Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Saving and Emission Reduction
• Waste Management
• Resource Utilization and Ecological Protection
• Employment and Labor Practices
• Health and Safety
• Development and Training
• Supply Chain Management
• Product Liability
• Anti-Corruption
• Community Investment
• Charity

Environmental Achievements

• Reduced carbon dioxide emissions by 2,526 thousand tons through wind power generation.
• Added agreed capacity from photovoltaic power generation projects of 630 MW.
• Total investment in environmental protection amounted to RMB35,194,600.

Social Achievements

• No safety incidents or personal casualties at work.
• Hebei Natural Gas won “Shijiazhuang’s Top 10 of China Best Employer award 2015” award.
• Various employee engagement activities such as baking classes, youth activities, and safety quizzes were held.

Governance Achievements

• Established and strictly implemented relevant management systems and rules in compliance with national laws and regulations.
• Developed a series of policies and relevant management measures to enhance the prevention and treatment of corruption.
• No lawsuit about anti-corruption or bribery occurred in the Group.

Climate Goals & Targets

Environmental Challenges

• Uncertainties about wind curtailment and restricting power generation.
• Change in natural gas price.
• Slowed economic growth and decrease in alternative energy such as coal.

Mitigation Strategies

• Accelerated the construction of filling station projects.
• Actively expanded gas source projects.
• Introduced diversified gas source such as coalbed methane gas.
• Developed new markets and expanded urban gas projects.

Supply Chain Management

Supplier Audits: 20 suppliers reviewed by headquarters, 56 by HECIC New-energy, and 38 by Hebei Natural Gas.

Responsible Procurement

• Project Tendering Management Measures
• Project Construction Management Measures
• Project Quality Management Measures
• Civilized Construction Management Measures for Project Construction
• Construction Project Safety Management Measures

Climate-Related Risks & Opportunities

Physical Risks

• Extreme icy and snowy weather

Transition Risks

• Wind curtailment
• Changes in natural gas prices

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: Environmental, Social and Governance Reporting Guide issued by The Stock Exchange of Hong Kong Limited, G4 Sustainability Reporting Guidelines issued by Global Strategic Alliances

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Hebei Natural Gas won “Shijiazhuang’s Top 10 of China Best Employer award 2015” award.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Saving and Emission Reduction
• Resources Use and Ecological Protection
• Employment and Labour Practices
• Health and Safety
• Development and Training
• Supply Chain Management
• Product and Service
• Technology Innovation
• Community Investment
• Charity
• Anti-corruption

Environmental Achievements

• Reduced carbon dioxide emissions by 36,221,500 tons through wind power generation.
• Reduced sulfur dioxide, nitrogen oxide, and dust emissions through wind power generation (quantities provided in the report).
• Total investment in environmental protection amounted to RMB38,698,750.
• Successfully implemented wind-hydrogen construction projects to improve wind energy utilization efficiency and achieve zero carbon emission.
• Completed first finance lease to support the development of wind power projects, reducing capital cost by nearly 8%.

Social Achievements

• Held the second session of the congress of representatives of employees, addressing 40 proposals.
• Awarded “2015 Annual Top 10 Best Chinese Employers in Shijiazhuang” for Hebei Natural Gas.
• Implemented various safety training programs, resulting in zero casualties and lost workdays due to injury in 2016.
• Conducted targeted poverty alleviation program in Leguo Village, including industrial support, appearance improvement, and school donations.
• Provided assistance to employees facing difficulties through donations and other support measures.

Governance Achievements

• Established a complete ESG management system.
• Implemented anti-corruption policies and training programs (22.38 hours on average in 2016).
• No lawsuits regarding anti-corruption or bribery occurred during the reporting period.
• Improved internal control system and promoted it to relevant companies in Northwest China.

Climate Goals & Targets

Environmental Challenges

• Abandonment of wind power in the domestic new energy industry.
• Air pollution in key areas of Beijing, Tianjin, and Hebei.

Mitigation Strategies

• Improved wind energy utilization efficiency through wind-hydrogen construction.
• Advanced infrastructure construction and explored downstream natural gas market to promote the replacement of coal gas with natural gas.

Supply Chain Management

Supplier Audits: 100 suppliers on-site reviewed by headquarters, 41 by Hebei Natural Gas

Responsible Procurement

• Project Tendering Management Measures, Project Construction Management Measures, Project Quality Management Measures, Materials Procurement Management Measures, Civilized Construction Management Measures for Project Construction, Construction Project Safety Management Measures

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: “Environmental, Social and Governance Reporting Guide of Rules Governing as set out in Appendix 27 to the Listing of Securities” on The Stock Exchange of Hong Kong Limited, G4 Sustainability Reporting Guidelines

Certifications: OHSAS 18000 (Hebei Natural Gas)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Wind power, solar power, natural gas

Awards & Recognition

• “2015 Annual Top 10 Best Chinese Employers in Shijiazhuang” (Hebei Natural Gas)

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Uncertainties in wind resources
• Risk of decrease in tariff rate
• Continuation of wind curtailment and power constraints
• Increase in management difficulty of construction
• Shortage of upstream resources leads to tightening supply of gas in winter
• Increase in gas costs results in adverse impact on operating profits and market expansion
• Risk of accounts receivable is effectively controlled, yet it is still difficult in recovering trade receivables
• Interest rate risk

Mitigation Strategies

• Comprehensive analysis of wind resources to evaluate potential installed capacity
• Study relevant government policies and understand actual situations of projects
• Strengthen operation, maintenance and management, enhance safety and reliability of equipment
• Prioritize development and construction of wind power projects in regions with great availability of power grid facilities
• Explore and develop innovative consumption methods for wind power
• Coordinate with PetroChina and Sinopec Corp. for implementation of volume indicators
• Make demand forecast in respect of bad weather and peak season of natural gas consumption
• Complete sales price adjustment, adopt measures based on local conditions
• Adopt effective measures and use different techniques to accelerate the recovery of trade receivables
• Keep an eye on the trend of the national monetary policies, strengthen communications with financial institutions
• Expand financing channels in various aspects to achieve financial innovation

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• volatility of wind resources

Transition Risks

• decrease in tariff rate
• wind curtailment and power constraints

Environmental Metrics

ESG Focus Areas

• Environmental Responsibility
• Social Responsibility
• Governance

Environmental Achievements

• Generated 14.198 billion kWh of green electricity, equivalent to avoiding 11,755,944 tons of carbon dioxide emissions

Social Achievements

• Launched a program to support three poor students in Pingshan County
• Employees participated in public welfare activities and volunteer work

Governance Achievements

• Rated the highest tier Grade A (Excellent) in the 2021-2022 information disclosure evaluation by the Shanghai Stock Exchange
• Awarded the “Best Practice Case of Office of Board of Directors of Public Companies 2022” by China Association for Public Companies
• Won the Fifth New Fortune Best Investor Relations Hong Kong-listed Company (A+H shares) award

Climate Goals & Targets

Environmental Challenges

• Fluctuation of wind resources
• Power constraints
• Slow land approval and complicated formalities
• Risk of market-based electricity trading
• Surge in project investment due to energy storage requirements
• Risks of falling pipeline transmission fees and urban gas charges
• Risk of further increased difficulty for market expansion
• Risk of incomplete recovery of original accounts receivable
• Risk of natural gas price rise
• Interest rate risk
• Risk of safety in both new energy and gas sectors

Mitigation Strategies

• Comprehensive wind resources test
• Prioritize development in regions with good power grid facilities
• Explore innovative consumption methods
• Arrange a reasonable schedule and coordinate with manufacturers and governments
• Conduct in-depth study on market-based electricity trading
• Seize the favorable opportunity of promoting clean energy
• Optimize resource mix, explore cooperation with resources units, improve market layout
• Actively explore new measures and ideas for payment collection
• Enhance efforts in downstream market exploration, employ flexible resources and low-cost gas sources
• Keep an eye on the trend of national monetary policies, strengthen communications with financial institutions
• Improve safety policies and systems, formulate management measures, and enhance inherent safety assurance capability

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Fluctuation of wind resources

Transition Risks

• Risk of market-based electricity trading

Awards & Recognition

• Best Environmental Responsibility Award of the China ESG Golden Awards
• Best Practice Case of Office of Board of Directors of Public Companies 2022
• Fifth New Fortune Best Investor Relations Hong Kong-listed Company (A+H shares) award

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced CO2 equivalent emissions by 11,745,300 tons through the use of new energy such as wind power and photovoltaic power to generate electricity.

Social Achievements

• Launched a book donation campaign, "Books Ignite Dreams, Love Powers Revitalization", donating 473 books to Yuantou Primary School.
• Organized voluntary blood donation activities.
• Launched a promotional campaign on energy conservation.
• Launched activities titled “Practicing the Lei Feng Spirit and Passing on Public Welfare and Love”.

Governance Achievements

• Established a stringent internal control system in compliance with CSRC and Shanghai Stock Exchange requirements.
• Honored as one of the Top 50 Players in Carbon Neutrality of ESG Golden Bull Award and an excellent case of ESG practices.

Climate Goals & Targets

Environmental Challenges

• Fluctuation of wind resources impacting wind power generation.
• Power constraints limiting the development of wind and photovoltaic projects.
• Slow land approval and complicated formalities affecting project construction.
• Fluctuation in electricity prices due to market-based trading.
• Increased project investment due to energy storage requirements.
• Risks of falling pipeline transmission fees and city gas charges.
• Increased difficulty for market expansion in the natural gas sector.
• Risk of incomplete recovery of original accounts receivable.
• Risk of natural gas consumption decline.
• Interest rate risk impacting capital costs.
• Risk of exchange rate fluctuations impacting the cost of LNG imports.
• Safety risks related to aging equipment in old wind farms and gas pipelines.

Mitigation Strategies

• Comprehensive wind resources tests to evaluate potential installed capacity.
• Prioritizing projects in regions with good power grid availability.
• Exploring innovative consumption methods.
• In-depth study of market-based electricity trading rules.
• Monitoring national monetary policies and expanding financing channels.
• Adopting measures to reduce exchange rate risk.
• Improving operations and maintenance work in old wind farms.
• Launching a special campaign to remove safety risks and hidden dangers.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Fluctuation of wind resources

Transition Risks

• Fluctuation in electricity prices

Awards & Recognition

• Top 50 Players in Carbon Neutrality of ESG Golden Bull Award
• Excellent case of ESG practices in the 2nd Xinhua Credit Jinlan Cup