comprehensive environmental management system and conducted climate scenario analyses
• Implemented a dual prevention mechanism for safety risk assessment and hazard management
• Strengthened asset integrity management using technological methods
• Developed various water conservation efforts and explored water recycling and reuse
• Formulated response strategies for transition and physical risks
• Set short, medium, and long-term carbon reduction targets
• Enhanced information security management policy and data protection platforms

Supply Chain Management

Supplier Audits: 96.6% of new suppliers were screened using ESG standards

Responsible Procurement

• Blue Book: Procurement Manual for Group Affiliates
• Manual on Joint Procurement Management
• ESG performance incorporated as an assessment criterion
• Green purchasing strategies prioritizing suppliers with environmental certifications

Climate-Related Risks & Opportunities

Physical Risks

• Rainstorms
• River flooding
• Typhoons
• Temperature rise and extremely high temperature

Transition Risks

• Regulatory changes
• Market shifts
• Technological advancements

Opportunities

• Development of low-carbon products and services
• Investments in new technologies
• Energy efficiency improvements
• Development of new businesses and shift to be a multi-energy supplier

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, TNFD

Certifications: ISO 14001, ISO 45001, ISO 9001, ISO 50001

Third-party Assurance: Hong Kong Quality Assurance Agency (HKQAA)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 13 (Climate action)

Initiatives contribute to these goals through energy efficiency improvements, renewable energy development, and climate change mitigation efforts.

Sustainable Products & Innovation

• Smart kitchen products
• TGSE CHIP IoT security chip
• Hydrogen energy sensors

Awards & Recognition

• S&P Global “Top 1% S&P Global ESG Score (China)” and “Industry Mover”
• Hong Kong International ESG Alliance “Best Listed Company at ESG Practices” and “Best Listed Company at ESG Advancement”
• 21st Century Business Herald “2023 Carbon Neutral Pioneer Company”
• HK01 “2023 Outstanding ESG and Smart Living Enterprise”
• The Hong Kong Management Association “Hong Kong Sustainability Award 2023 – Distinction Award” and “Certificate of Excellence in Environmental, Social and Governance Reporting”
• Jiemian News “2023 ESG Pioneer 60 Environmental Responsibility Excellence Award”
• Energy Magazine “Energy Transformation and Green Development Special Contribution Award”
• Gelonghui “Annual ESG Pioneer Award (Large Market Cap)”
• Sungang Sub-district Office, Luohu District, Shenzhen “Caring Enterprise”