Climate Change Data

Environmental Metrics

ESG Focus Areas

• Business ethics
• Drug research (animal welfare, intellectual property)
• Drug development (clinical trial safety, data privacy)
• Commercial operations (quality, safety, traceability, responsible marketing, fair access)
• Environmental topics (waste, emissions)
• Human capital management (talent acquisition, retention, development, engagement, occupational health and safety, community investment)

Environmental Achievements

• 4,119 tonnes of non-hazardous waste and 39 tonnes of hazardous waste disposed; 334,411 m3 of wastewater discharged.
• Suzhou manufacturing facility features energy-efficient equipment and technology (variable-frequency motors, airtightness and insulation).

Social Achievements

• Zero work-related incidents reported.
• RMB 3.5 million donated to Shanghai Charity Foundation for COVID-19 prevention and control.
• 240 infrared ear thermometers and 500 silver mercury thermometers donated to Fengxian District, Shanghai.
• Over 36,000 boxes of Shengmai Injection donated to various regions in China.
• Employee Engagement score of 81 (11% above benchmark).

Governance Achievements

• Established Group-wide Anti-bribery and Anti-corruption (ABAC) Policy and Code of Ethics.
• Provided around 10,000 hours of training on Code of Ethics and ABAC Policy.
• Clear Complaints Procedures in place for reporting non-compliance.
• No cases of non-compliance with codes, policies, or laws reported in 2020.

Climate Goals & Targets

Environmental Challenges

• Climate change risks (extreme weather events affecting operations)
• Waste generation from non-commercialized products.

Mitigation Strategies

• Exploring greener manufacturing and operations.
• Actively reducing energy and water consumption, and carbon emissions.
• Implementing 'the three parallels' management strategy for pollution prevention.
• Exploring long-term waste reduction strategies as product commercialization matures.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Code of Ethics for Business Partners

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (floods, typhoons)

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Nasdaq ESG Reporting Guidelines, Hong Kong Exchanges and Clearing Limited (HKEX) ESG Reporting Guidelines, FTSE Russell quantitative ESG data points

Certifications: ISO 14001 (Shanghai Hutchison Pharmaceuticals), ISO 45001 (HUTCHMED China Oncology/Immunology and Shanghai Hutchison Pharmaceuticals), AAALAC International Accreditation

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

• Business ethics
• Drug research
• Drug development
• Responsible commercialization
• Talent management
• Environmental protection

Environmental Achievements

• Group-wide Scope 1 emissions decreased by 14% compared with 2020
• Overall greenhouse gas emission intensity by revenue reduced 30% compared with 2020
• 38% decrease in wastewater discharged compared with 2020
• Approximately 4,000 tons of Chinese medicine residues and sludge converted into organic fertilizer in SHPL
• SHPL reduced over 3,600 tons of water consumption since the end of 2020 with the use of heated condensate as boiler feedwater
• Saved est. 14.5 tons of coal each year by merging 24-hour chilled water system with chilled water process unit at our production facility in Shanghai
• Saved approximately 200 tons of water each year by installing a wastewater recovery system
• Installing a pilot 21.6 kW solar panel system in our Shanghai production facility
• Upgrading the boiler system to reduce nitrous oxide emissions in our Shanghai production facility

Social Achievements

• Launched ORPATHYS® Patient Access Program, benefiting over 120 patients and saving over RMB 5 million in treatment costs over three months
• Donated 7,500 boxes of SULANDA®, benefiting over 360 patients
• HUTCHMED scored higher than the benchmark in 20 out of 26 categories in an Employee Engagement Survey
• Total occupational health and safety training hours increased by 3-fold compared with 2020
• HUTCHMED staff volunteered a total of 1,200 hours
• A total donation of HK$14.9 million (US$1.9 million) was made to support our local communities
• Launched HUTCHMED e-learning platform, with employees completing over 1,600 online learning courses

Governance Achievements

• Established the Board-level Sustainability Committee in July 2021
• 100% of directors and staff received training on Code of Ethics and ABAC Policy (around 12,000 training hours in total)
• No significant data leak was observed or recorded in 2021
• No cases of non-compliance with codes and policies, or violations of applicable laws and regulations were found in 2021
• No product recalls due to adverse events in 2021
• No safety issue reported in 2021

Climate Goals & Targets

Environmental Challenges

• Extreme weather events (floods, typhoons) could impact operations
• Supply chain disruptions due to COVID-19

Mitigation Strategies

• Business continuity plans and emergency preparedness procedures at manufacturing sites
• Procedures in place for prevention against floods and typhoons and in the event of power failure, water loss or gas loss, as well as potential lockdowns due to the pandemic
• Regular emergency drills
• Worked closely with local distributors to overcome challenges of maintaining continual drug supplies to patients in Hong Kong

Supply Chain Management

Supplier Audits: 43 audits

Responsible Procurement

• Reduce use of virgin materials
• Avoid single-use items
• Minimize packaging
• Reduce hazardous substances
• Adopt specifications for greater energy efficiency, water efficiency and clean technology

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Typhoons

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: HKEX ESG Reporting Guide, Nasdaq ESG Reporting Guide, London Stock Exchange Group's ESG Reporting Guidance, UN Sustainable Development Goals

Certifications: ISO 14001 (SHPL), ISO 50001 (SHPL), ISO 45001 (HUTCHMED China Oncology/Immunology sites and SHPL)

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

• Sustainability

Social Achievements

• Enhanced disclosures, including publishing our second Sustainability Report, and publishing eight new governance and sustainability-related policies and statements; Strengthened governance, including establishing a four-tier governance framework to facilitate oversight and implementation of sustainability issues; Committed to 11 short-to long-term sustainability goals and targets, incorporated sustainability KPIs on goals and targets into management’s performance-based remuneration; Comprehensive stakeholder engagement conducted with over 2,400 key internal and external stakeholders involving quantitative and qualitative assessments, and a materiality analysis to help identify the most material sustainability issues to the Company; Enhanced sustainability awareness building in over 20 meetings/ sessions during the year amongst the general staff, the Sustainability Working Group, senior management, the Sustainability Committee and the Board; Climate risks action, including an assessment to identify climate- related risks and opportunities for the Company, and following the recommended disclosure framework of the Task Force on Climate- related Financial Disclosures (TCFD).

Governance Achievements

• Established a four-tier governance framework to facilitate oversight and implementation of sustainability issues; incorporated sustainability KPIs on goals and targets into management’s performance-based remuneration

Climate Goals & Targets

Environmental Challenges

• Difficult market conditions
• Pandemic-related lockdowns in the first half of 2022 impacting clinical sites in Shanghai and travel restrictions
• Competition in discovering, developing and commercializing drugs
• China’s NRDL system driving down the price of innovative drugs
• Uncertainties with respect to the legal system and changes in laws and regulations in China
• Adverse information technology incidents
• Foreign currency fluctuations
• Compliance with personal information and data protection and privacy regulations
• Protect product intellectual property rights

Mitigation Strategies

• New strategy focusing on accelerating the path to a sustainable and profitable business, reprioritization of pipeline assets and a partnership approach for bringing innovative medicines more efficiently to patients outside of China
• Measures to reduce the impact of COVID-19 restrictions, including online patient follow-up and retention of core research teams
• Targeting potential markets with high unmet demands, formation of strategic partnerships
• Holistic assessments to determine minimum acceptable pricing when applying for NRDL inclusion
• Close monitoring of the pharmaceutical regulatory environment in China
• Information technology systems security subject to regular reviews, regular maintenance and upgrade, compliance with best-practice cybersecurity guidelines
• Active cash management to mitigate foreign currency exposure
• Establishing Information Security Policy, Personal Information Protection Policy and other related policies and procedures
• Active management and tracking of intellectual property rights, frequent consultations with external counsel, establishing protection mechanisms

Supply Chain Management

Responsible Procurement

• Sourcing from well-established clinical suppliers with long-term relationships

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD, GRI

Environmental Metrics

ESG Focus Areas

• Climate Action
• Innovation
• Ethics and Transparency
• Human Capital
• Access to Healthcare

Environmental Achievements

• Achieved a 68% reduction in carbon emission intensity compared to 2020
• Achieved a 58% reduction in energy intensity compared to 2020
• 2.4% reduction in business air travel intensity compared to 2019
• Completed Scope 1-3 emission inventory
• Disclosed HUTCHMED’s material Scope 3 data for the first time

Social Achievements

• U.S. FDA approval of FRUZAQLA™ (fruquintinib) for metastatic colorectal cancer
• ELUNATE® (fruquintinib), SULANDA® (surufatinib), and ORPATHYS® (savolitinib) included in the China National Reimbursement Drug List (NRDL)
• ELUNATE® (fruquintinib) approved in Hong Kong
• TAZVERIK® (tazemetostat) and ORPATHYS® (savolitinib) approved in Macau
• Over 150,000 patients received novel cancer medicines commercially since 2018
• Launched first Culture Handbook
• 96% response rate in employee engagement survey, exceeding industry benchmarks in 14 dimensions
• Established a Diversity, Equity and Inclusion Team

Governance Achievements

• Developed a holistic sustainability framework
• Enhanced four-tier sustainability governance structure
• Maintained 100% training rate for all employees on the Code of Ethics
• No significant bribery or potential bribery-related risks identified
• No material legal cases regarding corrupt practices

Climate Goals & Targets

Environmental Challenges

• Challenges in progressing on air travel emission reduction target due to increased business travel, limited adoption of alternatives, and operational constraints

Mitigation Strategies

• Reviewing travel policies
• Enhancing employee engagement
• Establishing an internal departmental travel budget
• Encouraging remote communication
• Promoting low-carbon modes of travel
• Providing training and awareness programs

Supply Chain Management

Supplier Audits: 1,033 supplier assessments and audits/year

Responsible Procurement

• Comprehensive supplier assessment process
• EHS compliance risk evaluation
• Contracts with EHS agreements
• Annual review of key suppliers
• Compliance training for business partners
• ESG criteria included in new supplier assessment process

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather patterns

Transition Risks

• Regulatory changes

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: HKEX ESG Guide, Nasdaq ESG Reporting Guide, London Stock Exchange ESG Reporting Guidance, GRI Standards, IFRS Sustainability Disclosure Standards (IFRS S1 and IFRS S2), SASB Biotechnology & Pharmaceuticals Sustainability Accounting Standard, UN SDGs, TCFD

Certifications: ISO 9000/9001, ISO 14001, ISO 50001, ISO 45001:2018

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 3
• Goal 7
• Goal 8
• Goal 9
• Goal 10
• Goal 12
• Goal 13
• Goal 17

The report details how various initiatives contribute to these goals.

Sustainable Products & Innovation

• Enzyme-catalyzed reactions to reduce hazardous wastes and water usage

Awards & Recognition

• Bloomberg Businessweek “ESG Leading Enterprises 2023”
• GBA ESG Achievement Awards 2023
• Top 20 Chinese Pharmaceutical Listed Companies in ESG Competitiveness – Healthcare Executive 2023
• Caring Company – The Hong Kong Council of Social Service
• “Recognized Sustainable Development Corporate” Certificate
• HRise 2023 Fourth Annual Human Resources Forward-thinking Summit: 2023 Forward-looking Employer Award (SHPL)