Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Employee Rights and Benefits
• Occupational Health and Safety
• Supply Chain Management
• Anti-corruption
• Intellectual Property Protection
• Information Security
• Product Quality Management
• Customer Service
• Community Investment

Environmental Achievements

• Implemented energy conservation measures, resulting in energy consumption intensity of 2.02 MWh/employee (2022: 1.45 MWh/employee)
• Implemented water-saving measures, resulting in water consumption intensity of 8.47 tons/employee (2022: 11.32 tons/employee)
• Reduced Scope 2 greenhouse gas emissions to 253.31 tCO2e (2022: 152.11 tCO2e)

Social Achievements

• Maintained a workforce with 43% female employees (2022: 45%)
• No work-related injuries or deaths in 2023 or the past three years
• Provided various employee benefits and activities, including birthday parties, team-building events, and annual conferences

Governance Achievements

• Established a sound compliance management system
• Implemented a risk control mechanism
• Maintained a “zero tolerance” policy towards bribery and corruption
• Provided anti-corruption training to all board members and employees

Climate Goals & Targets

Environmental Challenges

• Lower-than-expected market demand and centralization of advertising traffic platforms affecting AR/VR marketing services
• Slight decrease in the average price of AR/VR content projects
• Fluctuations in revenue from different industries
• Potential risks associated with Contractual Arrangements, including regulatory changes and enforcement challenges in China

Mitigation Strategies

• Provided higher-quality content and efficient AR/VR marketing solutions
• Improved content production efficiency through R&D investment and AIGC application
• Expanded into new business areas such as digital character development and operation services, and XR+ content
• Implemented measures to ensure compliance with Contractual Arrangements, including regular Board reviews and engagement of external advisors

Supply Chain Management

Supplier Audits: 5 suppliers met the Company’s regulations on responsible procurement

Responsible Procurement

• Formulated the Procurement Management System, Management Measures for Procurement and Use of Commonly Used Intangible Assets, and Supplier Management System
• Formulated Requirements for Qualification of Suppliers and Customers
• Required suppliers to sign the Statement of Good Faith

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather damage to property, plant, and equipment; employee safety accidents
• Disruption of data center operations and routine business due to extreme weather
• Impacts on employee commuting safety and health; challenges to business continuity due to extreme climate conditions

Transition Risks

• Stricter disclosure requirements and regulations on climate change
• Impacts of national policies for corporate carbon emissions management
• Impacts of stricter low-carbon energy conservation and emission reduction regulations

Opportunities

• Increasing demand for green and low-carbon products and services
• Opportunities to build an environmentally friendly corporate image

Reporting Standards

Frameworks Used: GRI Standards 2021, TCFD recommendations

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Low-carbon Metaverse products, services, and solutions

Awards & Recognition

• The Most Influential Virtual Reality Enterprise (February 2023)
• Best CEO in the 8th Zhitongcaijing Listed Companies Selection (December 2023)
• 2023 Digital Economy Listed Unicorn Enterprise (December 2023)