Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Revenue from COVID-19 tests may decrease in the future.
• Incurred significant net losses in 2018 and 2019.
• Supply chain disruptions due to reliance on third-party suppliers.
• Potential non-compliance with PRC laws and regulations.
• Risks related to natural disasters, health epidemics, and other outbreaks.
• Data security and privacy concerns.

Mitigation Strategies

• Cost control measures.
• Quick response to COVID-19 tests demand.
• Expansion of on-site diagnostic centers.
• Implementation of internal control measures on data privacy and personal information protection.
• Maintaining insurance policies.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Uses a solvent waste liquid recycling machine to recycle xylene waste liquid, reducing xylene emissions.
• Uses new energy vehicles in its national cold chain logistics, with approximately 50.2% being new energy vehicles.
• Employs latest technology and equipment for wastewater treatment to meet environmental emission standards.

Social Achievements

• Provided professional services for more than 840 medical institutions from 398 medical institution alliances across China.
• Conducted approximately 500 community charitable clinical diagnostic activities and more than 140 health knowledge activities.
• Total cumulative investment value of public welfare donations and public benefits exceeded RMB5 million.
• Launched the Yunkang digital pathology remote diagnosis platform to improve testing quality and diagnostic efficiency.

Governance Achievements

• Improved governance structure, with independent directors accounting for 42.9% and female directors accounting for 14.3% of the total number of directors in 2022.
• Established an ESG Working Group to oversee ESG implementation and reporting to the Board of Directors.
• Implemented ten digital “cloud” systems to improve the digitalization and information management of laboratory operation.

Climate Goals & Targets

Supply Chain Management

Responsible Procurement

• Strengthened supplier quality management and risk management, and enhanced assessment and supervision.

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Environmental Protection
• Labor Practices
• Service Quality
• Community Feedback
• Climate Change

Environmental Achievements

• Reduced carbon emission intensity to 11.26 tCO2e/million RMB
• Approximately 54.1% of nationwide cold chain logistics vehicles are new energy vehicles.
• ISO 14001 certification obtained by Guangzhou Da’an Clinical Laboratory Center

Social Achievements

• Launched employee well-being programs, including health lectures, sports activities, and employee care initiatives.
• Achieved 100% employee satisfaction rate.
• Provided complimentary medical examinations to over 73,500 person-times and charitable clinical diagnostic activities to over 56,000 people.
• Added parental leave to improve female employee welfare.

Governance Achievements

• Established and improved ESG and climate change management system.
• Received several awards, including the “ESG Special Recognition Award” from TVB and four annual report awards from LACP.
• No corruption lawsuits filed or concluded against the Company or its employees.

Climate Goals & Targets

Environmental Challenges

• Reputational risk due to stakeholders' growing concern over negative feedback on climate change.
• Potential increase in operating costs due to evolving GHG emission policies and regulations.
• Potential litigation risks due to stricter environmental laws and regulations.
• Increased compliance costs due to higher disclosure requirements for GHG emissions.

Mitigation Strategies

• Developed a sound emergency plan and conducted internal prevention education for employees.
• Established a hierarchical early warning system and strengthened cooperation with local governments, customers, and suppliers.
• Developed and implemented carbon reduction policies and measures.
• Continuously monitored environmental laws and regulations and strictly complied with relevant requirements.
• Kept abreast of the latest regulatory requirements for GHG emissions and improved the GHG collection system.

Supply Chain Management

Supplier Audits: 110 suppliers (31.16%) evaluated annually

Responsible Procurement

• Procurement Integrity Agreement
• Environmental protection requirements in procurement contracts
• Quality assurance agreements with suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Acute physical risks (extreme weather events)
• Chronic physical risks (long-term climate changes)

Transition Risks

• Policy and legal risks (GHG emission pricing)
• Exposure to legal proceedings
• Stricter disclosure requirements for GHG emissions
• Expenditures of the transition to low-carbon technologies
• Changes in customer behaviors

Opportunities

• Resource use
• Energy efficiency
• Products and services
• Markets and adaptability

Reporting Standards

Frameworks Used: ESG Reporting Guide (Hong Kong Listing Rules), TCFD

Certifications: ISO 15189, CAP, ISO 9001, CMA, ISO 20000-1, ISO 27001, ISO 37301, ISO 14001, ISO 10015, ISO 45001, GB/T 31950-2023, GB/T 31863-2015, GB/T 27922-2011, SB/T 10962-2013, GB/T 42186-2022, GB/T 28842-2012

Awards & Recognition

• ESG Special Recognition Award (TVB)
• Platinum Award (Healthcare), Top 80 Reports Asia Pacific region, Top 50 Chinese Annual Reports, Technical Achievement Award (LACP)
• Best Digital Investor Relations Award, Best Leader Award, Best Director Award (7th China IR Annual Awards)
• Bronze Cup (2022 Guangdong Poverty Alleviation Hongmian Cup)