Climate Change Data

Environmental Metrics

ESG Focus Areas

• Product Safety and Quality
• Occupational Health and Safety
• Employee Compensation
• Risk Management
• ESG Management System
• Engagement of Stakeholders

Environmental Achievements

• Implemented an Emergency Plan for Environmental Emergencies

Social Achievements

• Launched the "Stella Cloud Talent" selection program
• Held the first Quality Month Forum
• Organized multiple compliance marketing trainings
• Established eight horizontal organizations including the Sports Federation and Women’s Federation
• Held the “Appointment with Senior Management” luncheon

Governance Achievements

• Established an ESG working group
• Established the Board as the highest responsible organization of the governance structure
• Formulated the Employee Integrity Management System
• Organized all employees, senior management and directors to participate in the Group’s compliance trainings
• Formulated the Regulations on the Management of Intellectual Property Rights

Climate Goals & Targets

Environmental Challenges

• Increased compliance costs to meet regulatory requirements
• Increased operational costs due to exploration of new technologies and remodeling of facilities
• Increased production costs due to changes in raw material prices and emission requirements
• Potential reputational impact due to stakeholder expectations
• Production capacity decline or interruption due to extreme climate events
• Potential abnormal power supply due to climate change

Mitigation Strategies

• Formulated the Emergency Plan for Environmental Emergencies
• Comprehensive consideration of policy and legal, technology, market, reputation risks in transformation risks and acute and chronic risks in physical risks

Supply Chain Management

Responsible Procurement

• Multi-dimensional supplier access evaluation
• Annual evaluation of suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme climate events disrupting operations and supply chain
• Abnormal power supply due to continuous hot weather

Transition Risks

• Increased compliance costs
• Increased operational costs
• Increased production costs
• Reputational risks

Opportunities

• Improved product efficiency and lower costs
• Improved resource efficiency and reduced operational costs
• Mitigation of risks associated with higher energy prices

Reporting Standards

Frameworks Used: HKEX ESG Reporting Guide

Certifications: ISO 13485

Awards & Recognition

• 2021 A’ Design Award Product Design Silver Award
• 16th “Silver Pigeon Award” Design Excellence Award

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Product Quality and Safety
• Talent Development
• Inclusive Healthcare
• Climate Change Mitigation and Adaptation
• Environmental Responsibility
• Business Ethics and Anti-Corruption
• Responsible Supply Chain
• Information Security and Privacy Protection

Environmental Achievements

• Reduced hazardous waste generation by 20% through process improvements

Social Achievements

• Established 31 Toumai Laparoscopic Surgical Robot Co-Training Centres and 13 SkyWalker Orthopedic Surgical Robot Co-Training Centres
• Provided training to 1,347 people in clinical verification surgery and training activities
• 100% employee participation and pass rate in safety training
• Zero work-related fatalities from 2020 to 2023
• Zero work-related incidents during the reporting period

Governance Achievements

• Established a three-level ESG governance structure
• Obtained ISO 14001 environmental management system certification and ISO 45001 Occupational Health and Safety Management System certification
• Listed as the “Patent Work Demonstration Enterprise in Shanghai” and “National Intellectual Property Advantageous Enterprise”

Climate Goals & Targets

Environmental Challenges

• Global economic and geopolitical instability impacting the economic environment and medical device industry in China
• Stringent industry regulation and intensifying industry competition
• High upfront capital expenditure and ongoing R&D expenses
• Risks related to intellectual property rights
• Potential for clinical trial failures
• Limited experience in commercialising products
• Climate change related risks (transition and physical)

Mitigation Strategies

• Focused business strategy to drive sustainable revenue growth
• Enhanced operational efficiency
• Cost reduction measures
• Filing patent applications in the PRC and other jurisdictions
• Strict adherence to national or local regulations for animal experiments
• Development of a series of standards for animal experiments
• Comprehensive implementation of various measures to reduce costs and increase efficiency
• Developed emergency plan for environmental emergencies
• Strengthened monitoring and early warning mechanism for extreme weather events

Supply Chain Management

Supplier Audits: Annual audits of Class A suppliers

Responsible Procurement

• Supplier Quality Assurance Agreement
• Purchasing Framework Agreement (including requirements on business ethics, anti-corruption, safety, environmental protection, human rights, and labour conditions)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events disrupting daily operations and supply chain
• Abnormal power supply due to continuous hot weather

Transition Risks

• Increased compliance costs
• Increased operational costs
• Increased production costs
• Potential impact on reputation

Opportunities

• Improve the execution and profitability of superior products and lower product costs
• Improve the efficiency of energy and water resources usage and reduce operational costs
• Increase the use of low-emission/clean energy

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix C2 to the Rules Governing the Listing of Securities of the Stock Exchange of Hong Kong Limited), TCFD

Certifications: ISO 13485, ISO 14001, ISO 45001, GB/T29490–2013

Awards & Recognition

• First prize of Shanghai Science and Technology Progress Award
• iF Design Award 2023
• Private Enterprise Entrepreneurship and Innovation Award
• Top award of China (Shanghai) International Technology Fair
• Industry Contribution Award of 2023 MedRobot Award
• SHANGHAI DESIGN 100+
• Golden Jade Award — Outstanding Solution
• ESG Pioneer Practitioner
• Innovative enterprise headquarters in Shanghai
• Top 10 Core Technology Enterprises for 2023
• 2023 Top 10 Independent Innovative Medical Device Products Award
• 2023 Shanghai Industry-University-Research Cooperation Excellent Project Award

Environmental Metrics

Social Achievements

• Established nearly 40 clinical application and training centers for Toumai and 20 for SkyWalker worldwide, training more than 200 surgeons and conducting over 1,000 surgical robot clinical application and training events.

Climate Goals & Targets

Environmental Challenges

• External environment uncertainties and increasingly complex and volatile industry development trends.

Mitigation Strategies

• Resolute execution of business strategies, driving rapid growth across various business lines while intensifying efforts to reduce costs, improve efficiency, and strengthen strategic focus.

Supply Chain Management

Climate-Related Risks & Opportunities