Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced energy consumption through energy-efficient equipment and promoting a paperless office.
• Improved solid waste management through recycling and reuse of materials.

Social Achievements

• Implemented a stock incentive plan to motivate employees.
• Provided interest-free housing loans to eligible employees.
• Organized various employee activities to enrich their lives.
• Offered free health checkups and health consultation services.

Governance Achievements

• Established a compensation committee, a nomination committee, and an audit committee.
• Implemented a code of conduct and policies to ensure compliance with anti-corruption laws and regulations.

Climate Goals & Targets

Environmental Challenges

• New game releases decreased in 2017 compared to 2016, leading to lower revenue.
• Some self-developed products did not meet expectations.
• Operating losses increased in the investment company, Axe Interactive Entertainment Co., Ltd.

Mitigation Strategies

• Focused on improving game development quality and launching competitive games.
• Implemented cost-cutting measures and improved efficiency.
• Took actions to resolve ESG-related controversies and legal issues (e.g., the "King's Sword" trademark case).

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Strict requirements on supplier reputation and product quality.
• On-site inspections of suppliers' qualifications, technical experience, and product quality.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced energy consumption through cloud server migration and local data center optimization.
• Implemented green office practices, including paperless initiatives and promoting energy-efficient appliances.

Social Achievements

• Launched employee well-being programs, including annual health checkups, provision of anti-smog masks, and emergency medical supplies.
• Implemented comprehensive measures to protect employee health and safety during the COVID-19 pandemic, including extended work-from-home periods and provision of protective gear.
• Organized various training programs and internal knowledge-sharing sessions to enhance employee skills and professional development.
• Maintained high customer satisfaction (90.20%) with a 100% complaint resolution rate.

Governance Achievements

• Established a robust internal control system based on the COSO framework.
• Implemented a whistleblower system to address potential misconduct.
• Maintained compliance with relevant laws and regulations.

Climate Goals & Targets

Environmental Challenges

• Intense competition in the entertainment industry, particularly in the gaming sector.
• Stringent game licensing policies in China.
• Potential risks associated with the contract arrangement for operating the core business in China.

Mitigation Strategies

• Adopted a conservative business strategy, focusing on key overseas markets (Japan, Korea) and diversifying product lines.
• Strengthened internal control systems and risk management processes.
• Continued to monitor and adapt to changes in domestic policies.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Focus on supplier service quality, reputation, and social responsibility.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: HKEX GEM Listing Rules Appendix 20

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• 2019 Annual Excellent Overseas Game Company Award
• 2019 Most Anticipated Value Web Drama Award
• Best Innovation Enterprise in Internet Field
• 2020 Most Valuable Investment Drama Company Award
• 2020 Annual Entertainment Cross-border Influence Figure Award

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Implemented energy-saving measures, including replacing high-energy equipment with energy-efficient products, promoting a paperless office, and optimizing server room configuration.
• Reduced harmful waste generation to 1.6 kg, with a density of 0.01 kg/person.

Social Achievements

• Maintained a 100% labor contract signing rate and prohibited child labor and forced labor.
• Provided competitive salaries and benefits, including social insurance, a fixed-contribution retirement plan, and bonuses.
• Organized 12 birthday parties and various team-building activities and interest clubs.
• Implemented comprehensive measures to prevent and control the COVID-19 epidemic.
• Conducted 31 training sessions, focusing on employee skill development and professional growth.

Governance Achievements

• Established a robust internal control system based on the COSO framework.
• Implemented measures to combat unauthorized behavior and inappropriate player behavior in games.
• Established a whistleblower system to report misconduct.
• Complied with anti-corruption and anti-money laundering laws and regulations.

Climate Goals & Targets

Environmental Challenges

• Intense competition in the gaming industry, tightening of game license policies, and unfavorable market conditions in the broader entertainment industry.
• Potential system failures, interruptions, and security vulnerabilities in technical infrastructure.
• Risk of players selling and buying virtual tokens or items in violation of game policies.
• Impact of domestic policies on both gaming and film/TV businesses.

Mitigation Strategies

• Implementing a strategy to focus on high-quality products and expanding into stable overseas markets (Korea, Japan).
• Regularly checking system stability to reduce the occurrence of incidents.
• Establishing game policies to combat unauthorized actions and inappropriate player behavior.
• Closely monitoring domestic policies and adjusting development strategies accordingly.

Supply Chain Management

Supplier Audits: 2258 suppliers in total (1859 domestic, 399 international)

Responsible Procurement

• Focus on supplier service quality, social responsibility, and value for money.
• Prioritizing suppliers with China Environmental Mark products.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GEM Listing Rules Appendix 20

Environmental Metrics

ESG Focus Areas

• Product Responsibility
• Employment
• Resource Utilisation
• Community Investment
• Emissions
• Health & Safety
• Development & Training
• Anti-corruption
• Labour Standard
• Supplier Management

Environmental Achievements

• Reduced greenhouse gas emissions and total electricity consumption compared to 2022.
• Reduced exhaust gas emissions compared to 2022.

Social Achievements

• No work-related fatalities in the past three years.
• No lost days due to work injury in 2023.
• Overall customer satisfaction rate of 95.48%.

Governance Achievements

• No material breaches of or non-compliance with laws and regulations relating to environmental protection.
• No material behaviours of corruption, money laundering, and bribery.

Climate Goals & Targets

Environmental Challenges

• Intense industry competition.
• Government control over the cultural industry.
• Potential technology infrastructure failures and security breaches.
• Potential violations of game policies by players.
• Impact of domestic policies on gaming and filming businesses.

Mitigation Strategies

• Focus on self-operated development and IP reserve enhancement.
• Regular system stability checks and security measures.
• Strict game policies against unauthorized player behavior.
• Monitoring of domestic policies and timely strategy adjustments.

Supply Chain Management

Supplier Audits: Onsite investigations and assessments at suppliers’ factories for major procurement.

Responsible Procurement

• Assets Procurement Management Policy and Details
• Require suppliers to uphold high standards of social responsibility.
• Focus on environmental and social compliance of suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Super typhoon
• Storm surge
• Extreme rainfall
• Heat wave
• Sea level rise

Transition Risks

• Policy and regulation risks
• Reputation risk
• Market risks

Opportunities

• Explore the possibility of using renewable energy
• Apply highly efficient equipment

Reporting Standards

Frameworks Used: GEM Listing Rules Appendix C2