Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employee Care and Mutual Growth
• Safety and Quality of Products
• Compliance with the Law
• Technology and Innovation
• Business Performance
• Management of Three Types of Waste
• Energy Consumption Management
• Water Management
• Packaging Materials Management
• Incorruptibility and Integrity
• Customer Service and Satisfaction
• Contribution for Public Welfare
• Complaints and Recalls
• Supply Chain Management
• Intellectual Property Protection Management

Environmental Achievements

• Introduced Ding Talk System to reduce paper usage.
• Changed to LED lighting to reduce energy consumption.
• Set internal air-conditioning temperature at 26°C to reduce greenhouse gas emissions.
• Achieved passing standards in environmental protection tests for wastewater treatment.
• Hangzhou Shibao and Hangzhou New Shibao complied with stricter Hangzhou emission standards.
• Hangzhou New Shibao passed the electric steering system 'Clean Production' review.

Social Achievements

• No material accidents or production safety accidents.
• Implemented three-tier safety education for new employees and regular safety training.
• Established an emergency rescue team and conducted regular disaster drills.
• Provided occupational disease checks annually for employees.
• Formulated a pandemic prevention and control plan and encouraged vaccinations.
• Implemented a rigorous supplier selection process with on-site reviews.

Governance Achievements

• Established a three-level ESG management structure (Board, Committee, Working Group).
• Revised Regulations on Punishment of Employees Under the Code of Conduct.
• Adopted a zero-tolerance approach to bribery, extortion, fraud, and money laundering.
• Established a dedicated reporting hotline and email for suspected corruption.

Environmental Challenges

• Potential impacts of climate change on business operations (energy supply, water resources, etc.).
• Potential risks from extreme weather events (typhoons, floods, high temperatures).

Mitigation Strategies

• Established an emergency rescue team and prepared emergency materials.
• Regularly inspected emergency supplies and cleaned drainage systems.
• Formulated heatstroke prevention measures for high-temperature weather.

Supply Chain Management

Supplier Audits: At least four times a year for new suppliers, two times for existing suppliers.

Responsible Procurement

• Suppliers required to obtain IATF:16949 certification.
• Suppliers required to provide environmentally friendly products and services.
• Review of supplier's Environmental Management System Certification.

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons
• Floods
• Rise in average temperature
• Heavy rainfall

Reporting Standards

Frameworks Used: Hong Kong Stock Exchange's Environmental, Social and Governance Reporting Guide

Certifications: ISO 14001 (Hangzhou Shibao, Hangzhou New Shibao, Jilin Shibao), OHSAS 18001 (Hangzhou New Shibao), ISO 45001 (Jilin Shibao), IATF 16949

Sustainable Products & Innovation

• EPS system (energy-saving, low-pollution power steering system).

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Discharged sewage and waste gas meet local government environmental protection department requirements.
• Hangzhou Shibao, Hangzhou New Shibao and Jilin Shibao obtained ISO14001 environmental management system certification.
• Launched electric power steering (EPS) system product, which is powered by rechargeable batteries and with dynamo as its power generating unit, is capable of operating separately from the automobile engine and its fuel consumption drawn from the engine can be close to none. With its electronic mode of control, the EPS system almost does not cause any pollution problem to the environment and achieves further decrease in fuel consumption.

Social Achievements

• Maintained good relationship with employees.
• Provided substantial remuneration benefits to employees in accordance with market practice, and provided retirement benefits in accordance with the related laws of the PRC.
• Established an employee remuneration and evaluation system, which is in line with its operation and development.
• Paid attention to skill training of employees and team building.

Governance Achievements

• Established an Internal Reporting System for Material Information and an Insider Registration and Management System.
• Established an Audit Committee, Remuneration Committee, Nomination Committee, Investment and Strategy Committee, and ESG Committee.
• Implemented Board Diversity Policy.

Climate Goals & Targets

Environmental Challenges

• Risks relating to industry fluctuations
• Risks relating to product quality
• Risk relating to technical innovation
• Risk relating to downward prices
• Risk relating to price fluctuation of raw materials
• Risks relating to overseas market expansion
• Risk relating to operation management risk arising from expansion in scale
• Risk of accounts receivable recovery
• Higher risk of inventory size
• Risk relating to the stock market

Mitigation Strategies

• The Company will adopt a development strategy that facilitates both organic growth, and merger and acquisition.
• The Company will concentrate on the automotive component industry, particularly the area of steering system, and pioneer the development of the industry in respect of intelligent application and innovation.
• The Company continuously optimizes its quality control system and implements strict quality control measures in all aspects of the production process to ensure that its products always meet the requirements of its customers.
• The Company focuses its R&D resources on the technical research of automotive steering system’s safety, intelligent, energy saving, light weight, including intelligent steering related technologies.
• The Company has established a flexible talent introduction and incentive policy to attract external excellent talents to join the Company.
• The Company maintains a balance between continuity of funding and flexibility through the use of several financing methods such as notes settlement and bank borrowings, as well as optimizing financing structure through the combination of long and short-term financing.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Environmental, Social and Governance Reporting Guide

Certifications: IATF 16946:2016 Quality System Certification, ISO14001 environmental management system certification

Sustainable Products & Innovation

• electric power steering (EPS) system product