Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Greenhouse gas emissions
• Water resource management
• Waste management
• Energy management
• Climate change
• Employee remuneration and welfare
• Employee training and development
• Employee rights
• Occupational health and safety
• Diversity and inclusion
• Supply chain management
• Product quality and safety
• Corporate governance

Environmental Achievements

• Obtained ISO 14001 Environmental Management System Certification for some operations
• Implemented various environmental initiatives for decarbonization, including adopting green energy and introducing high-energy efficiency equipment
• Promotes sustainable waste management, including waste reduction, recycling, and harmless treatment
• Carried out water-saving projects to optimize cleaning processes and recycle wastewater

Social Achievements

• Some operations passed the certification of ISO 45001 on occupational health and safety management system
• Established a development and training system covering all employees
• Promotes board diversity

Governance Achievements

• Established a three-level ESG management structure composed of the Board, the Audit Committee, and the ESG management and promotion team

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to global economic and political conditions, including trade tensions, tariffs, sanctions, and the Russia-Ukraine conflict
• Price fluctuations, inflation, and supply shortages of raw materials or utilities
• Rapidly changing technology and short product life cycles in the optical industry
• Competition from other optical products manufacturers
• Potential product liability
• Risks associated with international marketing, distribution, and sales
• Compliance with extensive environmental, safety, and health laws and regulations
• Maintaining effective quality control systems
• Maintaining effective internal controls
• Dependence on PRC markets
• Dependence on a limited number of suppliers and agents for key components and raw materials
• Potential increase in labor costs due to PRC Labour Contract Law and inflation
• Uncertainties in the PRC legal system
• Difficulties in enforcing judgments obtained from non-PRC courts against the Group or its management residing in the PRC
• Potential classification as a “resident enterprise” of the PRC under the EIT Law, resulting in unfavorable tax consequences
• Scope 3 emissions

Mitigation Strategies

• Expanding resource channels to explore various and complementary supply resources
• Monitoring exchange rates, market supply and demand, tariff policies, market prices, and international political dynamics
• Planning production capacity in advance and adjusting product mix to respond to customer needs and supply chain changes
• Implementing prudent financial policies and effective financial management
• Maintaining long-term relationships with domestic and international banks
• Investing in R&D to develop more advanced products and improve product quality
• Reinforcing and diversifying its supplier network
• Recruiting, training, and retaining skilled engineers and experienced staff
• Implementing measures to enhance internal controls
• Formulating management policies to address climate change, such as increasing the consumption ratio of green energy and enhancing energy efficiency
• Formulating the ‘Procedures on Emergency Preparation, Response and Control’ to respond to emergencies
• Promoting sustainable waste management and supporting waste reduction, recycling, and harmless treatment
• Carrying out water-saving projects

Supply Chain Management

Responsible Procurement

• Supplier certification program evaluating product quality, delivery time, cost, and technical capability

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons, floods

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: SLBP 2020, SLLP 2022, TCFD

Certifications: ISO 14001, ISO 45001, ISO 9001

Third-party Assurance: S&P Global Ratings

UN Sustainable Development Goals

• SDG 7
• SDG 9
• SDG 11
• SDG 13

Initiatives contribute to affordable and clean energy, industry, innovation, and infrastructure, sustainable cities and communities, and climate action.

Sustainable Products & Innovation

• Heat dissipation lamp bead on projection display
• Laser heat sink
• Low voltage chip
• Graphene gimbal back cover

Awards & Recognition

• FTSE4Good Index Series constituent
• Hang Seng ESG 50 Index constituent
• Hang Seng Corporate Sustainability Index constituent
• Hang Seng Index ESG Screened Index constituent
• Hang Seng Index Low Carbon Index constituent
• 2021 Hurun China Private Companies SDG Readiness 100
• Fortune China Top 500 list
• Best TMT Company at the 5th Golden Hong Kong Stocks Awards
• Best Tech Constituent Stock at the Hong Kong Outstanding Listed Enterprises Awards 2021
• The Most Remarkable Investor Relations Recognition-Hong Kong Index Constituent (Hang Seng Index) Category at Quam IR Award 2021

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Responsibility
• Governance

Environmental Achievements

• Reduced carbon dioxide emission by 1.36% compared to 2021; Reduced comprehensive energy consumption by 12.61% compared to 2021; Reduced carbon dioxide emission per unit operating income by 18% compared to 2021
• Successfully completed the first "blue carbon" trading.
• Reduced carbon emission by 176,000 tons of standard coal in Pinglu Canal project; Reduced carbon emission by 9806.65 tons of standard coal in Zhangjinggao Yangtze River Bridge project; Achieved carbon emission reduction of about 1.09 million tons during the construction period of the Project from Chengde (Lijiaying) to Pinggu (Beijing-Hebei boundary) of Ring Expressway in Capital Region

Social Achievements

• Successfully implemented a batch of landmark projects and "small yet smart" livelihood projects.
• Actively practiced global corporate citizenship responsibilities, highly recognized for participating in Sudan evacuation.
• The localization rate of overseas project employees exceeds 80%.
• Trained thousands of leading figures, medical personnel, people's teachers, and technical workers, and created hundreds of collective economic enterprises, educational facilities, health care rooms, and party building positions.
• Invested RMB 63.4 million in industrial support for free to help improve the quality and upgrade of regional industries.

Governance Achievements

• Established the Strategy & Investment and ESG Committee of the Board of Directors.
• Linked ESG performance with executive compensation.
• Improved the corporate governance system of “statutory rights and responsibilities, transparent rights and responsibilities, coordinated operation and effective checks and balances”.

Climate Goals & Targets

Environmental Challenges

• Stricter policy supervision and emission reduction requirements; Increase of carbon trading price; EU Carbon Border Adjustment Mechanism (CBAM); Increase of price of raw materials and energy; Market shrinkage; Reputation decline caused by business violation; Extreme weather such as floods, hurricanes, etc.; Slow climate change; Stricter emission standards requirements

Mitigation Strategies

• Revised Action Plan for Carbon Peak and Carbon Neutrality and CCCC 14th Five-Year Green and Low-carbon Development Plan; Improve the utilization rate of renewable energy sources; Increase research and use of new energy technologies; Promote green finance support; Build a "1+2" internal carbon trading system; Establish a carbon emission accounting system; Strengthen the R&D and transformation of green low-carbon equipment; Promote the research and application of low-carbon technologies; Actively promote the construction of green factories; Develop ESG strategy; Comprehensively and systematically analyze typical cases of extreme weather; Develop emergency plans for extreme weather; Develop strategic emerging industries; Formulate management systems such as Green and Low-carbon Budget Management Measures; Develop green products; Enrich information disclosure channels; Make and implement rectification plans; Strengthen the research and development of green equipment

Supply Chain Management

Supplier Audits: 2,965

Responsible Procurement

• Establish an integrated management and control mechanism for procurement and supply; Improve the overseas supply chain construction scheme

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather such as floods, hurricanes, etc.
• Slow climate change

Transition Risks

• Stricter policy supervision and emission reduction requirements; Increase of carbon trading price; EU Carbon Border Adjustment Mechanism (CBAM); Market shrinkage

Opportunities

• Better know and adapt to changes in climate policies and markets; Use green and low-carbon technologies to reduce resource usage; Improve resource utilization efficiency and reduce production and operating costs; Occupy the first mover advantage of low-carbon technology and enhance the company's reputation and responsible image; Increase company revenue and enhance competitiveness of green products; Develop a carbon trading market; Reduce production and operation costs

Reporting Standards

Frameworks Used: Guidelines on Environmental, Social and Governance Report released by The Stock Exchange of Hong Kong Ltd., Supervision Guidelines on Self-regulation of Listed Companies No. 1- Standardized Operation released by Shanghai Stock Exchange, Guidelines on Social Responsibility Report of Chinese Enterprises (CASS-ESG5.0) released by Chinese Academy of Social Sciences, UN 2030 Agenda for Sustainable Development, GRI Sustainable Development Reporting Standards (GRI Standards), IFRS Sustainability Disclosure Standard S1-General Requirements for Disclosure of Sustainability-related Financial Information and IFRS Sustainability Disclosure Standard S2-Climate-related Disclosure, The Ten Principles of United Nations Global Compact, Guidelines on Social Responsibilities (ISO 26000)

Awards & Recognition

• China Construction Engineering Luban Prize
• National Quality Engineering Award
• Tien-yow Jeme Civil Engineering Prize
• China Patent Award
• openBIM Award
• George S. Richardson Medal
• China Charity Award
• Responsibility Bellwether Award-Responsible Enterprise Award
• Best Practice Case of Director Office of Listed Companies
• Top Ten Excellent Cases of International Image of Chinese Enterprises
• Xinhua Credit Jinlan Cup ESG excellent cases
• ESG Best Practice Cases and Excellent Practice Cases
• CCTV "2023 China ESG Excellence Practice" award
• Central Enterprise ESG Pioneer 100 Index
• Central Enterprises Responsibility Management Pioneer 30 Index
• Social Responsibility Development Index of Top 300 Chinese Enterprises
• Key Industry Social Responsibility Development Index
• Listed Company Information Disclosure Class A Evaluation
• Wind ESG rating "A"
• Chinese ESG Listed Company Pioneer 100