Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Invest in the latest technology to reduce carbon emissions through energy efficient equipment
• Proactive in addressing waste and recycling issues

Social Achievements

• Lifetech was awarded the “Best scientific and technological innovation listed company” in the sixth China Securities Golden Bauhinia Award
• Lifetech Knowledge Exchange Program (LKEP) continued to promote the spread of cutting-edge science in minimally invasive surgery with cardiovascular intervention aiming to improve the treatment skills of the doctors and thereby to allow more patients to receive safer and more effective treatment.
• In April 2016, Lifetech cooperated with experts on congenital cardiovascular diseases from the People’s Hospital of Tibet Autonomous Region and West China Second University Hospital of Sichuan University, to perform voluntary screening of congenital heart diseases on children in Naqu County, Tibet.

Governance Achievements

• The Company has applied the code provisions of the Corporate Governance Code (the “CG Code”) as set out in Appendix 14 to the Listing Rules as its own code of corporate governance and confirms that it has complied with all material code provisions and most of the recommended best practices under the CG Code throughout the year ended 31 December 2016

Climate Goals & Targets

Environmental Challenges

• uncertain global economic environment and more fierce worldwide competition within the medical devices industry
• almost no sales revenue generated from the CeraFlexTM product in Europe as we terminated the exclusive distribution rights of Medtronic for CeraFlexTM occluders in selected countries in Europe and the Middle East
• lawsuit issue in India. AGA Medical Corporation (AGA) has filed a suit with the High Court of New Delhi (the “Court”) against our companies, alleging that our occluders sold in India infringed its patent.

Mitigation Strategies

• To minimize exposure to foreign exchange risk, most of the bank deposits of the Group are being kept in Renminbi
• After seeking legal advice, the Board is of the opinion that it is very unlikely that the Court will grant a permanent injunction to the plaintiff and it is also very unlikely for the Court to award damages to the plaintiff or direct delivery of infringing devices. Accordingly, the Board considers that no provision is necessary for any potential liability in the consolidated financial statements.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• “Best scientific and technological innovation listed company” in the sixth China Securities Golden Bauhinia Award

Environmental Metrics

ESG Focus Areas

• Emissions
• Health and Safety
• Development and Training
• Community Investment

Environmental Achievements

• Reduced ethylene oxide emissions to 0.3mg/m3, lower than the Guangdong Province standard of 4mg/m3.
• Implemented rain and sewage diversion, and hierarchical management for polluted water.
• Increased investment in environmental protection, including additional ethylene oxide exhaust gas processors, industrial wastewater treatment stations, and waste gas treatment devices.

Social Achievements

• No work injury cases occurred in the Shenzhen plant.
• Organized various targeted safety education training courses.
• Provided opportunities for employees to attend professional external training.
• Employed 34 ethnic minority employees (6.1% of total employees).
• Conducted voluntary medical activities in Sichuan, Tibet, Peru, and the Philippines, providing medical diagnosis and treatment.

Governance Achievements

• Formulated the LifeTech Anti-Corruption Policy and the LifeTech Dealer/Agent Anti-Corruption and Compliance Policy.
• Organized anti-corruption training courses for staff.
• Implemented stringent systematic quality controls on the upstream supply chain.

Climate Goals & Targets

Environmental Challenges

• Increased hazardous waste production volume due to increased product output.
• Limited number of suitable domestic talents in the medical device industry.
• Potential risks associated with chemicals treatment, electrical engineering, metal cutting, and other high-risk tasks.

Mitigation Strategies

• Engaged Carbon Care Asia to conduct carbon assessment and quantify greenhouse gas emissions.
• Implemented various energy-saving measures.
• Formulated relevant systems for specific workplaces to manage and ensure employee safety.
• Provided protective supplies and arranged health examinations for employees involved in high-risk tasks.
• Organized regular emergency and onsite handling drills.

Supply Chain Management

Responsible Procurement

• Procurement Control Procedures

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: HKEx Environmental, Social and Governance Reporting Guide

Third-party Assurance: Carbon Care Asia (CCA)

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employee Care
• Supply Chain Management
• Product Responsibility
• Anti-Corruption
• Community Investment

Environmental Achievements

• No case of violation of laws and regulations in relation to emissions.
• Gradual replacement of diesel vehicles with gasoline vehicles.
• Implementation of methods such as catalytic combustion or absorption to recycle or remove VOCs.
• Reduction in paper waste through electronic office practices.

Social Achievements

• Improved employee welfare and benefits system (overtime allowance, dormitories, subsidies, family-friendly policies).
• Dual-channel promotion regime for employee development.
• Annual physical examinations for employees.
• Provision of medical and supplementary insurance for employees.
• Organization of various employee activities and team-building events.

Governance Achievements

• Establishment of an IPR department to manage intellectual property rights.
• Formulation of a data confidentiality agreement to protect personal data.
• Implementation of an anti-corruption policy and quarterly training for employees.
• No violations of laws or regulations relating to corruption.

Climate Goals & Targets

Environmental Challenges

• Emissions and exhaust gas discharges during production.
• Employees' welfare and benefits and talent management.
• Product responsibility and safety.
• Product research and development and improvement.
• Protection of intellectual property rights.

Mitigation Strategies

• Compliance with relevant laws and regulations, development of internal policies, and use of latest technology to reduce emissions.
• Improved welfare and benefits system, employee training, and dual-channel promotion regime.
• Sound health and safety policies, establishment of clean rooms, pandemic prevention policies, and rigorous quality control.
• Establishment of R&D laboratory, clinical approval and registration for self-developed products, and internal management policies.
• Establishment of an IPR department, confidentiality agreements with partners, and strict management of IPR matters.

Supply Chain Management

Responsible Procurement

• Comprehensive evaluation and selection of suppliers based on commercial terms, cost, quality, R&D, manufacturing, and after-sales service.
• Development of alternative suppliers for major raw materials.
• Strategic reserve of imported raw materials.

Climate-Related Risks & Opportunities

Reporting Standards

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

Certifications: ISO 13485:2016, ISO 14001

Awards & Recognition

• National High-Tech Enterprise
• Intellectual Property Advantage Enterprise of the People’s Republic of China
• Intellectual Property Demonstration Enterprise of Guangdong Province

Environmental Metrics

ESG Focus Areas

• Product Quality and Safety
• Research & Development of Branded Product
• Customer Service
• Protection of Intellectual Property Rights
• Occupational Health and Safety
• Information Security and Personal Data Protection
• Product Diversity and Innovation
• Talent Management & Development
• Equal Opportunities
• Water Management
• Climate Change
• Community Participation
• Corporate Governance and Risk Management

Environmental Achievements

• Replaced diesel service car with gasoline vehicle, reducing diesel consumption.
• Adopted methods such as catalytic combustion or absorption to recycle or remove VOCs and reduce air emissions.
• Upgraded or eliminated some old, high energy consuming equipment and strengthened equipment maintenance to improve energy efficiency.

Social Achievements

• Established a new talent training system including management training, on-the-job training, newcomer training, and an internal lecturer system.
• Increased the vaccination rate to 98% for those eligible for a first booster dose, and 84% for those eligible for a second booster dose.
• Held 12 tourism and various other types of employee team building activities.

Governance Achievements

• The Board reviews sustainability performance and reporting results annually, ensuring ESG matters are incorporated into key governance processes.
• Organized anti-corruption training for newly joined employees and all employees every quarter.
• No lawsuits of corruption related to the Group and employees as of 31 December 2021.

Climate Goals & Targets

Environmental Challenges

• Domestic economic recovery after the COVID-19 outbreak, ever-changing international border control measures, and policy changes in environmental regulation affected the Group’s strategy in 2021.
• Extended delivery period of some overseas suppliers due to the pandemic.
• Potential damage to facilities due to natural disasters/extreme weather (although not currently impacting operations).

Mitigation Strategies

• Actively carried out online academic conferences and promoted innovative surgical treatment.
• Continued to cultivate grassroots market through online events and regional grassroots lecture tours.
• Made strategic reserves for imported raw materials and cargo reserves in various regions to cope with the impact of international freight during the pandemic.
• Implemented off-peak production methods and arrangements in special weather when involving exhaust gas emission processes.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Comprehensive evaluation and selection of suppliers based on commercial terms, cost, quality assurance, R&D capabilities, manufacturing capabilities, and after-sales service.
• Development of alternative suppliers for major raw materials.
• Requirement for suppliers of polymer materials and nickel-titanium wire material to provide a REACH declaration.

Climate-Related Risks & Opportunities

Physical Risks

• Potential emergencies due to natural disasters/extreme weather
• Potential damage to facilities due to natural disasters/extreme weather

Transition Risks

• Increased plant emission costs due to tightened environmental policies

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: HKEX ESG Guide

Certifications: ISO 13485:2016, ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• 22nd China Patent Gold Award (LAA Occluder)
• Second prize of the Chinese Medical Science and Technology Award of 2020
• Ranked 39th overall and 3rd in the biomedical industry category in the Top 100 Shenzhen Enterprise Innovation Capability List of 2020
• “Little Giant” Enterprise
• Golden Hong Kong Stock “Best Pharmaceutical and Medical Company”

Environmental Metrics

ESG Focus Areas

• Product Quality and Safety
• Employee Benefits
• Employee Training and Occupation Development
• Occupational Health and Safety
• Governance and Risk Management
• Workplace Equality and Diversity
• Talent Outflow
• Intellectual Property Protection
• Information Security and Trade Secret Protection
• Customer Service and Customer Complaint Handling

Environmental Achievements

• Achieved 100% of sustainable development targets set in early 2023, including improvements in energy efficiency, water resource use, sewage discharge, and waste disposal.
• Implemented various measures to reduce energy consumption, such as replacing lights with LED lights and optimizing air conditioning use.
• Implemented waste gas treatment facilities and a sewage treatment facility at the Songshan Lake Park.

Social Achievements

• Organized over 200 offline trainings for internal employees and distributors, with over 3,000 attendees.
• Established a new talent training system, including management training, on-the-job training, new joiner training, and an internal lecturer system.
• Maintained compliance with relevant labor laws and regulations, with no cases of child or forced labor.

Governance Achievements

• Established an ESG governance system coordinated by the Board, ESG Committee, and relevant professional departments.
• Conducted anti-corruption training for all employees every quarter.
• No illegal or irregular cases related to corruption were found during the reporting period.

Climate Goals & Targets

Environmental Challenges

• Potential risks related to natural disasters/extreme weather impacting supply chains and facilities.
• Increased plant emission costs due to tightened environmental regulations.
• Water scarcity in the plant's location.

Mitigation Strategies

• Purchased new energy-efficient equipment and upgraded existing equipment to reduce energy consumption and GHG emissions.
• Strengthened maintenance of air extraction and exhaust facilities to reduce pollutant emissions.
• May adopt off-peak production methods and arrangements in special weather conditions.

Supply Chain Management

Supplier Audits: Annual reviews for all suppliers; on-site audits for Class A suppliers, file audits for Classes B, C, and D.

Responsible Procurement

• Supplier access evaluation system, supplier operation evaluation system, supplier selection criteria and procedures, Supplier Evaluation Guidelines, and requirements for raw materials.

Climate-Related Risks & Opportunities

Physical Risks

• Potential related emergencies due to natural disasters/extreme weather
• Potential damage to facilities due to natural disasters/extreme weather
• Plant location in a water-stressed area
• Infrastructure in areas threatened by rising sea levels

Transition Risks

• Increased plant emission costs due to tightened environmental regulations

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix C2 to the Rules Governing the Listing of Securities on the Stock Exchange)

Certifications: ISO 13485:2016, MDSAP

Awards & Recognition

• German Red Dot Award
• First Prize of Beijing Technological Invention Award
• Second Prize of Beijing Science and Technology Progress Award
• 2023 Top Ten Independent Innovative Medical Device Product Award
• 7th Top 100 Innovative SME in Shenzhen
• Shenzhen Nanshan District Air Emission Reduction Pioneer Enterprise
• National Intellectual Property Demonstration Enterprise