Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic
• Environmental
• Social
• Governance

Environmental Achievements

• Completed 14 energy-saving, water-saving, and waste-reduction projects, saving 17,942,676 kWh of electricity and 253,165 tons of water.
• Achieved a 57.4% reduction in carbon emissions per unit product area compared to 2010.

Social Achievements

• Donated RMB 10 million in cash and supplies to fight the COVID-19 pandemic.
• Continued the "SMIC Liver Transplant Program for Children", raising a total of RMB 28.93 million for 530 disadvantaged children.
• Established special purpose funds and invested RMB 18.44 million for charitable programs in healthcare and education.
• More than 10,000 SMIC employees participated in volunteering and completed over 100,000 hours of service.

Governance Achievements

• Established a corporate risk management system.
• Established an internal compliance program (ICP) to ensure compliance with international export control laws.
• Revised the Conflict Minerals Policy into the Responsible Minerals Policy.
• No corruption lawsuits filed against SMIC or its employees in 2020.

Climate Goals & Targets

Environmental Challenges

• Extremely complex and challenging external environment and pressure from COVID-19 prevention.
• Supply chain risks (such as supply chain disruption caused by restrictions on our suppliers).
• Customer risks (such as customers restricted from placing orders).
• Changes in business laws and regulations.
• Intellectual property litigation risks.
• Macroeconomic risks.
• Foreign exchange risks.
• High Capital Expenditure
• Complex Technology
• Talent Shortage

Mitigation Strategies

• Worked with upstream and downstream partners from the supply chain with strategic determination.
• Implemented prevention and control measures and introduced a series of support policies on vacations, subsidies, etc.
• Established a comprehensive supplier management system.
• Established a corporate risk management system to assess the frequency and impact of identified risks.
• Established an internal compliance program (ICP).
• Revised the Conflict Minerals Policy into the Responsible Minerals Policy.

Supply Chain Management

Supplier Audits: 4 special CSR audits for suppliers, 23 on-site quality audits of suppliers, More than 100 supplier quality surveys via questionnaires

Responsible Procurement

• Supplier admittance assessment mechanism
• Supplier evaluation regulations
• Supplier promotion regulations
• RBA Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (such as low temperature)

Transition Risks

• Carbon trading

Opportunities

• Development of green products and the promotion of green production

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, Hong Kong Stock Exchange (HKEX) ESG Reporting Guide, China Corporate Social Responsibility Reporting Guide (CASS-CSR4.0), CSR Guide for China's Industrial Enterprises, SJ/T 16000-2016, ISO 26000:2010

Certifications: ISO 9001, TL 9000, IATF 16949, ISO 14001, ISO 27001:2013, ISO 14064

UN Sustainable Development Goals

• Goal 1: No Poverty
• Goal 3: Good Health and Well-being
• Goal 4: Quality Education
• Goal 5: Gender Equality
• Goal 6: Clean Water and Sanitation
• Goal 7: Affordable and Clean Energy
• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation and Infrastructure
• Goal 10: Reduced Inequalities
• Goal 11: Sustainable Cities and Communities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 17: Partnerships for the Goals

SMIC incorporated some of the requirements by the UN's SDGs and China's National Plan for Implementing the 2030 Agenda for Sustainable Development into CSR management.

Awards & Recognition

• "Most Honored Company" by Institutional Investor magazine

Environmental Metrics

ESG Focus Areas

• Governance
• Environmental Protection
• Employee Rights and Interests
• Public Welfare Activities

Environmental Achievements

• Five sites certified as green factories
• Five main plants certified as green buildings
• Investment of 34.42 million yuan in energy-saving and emission reduction projects, reducing energy consumption by 11,976,944 kWh annually
• Investment of 2.45 million yuan in refrigerant replacement and upgrading, reducing GHG emissions by approximately 22,233 tons of CO2 equivalent annually

Social Achievements

• Launched and continued the "SMIC Liver Transplant Program for Children", donating nearly RMB 45 million and assisting 832 children.
• Organized nearly 25,000 hours of employee participation in public welfare activities.
• Maintained an average customer satisfaction score of about 84 points.
• Completed 72 on-site supplier audits and held 6 supplier quality management presentations.

Governance Achievements

• Strengthened corporate governance, improved governance structure, and facilitated participation in ESG management.
• Established a robust risk management framework.
• Established a comprehensive export control compliance mechanism.
• 100% of new employees signed the Commitment to Integrity and Self-Discipline.
• 100% of suppliers signed the Supplier Commitment to Corporate Social Responsibility.

Climate Goals & Targets

Environmental Challenges

• Climate change related risks (typhoons, floods, droughts, extreme precipitation, rising temperatures, sea level rise)
• Transition risks (regulation changes, environmental information disclosure requirements, innovation risks in decarbonization technology, changing customer preferences, stakeholder concerns)
• Supply chain disruptions

Mitigation Strategies

• Established a sound environmental emergency plan.
• Established a legal risk identification platform.
• Regularly verifies and calculates carbon emission inventory.
• Optimizes production processes and technologies.
• Rational allocation of purchase volume to suppliers with stronger supply chain security.
• Strengthened supplier management system incorporating ESG risks.

Supply Chain Management

Supplier Audits: 72 on-site audits/year

Responsible Procurement

• Incorporated product quality, environmental protection/safety/health management, and sustainable development requirements into supplier management system.
• Supplier scoring every six months based on QCDSE (Quality, Cost, Delivery, Service, Environment).

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons
• Floods
• Droughts
• Extreme precipitation
• Rising temperature
• Sea level rise

Transition Risks

• Regulation and requirements for existing products
• Environmental information disclosure
• Innovation risks in decarbonization technology
• Change in customer consumption preference
• Stakeholders' growing concern about negative environmental feedback

Opportunities

• Developing green products
• Building a sustainable supply chain
• Innovating and developing low-carbon and energy-saving projects

Reporting Standards

Frameworks Used: GRI Standards, CASS-ESG 5.0, TCFD, UN SDGs, RBA Code of Conduct, ISO 26000:2010

Certifications: ISO 14001, ISO 45001, ISO 9001, TL 9000, IATF 16949, ISO 27001:2013, LEED Gold (5 fabs), China Green Building Label (2 fabs)

Third-party Assurance: Ernst & Young Hua Ming LLP

Awards & Recognition

• S&P Global Sustainability Yearbook 2023 (China Edition)
• 11th Mirror Post Outstanding CSR Award
• Fortune's List of Top 500 Publicly Traded Chinese Companies
• China Association for Public Companies ESG Best Practice Cases