Climate Change Data

Environmental Metrics

ESG Focus Areas

• Occupational Health and Safety
• Diversity and Equal Opportunity
• Socioeconomic compliance
• Corporate Governance
• Risk Management
• Economic Performance
• Anti-Corruption
• Energy
• Environmental Compliance

Environmental Achievements

• Achieved ISO 14001 environmental management system accreditation.
• Zero incidents of non-compliance with environmental laws and regulations.

Social Achievements

• Zero fatal accidents reported from FY2017 to FY2019.
• Zero complaints on discrimination.
• Provided cancer screening test for all female workers.
• Donated RMB11,800 to two employees who suffered from sickness.

Governance Achievements

• Established anti-corruption policy with zero reported incidents of corruption.
• Maintained compliance with the Code of Corporate Governance 2018.

Climate Goals & Targets

Environmental Challenges

• Turbulent global market conditions and sluggish petrochemical market.
• Low nitrogen fertilizer and urea prices.
• Increasing competition and demanding customers.
• COVID-19 outbreak delaying operations.

Mitigation Strategies

• Improved quality management processes and developed new technologies.
• Diversified into non-fertilizer industries.
• Enhanced market presence through technology and accreditation.
• Developed new technologies (e.g., isothermal ammonia synthesis).
• Closely monitoring the evolving COVID-19 situation and making necessary adjustments.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, Core option

Certifications: ISO 9001, ISO 14001, OHSAS 18001, GB/T 29490-2013

Environmental Metrics

ESG Focus Areas

• Economic Performance
• Anti-Corruption
• Occupational Health and Safety
• Diversity and Equal Opportunity
• Socioeconomic Compliance
• Energy
• Environmental Compliance
• Corporate Governance
• Risk Management

Environmental Achievements

• Energy consumption in FY2020 was lower than the 5.9 million kWh target; Production was suspended due to COVID-19 quarantine policy.

Social Achievements

• Zero workplace injury incidents reported from FY2018 to FY2020.
• Zero reported discrimination in the company.
• Provided medical examination for all employees; labor union provided assistance to employees in need; organized employee participation in public blood donation activities.

Governance Achievements

• No reported incidents of corruption during FY2020.
• Maintained a strong cash position with cash and cash bank balances amounting to approximately RMB112.37 million as at 31 December 2020.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic disrupted normal operations, resulting in delayed production and disrupted project deliveries.
• Low oil prices and decline in demand impacted revenue and orders, resulting in a 45% revenue drop.
• Sluggish chemical fertilizer industry.

Mitigation Strategies

• Implemented strategic response measures to maintain customer relationships and achieve a healthy order book of RMB116.6 million.
• Implemented safety measures (social distancing, mask-wearing, temperature checking, disinfection) to manage COVID-19 risk.
• Diversified into non-fertilizer industry (contributed 65% of total revenue in FY2020).

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, Core option

Certifications: ISO 9001, ISO 14001, OHSAS 18001

Awards & Recognition

• First prize of science and technology progress in China Petroleum and Chemical Industry Federation

Environmental Metrics

ESG Focus Areas

• Economic Performance
• Anti-Corruption
• Occupational Health and Safety
• Diversity and Equal Opportunity
• Socioeconomic Compliance
• Energy
• Environmental Compliance
• Corporate Governance
• Risk Management

Environmental Achievements

• Reduced electricity consumption to below the 5.86 million kWh target set last year, mainly due to enhanced production equipment.

Social Achievements

• Zero reported cases of major workplace injury; implemented COVID-19 safety measures.
• No reported discrimination.

Climate Goals & Targets

Environmental Challenges

• Disrupted supply chains due to the COVID-19 pandemic.
• Increased purchase price of industrial producers of ferrous materials (20.3% year-on-year increase).
• Power outages due to regional power rationing.
• Government curbs on fertilizer exports and severe flooding.

Mitigation Strategies

• Refined working processes to minimize the impact of supply chain disruptions.
• Strengthened working relationships with customers to improve cooperation in managing unforeseen circumstances.
• Monitored policy updates and significant events (e.g., US Federal Reserve interest rate hike, projected economic slowdown and inflation in China).

Supply Chain Management

Responsible Procurement

• Established anti-corruption policy.

Climate-Related Risks & Opportunities

Physical Risks

• Severe flooding

Transition Risks

• Changes to China's 'dual control of energy consumption' policy.

Opportunities

• Developing green and low-carbon technologies and products.

Reporting Standards

Frameworks Used: GRI Standards, Core option

Certifications: ISO 9001, ISO 14001, OHSAS 18001

Environmental Metrics

ESG Focus Areas

• Economic Performance
• Anti-Corruption
• Resources Utilisation
• Waste and Emission Mitigation and Adaptation to Climate Change
• Employment, Diversity and Equal Opportunity
• Training and Occupational Health and Safety
• Education
• Supply Chain
• Product Quality and Safety Management
• Corporate Governance
• Local Communities
• Enterprise Risk Management

Environmental Achievements

• Electricity consumption in FY2023 was 7.08 million kWh (FY2022: 7.31 million kWh), lower than the target of 8.1 million kWh set for FY2023.
• Zero incidents of non-compliance with environmental laws and regulations resulting in significant fines or sanctions.
• 125 tonnes of non-hazardous waste generated, all handled by professional third-party for recycling.
• 407 tonnes of carbon dioxide equivalent (tCO2e) Scope 1 GHG emissions and 4,039 tCO2e Scope 2 GHG emissions in FY2023.

Social Achievements

• Organised a fire safety training for employees, raising awareness and improving emergency response capabilities.
• 4 work-related injuries (all minor), one minor recordable injury involving a non-employee but whose workplace is controlled by the Group.
• Total of 5,500 training hours in FY2023, with an average of 25.35 hours per employee.
• No reported discrimination in the Group.

Governance Achievements

• Zero confirmed incidents of corruption or public legal cases regarding corruption.
• No incidents of material penalties in relation to various compliance matters.
• All employees and members of the governance body received anti-corruption training.

Climate Goals & Targets

Environmental Challenges

• Challenging macroeconomic conditions and evolving business environment.
• Lower percentage of completion for CSC contracts and reduced contracts in progress resulted in a 34% fall in revenue from this segment.
• Reduced contracts in progress resulted in a lower gross profit margin of 18% in FY2023 as compared to 27% in FY2022.
• Increased frequency and severity of extreme weather events disrupting business operations, damaging assets, and increasing repair costs.
• Stricter climate legislations and regulations increasing disclosure requirements and compliance risks.
• Transition to low-carbon economy potentially reducing demand for petrochemical products and affecting revenue.

Mitigation Strategies

• Strategic investments in research and development, obtaining three new patented technologies.
• Boosting order book by 28% in FY2023.
• Formulated crisis response plans to reduce negative impacts from extreme weather events.
• Regularly monitoring existing and emerging climate-related trends, policies, and regulations.
• Focusing on innovation of more environmentally-friendly and energy-efficient technology.
• Integrating climate change into internal control procedures and enterprise risk management.

Supply Chain Management

Supplier Audits: 50 suppliers screened, including 7 new suppliers.

Responsible Procurement

• Considering suppliers’ environmental and social performance during selection and evaluation.
• Communicating requirements and expectations on environmental and social performance.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (extreme heat and flash floods) disrupting operations, damaging assets, and injuring employees.

Transition Risks

• Stricter climate regulations and compliance risks.
• Market risk of reduced demand for petrochemical products.

Opportunities

• Development of energy-efficient products and technologies.

Reporting Standards

Frameworks Used: GRI Standards 2021, TCFD

Certifications: ISO 14001, ISO 45001, ISO 9001

Third-party Assurance: Not disclosed

Sustainable Products & Innovation

• Isothermal shift reactor and low-temperature and low-pressure ammonia synthesis catalysts.

Awards & Recognition

• National Specialised & Innovative “Emerging Giant” Enterprise
• Innovative Small & Medium Sized Enterprise
• High-new Technology Enterprises certification