Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Occupational health and safety
• Employee development and training
• Supply chain management
• Product responsibility
• Anti-corruption
• Community investment

Environmental Achievements

• Replaced 100-tonne coal-burning boilers with 60-tonne gas-burning boilers, reducing SO2 emissions by 21.82 tons and smoke and dust by 28.15 tons.
• Saved 98,385 tons of water compared to the previous year.
• Achieved zero environmental pollution incidents and met pollutant emission standards.

Social Achievements

• Maintained a low employee turnover rate of 4.75% in 2016.
• Zero work-related fatal accidents in 2016.
• Invested RMB21,287,800 in enhancing workplace safety.
• Rectification rate of potential hazards at 100%.

Governance Achievements

• Complied with all code provisions in effect during 2016.
• No corruption, bribery, extortion, fraud or money laundering incidents in 2016.

Climate Goals & Targets

Environmental Challenges

• Demand for capital expenditure in a capital-intensive business.
• Relatively high corporate gearing ratio.
• Market risks from slowing domestic economic growth.
• Regulation risks from stricter government policies.

Mitigation Strategies

• Maintaining good relationships with commercial banks.
• Lowering product costs and raising sales and profitability.
• Developing new MPV models and upgrading existing products.
• Exploring potential strategic partnerships.

Supply Chain Management

Supplier Audits: 329 suppliers audited; ISO/TS16949, ISO14001, and OHSAS18001 certifications required for relevant suppliers.

Responsible Procurement

• ISO/TS16949, ISO14001, and OHSAS18001 certifications; Supplier rating guidance considering building conditions, production flexibility, and 5S cleaning requirements.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Appendix 27 to the Listing Rules

Certifications: GB/T24001-2004 (Environmental Management System), GB/T28001-2011 (Occupational Health and Safety Management System), ISO/TS16949 (Quality Management System), ISO14001 (International Environment Management System), OHSAS18001 (Occupational Safety and Health Management)

Third-party Assurance: Grant Thornton Hong Kong Limited

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Employee well-being
• Compliance
• Stakeholder engagement
• Anti-corruption

Environmental Achievements

• Reduced GHG emissions to 167 tonnes CO2e in 2021 (mainly from Scope 2 and 3 emissions)
• Implemented energy-saving measures (LED lighting, air conditioning at 26 degrees Celsius, etc.)
• Reduced water consumption through measures like motion sensor taps
• Reduced paper consumption by encouraging e-contracts and double-sided printing
• Donated redundant office furniture to institutions for reuse

Social Achievements

• Maintained employee engagement score of 88% in 2021
• Provided 2,075 hours of training (average 12 hours per employee)
• Implemented COVID-19 prevention measures (mask provision, temperature checks, etc.)
• Organized employee sports club and town hall meetings
• Achieved 100% resolution rate for customer complaints (21 total complaints)

Governance Achievements

• Established three lines of defense for risk prevention and control
• Revised and improved 16 internal rules and regulations
• Implemented anti-corruption training and established a whistleblower mechanism
• Conducted annual compliance inspections
• Improved internal control systems following an independent investigation

Climate Goals & Targets

Environmental Challenges

• Unauthorised guarantees and pledged deposits by former management
• Fund inflows and outflows without commercial rationale
• Internal control deficiencies
• Restructuring of RBJAC and Huachen
• COVID-19 pandemic impact

Mitigation Strategies

• Independent investigations and forensic audits
• Implementation of remedial measures to strengthen internal controls
• Engagement of legal counsel to defend legal proceedings
• Active cooperation with restructuring procedures
• COVID-19 prevention measures and flexible working arrangements

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Suppliers must fulfill social responsibilities and comply with relevant laws

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: ESG Guide (Appendix 27 to the Listing Rules)

Certifications: Null

Third-party Assurance: Grant Thornton Hong Kong Limited

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Digitally focused marketing; e-application and e-contracting

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Emissions
• Use of Resources
• Environment and Natural Resources
• Climate Change
• Employment
• Health and Safety
• Development and Training
• Labour Standards
• Supply Chain Management
• Product Responsibility
• Anti-corruption
• Community Investment

Environmental Achievements

• Extended ESG reporting boundary to cover production operations.
• Implemented various measures and guidelines with internal monitoring system to ensure ESG management process was well monitored.
• Provided various training to staff on ESG management.

Social Achievements

• Launched online application and training platform for employees and customers.
• Implemented digitally focused marketing strategy.
• Achieved 100% complaint solution rate.

Governance Achievements

• Adopted a whistleblowing policy and an anti-corruption policy.
• Established a subsidiary senior management appointment committee.
• Implemented all remedial measures recommended by the Internal Control Consultant.

Climate Goals & Targets

Environmental Challenges

• Challenging operating environment due to COVID-19 pandemic, temporary shutdown of dealers, geopolitical tension, industry-wide shortage in chip supply and rising raw material costs.
• Reduced revenue contribution from BBAFC as a result of citywide COVID-19 induced lockdowns in Shanghai.
• Higher refinancing costs for BBAFC due to the ongoing and extended Huachen group restructuring.
• Restructuring of RBJAC.

Mitigation Strategies

• Maintained sufficient production to meet strong customer demands.
• Improved price realisation.
• Opened Dadong Plant extension and new Lydia Plant.
• Expanded new business cooperation with carefully selected NEV partners in China including Tesla and Li Auto.
• Successfully completed its first green and carbon neutral RMB235 million syndication bank loan.
• Evaluating various strategic options for RBJAC from an operational perspective.

Supply Chain Management

Supplier Audits: 213 key suppliers audited

Responsible Procurement

• Supplier management control program; supplier qualification review; onsite inspections on suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions such as torrential rain, blizzard, extreme cold, heat wave and thick smog

Opportunities

• Development of energy-efficient products; supporting the development of NEVs.

Sustainable Products & Innovation

• NEV-related products; camshafts for hybrid vehicles; online training platform; digital marketing campaigns.

Environmental Metrics

ESG Focus Areas

• Customer information and privacy
• Observing and protecting intellectual property rights
• Cultivation of local employment
• Climate change
• Customer satisfaction

Environmental Achievements

• Ningbo Yumin achieved national recognition as a 3-star Green Factory in Beilun District. A distributed photovoltaic power generator was installed, with all generated electricity consumed by Ningbo Yumin.
• Scope 1 and 2 GHG emissions slightly decreased.

Social Achievements

• Employee turnover rate decreased to approximately 13.16% (2022: 31.00%).
• Total training hours provided to staff were 37,461 hours (2022: 41,353 hours), averaging 32.24 hours per employee (2022: 32.18 hours).

Governance Achievements

• Adopted a whistleblowing policy, an anti-corruption policy, and a conflict of interest policy.
• The Board has overall responsibility for the Group’s sustainable business development through ESG strategy.

Climate Goals & Targets

Environmental Challenges

• Continuing fall in demand for motor vehicle components from traditional fossil-fueled motor vehicles.
• Growing concerns around global economic development and fierce competition between key OEM brands.
• Increasing acquisition costs and the need for stricter risk controls in the auto financing industry.
• Climate change inducing extreme weather conditions.

Mitigation Strategies

• Increasing demand from electric and hybrid motor vehicle manufacturers offsetting the decrease in demand for traditional components.
• Formulating measures to offset market challenges in the auto financing industry, including selective expansion of cooperation partnerships and creative refinancing channels, while implementing robust risk control measures.
• Integrated GHG emission reduction targets and plans into strategic planning, regularly reviewed and supervised climate change-related work, and complied with relevant regulations.
• Policies and guidelines are set up for the employees to follow when facing extreme weather events.

Supply Chain Management

Supplier Audits: 211 key suppliers audited

Responsible Procurement

• Supplier Management Control Program

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of extreme weather events (e.g., extreme heat leading to blackouts)
• Changes in precipitation patterns and extreme variability in weather patterns (risk of asset write-offs and damage)

Transition Risks

• Stringent government regulations and requirements
• Technological improvements or innovations
• Market shifts to new energy vehicles
• Reputational risks tied to changing customer or community perceptions

Opportunities

• Focus on the value chain of new energy vehicles

Sustainable Products & Innovation

• NEV-related products

Awards & Recognition

• Ningbo Yumin recognized as a 3-star Green Factory