Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic Responsibility
• Social Responsibility
• Environmental Responsibility

Environmental Achievements

• Zhanjiang Steel Base Project achieved world-leading levels in technical, environmental protection, and energy consumption indicators; 116 energy-saving and environmentally friendly technologies applied.
• Formosa Ha Tinh Steel Project utilized MCC's self-developed technologies for green and energy-saving production.
• SO2 emissions reached 31,230 tons, and the recycling rates of non-hazardous solid wastes in the “engineering service” sector were all above 22%.
• Recycling rate of water resources more than 98% at Zhanjiang Steel Base, realizing “zero discharge” of sewage.
• Emissions per ton of steel at Zhanjiang Steel Base are the lowest in the country.
• 111 subsidiaries passed ISO14001 environmental management system certification.

Social Achievements

• Launched “MCC’s Special Training Class for Project Managers 2017” to improve the ability of engineering managers.
• Invested RMB 3.692 million to help employees in need, totaling 4,490 person-time.
• Organized various recreational activities to improve the cultural quality of employees.
• Implemented measures to safeguard the legitimate interests and rights of employees, including full and timely payment of social insurances and housing provident funds.
• Organized numerous public welfare and charity activities, including volunteer work, donations, and medical assistance.
• Assisted 568 registered people in need to get rid of poverty.

Governance Achievements

• Strengthened discipline and examination, improved supervisory mechanism, and implemented accountability system to establish a long-term mechanism against corruption.
• Revised implementation measures of decisions and systems of “Three Major and One Large”, further clarifying the scope of rights and responsibilities between the Party Committee, Board of Directors, Board of Shareholders and Management.
• Established and improved the internal control system featuring “risk-oriented and system-based management”, effectively enhancing internal control management and risk prevention ability.
• Improved the legal risk management and control system, achieving zero legal disputes caused by careless legal review.

Climate Goals & Targets

Environmental Challenges

• Treatment of sintering flue gas in the iron and steel industry.
• Managing environmental risks and pollution in various business sectors.
• Ensuring workplace safety in domestic and overseas projects.
• Maintaining harmonious labor relations and addressing employee needs.

Mitigation Strategies

• Developed a multi-pollutant treatment technology for sintering flue gas.
• Implemented strict environmental management measures, including environmental performance assessments and a green management platform.
• Optimized work safety accountability and management systems, enhanced inspections, and increased safety awareness training.
• Safeguarded employee rights and interests, provided welfare benefits, and organized various activities to improve employee well-being.

Supply Chain Management

Supplier Audits: 48 centralized bidding projects completed through open bidding

Responsible Procurement

• Green procurement
• Streamlined, standard, and information-based procurement
• Opposition to illegitimate competition and corruption

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Guidelines of the State-owned Enterprises on Better Fulfilling Corporate Social Responsibilities, Environmental, Social and Governance Reporting Guide of Hong Kong Exchanges and Clearing Limited, Guidelines of Shanghai Stock Exchange for Environmental Information Disclosure of Listed Companies, ISO 26000: Guidance on Social Responsibility (2010), GB/T 36001-2015: Guidance on Social Responsibility Reporting, GRI G4 Sustainable Reporting Guidelines, Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises (CASS-CSR 3.0)

Certifications: ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Hollow partition boards of metallurgical slag and concrete
• Polysilicon production method

Awards & Recognition

• Four National Science and Technology Awards
• Ranked 8th in the Top 250 Global Contractors
• A-shares included in the MSCI Emerging Markets Index
• Best Investor Relations Award and Best Performance Award for Sustainable Development
• Level A listed company in information disclosure by Shanghai Stock Exchange
• Chinese Patent Gold Award for three consecutive years
• Metallurgical Science and Technology Special Award
• 18 prizes in the third China Construction Engineering BIM Competition
• Three Tien-yow Jeme Civil Engineering Prizes
• Eight Luban Prizes for Construction Projects
• 18 National High Quality Engineering Awards
• Excellent Corporate Bond Issuer

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Improved energy conservation and environmental protection management systems
• Fulfilled safety and environmental protection rectification responsibilities
• Vigorously built green projects and actively deployed green environmental protection industries
• Implemented energy-saving and consumption-reducing projects
• Removed obsolete and energy-intensive mechanical equipment
• Prioritized the use of new environmental protection equipment

Social Achievements

• Actively fought against the pandemic, showing the essence of central state-owned enterprises (SOEs)
• Donated medical and anti-pandemic materials to several countries
• Implemented pandemic prevention and control carefully and effectively, and resumed work and production properly in an orderly manner
• Completed about 4 million square meters of relocation projects and built 2,300 kilometers of roads in villages
• Allocated a total of RMB 8.4243 million in poverty alleviation funds

Governance Achievements

• Established a comprehensive risk management and internal control system
• Implemented the rule of law work plan, focusing on improving the construction of the rule of law system
• Organized 2,302 anti-corruption training sessions for board members and employees at all levels, with 116,391 participants in total
• Established a blacklist system to manage the environmental and social risks of the supply chain

Climate Goals & Targets

Environmental Challenges

• Severe challenges of the pandemic era
• Climate change and the commitment to achieve carbon neutrality by 2060
• Impact of the global pandemic on the iron and steel industry
• Climate change risks (physical risks such as floods and scorching heat, and transition risks such as policy and market changes)

Mitigation Strategies

• Closely followed and fully implemented the important instructions of General Secretary Xi Jinping and the CPC Central Committee’s decisions and arrangements
• Strengthened ecological protection as the obligation of an enterprise
• Improved energy conservation and environmental protection management systems
• Strengthened targets setting and took multiple measures to increase energy conservation and consumption reductions
• Implemented energy-saving and emission-reduction technologies
• Established a comprehensive risk management and internal control system
• Incorporated environmental protection, social responsibility, and corporate governance risks into risk management

Supply Chain Management

Responsible Procurement

• Green procurement
• Supplier sustainability requirements

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Scorching heat

Transition Risks

• Policy and market changes brought about by the country's carbon peak and carbon neutrality target

Opportunities

• Low-carbon technology, technological equipment innovation, green buildings and new energy

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, ISO 26000: Guidance on Social Responsibility, GB/T 36001-2015: Guidance on Social Responsibility Reporting, Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises (CASS4.0)

Certifications: ISO 14001, ISO 9001, ISO 45001

UN Sustainable Development Goals

• Goal 1: No Poverty
• Goal 5: Gender equality
• Goal 7: Affordable and clean energy
• Goal 9: Industry, innovation and infrastructure
• Goal 11: Sustainable cities and communities
• Goal 13: Climate action
• Goal 17: Partnerships for the goals

The report maps MCC's actions to the UN Sustainable Development Goals.

Awards & Recognition

• A-level of information disclosure by Shanghai Stock Exchange for 4 consecutive years
• Best Board and Best IR awards for the 11th Tianma Prize
• Best IR Hong Kong Listed Company by New Fortune
• Special Contribution Awards for 20th Anniversaries at the 20th China Business Top 100
• 17 Science and Technology Awards in Construction by China Association of Construction Enterprise Management
• 8th in the ENR’s 2020 Top 250 Global Contractors
• 6 first places of China Construction Engineering BIM Competition
• 7 Luban Prizes for China Construction Projects
• China Top 500 Enterprises Charity and Public Welfare
• 28 projects won the National Quality Engineering Award
• 18 Metallurgical Science and Technology Awards by China Iron and Steel Association and the Chinese Society for Metals
• 7 first places of Science and Technology Awards by China Nonferrous Metals Industry Association
• Golden Round Table-the Best Board of Directors award for 2 consecutive years
• Golden Bauhinia Award for “The Most Responsible Listed Company” and “The Best IR Listed Company” for 9 consecutive times

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Social responsibility
• Carbon emission reduction

Environmental Achievements

• Achieved the objective of total emission reduction in all units under the Name List of Enterprises with Significant Waste Disposal; no excessive emission.
• 26 projects won the National Quality Project Award (14 construction projects reached a record high).
• Won the National Excellent Project Gold Award for three consecutive years for its metallurgical projects, and won the Luban Prize for Construction Project for 6 domestic projects.

Social Achievements

• Successfully selected as "2021 People's Corporate Social Responsibility Case" by People's Daily with the green practice of the National Snowmobile and Sled Center of the Winter Olympics.
• Allocated RMB8,679,140 of assistance funds to designated poverty alleviation targets, and completed consumption assistance of about RMB29 million.
• Actively fulfilled its social responsibilities and made positive contributions in rural revitalization, rescue and disaster relief, voluntary communities, and overseas donations.

Governance Achievements

• The Board of the Company was awarded the “Golden Round-table • Best Board of Directors” of listed companies for the third time.
• The Company was awarded Tianma Award, namely the Chinese Listed Companies “Best Investor Relations Company Award”.
• Rated Class A (the top class) Listed Company for SSE Information Disclosure for five consecutive years.

Climate Goals & Targets

Environmental Challenges

• The COVID-19 pandemic continues to spread across the globe, and the international political and economic situation remains complicated and volatile, with many unstable and uncertain factors.
• Changes in the policies of industry in which the Company was involved and demands of its domestic and overseas markets (carbon emission peak and carbon neutrality goals, environmental remediation, dual control of total energy consumption, real estate industry development, global mineral product price reversal).
• Risks associated with traditional metallurgical engineering business segment (market shift from incremental to stock market, increasing competition, carbon peak and neutrality policy).

Mitigation Strategies

• Focus on risk prevention and control to ensure the steady growth of the Company.
• Seek growth with an open mind, promote reform with an entrepreneurial passion, prevent risks with a sense of hardship, seek promotion with a confident mind.
• Adhere to the focus on the main business, persist in the strategic positioning of “being the world-class national team for metallurgical construction, the vanguard of the main force of capital construction and the vanguard of the leaders in emerging industries, continuing to pursue high-tech, high-quality and innovative development in the long run”, and comprehensively improve the overall strength and the management level as well as the spirit of the enterprise.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• “Golden Round-table • Best Board of Directors”,
• Tianma Award, namely the Chinese Listed Companies “Best Investor Relations Company Award”
• Best IR Hong Kong Stock Company Award by New Fortune
• China Securities “Golden Bauhinia”, namely the “Listed Companies with Best Investment Value Award during the Fourteenth Five-year Plan Period”
• 2021 China ESG Golden Award Best Corporate Governance Award
• “2021 China Company Top50 with Potential Value” by the”Barron Weekly”,
• CSRC "Listed Company’s Excellent Practice Cases of Performance Meeting for the 2020 Annual Report
• Rated Class A (the top class) Listed Company for SSE Information Disclosure for five consecutive years.

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Social Responsibility
• Governance

Environmental Achievements

• Successfully completed construction of Olympic venues with focus on sustainability.
• Built the world's first hydrogen-based direct reduction shaft furnace.
• Developed the world's first full heat recovery process for a converter.
• Completed the largest long-process special steel production base in China.
• Created the world's first Nangang blast furnace.
• 40 MCC projects received the Green Construction Level Evaluation from China Association of Construction Enterprise Management.
• The first Certificate for China Green Building Material Product Certification in the mixed concrete industry

Social Achievements

• Successfully provided event protection for the Beijing Olympic Winter Games and Paralympic Games.
• Built high-quality, inspection-free "life pods" in Shanghai and Shenzhen during the pandemic.
• Participated in flood control and rescue efforts.
• Contributed to rural revitalization through industrial assistance, engineering assistance, and consumer assistance.
• Recruited 5540 university graduates.
• Trained 87000 employees, with more than 800000 training man-times.

Governance Achievements

• Established a Sustainable Development Committee of the Board of Directors in 2022.
• Formulated the Working Rules of the Sustainable Development Committee.
• Implemented the Three-Year Action Plan for State-owned Enterprise Reform, completing 88 reform objectives and tasks.
• Strengthened closed-loop management of risk pre-warning, prediction, mid-term monitoring and surveillance, and post-event reporting and disposal.
• Established a compliance management system.

Climate Goals & Targets

Environmental Challenges

• Complex and severe internal and external situation.
• Downward pressure of the economy.
• Impact of the pandemic.
• Multiple pressures.

Mitigation Strategies

• Adhered to the guidance of General Secretary Xi Jinping's thought.
• Implemented the spirit of the 20th National Congress of the CPC.
• Implemented the important instruction requirement of "the pandemic should be prevented, the economy should be stabilized and the development should be safe".
• Overcame the impact of the pandemic.
• Withstood the downward pressure of the economy.
• Successfully completed annual targets and tasks.
• Strengthened the foundation of high-quality development.

Supply Chain Management

Supplier Audits: 530 suppliers blacklisted in 2022

Responsible Procurement

• Measures for the Management of Suppliers of MCC Group and MCC

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: HKEX ESG Reporting Guide, Shanghai Stock Exchange Guidelines for Environmental Information Disclosure, GRI Sustainability Reporting Standards, ISO 26000, GB/T 36001-2015, CASS-ESG5.0

Certifications: ISO 14001

Awards & Recognition

• Golden Bauhinia Award (11 consecutive years)
• A-grade rating for information disclosure from the SSE (6 consecutive years)
• Best Practice Award for Annual Report Performance Explanation (2021)
• Golden Round Table - Special Contribution to Corporate Governance Award (2022)
• ESG Excellent Practice Case of Listed Companies (China Association for Public Companies)
• 10 Luban Prize for Construction Projects (2022)
• 23 National Quality Engineering Awards (2022)
• 3 Tien-yow Jeme Civil Engineering Prizes (2022)
• 20 Metallurgical Science and Technology Award (2022)
• Gold Award of the International Sudomo Quality Medal (ICQCC)

Environmental Metrics

Environmental Achievements

• MCC Ecological Environmental Protection processed 312 million tons of sewage, achieving 79,500 tons of COD reduction and 8,000 tons of ammonia nitrogen reduction; China ENFI processed 870,000 tons of municipal solid waste and 400,000 tons of sewage, achieving 20,000 tons of COD reduction and 503 tons of ammonia nitrogen reduction.
• MCC-SFRE carried out energy-saving transformations for its furnace kilns and ultra-low nitrogen transformations for its boilers, expected to save 17.55 million cubic meters of natural gas and reduce carbon emissions by 38,000 tons per year.

Social Achievements

• The Company undertook non-reimbursable assistance funds of RMB17.36 million for poverty alleviation and rural revitalization.
• CISDI helped Yanhe County develop a 200-mu demonstration garden for characteristic "black industry", supporting 2,087 people in 537 households.

Governance Achievements

• The Company further promoted the unity of strengthening the Party’s overall leadership and improving corporate governance.

Climate Goals & Targets

Environmental Challenges

• Risks associated with macro-economy (global economic slowdown, geopolitical conflicts, inflation, supply chain disruptions)
• Risks associated with the traditional metallurgical engineering business segment (industry restructuring, green and low-carbon transformation)
• Risks associated with the non-steel engineering segment (urbanization slowdown, government debt control, intense market competition)
• Risks associated with the real estate development business segment (weak housing demand, price drops)
• Risks associated with financial segment (high interest rates, economic downturn)
• Risks associated with bulk commodity prices (volatility affecting production costs and profits)
• Risks associated with international operation (political, economic, social, legal, and exchange rate factors)
• Environmental and safety production risks
• Risks associated with documents fraud or theft
• Cyber risk and security

Mitigation Strategies

• Adhering to the business system of “One Core, Two Main Bodies and Five Features”, tracking macroeconomic policies and industry trends, adjusting business strategies.
• Maintaining leading position in metallurgical construction, focusing on high-end, intelligent, and green development.
• Integrating into national strategy, innovating business models, strengthening marketing.
• Implementing "destocking" programs, asset revitalization, and risk project clearance.
• Paying close attention to policy directions and market changes, optimizing financing structure.
• Enhancing research and forecast on bulk commodity prices, adjusting procurement and sales strategies.
• Supervising subsidiaries, formulating safety plans, establishing good relationships with local partners.
• Improving energy conservation and environmental protection systems, enhancing daily supervision.
• Perfecting safety management systems, intensifying inspection and governance of hidden dangers.
• Establishing a comprehensive safety protection system, optimizing application systems and IT infrastructure.

Supply Chain Management

Climate-Related Risks & Opportunities