Climate Change Data

Environmental Metrics

ESG Focus Areas

• Energy conservation
• Emission controls
• Environmental protection
• Safety

Environmental Achievements

• Reduced electricity consumption by approximately 30% through heat-recycling plants at over 80% of production capacity
• Decreased CO2 emissions by approximately 20,000 tons per year per million tons of production
• Reduced nitrous oxide emissions by approximately 60% per ton of clinker produced with De-NOx equipment
• Installation of PM reduction equipment at all plants
• First cement producer in Shaanxi Province to use desulfurized gypsum and construction waste as raw material inputs
• Regularly recycles fly ash and slag from iron & steel plants as inputs

Social Achievements

• Revised and improved safety emergency response plan
• Revised handbooks and guidelines to improve work safety measures
• Numerous safety-related training courses initiated
• Implementation of a “Sustainable Safety Development Project”
• Charitable donations of approximately RMB3.7 million

Governance Achievements

• Joined the Cement Sustainability Initiative (CSI)

Climate Goals & Targets

Environmental Challenges

• Low demand in Xi’an Metropolitan Area and Central Shaanxi
• Oversupply and fragmented supply in Shaanxi cement market
• Low sales volume in Xinjiang
• Slight drop in sales volume in Guizhou due to imbalance between demand and supply
• Increase in environmental costs due to tightened environmental policy

Mitigation Strategies

• Occasional peak-shifting production halts during low season periods under stringent environmental policy
• Efficiency gains and cost-cutting measures
• Collaboration with Conch Cement to improve supply side and market outlook
• Cost-cutting measures including administrative and head office cost cuts and staff incentives

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: International Financial Reporting Standards (IFRSs)

Third-party Assurance: Deloitte Touche Tohmatsu

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Emission Reduction
• Occupational Health and Safety
• Community Development
• Education
• Supplier Responsibility
• Anti-corruption
• Water Management
• Waste Management
• Biodiversity

Environmental Achievements

• Reduced GHG emissions by 10.8% year-on-year to 10,359,742.6 tonnes of CO2 equivalent
• Reduced energy consumption per unit of clinker by 1.1%
• Built a 10MW pure low-temperature residual heat power generation system
• Consumed over 8.7 hundred thousand tonnes of urban construction waste and other alternative materials, resulting in cost savings of over 5 million RMB
• Completed three hazardous waste co-disposal projects
• Reduced SO2 emissions by 51.5% and NOx emissions by 47.8%
• Achieved zero discharge of industrial wastewater in Fuping subsidiary
• 15 subsidiary companies evaluated as second-level standardised safety enterprises, and 7 mines as second-level standardised mines
• Completed restoration and treatment of 250,000 square meters of mine land

Social Achievements

• Established a comprehensive and standardised recruitment system
• Recruited 592 employees
• Maintained low employee turnover rate of 7.77%
• Provided training to 883 talents under the talent programme
• Organised EMBA Leadership Enhancement Training for 18 senior executives
• Provided training to 3,347 individuals in West Holding Group
• Invested 3,837,000 Yuan in various types of education charity funds, benefiting 2,390 people
• Invested more than 5.33 million RMB in various educational charity funds in Africa
• Donated 40 tonnes of cement to UNIKAL University in DRC
• Invested over RMB 48.79 million in improving the living environment in Africa
• Invested over 6.35 million RMB in community welfare and charity activities in Africa

Governance Achievements

• Established an Environmental, Social and Governance Working Committee
• Conducted 69 comprehensive internal control audits
• Established a robust anti-corruption system
• Received and addressed 37 reports on cadres' work style and abuse of authority

Climate Goals & Targets

Environmental Challenges

• Physical risks such as extreme weather events and water scarcity
• Transition risks such as stricter environmental regulations and increased market competition
• Potential for supply chain disruptions

Mitigation Strategies

• Annual mock flood exercises and emergency plans
• Strengthening maintenance of flood prevention and drainage facilities
• Regularly updating regulations to ensure compliance
• Accelerating the switch to energy-saving and automated equipment
• Promoting the use of new and clean energy
• Supplier audits and evaluations
• Diversifying supplier resources
• Implementing a robust anti-corruption system and stringent compliance measures

Supply Chain Management

Supplier Audits: 612 suppliers audited in 2023

Responsible Procurement

• Revised and implemented management policies requiring suppliers to conduct their business responsibly and ethically

Climate-Related Risks & Opportunities

Physical Risks

• Storms, floods, damage to facilities, transportation delays

Transition Risks

• Stricter environmental policies, increased operating costs, increased market competition

Opportunities

• Decreased costs from energy efficiency, increased revenue from investor and consumer preference for environmentally friendly products

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix C2 of the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange), Guidelines for the Preparation of Social Responsibility Report of Cement Enterprises (T/CCAS 002-2018)

Certifications: ISO 14001 (21 production enterprises), ISO 9001 (all cement production enterprises)

Awards & Recognition

• Special Contribution Award for the 4th Shaanxi Province College Students Ecological Literature Creation Competition
• Outstanding Achievement and Classic Case in the Cultural Construction of Building Materials Enterprises
• Outstanding Contribution Award in the First Shaanxi Province High-Strength Green Low-Carbon Concrete Mix Design Skills Competition
• Excellent Organisation Award in the 2023 Cement Industry "Mei Nuofu" Cement Quality Inspector Skills Competition
• Exemplary Unit for Energy-saving and High-efficiency Development in Shaanxi Province
• Top 10 Private Building Materials Enterprises in 2023
• Top 50 Building Materials Enterprises in 2023
• Advanced Unit with Outstanding Contributions in the National Cement Comparative Analysis