Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Social Aspect
• Governance

Environmental Achievements

• Implemented various emission reduction solutions and optimized production facilities.
• Achieved a 75% recycling efficiency in energy recovery from discharging batteries.
• Actively promoted the use of metal pallets instead of wooden pallets for finished product packaging.

Social Achievements

• Provided 1,176 hours of training for employees.
• Organized outward bound training and various leisure activities for employees.
• Established the “Xinyi Education Fund” to support employees' children's education.

Governance Achievements

• Formulated the “Top 10 Integrity Rules for Xinyi’s Staff” and the “Xinyi’s Whistleblower Protection and Reward System”.
• Implemented anti-corruption measures and communication channels for reporting.
• Complied with local and national legislation on standards of conduct.

Climate Goals & Targets

Environmental Challenges

• Minimizing the environmental impact of operations.
• Maintaining high calibre staff members.
• Ensuring compliance with environmental protection laws and regulations.

Mitigation Strategies

• Continuous upgrading of equipment for lithium battery production to achieve energy saving and emission reduction.
• Yearly internal appraisal of staff and participation in the Company’s share option scheme.
• Strict compliance with relevant laws and regulations and implementation of internal safety manual.

Supply Chain Management

Responsible Procurement

• Stringent supplier selection criteria including business ethics, human rights and public responsibility.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Environmental, Social and Governance Reporting Guide (Appendix 20 to the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited)

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Social Responsibility
• Governance

Environmental Achievements

• Complied with applicable environmental protection laws and regulations without penalties.
• Adopted de-ionized water as a solvent for mixing anode powders, achieving over 95% recovery rate of NMP solvent.
• Equipped production base with sewage treatment and collection system.
• Implemented energy-saving and emission reduction measures in lithium battery production, improving resource utilization efficiency.
• Recycled energy from discharging batteries, achieving approximately 75% recycling efficiency.
• Used simple packaging and recycled wooden trays, cardboard, and packaging strips.

Social Achievements

• Provided fair, just, and reasonable development opportunities for employees.
• Complied with labor laws and regulations in China and Hong Kong.
• Paid social insurance and mandatory provident fund for all staff.
• Formulated employment policies and procedures to ensure fairness, equity, and transparency in recruitment.
• Conducted background checks for new employees in key positions.
• Provided attractive remuneration and benefits, including performance-based salary and various allowances.
• Organized medical check-ups, travel tours, and fun activities for employees.
• Established the “Xinyi Education Fund” to support employees’ children’s education.
• Implemented internal safety manual and safety training programs.
• Provided 1,428.5 hours of training for employees in 2020.
• Complied with working hour limits and holiday requirements.
• Implemented anti-corruption measures and provided anti-corruption training.

Governance Achievements

• Established a strict quality management system and obtained relevant certifications (ISO9001:2015, UL1973, UL2580, UN38.3, CCS).
• Formulated internal policies for customer data protection and intellectual property rights protection.
• Implemented a whistleblower protection and reward system.

Climate Goals & Targets

Environmental Challenges

• Minimizing the environmental impact of operations.
• Managing risks related to supply chain.
• Maintaining high staff retention rates.

Mitigation Strategies

• Implemented various emission reduction solutions and green office practices.
• Selected suppliers based on stringent criteria, including business ethics, human rights, and public responsibility.
• Conducted regular on-site inspections and assessments of major suppliers.
• Entered into “Supplier Anti-corruption Agreement” with suppliers.
• Closely monitored staff turnover rates and conducted resignation interviews to gather feedback and implement improvements.

Supply Chain Management

Responsible Procurement

• Stringent supplier selection criteria including product quality, price, production capacity, experience, industry qualifications and certifications, market credibility, aftersales services, business ethics, human rights, and public responsibility.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Appendix 20 to the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited

Certifications: ISO9001:2015, UL1973, UL2580, UN38.3, CCS

Sustainable Products & Innovation

• Lithium-ion batteries and energy storage systems

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Social Responsibility
• Governance

Environmental Achievements

• Complied with applicable environmental protection laws and regulations without penalties or fines.
• Relocated lithium battery production base to Zhangjiagang, adding a production line with improved manufacturing techniques.
• Established a carbon management group and office to manage carbon emissions.
• Implemented various emission reduction solutions and energy conservation strategies.
• Installed distributed PV power generation equipment at its production base.

Social Achievements

• Provided 2,241.1 hours of employee training (average 4.4 hours per employee).
• Maintained a diverse workforce across age, gender, and region.
• Implemented internal safety manual and safety training programs.
• Established Xinyi Education Fund to support employees' children's education.
• Organized various employee wellbeing activities.

Governance Achievements

• Board of Directors has overall responsibility for the Group’s ESG strategy and reporting.
• Established an audit committee, a remuneration committee, and a nomination committee.
• Formulated Integrity Management System and “Top 10 Integrity Rules for Xinyi’s Staff” to strengthen integrity culture.
• Implemented anti-corruption measures and a whistle-blowing system.
• No legal cases regarding corruption activities involving the Group and employees.

Climate Goals & Targets

Environmental Challenges

• Climate change risks (extreme weather, sustained heat, drought, reputational risks, policy risks, market risks, technology risks).
• High employee turnover rate (70%) due to relocation of production base.
• Managing environmental and social risks in the supply chain.

Mitigation Strategies

• Formulated emergency response plans for extreme weather, implemented cooling measures for high-temperature weather.
• Improved sustainable development capabilities, enhanced management transparency, responded to stakeholder concerns.
• Paid close attention to environmental laws and regulations, actively carried out energy conservation and emission reduction work.
• Promoted business innovation, researched and developed green products to meet customer demand.
• Improved research and development capabilities, researched and applied low-carbon technologies.
• Conducted on-site inspections and assessments of suppliers, implemented a supplier grading system and comprehensive management system.
• Implemented a stringent set of criteria for supplier selection, including environmental and social performance.

Supply Chain Management

Responsible Procurement

• Stringent set of criteria for supplier selection; implemented a grading system and comprehensive management system for suppliers; required major raw material suppliers to pass ISO9001 certification; emphasized specific requirements on suppliers’ environment, business ethics, human rights, and public responsibilities; prioritized suppliers with relevant certifications.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (typhoon, rainstorm, earthquake), sustained heat, drought

Transition Risks

• Reputational risk, policy risk, market risk, technology risk

Opportunities

• Increasing demands for energy storage products, photovoltaic power generation, and lithium-ion forklifts; improved efficiency of resource use.

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix 20 to the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited)

Sustainable Products & Innovation

• Energy-saving and green products; lithium-ion batteries and energy storage systems; electric forklifts.

Environmental Metrics

ESG Focus Areas

• Emissions
• Use of Resources
• The Environment and Natural Resources
• Climate Change
• Employment
• Health and Safety
• Development and Training
• Labour Standards
• Supply Chain Management
• Product Responsibility
• Anti-corruption
• Community Investment

Environmental Achievements

• Reduced greenhouse gas emissions from 10,557.6 tonnes of CO2e in 2021 to 9,353.6 tonnes of CO2e in 2022.
• Reduced greenhouse gas emission intensity for electric storage business from 93.0 kg of CO2e/kWh in 2021 to 35.5 kg of CO2e/kWh in 2022.
• Installed distributed PV power generation equipment to reduce indirect greenhouse gas emissions.
• Improved the speed of coating machines to increase efficiency and reduce steam usage.
• Implemented measures to reduce waste generation, including technological optimization of the aluminum shell initial injection process and a new negative pressure pulse formation process.

Social Achievements

• Reduced employee turnover rate from 70% in 2021 to 59% in 2022.
• Provided 3,386.0 hours of training for employees in 2022 (2,241.1 hours in 2021).
• Implemented a stringent supplier selection process based on product quality, price, and environmental and social performance.
• Established a whistleblower protection and reward system to encourage reporting of corruption.

Governance Achievements

• Established a Carbon Management Group and a Safety Committee to manage ESG-related risks.
• Implemented an Integrity Management System and “Top 10 Integrity Rules for Xinyi’s Staff” to strengthen integrity culture.
• Concluded two legal cases regarding corruption activities, with persons involved immediately dismissed.

Climate Goals & Targets

Environmental Challenges

• Extreme weather events that may damage factories, office buildings, and equipment.
• Sustained heat and drought that may lead to heatstroke events and increased operating costs.
• Stricter government policies and regulations related to climate change.
• Changes in consumer behavior that may impact demand for the Group's products and services.

Mitigation Strategies

• Formulated emergency response plans for extreme weather.
• Implemented cooling measures for high-temperature weather.
• Closely monitor developments of environmental laws, regulations, and policies.
• Actively carry out energy conservation and emission reduction work.
• Promote business innovation and launch products that meet market demand.

Supply Chain Management

Supplier Audits: Semi-annual assessments

Responsible Procurement

• Supplier evaluation based on product quality, price, payment conditions, production capacity, experience, industry qualification and certification, market reputation, after-sales service, environmental and social performance.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (typhoon, rainstorm, earthquake)
• Sustained heat, drought

Transition Risks

• Reputation risk
• Policy risk
• Market risk
• Technology risk

Opportunities

• Increased demand for energy storage products, photovoltaic power generation, and lithium-ion forklifts.
• Improved efficiency of resource use.

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix 20 to the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited)

Certifications: ISO9001:2015, UL1973, UL2580, UN38.3, China Classification Society Certification CCS

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Lithium batteries, energy storage systems, electric forklifts, PV Films

Awards & Recognition

• Not disclosed