Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced water consumption by approximately 3% in 2021 compared to the previous year.
• Reduced harmless waste generation by approximately 30% in 2021 compared to the previous year.
• Implemented paperless counter services, reducing paper consumption by over 70%.

Social Achievements

• Launched "Qixin Luli, Zhushang Huimin" special campaign to support the development of individual industrial and commercial households.
• Organized various activities such as the "Two Excellent and One First" commendation conference and the "Singing Red Classics, Celebrating the 100th Anniversary of the Founding of the Party" chorus performance.
• Provided various types of training to enhance employee capabilities and professional skills.

Governance Achievements

• Established a comprehensive risk management system, covering credit risk, market risk, liquidity risk, information technology risk, legal risk, compliance risk, reputation risk, and climate change risk.
• Adopted the Equator Principles, becoming the first "Equator Bank" in Shandong Province.
• Implemented anti-corruption and anti-money laundering management systems and control and supervision measures.

Climate Goals & Targets

Environmental Challenges

• Potential transition risks due to China's industrial restructuring and the national "carbon peak, carbon neutrality" goals.
• Potential physical risks from extreme weather events such as typhoons, rainstorms, and floods.

Mitigation Strategies

• Undertaken environmental and climate risk stress tests to improve climate and environmental risk management capabilities.
• Developed contingency plans for extreme weather events to mitigate potential disruptions to operations.
• Actively tracked and responded to new national and local policies and regulations related to carbon emission reduction.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Established unified external supplier procurement standards and procedures; required suppliers to meet compliance requirements; considered environmental and social performance of suppliers (e.g., employment and labor standards, health and safety, integrity).

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons, rainstorms, hurricanes, or floods

Transition Risks

• Regulatory changes related to carbon emission reduction

Opportunities

• Development of green financial products and services

Reporting Standards

Frameworks Used: HKEX ESG Reporting Guide

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Green credit products, such as "Photovoltaic Loan"

Awards & Recognition

• National Top Ten City Commercial Banks
• Enterprise Standard "Leader" in Bank Branch Service Field
• 2021 Shandong Social Responsibility Enterprise

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced electricity consumption by approximately 11% and greenhouse gas emissions by approximately 15% compared to 2021. Reduced water consumption by approximately 5% and waste generation by approximately 30% compared to 2020.
• Implemented various green operation measures including energy management (lighting, air conditioning, electronic devices, company vehicles), water resource management, waste and resource management, and paperless office initiatives.
• Adopted the Equator Principles in 2021, becoming the first “Equator Bank” in Shandong Province. Completed 12 project financings totaling RMB 494 million under the Equator Principles by the end of 2022.

Social Achievements

• Achieved 100% complaint resolution rate.
• Implemented various measures to improve service quality, including standardization, customer communication, and video banking.
• Launched a series of online credit products to meet the needs of small and micro enterprises.
• Organized various employee activities to enhance employee sense of belonging and relationships.
• Provided comprehensive training programs for employees, including new hires, existing staff, and management personnel.

Governance Achievements

• Established a complete risk management system covering credit risk, market risk, liquidity risk, information technology risk, legal risk, compliance risk, reputation risk, and climate change risk.
• Established anti-corruption, anti-money laundering, and intellectual property protection management systems and control and supervision mechanisms.
• Implemented a robust supplier management system based on legal and regulatory compliance.

Climate Goals & Targets

Environmental Challenges

• Climate-related risks (acute risks like extreme weather events and policy/legal risks from government regulations), market risks (changes in consumer expectations), and technological risks (lack of understanding of green technologies).

Mitigation Strategies

• Developed emergency extreme weather plans, tracked the latest policies and regulations, and provided employee training on climate change and green technologies.
• Developed green financial products and solutions to meet new customer demands and attract investors.
• Strengthened internal controls and ESG risk management systems to identify, assess, and manage major ESG risks and opportunities.

Supply Chain Management

Responsible Procurement

• Established a unified external supplier procurement standard and process, requiring suppliers to comply with regulatory requirements and ESG considerations.

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons, rainstorms, hurricanes, floods, extreme heat

Transition Risks

• Government regulations on emission reduction

Opportunities

• Development of climate-related products and services

Reporting Standards

Frameworks Used: Hong Kong Exchanges and Clearing Limited's Environmental, Social and Governance Reporting Guidelines

Sustainable Products & Innovation

• Green credit products, environmental rights mortgage loans, carbon emission rights mortgage loans, and sustainable development linked loans.

Awards & Recognition

• Leader in the field of enterprise standards for bank branch services
• Top 10 retail bank financial innovation award
• Excellent unit of financial system cultural construction
• 2022 Big Data "Star River" Case - Database Benchmark Case Award

Environmental Metrics

ESG Focus Areas

• Green Finance
• Environmental Protection
• Social Responsibility
• Corporate Governance

Environmental Achievements

• Rated as the highest “ESG Level A Company” in the ESG evaluation of the banking industry in Shandong Province in 2022.
• Successfully issued green financial bonds of RMB5 billion.

Social Achievements

• The Bank’s proposal of “Improving Green Financial Service Capabilities and Implementing Green, Low-Carbon Transformation Strategy” won the competition award in the selection of best ESG practice cases for listed companies in 2023.
• The Bank’s “Innovation Case on Focusing on Marine Economy and Supporting Rural Revitalization” was awarded as an “Excellent Case on Financial Service Innovation for Rural Revitalization” by The Banker.
• The “Deepening Marine Finance and Serving the Blue Economy” was rated as an “Excellent Case on Financial Support for Rural Revitalization in Shandong Province”.

Governance Achievements

• Continued to improve the transparency and accountability of its corporate governance and ensured a high standard of corporate governance practices.
• Established a relatively comprehensive corporate governance structure in accordance with the requirements of the Listing Rules.
• Complied with the code provisions set out in Part 2 of Appendix C1 to the Listing Rules.

Climate Goals & Targets

Environmental Challenges

• Complicated macroeconomic and financial situation.
• Changes in economic environment.

Mitigation Strategies

• Increased credit supply and actively participated in economic and social development.
• Strengthened the management and control of the quality of credit assets.
• Increased the allowance for and disposal of risk assets to improve its ability of withstanding risks.
• Optimized the internal capital adequacy assessment framework, system process and design plan.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: BDO Limited

Sustainable Products & Innovation

• Green finance bonds

Awards & Recognition

• “ESG Level A Company” in the ESG evaluation of the banking industry in Shandong Province in 2022
• “Green Leasing Leading Enterprise” and “Most Promising Financial Leasing Company” at the 2023 (10th) Annual Summit of the Leasing Industry Competitiveness Forum