Climate Change Data

Environmental Metrics

ESG Focus Areas

• Youth welfare
• Social welfare
• Environmental protection
• Employee well-being
• Supply chain management
• Data privacy
• Anti-corruption

Environmental Achievements

• Maintained a relatively low level of emissions from vehicles and office operations.
• Recycled approximately 178 kg of paper.

Social Achievements

• Launched the “CMGE Dream Library” program, completing five libraries.
• Donated RMB 1.4 million to Hubei Charity Federation and healthcare institutions during the COVID-19 outbreak.
• Awarded “Best Employer Enterprise in Guangdong Province”.

Governance Achievements

• Established four Board Committees: Audit, Nomination, Remuneration, and Corporate Governance.
• Complied with the CG Code, except for a deviation from code provision A.2.1 (Chairman and CEO roles combined).

Climate Goals & Targets

Environmental Challenges

• Potential risks associated with IP licensing, in-house game development, attracting and retaining players, and evolving regulations in the PRC.
• Risks related to the Contractual Arrangements, including potential non-enforcement under PRC laws and potential increased income tax.
• Two legal proceedings related to copyright infringement and unfair competition.

Mitigation Strategies

• Implemented robust risk management and internal control systems.
• Regularly reviewed the Contractual Arrangements and compliance with PRC laws and regulations.
• Adopted measures to ensure effective operation of the Contractual Arrangements and compliance, including regular reviews by the Board and independent non-executive Directors.
• Secured legal advice and implemented internal control measures to address legal proceedings.

Supply Chain Management

Responsible Procurement

• Adopted the Procurement Management System, specifying supplier selection and approval procedures.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Appendix 27 to the Listing Rules

Awards & Recognition

• Best Employer Enterprise in Guangdong Province
• Outstanding Enterprise in the Chinese Game Industry
• Advanced Game Operation Unit in the Chinese Game Industry
• Most Influential Enterprise of 2019
• 2019 Most Popular Online Game
• 2019 Chinese Game Industry Outstanding Mobile Game (three games)
• Social Responsibility Award for Internet Corporate 2019

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced total greenhouse gas emissions by 101.37 tonnes of carbon dioxide equivalent compared to 2021 (783.68 vs 885.05).

Social Achievements

• Established 10 "CMGE Dream Libraries" to promote reading among youth; Donated RMB 1.0 million equivalent for pandemic relief in Hong Kong; Awarded "Outstanding Social Responsibility Performance Enterprise" and "Guangdong-Hong Kong-Macao Greater Bay Area Social Responsibility Innovation Model".

Governance Achievements

• Established environmental, social, and governance policies and procedures; Incorporated sustainable development into daily management; Implemented robust risk management and internal control system.

Climate Goals & Targets

Environmental Challenges

• Revenue decrease due to licensing delays for various games; Underperformance of certain investee companies; Impairment of financial and contract assets.

Mitigation Strategies

• Enhanced refined operation on launched games; Increased R&D investment; Committed to enhance revenue contribution of products in stable operating period; Implemented vehicle management measures, energy saving policies and green measures to reduce emissions and energy consumption.

Supply Chain Management

Supplier Audits: 39 major qualified suppliers; Annual review of suppliers' performance.

Responsible Procurement

• Procurement Management System; Preliminary review of suppliers' information; Screening; Information database management; Examination of suppliers; Selection of suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions (increased flooding); Electricity consumption increases due to hot weather.

Transition Risks

• More stringent climate policies and regulations; Revenue declines due to consumer shifts towards environmentally friendly products.

Reporting Standards

Frameworks Used: Appendix 27 to the Listing Rules

Awards & Recognition

• Influential Game Enterprise of the Year Award
• Popular IP Game of the Year Award
• Metaverse Industrial Application and Pioneering Technology Potential Top 100 2022
• Most Watched Enterprise of the Year
• Metaverse Innovation and Technology Enterprises of China Top 30 2022
• Outstanding Enterprise in the Chinese Game Industry 2022
• Advanced Game Operation Unit in the Chinese Game Industry 2022
• Outstanding Mobile Game in the Chinese Game Industry 2022
• Outstanding Online Game in the Chinese Game Industry 2022
• Outstanding Entrepreneur of China’s Game Industry 2022
• Chinese Internet Industry Award of Outstanding Self-Regulation and Philanthropy 2021-2022
• Metaverse Leading Enterprise Award
• Shenzhen Service and Trade Industry Leadership Award
• Best Game for Going Overseas 2022
• Social Responsibility Award 2022
• Outstanding Contribution Award 2022
• Potential Listed Company Top 100 2022
• Outstanding Game Company of the Year 2022
• Best Game for Going Overseas 2022
• Shenzhen Top 500 Enterprises 2022
• Guangdong Top 500 Enterprises 2022
• Most influential Mobile Game Publisher
• Gamers’ Most Anticipated Online Mobile Game
• Excellent Digital Enterprise 2022
• Best Internal Governance Listed Company

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Social responsibility
• Governance

Environmental Achievements

• Reduced paper consumption through paperless office initiatives
• Recycled approximately 105.00 kg of paper in 2023

Social Achievements

• Established 12 "CMGE Dream Libraries" across China to promote reading among youth
• Donated RMB 123,000 to charitable causes
• Participated in the research and development of four group standards related to online game safety and minors' protection
• Maintained less than 0.01% of revenue from minors in China

Governance Achievements

• Established an environmental, social, and governance working group
• Complied with the applicable code provisions of the CG Code, except for a deviation from code provision C.2.1 (Chairman and CEO roles combined)

Climate Goals & Targets

Environmental Challenges

• Overall gaming market recorded relatively low year-on-year growth
• Generally low payment willingness by game users
• Unsustainable momentum of some launched games resulting in lower than expected revenue
• Delay in testing and launch of some games

Mitigation Strategies

• Increased R&D investment (RMB 370 million in 2023)
• Applied AIGC technology to reduce costs and improve efficiency in game development
• Actively exploring the mini-game segment (RMB 600 million revenue in 2023)
• Vigorous promotion of successful games like Sword and Fairy: Wen Qing

Supply Chain Management

Supplier Audits: 57 major qualified suppliers, annual review

Responsible Procurement

• Compliance with Tendering and Bidding Law of the PRC, Procurement Law of the PRC, Labour Law of the PRC, and Labour Contract Law of the PRC

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions (flooding)
• Increased electricity consumption due to hot weather

Transition Risks

• More stringent climate policies and regulations
• Revenue declines due to consumer preference shifts

Opportunities

• Development of energy-efficient products (implicitly mentioned)

Reporting Standards

Frameworks Used: Listing Rules

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Numerous awards for game quality, social responsibility, and innovation (listed in the report)