2025
Sustainability Report
2025 Shandong Iron and Steel Co. Ltd.
Sustainability Report
2025 Sustainability Report Shandong Iron and Steel Co. Ltd.Contents
About This Report 1 01 03
Chairman's Message2
Party-building Leadership 12 Innovation-Driven Development 60
About Shandong Steel4 Corporate Governance 14 Intelligent Manufacturing 66
ESG Governance 18 Supply Chain Security 68
Business Ethics 23 Product and Service Safety and Quality 70
Compliance and Risk Management 26 Data Security and Privacy Protection 76
Tax Management 30 Employees 78
Occupational Health and Safety 85
Social Welfare 92
02 Appendix
Addressing Climate Change 34 ESG Key Data Table 94
Environmental Compliance Management 41 GRI Standards Index100
Pollutant Emissions 41 Topic Disclosure Index 107
Waste Management 47 Feedback Form108
Energy Utilization 49
Circular Economy 55
Ecosystem and Biodiversity Protection 562025 Sustainabil ity Report About This Report
About This Report
Shandong Steel Co. Ltd. Sustainability Report systematically discloses the Company's
philosophy initiatives practices and performance in environmental social and governance Data Sources
matters for 2025. All data contained in this Report originate from official documents and statistical reports of Shandong Iron and Steel Co. Ltd.This report is published in both Chinese and English versions. In the event of any discrepancy the Chinese version shall prevail.Preparation Basis
◎ Global Sustainability Standards Board "GRI Standards for Sustainability Reporting" (GRI Standards)
Reporting Entity and Scope ◎ United Nations 2030 Sustainable Development Goals (SDGs)
This Report refers to Shandong Steel Co. Ltd. which includes its subsidiaries branch companies directly affiliated institutions ◎ State-owned Assets Supervision and Administration Commission of the State Council "ESG Special ReportCompilation Study
and affiliated plants. On October 24 2025 the Company's Eighth Board of Directors held its Seventeenth Meeting and approved for State-owned Enterprise Controlled Listed Companies"
the resolution to acquire 100% equity stake in Laiwu Steel Group Yinshan Profile Steel Co. Ltd. with equity transfer completed
on November 1 2025. 2025 data includes Laiwu Steel Group Yinshan Profile Steel Co. Ltd. For convenience of expression and ◎ Guidelines No. 4 of Shanghai Stock Exchange for Self-Discipline Supervision—Compilation of Sustainability Report
reading "Shandong Steel Co. Ltd." is also referred to in this Report as "Shandong Steel" "the Company" or "we;" "Laiwu Steel
Group Yinshan Profile Steel Co. Ltd." is referred to as "Yinshan Profile Steel;" "Shandong Iron and Steel Group Co. Ltd." is ◎ Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial)
referred to as "SD STEEL" or "the Group."
◎ Shanghai Stock Exchange "Sustainability Development Report Compilation Guide for Listed Companies"
◎ Shandong Province "ESG Indicator System Work Guide for State-owned Controlled Listed Companies" (LuGuozi Shouyi
Reporting Period [2024] No. 3)
This Report covers the period from January 1 2025 to December 31 2025. To ensure data continuity and comparability of trends ◎ "Chinese Enterprise Sustainable Development Report Guide (CASS-ESG 6.0)"
portions of the content extend beyond this timeframe.◎ Guidelines for the Special Report on Environment Society and Governance (ESG) for Iron and Steel Enterprises by the China
Iron and Steel Association
Publication Cycle
Report Availability
This Report is an annual report generally released by April 30 of the following year. Since 2010 the Company has released annual
Social Responsibility Reports. In 2022 the Report was renamed to "Social Responsibility and ESG Report" and in 2024 it was You can search for Shandong Steel (Stock Code: 600022) announcements on the Shanghai Stock Exchange website http://www.further renamed to "Sustainability Report." The Company has continuously released Social Responsibility Reports / ESG Reports sse.com.cn or query and download this Report on the "Listed Companies - Shandong Steel (600022.SH)" column at http://www./ Sustainability Reports for 16 consecutive years. shansteelgroup.com the Shandong Iron and Steel Group Co. Ltd. website.
12025 Sustainabil ity Report Chairman's Message
Chairman's Message
In 2025 faced with a complex and volatile market environment and multiple internal and external challenges Shandong Steel adhered Technological innovation as a driving force. Guided by the development principles of "high-end high-efficiency intelligence and
to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era fully accurately and comprehensively green practices" and with value creation as the core objective the Company built a technology innovation management system
implemented the new development philosophy firmly seized the important opportunities of strong support from Shandong Iron and featuring clear accountability collaborative sharing efficient operations and dynamic vitality. Intellectual property lifecycle
Steel Group for its core business and integrated collaborative support from Baoshan Iron & Steel Co. Ltd. The Company accelerated management was strengthened to continuously enhance the contribution of technological innovation to enterprise value. R&D efforts
reform to strive for survival deepened benchmarking to identify gaps strengthened team-based tackling of difficulties and made focused on core process bottlenecks such as smooth on-site operations cost improvement and quality stability. By precisely aligning
targeted efforts along the five main lines of improving efficiency reducing costs expanding markets adjusting structure and with the practical needs of "the shop floor and the marketplace" the Company concentrated superior resources on key markets
strengthening coordination. Key reforms achieved remarkable results operating performance improved significantly and a steady and continuously refined product varieties strengthened brand presence and drove products toward premium positioning and deeper
positive development momentum was maintained. penetration of niche markets.Strengthening governance to build a solid foundation. The Company upheld Party-building leadership in driving development Building a nest to attract talent. Focused on enhancing the quality and effectiveness of talent management the Company continued
steadily converting the political strengths of Party-building into governance effectiveness and development momentum. Anchored in to improve talent development mechanisms driving continuous gains in human resource allocation efficiency and talent capital
our strategic positioning we pursued scientific planning of management and operations optimized the governance framework and effectiveness. Emphasizing a "high-caliber precision-focused urgently needed" orientation the Company prioritized the recruitment
standardized decision-making processes. We continued to advance the standardization and diversification of the Board of Directors of critically needed talent in key fields targeted national and provincial talent programs to broaden selection scope and horizons
deepened ESG governance practices and fully safeguarded the legitimate rights and interests of all stakeholders. By adhering to the and established an "industry-academia-research-application" collaborative training mechanism to deepen the development of
rule of law in corporate management and holding firm to the baseline of compliant operations the modernization of our governance highly skilled talent. The "Health Protection Union Companionship" employee wellness initiative was vigorously implemented and
system and capabilities continued to improve. the "universal coverage plus targeted precision" care system became more refined enriching employees' sense of belonging and
Deepening reform to unlock new capabilities. The "1+6+N" system transformation was further implemented achieving breakthroughs fulfillment.in key areas and continuously refining a modern organizational and institutional framework characterized by "centralized consistency Joining hands to write a new chapter. We further advance the integration and restructuring of the steel sector to enhance asset value
streamlined structure efficient processes and clear responsibilities." New business models for value creation operated with high creation capabilities vigorously advance intelligent manufacturing empower industrial operations with artificial intelligence fully
quality and efficiency the R&D system reform accelerated manufacturing processes were deeply optimized and the specialized tap the profit potential of production lines and productsactively foster new quality productive force promote strategic cooperation in
integration of energy and utilities advanced steadily. The vitality of all employees in value creation was fully unleashed overall all dimensions and actively improve the industrial and ecological chains. We actively advance market value management to boost
operational quality and efficiency improved comprehensively and core competitiveness continued to strengthen. both the quantity and quality of corporate value and effectively safeguard the rights and interests of shareholders and stakeholders.Dual breakthroughs in green and smart development. Upholding the philosophy of "Low-Carbon Clean Green Shandong Steel" With firm confidencesteadfast resolve strengthened actions and joint efforts we will together write a new chapter of high-quality
the Company empowered its transformation and high-quality development through green digital and intelligent initiatives. A development for Shandong Steel.routine management and control mechanism for ultra-low emissions was established consolidating and enhancing the Grade-A 2026 marks the first year of the "15th Five-Year Plan" and also a critical year for the steel industry to undergo in-depth adjustment
Environmental Performance rating across all operations. The pursuit of ultimate energy efficiency deepened with self-generated optimization and accelerated transformation and upgrading. Shandong Steel will continue to persist in the "Five Orientations"
electricity at Steel City Base rising steadily and Rizhao Base earning the national-level "Leader" title for energy efficiency in the steel (Differentiation High-end development Green development Intelligent development People-or iented development) development
industry.The carbon management system was strengthened to promote the application of proven carbon reduction technologies and direction and (production based on orders output with marginal contribution profits supported by cash flow revenue driven by profits)
AI-powered smart management was advanced to empower industrial operations fully tapping the profit potential of production lines of operations deepen transformation and survival vigorously enhance manufacturing capacity product operational capability and
and products and actively cultivating new quality productive forces with 20 "AI + Steel" application projects deployed across both value creation ability promote continuous improvement in operational performance and achieve a good start for the "15th Five-Year
bases. Plan."
2 3About Shandong Steel
About Shandong Steel
Shandong Steel carries forward its original intention and mission of "steel for national benefit and steel for national strength" transformation to smart manufacturing and integrates information technologies such
rooted in Shandong province serving the whole nation with eyes on the world standing at the forefront turning challenges into as one-click steelmaking remote operation and maintenance and industrial robots Product Application Areas
opportunities advancing steadily amid stability developing through reform breaking through in adversity and growing through with industrial development and corporate governance. Adhering to the concept of
innovation. The Company has explored a new development path characterized by green intelligent and low-carbon development attaching equal importance to developing circular economy and advancing energy
carving out a high-quality development route that adapts to the trends of the era suits the Company's reality and embodies innovative conservation and emission reduction through science and technology the Company
further strengthens structural energy conservation technological energy conservation
vitality.and management energy conservation through technological innovation deepens
the cascade utilization and circular utilization of resources and achieves remarkable
Company Overview results in energy conservation emission reduction and circular economy. The main
entities of the Company have successively received a number of honors including
Shandong Steel is headquartered in Gangcheng District Jinan City Shandong "National Environmentally Friendly Enterprise ""National Model Unit for Afforestation
Province and is a state-owned controlled large-scale integrated steel enterprise. ""National Pilot Demonstration Enterprise for Integration of Informatization and
Has successively won In December 2011 SD STEEL implemented an integration of its two steel listed Industrialization to Promote Energy Conservation and Emission Reduction ""Top Ten
the following honors subsidiaries—Jinan Iron and Steel Company Limited (Jigang) and Laiwu Steel National Enterprises for Comprehensive Utilization of Resources ""Environmentally
Company Limited (Laigang exchanged shares to merge into Jigang); in February Friendly Enterprise for Clean Production in China's Iron and Steel Industry "and
National Environmentally Friendly
2012 the Company's name was changed to "Shandong Steel Co. Ltd." and in "Green Factory". Meanwhile the Company has been selected as one of the first batch Enterprise
March 2012 the stock symbol was changed to "Shandong Steel" (Stock Code: of national circular economy pilot enterprises national water-saving benchmark
National Model Unit for Afforestation 600022). In December 2023 China Baowu strategically invested in SD STEEL enterprises the first batch of "Dual-Carbon" Best Practice Energy Efficiency
(holding 49% stake) and Baosteel strategically invested in Shandong Iron & Steel Benchmark Demonstration Factory Cultivation Enterprises by China Iron and Steel
National Pilot Demonstration Enterprise Rizhao Co. Ltd. (holding 48.6139% stake) forming a "dual participation" operating Industry Association and Shandong Province Grade-A Environmental Performance
for Integration of Informatization and model where China Baowu participated in SD STEEL and Baosteel participated in Enterprise (all regions) with its sustainable development capacity continuously
Industrialization to Promote Energy Rizhao operations. In November 2025 the Company completed the acquisition of improved.Conservation and Emission Reduction 100% equity stake in Laiwu Steel Group Yinshan Profile Steel Co. Ltd.Shandong Steel operates two major steel production bases—Steel City Base in
Top 10 Enterprises in National Jinan and Rizhao Coastal Base—forming five major product lines: plate hot and Principal Business
Resource Comprehensive cold rolled products section steel special steel and construction steel. The
Utilization Company's products are applied in advanced equipment marine engineering Driven by scientific and technological innovation Shandong Steel is committed to
rail transportation home appliances petrochemical equipment engineering building efficient and comprehensive integrated solutions for steel materials. Focusing
Clean Production and machinery automotive manufacturing and other key sectors and is a nationally on five core products namely section steel plate hot and cold rolled products special
Environmentally Friendly Enterprise recognized production base for medium-heavy plate materials gear steel and steel and construction steel the Company continuously strengthens the upgrading
in China's Iron and Steel Industry H-beam steel. The Company possesses a complete integrated production process and innovation of steel materials. As an important steel production base in China
covering raw materials coking sintering pelletizing ironmaking steelmaking the Company's products feature high standards high technological content and
Green Factory and steel rolling. Overall equipment levels are comparatively advanced including: environmental friendliness with outstanding comparative advantages high market
2 x 5100 m3 blast furnaces 1 x 3800 m3 blast furnace 4 x 210-tonne converters recognition and strong core competitiveness and have won numerous national and
2 x 4300 mm plate production lines 1 x 3500 mm steckel mill 1 x 2050 mm industrial awards. The Company devotes itself to the research and development
hot rolling line 1 x 2030 mm cold rolling line large and medium special steel of high-performance steel materials and has successfully made technological
bar production lines H-beam production lines and other process equipment all breakthroughs in key products such as hot-rolled coils of large-deformation-resistant
reaching nationally leading levels. pipeline steel and hot-rolled dual-phase steel for automobiles filling industry gaps
The Company upholds advance planning precise positioning and acting in and promoting products toward high-end development. The products are widely used
accordance with the trend actively advances the development of informatization in automobiles petroleum railways highways bridges construction electric power
intelligentization and greening empowers traditional industries with advanced machinery shipbuilding home appliances and other fields and are exported to dozens
technologies including artificial intelligence vigorously promotes the of countries and regions around the world.
4 5About Shandong Steel
Historical Milestones Organizational Structure1
2025 Shareholders'
11 Meeting
November 2025: The acquisition Strategic Planning and ESG
of 100% equity in Laiwu Steel Committee
Group Yinshan Profile Steel Co.
2023 Ltd. was completed.
10 Nomination Committee
December 2023: China Baowu
made a strategic investment in Board of Directors Board Secretary
SD STEEL acquiring a 49% stake; Budget Compensation and
Baosteel acquired a 48.6139% stake 2021 Appraisal Committee
in Shandong Iron & Steel Rizhao 09
Co. Ltd. inaugurating the "Double November 2021: The 32.26% equity
Participation" operating model. stake held by major shareholder Risk Management and Audit
Jigang Group was transferred Committee
2019 without consideration to SD Executive Management
08 STEEL.
The Rizhao High-End Steel Production
Base was fully put into operation
and the Laiwu Branch launched the
systematic optimization upgrading
and transformation for the transform- 2017
ation of old and new growth drivers. 07 July 2017: All steel production
lines at Jigang were permanently
shut down.
2013
06
March 2013: The National Deve-
lopment and Reform Commission
approved the Rizhao High-End Steel
Production Base project. 2012
05
February 27 2012: The Company
was renamed "Shandong Iron
and Steel Co. Ltd." Major Controlling
2011 Direct Institutions Direct Plants Subsidiaries
04
December 30 2011: The Company
completed the absorption and
merger of Laigang.
2006
03
April 24 2006: The split share
structure reform was completed.
2004
02
June 29 2004: The Company
was listed on the Shanghai Stock
Exchange.
2000
01
December 29 2000: The Company
was incorporated and registered.
1 Organization structure as at 31 December 2025
7
6
Tianyuan Gas Company/Huanyou Chemicals/
Regional Sales Subsidiaries
Corporate Culture Department
(Union Youth League Armed
Forces) Shanxin Software Co. Ltd.Laiwu Steel Group Yinshan Profile Steel Co. Ltd.Risk and Compliance
Department Shandong Iron and Steel Rizhao Co. Ltd.Plate and Strip Plant
Investment Management
Department Bar and Rod Plant
Section Steel Plant
Operations and Finance Special Steel Plant
Department
Steelmaking Plant
Ironmaking Plant
Logistics and Transportation Department
Operations Improvement
Department (AI Smart Safety and Security Department
Department)
Energy and Environmental Management
Department (Carbon Management Office)
Human Resources Equipment Management Department
Department Manufacturing Management Department
Human Resources Reserve Center
Planning and Technology
Department Financial Services Center
Shandong Steel Research Institute
(Technology Center)
Office (Board Office) Marketing Corporation
Procurement CenterAbout Shandong Steel
Corporate Culture Recognition and Honors
E SG Ratings
Vision Mission
Building the most Contributing new mom-
entum to the construction 2024-2025 China Iron and Steel Enterprise ESG Rating: AAAcompetitive steel
of a steel ecosystem
enterprise in and providing strong
northern China support for high-quality 2025 China Iron and Steel Enterprise ESG Rating: AAA
development of the man-
ufacturing industry
Wind ESG Rating: AA
Sino-Securities Index ESG: AA
Business Shandong
Core Values Philosophy Steel Spirit
Co-creation Co- Excellent Trust is constant
progress Co-win products win as mountains A wards and Honors
markets integrity innovation
creates the future transcends limits
Won the "2025 Best Practice Case in Sustainable Development for Listed Companies" by China Listed Companies Association
Won the "2025 Best Practice in Board Office Construction for Listed Companies" by China Listed Companies Association
Development Strategy Won the "2025 A-Share Listed Companies ESG Excellence TOP 100" by Sino-Securities Index
Won the Shandong Province's "May lst Labor Award"“Research and Application of Blast Furnace Stockline Charging Process Optimization Based on Discrete Element Method"won the Second Prize of Shandong Intelligent Manufacturing Competition
Integrate into the steel Implement the transition
ecosystem and establish Development from old to new growth
a new benchmark for drivers optimizing energy Rizhao Base was selected into the 2025 National Key Industry Energy Efficiency "Leader "List recognized as an Excellent-
green and intelligent Strategy process and technological
transformation in the structures level Smart Factory and included in the first batch of Environmental Facility Opening Units
steel industry
Develop China's premier Optimize inland product
coastal production base transformation and build
for high-quality sheet and China's section and special
coil products leading in Coastal Inland steel base
scale and efficiency
Implement the new development concept setting a model for green urban steel mill development
8 92025 Sustainabil ity Report
01 Governance Shandong Steel adheres to the concept of sustainable development integrating ESG management
into its entire business process. With Party-building leadership as the core and corporate governance
compliance and risk control tax management as priorities the Company improves its sound and steady
Party-building Leadership operation system by strengthening shareholder value management perfecting stakeholder communication
mechanisms and building a strong line of defense for business ethics so as to support the high-quality
Corporate Governance development of the Company.ESG Governance
Business Ethics
Compliance and Risk Management
Tax Management
10 112025 Sustainabil ity Report Party-building Leadership
Party-Building Leadership Organizational Strengthening
The Company places high importance on strengthening primary-level Party organization development with Party organizations'
political and organizational functions continuously enhanced. The Company continuously improves integrated top-down tightly
Shandong Steel consistently upholds Party leadership as the "foundation" and "soul" of enterprise development. Guided by "Xi Jinping organized and forcefully implemented organizational systems establishing regular guidance and inspection mechanisms for
Thought on Socialism with Chinese Characteristics for a New Era" the Company earnestly implements "the spirit of the 20th Party primary-level Party-building work and a monthly key work list advancement mechanism. Through deepening "Five-Heart Four-
National Congress and all subsequent plenums". Maintaining "two consistent principles" and achieving "two deep integrations" Party Modernization" Party-building brand development the Company integrates Party-building work with production and operations
committees fully exercise their role in setting direction managing the overall situation and ensuring implementation. The Company forming a "one Party committee one characteristic one branch one brand" primary-level Party-building work pattern. The Company
leads high-quality development through high-quality Party-building. builds a "1+N+X" brand matrix upgrading Party-building brands from "quantitative accumulation" to "quality enhancement" and from
"scale clusters" to "premium clusters." By the end of the reporting period the Company has cultivated 103 excellent Party-building
Political Leadership work brands with the proportion of four-star and above Party branches reaching 82.1%.The Company always prioritizes political development firmly establishing the political identity that "state-owned enterprises serve The Company widely carries out Party character practice activities such as employee Party responsibility areas model posts task
the Party." The Company strictly implements the "first agenda" system aligning political direction and enhancing political capability forces project assignments and technical problem-solving teams. The Company advances "Party-building+" projects and strategically
through studying the Party's innovative theories firmly upholding "two establishments" and resolutely achieving "two safeguards." develops the "Strive for Excellence and Innovation as Pioneers; Achieve Profitability and Build New Achievements" thematic practice
The Company conducts high-standard study and education on implementing "the spirit of the Central Committee's eight-point activity promoting effective coordination and unified effort between Party-building and central work. The Company fully leverages
the battle-fortress role of primary Party organizations and the pioneering role of Party members. By the end of the reporting period
decision" The Company decisively implements superior decision-making and deployment innovatively building a "1+4+N" three-
the Company has implemented 392 "Party-building+" projects; established 496 Party member model posts 525 Party member
dimensional supervision model and establishing a "one-matter-one-document time-limited feedback dynamic tracking" work
responsibility areas 248 Party member task forces and 386 responsibility area problem-solving projects. Party members undertook
mechanism. The Company bridges the "last mile" in implementation and ensures that superior decisions are faithfully executed 4878 assigned performance projects solving 4054 production and technical challenges. The Company organized 249 Party member
without deviation or distortion. volunteer services with 2081 Party member volunteer service participants.Ideological Excellence
Party organizations at all levels of the Company make full use of the theoretical study group sessions and the "First Agenda" study The proportion of Party branches rated four-star and above reached 82.1%.to conduct comprehensive systematic timely in-depth and practice-oriented learning and consciously arm the mind and guide
practice with the Party’s innovative theories. Taking the education on implementing the spirit of the Eight-Point Decision of the Excellent Party-building work brands: 103 Party member model posts: 496
Central Committee as an important starting point to deepen the Party’s work style and promote comprehensive and strict Party
governance the Company insists on leading bodies taking the lead in learning carries out thematic study seminars and warning Party member responsibility areas: 525 "Party-building +" projects: 392
education and advances learning inspection and rectification in an integrated way to ensure quality learning rigorous inspection and
Performance indicators undertaken by Party members: 4878
effective rectification. Party members and cadres have firmer ideals and beliefs stronger awareness of discipline and more steadfast
work style. Technical problems solved in production and operation: 4054
Institutional Consolidation Research projects in responsibility areas: 386 Party member volunteer services: 249
The Company continuously improves its Party-building system clearly defining the scope of matters subject to the Three Importance
Party member volunteer participants: 2081 person-times
and One Majority decision-making system implementing pre-discussion by Party committees on major issues and checklist-based
management of important matters and strictly enforcing the system for reporting major issues. The Company has comprehensively
implemented "Party-building inclusion in the Articles of Incorporation" across the Company and its subsidiaries clarifying Party
organizations' duties authority institutional structure operating mechanisms and fundamental safeguards. This has further Work Style Refinement
solidified the legal position of Party organizations in the Company's governance structure.T h e C ompany's Party Committee attaches high importance to conduct development deeply implementing the " R e fining Steel
Industry Conduct and Implementing New Development Strategy" Education and Practice Activity Plan. The Company communicates
and implements the "high standards strictness meticulousness solidity and speed" conduct requirements to every employee
continuously advances "four rectifications and four enhancements" activities actively advocates "breaking ten and establishing ten"
and earnestly refines steel industry conduct. This provides powerful momentum and solid guarantee for enterprise high-quality
development. The Company deepens specialized rectification of formalism and bureaucratism addresses development bottlenecks
and employee concerns and promotes problem self-inspection and rectification sign-off. The Company precisely implements "three
distinctions" appropriately exempting or not holding accountable certain issues identified in specialized supervision in accordance
with regulations. The Company conducts substantial follow-up education to demonstrate organizational care and inspire intrinsic
motivation for enterprise development.Party Governance and Discipline
We have always maintained a strict tone and made unremitting efforts formulated responsibility lists at all levels continuously
improved the responsibility implementation system featuring "coordination of four responsibilities" and sound operation kept
tightening the responsibility for Party governance over the Party and further promoted comprehensive and strict Party governance.We adhere to a problem-oriented approach conduct in-depth investigation and rectification carry out thorough warning education set
up rectification ledgers and implement "item-based cancellation management". We have continuously strengthened the development
of the major supervision system issued the "Notice on Deepening the Major Supervision System and Strengthening Administrative
Supervision" clarified the boundaries of duties pooled supervision synergy and taken integrity risk prevention and control as the
starting point to build a supervision system that combines daily supervision and special supervision.
12 132025 Sustainabil ity Report Corporate Governance
Corporate Governance
● The Shareholders' General Meeting serves as the Company's authority body and exercises all statutory
Shandong Steel adheres to principles of compliance first proactive engagement and honesty and integrity to earnestly protect powers. The Company treats all shareholders equally and fully protects shareholder legitimate rights.shareholder rights and continuously advance company value creation. The Company strictly complies with the "Company Law of the In 2025 the Company convened five General Meetings of Shareholders and deliberated 17 proposals.People's Republic of China" the "Securities Law of the People's Republic of China" the "Code of Governance for Listed Companies" All General Meetings were strictly conducted in accordance with Listed Company Shareholder Meeting
"Shanghai Stock Exchange Listing Rules" "Shanghai Stock Exchange Self-Regulatory Management Guidelines for Listed Companies Shareholders' General Rules and the Company's Articles of Association combining in-person and online voting actively inviting
No. 1 – Normative Operation" and other applicable laws regulations regulatory rules and the Company's Articles of Association. Meeting minority shareholders to participate. Proposals affecting minority shareholder interests had voting results
The Company has established an effective checks-and-balance governance structure and a standard-compliant internal control separately recorded.system fully protecting the legitimate rights and interests of the Company and all stakeholders while promoting healthy stable and
sustainable company development. ● The Board of Directors is the business decision-making body of the Company which formulates
strategies makes decisions and manages risks. It exercises the decision-making power on material
issues of the Company in accordance with legal procedures and the Articles of Association of the
Governance Strategy Company and strengthens the management and supervision over the management. The Board of
Directors has established the Strategic Planning and ESG Committee Nomination Committee Risk
The Company's governance strategy is grounded in protecting the legitimate rights of shareholders and all stakeholders centered on Management and Audit Committee as well as Budget Compensation and Appraisal Committee. Except
for the Strategic Planning and ESG Committee the other three committees are chaired by independent
enhancing governance effectiveness and decision-making science and maintains risk prevention and mitigation as its baseline. The Board of directors with independent directors accounting for the majority of their members. All members of
strategy ultimately aims to achieve the company's goals of long-term company value growth and sustainable development. Directors the Budget Compensation and Appraisal Committee are independent directors. In 2025 the Company
The Company adheres to the "two consistent principles" and continuously improves modern corporate governance with Chinese convened 13 meetings of the Board of Directors deliberating 88 proposals. The attendance rate of Board
characteristics. The Company establishes systematic comprehensive scientifically regulated and efficiently operated governance members was 100% and the performance of all special committees was strengthened. Among others the
systems. The Shareholders' General Meeting Board of Directors and Executive Management strictly adhere to principles of legally- Strategic Planning and ESG Committee held 1 meeting the Nomination Committee held 6 meetings the
defined authority and responsibility transparent authority and responsibility coordinated operation and effective checks and Risk Management and Audit Committee held 6 meetings and the Budget Compensation and Appraisal
balances ensuring compliant and efficient operations. Committee held 1 meeting.● Executive Management is the Company's execution body responsible for business planning
implementation and management. It reports to and is supervised by the Board of Directors. Executive
Strategic Planning and Management is responsible for company daily operations and management providing clear task
ESG Committee
Shareholders' General assignments responsibility clarification and detailed measures for Board decisions with focus on
Meeting Executive implementation. The Company implements closed-loop management strengthens tracking of proposal
Management execution and ensures effective implementation of all Board resolutions. In 2025 the Company revised
Nomination Committee the Working System for the General Manager to Report to the Board improved the reporting mechanism
held 28 general manager office meetings and deliberated 236 proposals with all Board resolutions fully
implemented with high quality.Board of Directors
Budget Compensation and
Appraisal Committee
Board diversity
Executive Management
Risk Management and The Company actively promoted Board diversity taking a multidimensional approach that considers gender age educational
Audit Committee background work experience professional expertise and skills and knowledge in composing the Board aligned with its development
model and business needs to ensure the diversity independence and compliance of Board membership. By the end of the reporting
period the Board comprised nine directors including one female director one employee director five non-independent directors
Corporate Governance Structure covering the fields of steel metallurgy business administration economic management and finance and four independent directors
who are experts in steel metallurgy automation accounting and applied economics.Including
5 non-independent directors 4 Independent Directors 1 Female Director 1 Employee Director
14 152025 Sustainabil ity Report Corporate Governance
List of Directors as at 31 December 2025
measures. It organized directors supervisors senior executives and key personnel of relevant departments to participate in training
Strategic Risk Budget on market value management fostered awareness of market value management and thinking on capital operation and improved
Position Name Gender Professional Planning Nomination Management Compensation professional competence. The Company continuously advanced share repurchase strove for the controlling shareholder to increase Background Board and ESG Committee and Audit and Appraisal
Committee Committee Committee its shareholding and strengthened investor relations management. It efficiently pressed ahead with asset restructuring and
completed the acquisition of 100% equity of Yinshan Steel Section which thoroughly resolved the issue of horizontal competition
Chairman Mao Zhanhong Male Steel Metallurgy Chairman significantly reduced related party transactions further optimized the product mix and improved management efficiency and core
competitiveness.Wang
Director Male Steel Metallurgy Director
Xiangdong Legally Compliant Information Disclosure
Independent Independent
Wang Jinkuan Male Automation
Director Director The Company strictly complies with all laws regulations and regulatory requirements for listed companies and continuously
Independent Independent improves information disclosure systems. In 2025 coordinating with "Company Articles of Association revisions" the Company
Wang Aiguo Male Accounting
Director Director timely revised and improved related systems including the "Management System for Information Disclosure Affairs" "Management
Independent Independent System for Reporting Significant Information" and "Working Rules of the Board Secretary" establishing a sound effective scientific
Xu Ke Male Steel Metallurgy
Director Director and standard information disclosure system. The Company issued 104 standardized announcements throughout the year covering
Independent Meng Independent Board and General Meeting resolutions earnings guidance and other materials. All information disclosures were truthful accurate
Male Applied Economics
Director Qingchun Director complete timely and fair.Director Li Hongjian Male Steel Metallurgy Director
Advancing Share Repurchase and Increase
Engineering and
Director Qiao Lihai Male Director
Finance The Company completed share repurchase as scheduled and controlling shareholder SD STEEL completed share increases on
Business Employee
Employee Director Gao Fengjuan Female schedule.Management Director
Reform of the Board of Supervisors
In 2025 in accordance with the arrangements for the reform of the board of supervisors made by the China Securities Regulatory In 2025 the Company repurchased I n 2 0 2 5 S D S T E E L i n c r e a s e d i t s
Commission and the State-owned Assets Supervision and Administration Commission of Shandong Province and in light of the 57338400 shares representing 0.5359% sharehold ing by 10 721 700 shares
Company’s actual conditions the Company completed the revision of the Articles of Association of the Company abolished the board of total shares outstanding for RMB representing 0.1002% of total shares
of supervisors and did not appoint supervisors. The Risk Management and Audit Committee of the Board of Directors exercises the 79987423 (excluding stamp duty trading outstanding for RMB 14098220 (excluding
functions and powers of the board of supervisors as stipulated in the Company Law of the People's Republic of China and regulatory commissions and other transaction fees). stamp duty trading commissions and
provisions. Meanwhile the Working Rules of the Risk Management and Audit Committee of the Board of Directors was revised From February 5 2024 to February 4 2025 other transaction fees). From June 13 2024
simultaneously. The reform of the board of supervisors and the revision of articles of association for all its affiliated companies were the Company cumulatively repurchased to June 12 2025 SD STEEL cumulatively
completed further consolidating the foundation for the standardized governance of subsidiaries. 153508852 shares representing 1.4348% increased its shareholding by 400349301
of total shares outstanding for a cumulative shares representing 3.74% of total shares
amount of RMB 200372658.92 (excluding outstanding for a cumulative amount of
Institutional Framework Improvement stamp duty trading commissions and other RMB 500076010.98 (excluding stamp duty
transaction fees). trading commissions and other fees).The Company continuously tracked the latest regulatory rules and promptly
undertook the development and revision of policies to ensure the legality
compliance scientific rigor and effectiveness of its corporate governance Strengthen Investor Relations Management
framework. In 2025 the Company formulated two new management policies — The Company continuously enhances communication and exchanges with investors focuses on improving the effectiveness of value
the "Information Disclosure Postponement and Exemption Management Policy" communication and boosts market recognition. Directors senior executives of the Company actively engage with investors and
and the "Director and Senior Management Departure Management Policy" — and other stakeholders earnestly listen to opinions and suggestions and respond to demands in a timely manner. Meanwhile it expands
revised 15 management policies including the "Board Authorization Management The Company won the 2025 Best Practice of the breadth and depth of communication with stakeholders through various channels including shareholders' general meetings
Measures" and the Board Deliberation Agenda consolidating the institutional Board Office of Listed Companies by China
Listed Companies Association. performance briefings investor exchanges visitor receptions hotlines SSE E-Interaction WeChat Official Accounts and news media. foundation for the Company's standardized and efficient operations. In 2025 the Company held 19 performance briefings or investor exchanges through a combination of online and offline approaches
attracting over 100 institutions to participate; it responded to 66 investor questions via SSE E-Interaction and answered 155 investor
Governance Strategy calls conducting thorough communication on key concerned issues such as operating performance equity acquisition of Yinshan
Section Steel informatization and intelligent construction technological innovation and capital expenditure.Systematic Promotion of Market Value Management Going forward Shandong Steel will continue to strengthen internal information communication ensure normalized and efficient
operation of Shareholders' General Meeting Board of Directors and Executive Management continuously improve decision-making
The Company has always taken improving operation quality as the core focus centered on value creation systematically planned
compliance and information disclosure quality strengthen research and application of shareholder value management policies
and further advanced market value management thoroughly studied and flexibly applied value management tools enhanced the
and value tools and deepen shareholder value management through active dividend distribution standardized governance capital
effectiveness of value communication and elevated the professional level of market value management. In 2025 the Company
operations advancement optimized information disclosure and continuous improvement of investor communication mechanisms
deliberated and approved the 2025 Valuation Improvement Plan and Action Plan for Quality Improvement Efficiency Enhancement and
enhancing market recognition of company value.Return Focus clarified the path for valuation improvement dynamically tracked work progress and optimized promotion
1617
Share Increase
Share Repurchase2025 Sustainabil ity Report ESG Governance
ESG Governance The Company has established and improved its ESG management system formulating policies including the "Working Rules of the Strategic Planning and ESG Committee of the Board of Directors" and "ESG Work Management System." These define ESG
management philosophy responsibility boundaries and work principles while optimizing internal management mechanisms.To strengthen the ESG responsibility awareness of senior management the Company closely links executive compensation with
Shandong Steel adhering to sustainable development principles integrates ESG management into the entire process of enterprise ESG factors such as safety technological innovation and risk management establishing an incentive-constraint mechanism of
operation and development. With normative governance as foundation stakeholder cooperation as linkage and material issue "responsibility binding and performance linkage."
management as leverage the Company systematically builds its ESG management system continuously improves governance
architecture deepens practice implementation and enhances disclosure quality. The Company earnestly fulfills environmental
social and governance responsibilities while contributing to the Company's high-quality development and industry-wide sustainable
development. Define ESG Define Optimize internal Strengthen ESG Responsibility
management responsibility management responsibility binding and
ESG Governance Framework philosophy boundaries and mechanisms awareness performance
work principles linkage
Shandong Steel deeply integrates ESG principles into its corporate governance system establishing a three-tier ESG governance The Company deepens the research on cutting-edge ESG theories and practical exploration through diversified means such as
structure: the Board of Directors the Strategic Planning and ESG Committee and ESG Promotion Organizations. By refining ESG top- organizing and participating in special ESG trainings and conducting ESG exchanges with peer enterprises continuously enhances
level design the Company ensures environmental social and governance-related topics are fully integrated into corporate strategic the ESG management awareness and professional competence of all employees and improves the effectiveness of ESG governance.planning and all major decision-making processes enabling strategic coordination and efficient implementation of ESG topics. In 2025 based on regulatory requirements advanced industrial practices and mainstream rating standards the Company formulated
Specifically: the Board of Directors is the highest responsible body for ESG management operations and information disclosure; the and issued an ESG improvement plan and management manual which substantially enhanced the management level of sustainable
Strategic Planning and ESG Committee serves as the research and guidance body for ESG work; the ESG Implementation Leading development and ESG work. With solid practices and outstanding achievements in the ESG field the Company has won a number of
Group oversees daily ESG operations; the ESG Coordination and Implementation Office organizes and implements daily ESG work; honors and achieved a significant improvement in ESG ratings.and all functional departments and business units serve as ESG execution bodies. For detailed responsibilities please refer to the
Company's "Announcement on the Proposal of ESG Governance Structure Construction" (Announcement No.2022-047).Board of Directors
Sino-Securities "2025 A-Share Listed China Listed Companies Association "2025 Sino-Securities "2025 A-Share Listed
Company Raw Materials Industry ESG Listed Company Sustainable Development Company ESG Excellence" TOP100
Performance" TOP20 Excellent Practice Case Award"
Strategic Planning and ESG Committee
ESG Implementation Leading Group
2024-2025 China Steel 2025 China Steel Wind ESG Rating Sino-Securities
Enterprise ESG Rating Enterprise ESG Rating ESG Rating
ESG
ESG Coordination and Implementation Office Implementation AAA AAA AA AA
Organization
Functional Departments and Business Units Stakeholder Engagement
The Company views communication with stakeholders as a critical component of ESG management. Adhering to principles of
integrity interaction equality and transparency the Company continuously improves stakeholder engagement mechanisms and
ESG Governance Framework communication channels establishing diversified communication platforms combining regular and ad hoc engagement. The
Company comprehensively collects stakeholder concerns and suggestions actively responds to and implements recommendations
and earnestly creates continuous value for all stakeholders.
1819
Decision- Management
Making Level Execution Level
Level2025 Sustainabil ity Report ESG Governance
Stakeholder Key Concerns Communication and Response D ual Materiality Assessment
● Shareholders' general meeting
● Corporate governance The Company follows the "dual materiality" assessment principle simultaneously considering both impact materiality and financial
● Information disclosure
● ESG governance
● Investor communication meetings materiality of ESG topics. The Company conducts annual material issue assessments and provides focused disclosure of dual
● Stakeholder communication
Shareholders and ● Earnings briefings materiality topics in reports to meet stakeholder expectations. ● Economic performance and financial results
Investors ● On-site visits
● Anti-commercial bribery and anti-corruption
● Other investor communication channels
● Meetings and training
●
● Compensation and benefits Compensation and benefits system optimization
● The Company comprehensively considers sustainable development disclosure standards and
●
● Democratic management Promotion mechanism improvement guidelines capital market rating requirements peer ESG disclosure practices and industrial
●
● Employee care and assistance Unions and workers' representative congresses sustainable development trends. Combined with the actual operation of the Company it optimizes
●
Employees ● Career development and training
Employee assistance
● Diverse cultural and recreational activities the original topics on the basis of the topics identified in 2024 and finally completes the identification
● Occupational health and safety
● Company intranet bulletin boards Wechat official screening and definition of 28 ESG topics highly relevant to the Company’s development.● Intelligent manufacturing account and other platforms Topic Screening
● Public reporting channels
● Product and service safety and quality
● Customer responsibility ● Quality management ● T he Company conducts communication and dialogue with stakeholders including shareholders and
● Innovation-driven development ● Communications and visits investors employees customers suppliers government agencies and regulators communities and
● Intelligent manufacturing ● Official media platforms the public and news media. The Company systematically collects important issues and concerns of
● ESG governance ● Customer satisfaction surveys and improvement initiatives each party.● Climate change response ● "Three-one" New service model
Customers
● Environmental compliance management ● QCDVS customized service
● Occupational health and safety ● Co-building technology innovation collaboration centers Stakeholder
● Anti-commercial bribery and anti-corruption ● Customer complaint channels Engagement
● Data security and customer privacy protection
● Supply chain security ● Supplier audits/assessments ● L everaging stakeholder engagement the Company assesses the likelihood scale and scope of topic
● ESG governance ● Supplier management
● Equal treatment of SMEs ● Communications and visits impacts. The Company organizes business experts financial experts and external sustainability experts
Suppliers ● Anti-commercial bribery and anti-corruption ● Supplier training to conduct financial materiality assessments across two dimensions: continuity of resource use and
relationship dependency. Based on quantitative analysis of impact materiality and financial materiality
assessment results the Company presents overall topic materiality priorities in matrix form.● Occupational health and safety Dual Materiality
● Climate change response Evaluation
● Environmental compliance management ● Compliance with laws and policies
● Pollutant emissions ● Major projects policy and recommendation participation
● Waste management ● Participation in government and regulatory meetings
Government ● Energy utilization ● Information disclosure
Agencies and ● Circular economy ● On-site inspections/visits/reception
Regulators ● Anti-commercial bribery and anti-corruption ● Energy conservation emission reduction and pollution ● B ased on assessment results the Company through internal review identifies topics requiring focused
● Anti-monopoly and fair competition control
disclosure with high materiality ensuring material topics are comprehensively presented in this report.● Compliance and risk management
● Economic performance and financial results The Company also applies assessment results to its ESG management work implementing targeted
closed-loop management to continuously improve performance.● Social welfare Verification and
● Public welfare and volunteer activities
● Climate change response Disclosure
● Community engagement
● Environmental compliance management
● Interactions via official media and WeChat
● Pollutant emissions
● Disclosure of energy conservation emission reduction
Communities and ● Waste management
Public and pollution control initiatives ● Water resource utilization
● Information disclosure
● Stakeholder communication
● Stakeholder communication
● Press conferences
● Climate change response
● Information disclosure
● Pollutant emissions
● Official media platforms Wechat official account and
● Social welfare
Media other channels
● Economic performance and financial results
● Anti-commercial bribery and anti-corruption
20 212025 Sustainabil ity Report Business Ethics
Based on the 2025 dual materiality assessment the Company identified six topics with both financial materiality and impact
materiality: addressing climate change pollutant emissions energy utilization innovation-driven development employees and Business Ethics
occupational health and safety. For these topics the Company will disclose information in four dimensions — governance strategy
impact risk and opportunity management and metrics and targets — in accordance with the Guidelines No.14 of Shanghai Stock
Exchange for Self-Regulation of Listed Companies — Sustainability Report (Trial) to fully demonstrate the management effectiveness Shandong Steel maintains professionalism honesty and integrity in commercial activities conducts business in accordance with laws
and advancement pathways for these topics. and highest ethical standards creates a fair transparent and honest environment cultivates a clean culture and firmly opposes and
severely cracks down on commercial bribery corruption unfair competition and other acts that damage reputation consolidating the
foundation of sustainable development.A n ti-Bribery and Anti-Corruption
High
Addressing Climate Change Integrity Risk Management
The Company strictly complies with the Criminal Law of the People's Republic of China the Anti-Money Laundering Law of the
Innovation-Driven Development
People's Republic of China Provisional Provisions on Prohibiting Commercial Bribery and other applicable laws and regulations. The
Compensation and Benefits Company formulates and implements systems including the "Integrity Risk Prevention and Control Work Implementation Measures
Energy Utilization (Trial)" "Guidelines for Special Prevention and Control of Commercial Bribery Risk" and "Sunshine Procurement Management
Measures" continuously improving its integrity management system. These provide solid institutional foundation for comprehensive
Environmental Compliance Career Development and Training anti-commercial bribery and anti-corruption work. The Company firmly maintains fair free market competition opposes any form
Management of commercial bribery extortion fraud money laundering monopolistic or other unfair competition practices and maintains zero
Occupational Health and Safety tolerance for all conduct violating business ethics.Water Resource Utilization The Company systematically advances anti-commercial bribery anti-corruption and integrity risk prevention system development
Product and Service Safety and Quality continuously strengthening institutional constraints digital enablement cultural immersion and supervision closed loops. The
Company solidly establishes integrity foundations for enterprise high-quality development. Integrity risk prevention is incorporated
Pollutant Emissions
Supply Chain Security into enterprise compliance and comprehensive risk management systems. The Company formulates and implements the "Integrity
Smart Manufacturing Anti-Monopoly and Risk Prevention and Control Work Implementation Measures (Trial)" establishing and continuously improving prevention networks
Fair Competition covering key areas core processes critical links and all positions. The Company establishes sound daily integrity risk investigation
Emission Reduction
Management identification early warning and disposal mechanisms.Customer Responsibility
The Company has formulated tiered and categorized prevention and control measures to realize systematic identification and precise
management and control of integrity risks. Meanwhile prevention and control measures are embedded into the entire process of
Data Security and Customer Waste Management operation and management and synchronized management and control is realized through information-based approaches. In 2025
Privacy Protection the Company did not incur any fines or settlements arising from unfair competition conflicts of interest money laundering or insider
Corporate Governance
Anti-Bribery and Anti-Corruption trading.Circular Economy Care and Assistance The Company continuously strengthens integrity compliance management for key position personnel. The Company formulated
Democratic Management the "Regulations for Clean Interaction between Key Position Personnel and Stakeholders" establishing eight "negative lists" for
Fair Treatment of SMEs
Compliance and Risk Management respectful yet clear interaction. These comprehensively standardize interaction between key position personnel and stakeholders
Social Welfare
establishing clean business relationships. The Company actively leverages information systems to enhance governance effectiveness
ESG Governance achieving effective monitoring of critical positions and sensitive areas continuously eliminating or reducing integrity risks.Stakeholder Engagement
Integrity Culture Development
Ecosystem and Biodiversity Conservation
The Company has actively advanced the development of the "Clean Shandong Steel" brand and earnestly implemented the Three-Year
Low Plan for Integrity Culture (2024–2026) and other relevant documents. We have continuously consolidated the "1+4" integrity education
Low High matrix which focuses on political education and Party spirit education and consists of four major components: "embedded"
Financial Materiality to the Company discipline education "stratified" warning education "interactive" family style education and "ladder-based" venue education. Integrity
education has been integrated into daily business procedures further enhancing the awareness of integrity in practice among all
●Environmental Topics ●Social Topics ●Environmental Topics
Party members cadres and employees. In 2025 various entities at all levels of the Company carried out diverse forms of integrity
education activities and business ethics training was provided to all employees.Shandong Steel 2025 Dual Materiality Topic Matrix
Going forward Shandong Steel will fully leverage this report's role in promoting management improvements continue implementing
sustainable governance initiatives address ESG management gaps overcome weak areas actively respond to stakeholder concerns
continuously enhance ESG management level and truly strengthen the Company's "non-financial reporting" brand.
2223
Impact Materiality on Economy Society and Environment2025 Sustainabil ity Report Business Ethics
"1+4" Integrity Education Matrix Building a Clean Ecosystem
● Discipline education is made a mandatory course for cadres and staff. Through multi-layered The Company views building a respectful-yet-clear mutually beneficial commercial ecosystem as a key dimension of sustainable
"Embedded" Discipline and categorized methods including discipline and law classes thematic lectures exchange development strategy. The Company is committed to permeating fair transparent and trustworthy compliance concepts through
Education discussions integrity conversations and knowledge tests the Company educates and guides
Party members cadres and staff to deeply understand the essence of discipline and law key business areas such as procurement and marketing. Through systematized institutional constraints digitalized process control
provisions strictly practice specific requirements and internalize compliance and discipline as normalized bidirectional supervision and deepened partner coordination the Company continuously strengthens integrity safeguards
unconscious daily conduct standards. and cultivates a healthy and stable market environment.● The Company strengthens warning education for "key minority personnel" including Party Actively promote the co-construction of a clean ecosystem upstream and downstream. On the procurement
"Stratified" Warning members cadres and key position personnel. Through one-on-one and face-to-face discussions side dynamically carry out integrity education case warning education and holiday reminders through
Education and exchanges viewing warning education films by individuals and family members circulating platforms such as the "Lianxinqiao" WeChat Official Account and the "Integrity & Upright" education
repentance records and typical case notices visiting integrity education bases and inviting experts column formulate and issue the Negative List for Interactions with Suppliers and continuously strengthen
for specialized lectures the Company strengthens warning deterrence and promotes learning
from cases and sustained vigilance. the compliance awareness of all employees
● The Company continued to deepen the unique role of families in integrity culture building Actively expand two-way communication take the initiative to listen to opinions through forms such as
flexibly organizing family-assisted integrity seminars signing of the Integrity Commitment Letter
and Family-Assisted Integrity Initiative Letter composing integrity-themed family letters and visits and research and co-construction activities promote business through integrity and strengthen
"Interactive" Family Style messages family visits and immersive experiences themed interactive activities integrity-themed cooperation through synergy so as to effectively create a supply chain integrity ecosystem that is open
Education calligraphy and painting solicitations and the recognition of exemplary role models among other transparent compliant and win-win.activities. These efforts continuously enhanced the appeal engagement and reach of family-
assisted integrity initiatives building a solid foundation of upright corporate culture through
thousands of clean and honest households. In 2025 the Company adopted the "dual-course Strengthen source governance revise the Integrity and Honesty Agreement and include violations such as
integration two-way co-construction dual-assessment activities" model to carry out family- commercial bribery fraudulent acts contract breaches and unfair competition into the breach clauses.assisted integrity activities sustaining a positive atmosphere of family-enterprise collaboration.Establish a working mechanism of "Interview & Consultation + Supervision & Recovery" strictly recover
● The Company builds the "Steel Integrity Culture Garden"2 at the Rizhao Base integrity culture funds from defaulting suppliers force suppliers to operate in good faith and create a sound political
"Ladder-based" Venue creation demonstration sites and education venues and integrity culture corridors providing ecosystem and a sunny and efficient operation ecosystem.Education excellent venue and environmental resources for integrity education. In 2025 the Company
organized 49 Party branches to participate in integrity culture demonstration point creation fully
activating "integrity" momentum consolidating and strengthening integrity highlands.Reporting and Investigation Mechanism
The Company establishes and improves a multi-dimensional reporting acceptance and investigation mechanism covering
letters visits internet telephone and QR code channels. It encourages all stakeholders to report any acts violating
business ethics either by real-name or anonymously and regularly inspects and evaluates the effectiveness of reporting
channels to ensure that any suspected violations of business ethics can be reported conveniently and securely.The reporting matters involving violations of discipline and laws by Party members shall be accepted by the discipline
inspection department in accordance with regulations while other matters shall be transferred to the corresponding
functional departments for investigation based on professional fields so as to ensure timely response and standardized
procedures. Strict confidentiality measures shall be implemented for reported matters through special personnel
acceptance and special archiving. Proper rewards shall be given to real-name reporters whose reports are verified to
be true in accordance with relevant provisions. In 2025 the timely disposal rate of reported matters of Shandong Steel
reached 100%."May 20 — I Love Integrity" Family-Assisted Integrity Awareness Campaign
Reporting Hotline: 0531-76821163，77920968
Online Reporting Mailbox: gf77920968@shan-steel.com
No. 99 Fucheng Street Gangcheng District Jinan City Shandong Province Postal Code: 271104
A n ti-Unfair Competition
The Company strictly abides by the Anti-Unfair Competition Law of the People’s Republic of China and other laws and regulations
upholds the principles of voluntariness equality fairness and good faith observes business ethics and eliminates unfair competition
acts. It focuses on preventing typical unfair competition acts such as commercial bribery strengthens the internal compliance
"Clean Breeze Nurtures Young Hearts; Integrity Guides Growth" system clarifies employee code of conduct and enhances supervision and restraint through the reporting mechanism. Meanwhile
Integrity-Themed Cultural Works Exhibition and Employee Family Fun Sports Day
the Company accelerates the formulation of the Compliance Guidelines on Anti-Unfair Competition and deepens compliance training
2 on anti-unfair competition. In 2025 the Company had no lawsuits or major administrative penalties caused by unfair competition acts.Recognized as China Baowu Warning Education Base and SD STEEL "Integrity Education Base".
24 252025 Sustainabil ity Report Compliance and Risk Management
Compliance and Risk Management Integrating ESG Risk
The Company integrates ESG risks including those related to environmental protection employee health and safety information
system security supply chain security and intellectual property into existing risk management processes for unified identification
The Company aims to achieve sustainable and high-quality development. It deeply integrates risk management compliant operation assessment and monitoring ensuring effective management of ESG-related challenges and opportunities. The Board Strategic
and independent audit into the entire process of corporate governance and operation and establishes a solid and effective supervision Planning and ESG Committee is responsible for identifying and monitoring ESG-related risks and opportunities significantly impacting
and control system to ensure the steady and long-term development of the Company. company business and guiding management in taking appropriate response measures.R isk Management
Based on the COSO-ERM framework and ISO 31000 standard and combined with its strategic planning and actual production and Environmental Occupational Information Supply Chain Intellectual
operation the Company has established a new "1+N" risk management system featuring innovation integration coordination Protection Health and System Security Property
and continuous improvement so as to ensure the Company’s law-based compliant and steady operation and achieve high-quality Safety Security
sustainable development. Guided by risk management based on internal control bottom-lined by compliance management and
guaranteed by the rule of law the system ultimately serves the creation and maintenance of the Company’s value.COSO-ERM framework Foundation System "1+N" new-model risk Risk Management and Control Process
ISO 31000 standards management system
Through routine risk screening specialized assessments project-based management and dynamic early-warning mechanisms the
Company achieved full-lifecycle risk management encompassing pre-event prevention in-process control and post-event resolution
ensuring that risks are identified flagged and mitigated at the earliest stage. The Risk and Compliance Department was deeply
involved in pre-review of major decisions and business activities proactively providing risk management recommendations in areas Risk Management System
such as bidding and procurement investment and asset disposal throughout the year effectively fulfilling its pre-event prevention
The Company established a risk management organizational system with clear authority and responsibilities and a "three lines of function. In 2025 all major risks of the Company remained under control.defense" operating mechanism building a comprehensive risk management institutional framework that is "scientifically designed
clearly structured process-standardized comprehensively covered responsibility-defined mutually supportive and operable."
Leveraging a standardized corporate governance structure the Company defined risk management responsibilities at all levels
and built a top-down integrated risk management organizational system comprising the Party Committee Board of Directors
Risk Management and Audit Committee General Manager / Senior Management Risk and Compliance Department and all risk Risk Management and Control Process
management business units achieving clarity of responsibilities standardized processes tiered management and coordinated
collaboration. In 2025 seven core management policies including the "Comprehensive Risk Management Measures" and the "Internal
Control Management Policy" were systematically revised standardizing the procedures for identifying assessing and reporting major
risks and strengthening the management information communication and supervision of major risks.Conduct regular risk identification forming risk lists
Risk
Identification
Organize risk assessment work assess risk probability and impact magnitude determine annual major
risk list
Risk
First Line of Defense Second Line of Defense Third Line of Defense Assessment
Business departments Risk and Compliance Department Internal Audit and the Risk Management and Audit Committee ● Based on risk assessment results analyze risk causes;
● Develop risk response plans including risk mitigation avoidance sharing/transfer and acceptance;
Business departments conduct Risk and Compliance Department Internal audit and the Risk Management Risk
comprehensive risk management guides and supervises all business and Audit Committee reviews risk Response ● Develop risk management improvement plans and complete improvements within timeframes
per management responsibilities. departments in implementing risk control effectiveness and audits risk
They are responsible for risk management requirements timely management during operations.identification response plan identifies risk management gaps Risk
development and dynamic develops risk response measures Monitoring Monitor and report on specialized risk management work and daily risk management progress
and Reporting
monitoring integrating risk control and monitors improvement
throughout daily operations. implementation.Three Lines of Defense in Risk Management
26 272025 Sustainabil ity Report Compliance and Risk Management
C o mpliance Management C u lture Cultivation
The Company innovates an integrated compliance operation and management mode advancing deep integration of compliance
The Company actively fosters a risk and compliance culture and creates a strong
management with production and operations to achieve full-coverage normalized compliance management. The Company
atmosphere where all employees study and practice risk and compliance culture and
strengthens compliance review of major and important business decisions enhances compliance management and internal
take the initiative to integrate it into the whole process of business operations so that In 2025，
control continuously monitors updates to laws and regulations in business jurisdictions timely develops compliance
risk prevention and compliance awareness are internalized in mind and externalized
management system revision work and strengthens compliance culture development to ensure company operations are legally
in conduct. Through regular internal training lectures by external experts case
compliant.studies and experience exchanges on risk control irregular compliance knowledge a total of 7 training sessions
competitions benchmarking learning and other means the Company ensures that on compliance management
employees fully understand compliance requirements and corporate policies and and risk prevention were held
The Company implements a chief legal counsel-led responsibility system building a coordinated top- improves their awareness and capability of risk prevention and compliance. Through
Management down compliance management organizational system centered on Party Committee Board of Directors
publicity channels such as WeChat Official Accounts and working groups the Company
Structure Executive Management compliance management functional departments business departments and timely releases information on risk and compliance activities and typical cases to covering more than 800
management units with business function and audit serving as three lines of defense. Additionally strengthen the publicity and implementation of risk control and compliance concepts. people
each subsidiary selects business personnel as compliance managers responsible for unit compliance The Company takes compliance management as a compulsory course for the training of
risk identification assessment and response ensuring position compliance performance and managers key position employees and new recruits.promoting deep integration of compliance management with business work.Case Business-Focused Compliance Capability Building
In June 2025 Shandong Steel invited senior legal experts to
The Company continuously strengthens compliance system development formulates "Measures conduct specialized contract management training. Over 70
Management for Compliance Management" develops specialized compliance guidelines for key areas such as business managers contract managers and key employees
System investment and contract management and includes compliance performance in performance from various units attended in person. The training
evaluation systems. focused on "eight-step contract review methodology" and
"commercial contract investigation guidelines" combining
typical steel industry contract cases to provide in-depth
instruction on full-cycle contract risk prevention and control.The training significantly enhanced business personnel's
The Company establishes a professional compliance risk assessment team conducts regular compliance risk assessments with
practical contract compliance management and risk
professional compliance risk evaluation teams and systematically analyzes compliance risk probability impact magnitude and
prevention capabilities establishing strong legal compliance
potential consequences. The Company provides timely warnings for typical widespread or potentially severe risks and develops
safeguards for company stable operations.contingency plans. The Company timely alerts subsidiaries to emerging trending or high-compliance-risk issues ensuring timely
and effective remediation.A u dit Management
Going forward Shandong Steel will continuously strengthen synergistic effectiveness of risk compliance and audit management.The Company strictly complies with the Audit Law of the People's Republic of China Audit Law Implementation Rules Audit The Company will strengthen major risk dynamic assessment and monitoring specialized risk assessment of major issues achieve
Commission Provisions on Internal Audit Work and other applicable laws formulating "Internal Audit Management Provisions" to normalized comprehensive risk management coverage and strictly prevent major risk occurrence. The Company will establish and
fully leverage internal audit functions and continuously improve governance systems. improve compliance management systems and compliance risk control mechanisms ensuring all business activities operate legally
and compliantly. The Company will strengthen audit supervision and service to enhance governance effectiveness. The Company will
The Company has established a comprehensive audit work organizational system. The Board of Directors is the leading body for the
continuously strengthen risk and compliance culture cultivation and development enhance employee compliance awareness and
Company's audit work; the Risk Management and Audit Committee of the Board is responsible for guiding and supervising internal
establish long-term risk management improvement mechanisms.audit work; the Risk and Compliance Department is the Company's internal audit management body under the guidance and
supervision of the Risk Management and Audit Committee.In 2025 the Company conducted 5 internal audits centered on high-risk management areas and critical links including economic
responsibility and procurement management received 3 audits from the parent company and played important roles in closing
gaps preventing risks improving performance and standardizing governance. The Company highly values problem remediation
implements monthly scheduling advancement mechanisms organizes responsible units to deeply analyze problem roots develops
concrete and feasible remediation measures and ensures thorough problem resolution. The Company improves "registered
remediation signed-off management" audit problem remediation records and monthly oversight advancement of remediation
implementation.
28 292025 Sustainabil ity Report Tax Management
Tax Management Tax Risk Management
The Company continuously strengthens the regular management of tax compliance risk and establishes a whole-process full-
link tax risk prevention mechanism and control process. The Company formulates "Tax Risk Management Measures" and "Tax Risk
Shandong Steel consistently treats tax management as an important component of company management. The Company strictly Management Standards" establishing a full-cycle tax risk control system featuring "pre-event warning in-process control post-event
implements national tax laws and regulations fulfills tax obligations legally ensures all taxes and fees are paid timely and in full assessment." The Company comprehensively monitors tax risks from prevention avoidance control and response dimensions.and strengthens internal management and standardized accounting processes to safeguard the authenticity and accuracy of tax data.In international tax business the Company complies with international tax laws and regulations and follows principles including
tax jurisdiction double taxation avoidance tax information exchange international tax adjustment anti-tax evasion and anti-escape
measures single taxation principles benefit principles and international tax neutrality to ensure all operations are conducted in
Tax Data Related Tax Potential Response Risk Control accordance with laws and regulations.Analysis Regulation Tax Risk Strategy and
The Company legally completes tax reporting and payment actively cooperates with local tax authority supervision and guidance and Research Identification Development Implementation
has maintained Level-A tax credit rating for consecutive years.Tax Risk Management Process
Our Commitments
The Company adheres to risk control at the source and integrates tax administration into the front end of business processes. For
procurement sales maintenance engineering finance and other businesses the entire chain from contract signing invoice issuance
to accounting and fund transactions is incorporated into the scope of tax risk control. It strengthens tax-related risk assessment for
major items and tax-related control over details of business processes and establishes an early warning mechanism for prone tax
risk points. Meanwhile it dynamically updates the information base of tax laws regulations and preferential policies conducts regular
internal audits and tax-related self-inspections and promptly identifies and eliminates potential tax risks.The Company's operations The Company avoids tax The Company discloses its The Company complies The Company determines
comply withtax and legal structures lacking commercial tax policies transparently. with tax law and fulfills tax transfer pricing based The Company emphasizes enhancing tax management team professional competency and risk awareness through multiple channels
regulations of countries/ substance proactively aligns Financial statements and reporting responsibilities on fair dealing principles of tax information exchange and learning. The Company actively organizes personnel to participate in tax business training and major
regions where it operates with tax policy guidance audit reports detail deferred while maintaining transparent does not exploit tax law enterprise tax risk specialized training conducted by tax authorities and professional training institutions. The Company periodically
engaging only intransactions focuses on developing income tax assets and relationships with government differences international tax invites tax authority experts and professional training institution instructors to conduct specialized training. The Company maintains
basedon genuine commercial business areas advocated by liabilities and applicable authorities. system gaps or tax havens normalized communication with external professional institutions such as tax service firms timely discussing and researching tax
activities. the state and fully utilizes company tax items and for tax evasion and does not regulations policies and company tax matters ensuring tax treatment throughout all processes is legally compliant.available tax incentives. rates. shift created value to lower- During the reporting period the Company had no major tax violations.tax jurisdictions.Our Initiatives
Tax Management System
Systematically identify and assess tax risks and develop targeted risk prevention measures;
The Company continuously advances tax management innovation building modern systematic and standardized tax management
systems promoting deep integration of business finance and tax operations and achieving transparent standardized fair and
Continuously monitor tax risk dynamics establish rapid response mechanisms and timely report and address
just tax treatment. The Company implements a headquarters-centralized control model with tax management tailored to different
potential risks;
business types and regional characteristics of management units. Headquarters and all management units' finance departments
establish dedicated tax management divisions or positions with overall responsibility for tax risk prevention fiscal-tax policy
implementation and tax business handling. Implement full-process audit of all tax-related business to ensure compliance;
To ensure the standardized and professional operation of tax administration the Company has formulated administrative measures
including the Administrative Measures for Enterprise Income Tax and the Administrative Measures for Taxation of Overseas Non-trade Conduct normalized tax risk training to enhance enterprise-wide tax risk awareness.Businesses as well as administrative standards including the Tax Administration Standard Tax Declaration Administration Standard
Enterprise Income Tax Administration Standard and Property and Behavior Tax Calculation and Administration Standard further
refining the specific operational procedures and requirements for tax administration to achieve the standardization and normalization
of tax administration. In 2025 the Stamp Duty Administration Standard and Value-Added Tax Calculation and Administration Standard
were newly formulated forming a complete framework of 12 management documents covering tax declaration tax category
calculation risk control and other aspects. The tax standardization system has been continuously improved.
30 312025 Sustainabil ity Report
Shandong Steel anchored in the steel industry's commitment to green low-carbon high-quality
02 Environment development thoroughly advances the development requirements of green productivity and pursues green development circular development and low-carbon development as core pathways. The Company integrates ecological and environmental protection concepts deeply into its entire production and operation
processes achieving breakthroughs across climate governance environmental compliance solid waste
utilization energy efficiency and ecosystem protection. The Company is committed to realizing a win-win
Addressing Climate Change relationship between ecological and environmental protection and high-quality enterprise development
and continuing to serve as a benchmark for green transformation in the steel industry.Environmental Compliance Management
Pollutant Emissions
Waste Management
Energy Utilization
Circular Economy
Ecosystem and Biodiversity Protection
32 332025 Sustainabil ity Report Addressing Climate Change
Addressing Climate Change Short-term Strategy: Carbon Reductionin Production Processes + Energy-conservation Carbon Reduction
The Company continuously optimizes blast furnace charge structure
reduces iron-to-steel ratio and increases scrap ratio implementing a series
of process-based carbon reduction projects including thick-bed sintering Rizhao Base maintained converter
Governance sintering flue gas hot air ignition hot air sintering and pellet waste heat scrap ratio above 23%
recovery utilization continuously reducing CO2 emissions. In 2025 Rizhao Base
Climate governance is a critical global issue. Shandong Steel continuously advances climate governance work. The Executive maintained converter scrap ratio above 23% while Steel City Base increased Steel City Base increased the con-
converter scrap ratio from 14% in 2024 to 16.5%.Management serves as the decision-making level for climate governance responsible for reviewing the Company's carbon peaking verter scrap ratio to 16.5%
and carbon neutrality targets and development plans studying and deciding on major matters in the carbon peaking and carbon Rizhao Base
neutrality process and establishing carbon management systems based on relevant national policy documents.Rizhao Base developed sintering hot air ignition energy-conservation technology in the sintering process reducing sintering
The Energy and Environmental Management Department serves as the management/supervisory level for climate governance coke oven gas consumption while improving sinter quality. In the blast furnace process the Company implemented an
with dedicated low-carbon positions. It is responsible for coordinating low-carbon policy research green low-carbon technology intelligent combustion project for blast furnace hot blast stoves utilizing big data for automatic optimization to construct
research and development and application; promoting carbon emission reduction carbon asset management and external exchange optimal combustion curves achieving online autonomous intelligent control with blast furnace gas consumption reduced
and cooperation; and organizing supervision and assessment of the implementation of climate governance measures at the by over 3%. In the converter process the Company upgraded steel ladle bakers to intelligent systems achieving automatic
implementation level. baking curve adjustment and intelligent air-fuel ratio control reducing converter gas consumption by 0.007 GJ/t. In the
rolling process the Company conducted online repair of heating furnace refractory materials reducing furnace heat loss
Each relevant department and subsidiary of the Company constitutes the implementation level for climate governance responsible and lowering gas consumption. Cumulatively CO2 emissions were reduced by 89900 tonnes.for implementing specific energy conservation and carbon emission reduction measures and accepting supervision and assessment
Steel City Base
by the Energy and Environmental Management Department.Steel City Base advanced the application of mature carbon reduction technologies with key carbon reduction projects such
Strategy as the 3800 m3 blast furnace hot blast stove co-firing with coke oven gas successfully commissioned expected to reduce
iron-making process carbon emission intensity by 8%. The Company implemented three projects: increased utilization
of reclaimed municipal water compressed air system renovation and medium-scale steam recovery from profile steel
Shandong Steel actively responds to the national "Dual-Carbon (carbon peaking and carbon neutrality) development strategy" follows production. In 2025 energy conservation and carbon reduction projects cumulatively saved 41000 tonnes of standard
SD STEEL's Carbon Peaking Work Plan and has established strategic targets for carbon peaking and carbon neutrality aligned with coal equivalent and reduced CO2 emissions by 127000 tonnes. The Company is currently advancing five projects including
the Company's circumstances. oxygen-enriched combustion modification for thick plate lines and waste heat recovery utilization for 1.2 million tonnes
pelletizing production line.Medium- and Long-term Strategy: Technology Innovation-driven Carbon Reduction + Green
Development-driven Carbon Reduction
Short-term
Target The target of reducing carbon emission intensity by 5% in 2025 compared with 2020 has been
achieved. Deepening Technology-based Carbon Reduction
The Company actively applies low-carbon and carbon-reduction technologies such as top-bottom combined blowing of CO2
in converters and blast furnace injection of coke oven gas. Building on the successful implementation of CO2 top-bottom
combined blowing resourceful utilization projects in Converters 1 and 2 at Rizhao Base in 2025 the Company promoted CO2
Medium-term resourceful utilization projects on Converters 3 and 4. By the end of the reporting period all four converters have achieved Ensure carbon peaking before 2030. By 2030 the Company will have resource conditions and the application of top-bottom combined blowing of CO2 enabling the Company to realize resourceful utilization of 15000 Target technical capacity to reduce carbon emission intensity by 30% compared to 2020 and will tonnes of CO2 annually.reduce carbon emission intensity by 20% compared to 2020.Management-based Carbon Reduction
The Company actively participates in the national carbon market enhancing carbon management capability through
building a carbon management platform and establishing a carbon management system. Steel City Base established a
Long-term carbon management system infrastructure platform (carbon accounting and analysis) and carbon asset management
Target Strive to achieve carbon neutrality by 2050. platform and has completed 2024 greenhouse gas emission reporting and verification 2025 monthly data archiving and
2024 carbon allowance fulfillment. Rizhao Base following the overall approach of "dedicated organizational structure
clarified responsibility lists closed-loop processes and precise connections" coordinated carbon data and carbon asset
management benchmarking advanced enterprises and established a Carbon Neutrality Promotion Committee. The Base
clarified low-carbon management organizational structure departmental responsibilities and business processes. A
unified "production data-carbon emission data" platform was built with data quality control schemes as the framework
and monthly digitalized archiving integrated throughout the year's carbon reduction work. The Company completed
Extreme energy the steel industry's first on-site verification after inclusion in the carbon emissions trading market 2025 monthly data
Scientific efficiency Process Technology Green archiving and the first carbon compliance fulfillment.planning improvement innovation innovation development
Synergistic Carbon Reduction
Carbon Reduction Pathway Rizhao Base's integrated smart energy project combining waste heat utilization for residents' daily needs with fishery
applications operates through 12 waste heat resource stations 1 primary station and 38 kilometers of heating pipeline
During the reporting period the Company implemented process-based carbon reduction projects actively researched and applied networks. The project converts industrial waste heat from slag-flushing circulating water and flue gas generated in steel
carbon reduction technologies and enhanced enterprise-wide energy conservation and low-carbon awareness continuing to explore production into "green thermal energy" benefiting residents' daily life saving 85800 tonnes of standard coal equivalent
long-term deep carbon reduction pathways for green sustainable development. annually and reducing CO2 emissions by 230000 tonnes equivalent to cultivating an "offshore green forest" spanning
approximately 2000 acres and achieving a win-win of environmental and social benefits.
34 352025 Sustainabil ity Report Addressing Climate Change
Impact Risk and Opportunity Identification Green Product R&D
Shandong Steel continuously researches green low-carbon steel materials with high strength high toughness high corrosion
Climate change risks have direct or indirect impacts on corporate operations and finances. Shandong Steel in alignment with its
resistance and high energy efficiency coordinating with downstream steel-using enterprises in the industrial chain to implement
actual circumstances assesses climate-related risks and opportunities across policy regulatory and market dimensions identifying
carbon reduction practices. Rizhao Base established a "Green Low-Carbon Product Development and Certification Task Force"
climate-related risks that may have material economic or strategic impacts on the Company's business.comprehensively advancing "green steel" research and development production certification and market application. The Base has
established the task force's organizational structure and a 2026 work advancement plan.Risk Type Risk Category Potential Impacts
Offshore Engineering and Pressure Vessel Steel Plates
Rizhao Base is located on the shores of the Yellow Sea and is vulnerable to typhoon
Physical Serial development of offshore engineering steel grades has been
Typhoons strikes. In recent years frequent extreme weather events globally may result in
Risks realized. The R&D and application of LRAH89 offshore engineering steel
impairment or loss of physical assets and other potential economic losses. marks the first application of the highest-grade steel grade in China’s
shipbuilding and offshore engineering sector. High-grade nuclear power
As the steel industry is included in the national carbon market and the Carbon Border steel SA738Gr.B has been successfully developed and a breakthrough
Adjustment Mechanism (CBAM) enters its formal implementation phase the Company has been made in the R&D of 420DR steel plates for mobile pressure
Policy and Legal will face rising carbon prices increased carbon compliance costs energy transition vessels.Framework policy constraints and green trade barriers such as foreign carbon tariffs which
may suppress exports and increase investment operational and export costs while
reducing returns.High-Strength High-Toughness Wind Power Steel Plate
In the low-carbon transition process the Company needs to increase investment Achieved full coverage of 355–500 MPa strength grades with innovative
Technology and in energy-saving environmental protection technology application and low-carbon applications in multiple landmark projects. The 420 MPa-grade wind
Cost steelmaking technology research and development which will result in rising R&D
Transition power steel plate was successfully applied to distributed wind power
costs and potential fixed asset value loss risks.Risks projects completing the first domestic full-tower design manufacturing
and demonstration application. While improving tower load-bearing
Domestic steel demand has entered a plateau phase. Driven by the green low-carbon capacity and safety performance steel consumption was reduced by
development trend across the entire industrial chain market demand for green low- 10% to 15% advancing the low-carbon development of the wind power
Market carbon emission steel products will gradually increase and competition among steel industry.enterprises will intensify. If the greening process lags the Company may lose market
share.High-Strength High-Toughness Pipeline Steel Hot-Rolled Coil
Stakeholders' and the public's concerns about the Company's climate action initiatives
Reputation
may pose reputational risks to company operations.Large-diameter long-distance oil and gas transmission high-strength
high-toughness pipeline steel hot-rolled coil achieves scientific
Climate change promotes and reshapes socioeconomic development patterns offering opportunities for enterprise sustainable balance between high strength and high toughness through innovative
development. Through analyzing industry and market conditions combined with the Company's circumstances and strategic processes. With excellent performance characteristics and broad mature
positioning the Company has identified the following opportunities: applications it has become the ideal selection for large-diameter long-
distance oil and gas transmission pipeline projects.Products and Services Energy Efficiency Energy Sources
228 Single-Tooth Track Plate Steel
Capitalize on the increasing demand for Through optimizing production processes Substitute clean energy for traditional
steel in new energy sectors by vigorously extreme energy utilization and resource high-carbon energy gradually increase
developing steel for wind power marine recycling improve energy efficiency Characterized by excellent strength and toughness erosion resistance the proportion of green electricity from
equipment steel and others. Through advance energy conservation and emission and fatigue resistance it is a key component for the traveling
researching and developing ultra-high yield reduction and reduce operational costs.photovoltaic wind and hydroelectric
sources establish a green circular mechanisms of large engineering machinery such as excavators
strength steel plates pipeline steel and economy system continuously reduce bulldozers and crawler cranes. It is one of the most challenging track
other low-carbon green products meet company energy expend i ture and plate steel varieties in the hot rolling process. The Company has mass
market and customer demand for low- compliance costs and support low- production capacity for track plate steel products across ten major series
carbon products and services. carbon development. and more than 40 specifications.
36 372025 Sustainabil ity Report Addressing Climate Change
Plates for Oil Storage Tank Low-Carbon Capability Building
Q490RW (Q490RW-SR) is a high-strength steel plate primarily used for
manufacturing petroleum storage tanks and other equipment. It meets Green Design
stringent performance requirements including a low yield-to-tensile ratio
( ≤ 0.91) high strength (610~730 MPa) and excellent low-temperature
impact toughness. In extreme regions such as deep seas and polar areas The Company adheres to the concept of Life Cycle Assessment (LCA) and green design and actively promotes the green design
it safeguards energy security. and green product certification of steel products. During the reporting period the Steel City Base carried out life cycle assessment
on three special steel products of the special steel small bar new medium bar and large bar production lines completed LCA
reports and issued Environmental Product Declarations (EPD) for round steel (large bar) and round steel (medium and small bars).High-Strength Structural Steel The Rizhao Base issued EPD reports for heavy steel plates (3500mm rolling mill) and heavy steel plates (4300mm rolling mill)
and promoted the carbon footprint accounting of steel for shipbuilding and marine engineering supporting the development of
Product development has been achieved for products with specifications
ranging from 6 to 100 mm and yield strength grades from 460 to 690 MPa. greenshipping through low-carbon production.These products have passed second-party certifications by a number of
well-known enterprises enabling large-volume supply to key customers.Product supply standards cover European standards American standards
Chinese national standards and Japanese standards. Q960E the highest-
strength medium and heavy plate product developed within Shandong
Province has been certified and put into mass production representing a
landmark breakthrough in medium and heavy plate products.Premium Fingerprint-Resistant Galvanized Products
Our products have successfully entered the high-end home appliance
market with over 80% supply share for television back panels of a
leading appliance enterprise and the Company has become the highest-
rated material supplier in its supply chain. Stable supply of this product
has effectively enhanced the Company's competitiveness in premium
appliance steel products.Participating in Green Low-Carbon Standard-Setting
Nickel-Based Steel Products
The Company actively participates in low-carbon standard-setting to advance industry green low-carbon development. During the
Ultra-thin nickel-based steel products with thicknesses of 5mm to 8mm reporting period the Company participated in formulating 1 national standard 1 industry standard 2 group standards and 2 local
achieve international advanced level in plate flatness control and realize standards: "Structural Steel Plate for Wind Power Towers" (GB/T 28410-2025) "General Requirements for Electric Arc Furnace Short-
the optimal matching of composition rolling and heat treatment. The
Company is the first in China to pass the crack arrest test for nickel- Route Steelmaking Production" (YB/T 6339-2025) "Hot-Rolled H-Beam Steel for Photovoltaic Support Structures" (T/SDSAS 005-
based steel with specifications of 10mm to 35.2mm at -165℃. Nickel- 2025) "Technical Specification for Selection of Steel Materials in Wind Turbine Tower Design" (T/CRES 0035-2025) "Safety Technical
based steel products have been successfully applied in the 270000 m3 Requirements for Converter Gas Dry Electrostatic Dust Collection Systems" (DB37/T 2119-2025) and "Safety Technical RequirementsLNG storage tank project of Phase II of CNOOC Jinwan “Green Energy for Converter Waste Heat Steam Recovery and Utilization" (DB37/T 2120-2025).Port" the world’s largest single LNG storage tank by capacity. The
Company has become one of the very few enterprises globally capable of
mass-producing ultra-thin nickel-based steel plates as thin as 5mm.Energy Conservation and Carbon Reduction Training
High-Strength Seismic Rebar Products
The Company actively conducts energy conservation publicity campaigns promoting resource conservation and environmental
protection as a fundamental national policy through environmental advocacy knowledge lectures and participation in training.We have achieved the full-series development of 400–635 MPa high-
The Company enhances green environmental and energy conservation awareness while advancing green low-carbon production
strength seismic rebar applied in multiple landmark projects across
nuclear power airports tunnels rail transit and civil air defense and lifestyle practices. During the reporting period Rizhao Base organized training on "National Carbon Market Platform Testing
underground engineering. The 600–635 MPa hot-rolled seismic rebar is Precautions Platform Functions and Operational Highlights" and a specialist training on "LCA and Carbon Footprint Methodology
the Shandong province's first product offering featuring high strength (Rel and CBAM Overview and Declaration" and also organized participation in the training class on Climate Change Response and Green
≥ 600 MPa) high plasticity and excellent seismic performance (yield-to- Low-Carbon Transition Capacity Enhancement.tensile ratio ≥ 1.25). While reducing processing and labor costs it saves
over 15% in steel consumption achieving significant cost reduction in
engineering applications.
38 392025 Sustainabil ity Report Environmental Compliance Management
Case Rizhao Base Conducts Greenhouse Gas Accounting Training Environmental Compliance Management
In March 2025 Rizhao Base invited experts to conduct training on the interpretation of Greenhouse Gas Emission
Accounting and Reporting Guidelines—Steel Industry and monthly data archiving requirements. Personnel from the Shandong Steel continuously optimizes its environmental management Decision-Making Level
Manufacturing Management Department Equipment Department Finance Department and energy management staff framework establishing a three-tiered environmental protection Company Executive
from each production facility participated. management system. The Company's Executive Management serves as Management
the decision-making level for environmental management responsible for
major environmental decisions. The Energy and Environmental Management
Department serves as the management/supervisory level responsible for Supervisory/Management Level
enterprise-wide environmental management including establishing and Energy and Environmental
Metrics and Targets Management Departmentimplementing environmental policy and organizing the organizational
structure planning activities responsibilities practices procedures
Shandong Iron and Steel conducts regular monitoring and management of direct and indirect greenhouse gas emissions and has processes and resources necessary to establish implement achieve Implementation Level
formulated short-term medium-term and long-term goals as well as phased and quantifiable implementation plans. In 2025 the review and maintain the environmental policy. Other functional departments All Functional Departments and
carbon emission intensity per tonne of steel was lower than 1.76 tCO2 per tonne of crude steel representing a decrease of more than
and production facilities serve as the implementation level establishing Production Facilities (with integrated
5% compared with 2020. During the reporting period the Company accounted for greenhouse gas emissions in accordance with integrated environmental protection management departments responsible
environmental protection management
sections)
relevant national requirements and standards. The total greenhouse gas emissions (Scope 1 + Scope 2) were 32.1474 million tonnes for implementing and executing the Company's environmental protection Environmental Compliance Management Structure
of carbon dioxide equivalent. work.The Company in accordance with ISO 14001 environmental management
system and the "Environmental Management System—Requirements
Indicator Unit 2023 2024 2025 and Guidelines for Use" (GB/T 24001-2016) conducts routine annual
environmental management system supervision audits achieving 100%
coverage of environmental management system certification.Greenhouse Gas Emissions
tCO e 24512877 24821339 29932954
(Scope 1) 2 During the reporting period Steel City Base focused on 5 key areas including
post-permit environmental management and dust control cumulatively
Greenhouse Gas Emissions organizing 306 environmental supervision inspections precisely identifying
tCO e 2670937 2331860 2214487
(Scope 2) 2 and eliminating environmental hazards conducting closed-loop remediation
of identified issues and continuously improving environmental compliance
management levels.Greenhouse Gas Emissions
tCO e 27183814 27153199 32147441
(Scope 1 and Scope 2) 2
Environmental Management
System Certification
Note: 2025 carbon emissions are preliminary accounting data. Pollutant Emissions
Governance
Shandong Steel strictly complies with environmental laws and regulations including the "Environmental Protection Law of
the People's Republic of China" "Law of the People's Republic of China on Prevention and Control of Air Pollution" "Law of
the People's Republic of China on Prevention and Control of Water Pollution" and "Law of the People's Republic of China on
Prevention and Control of Noise Pollution" and continuously improves pollution control systems. During the reporting period the
Company revised 9 regulations including "Exhaust Emission Control Management Regulations" "Wastewater Discharge Control
Management Regulations" "Noise Pollution Control Management Regulations" "Radiation Environment Management Regulations"
"Environmental Monitoring Management Regulations" "Environmental Protection Supervision Management Regulations"
"Environmental Factor Identification and Evaluation Management Regulations" "Environmental Protection Responsibility System and
Accountability Management Regulations" and "Construction Project Environmental Protection Management Measures" ensuring
standardized environmental management operations.The Company attaches great importance to pollution control and invested a special fund of 1.15 billion yuan in environmental
treatment projects in 2025. Through source emission reduction process control and end-of-pipe treatment the Company has
carried out in-depth environmental governance covering the whole process all areas and all dimensions consolidated and improved
the Grade A environmental performance across the board and continuously enhanced its environmental treatment capacity and
management level. During the reporting period the Company had no environmental pollution incidents. The compliance rate ofatmospheric pollutant emissions stood at 100% the implementation rate of environmental protection “three simultaneous" was
100% and the synchronous operation rate of environmental protection facilities reached 100%.
40 412025 Sustainabil ity Report Pollutant Emissions
Strategy wastewater discharge "and promotes the utilization of urban reclaimed water in a
timely manner in line with the requirements of local governments. Through source
reduction process control cascade utilization of wastewater and other measures
Wastewater discharge decreased by .Air Pollutant Emissions 19%the Company has improved the reuse rate of water resources and reduced the
volume of wastewater discharged. In 2025 the Company’s wastewater discharge
Shandong Iron and Steel has continuously deepened the governance of air pollutant emissions. The Rizhao Base took the lead was 5.4626 million tonnes down 19% year-on-year; the chemical oxygen demand COD (Chemical Oxygen Demand) emission
in completing ultra-low emission transformation in 2020 and became an enterprise with Grade A environmental performance in (COD) discharge in wastewater was 91.23 tonnes down 27% year-on-year. The
the same year; the Steel City Base completed ultra-low emission transformation in 2023 and became an enterprise with Grade emission intensities of COD and ammonia nitrogen were 0.005 kg per tonne of decreased by 27%.A environmental performance in the same year. The Company has become the first super-large iron and steel joint enterprise in crude steel and 0.00016 kg per tonne of crude steel respectively better than the
Shandong Province to achieve Grade A environmental performance across the entire iron and steel sector. During the reporting period national Grade I standard for cleaner production.the Company implemented the 2025 action special chapter of the "Three-Year Action Plan for Maintaining Grade A Environmental
Performance (2024-2026) " and carried out key environmental governance projects. Steel City Base
Steel City Base Steel City Base optimized its water intake model adjusted water consumption structure steadily increased municipal
reclaimed water usage improved fresh water quality and enhanced water use cost-effectiveness. Profile steel steelmaking
Steel City Base advanced 9 environmental governance projects. Three projects—standby coke oven pusher desulfurization plant and special steel plant circulating water systems were adjusted to the energy power plant achieving consolidated
480 m2 sintering charging room and cooling machine discharge fugitive dust emission treatment—were commissioned. professional management and efficient circular utilization of water resources while reducing wastewater discharge. Circulating
Environmental enhancement projects including upgrading and renovation of flue gas desulfurization and denitrification water chemical treatment was delegated to specialized companies for operation strengthening operational control and
systems for No.1 and No.2 coke ovens and coke outlet dust removal flue gas desulfurization treatment are advancing as supervisory monitoring of circulating water. The Base continuously advanced wastewater reduction projects and three projects
scheduled with intrinsic compliance capability further enhanced. The Base conducted specialized desulfurization and were commissioned: the New Dynamic Zone 70 MW power generation circulating water wastewater supply to 3800 m3 blast
denitrification treatment and sulfur mass balance calculation for the 480 m2 sintering machine reshaping the leading furnace slag quenching profile steel district rainwater-sewage separation domestic wastewater supply to profile steel 1880
advantage of active coke process joint pollutant removal from sintering flue gas in the industry. Precise control operational m3 blast furnace slag quenching and large drainage ditch pump station rainwater recovery supply to profile steel 1880 m3
schemes for environmental facilities were established the fugitive dust intelligent management platform was migrated and blast furnace slag quenching.environmental air quality monitoring station terminals were improved achieving 100% daily average compliance rate for 75
online monitoring facilities.Rizhao Base
Rizhao Base
Rizhao Base established a "differentiated collection–graded treatment–cascading reuse" system. Through source-based clean-
Rizhao Base deepened environmental governance implementing 6 key environmental sewage separation and pretreatment the base installed 28 water treatment systems with online monitoring and conducted
enhancement projects including Steelmaking Plant No.5 Continuous Caster fan deep end treatment with full external supply of concentrated brine. The base recycled 7 million tonnes of wastewater annually
suction enhancement. The Base conducted ultra-low emissions further enhancement consolidating the industry's zero-discharge benchmark with key indicators consistently exceeding the limits of GB 13456-2012
assessment identifying 220 issues and establishing 242 remedial measures while and GB 19430-2013.advancing implementation establishing a green channel for implementation further
consolidating ultra-low emissions results. The Base completed upgrades and Case Steel City Base Power Generation Circulating Water Wastewater Supply to Blast Furnace Slag Flushing
renovations of 32 online monitoring devices achieving hourly average compliance
rate exceeding 99.9% and data valid transmission rate exceeding 99.6%. The Base In 2025 Steel City Base implemented the 70 MW power generation
strictly implemented pollutant discharge permit self-monitoring requirements timely submitted pollutant discharge permit circulating water wastewater supply project for 3800 m3 blast furnace slag
execution reports and environmental information disclosure delegated annual environmental monitoring to qualified third-party Flushing redirecting external wastewater discharge from power generation
organizations was recognized as Rizhao's first batch of pollutant discharge permit management benchmark enterprises and circulating water for use in the blast furnace slag Flushing process
passed preliminary review as Shandong Province's pollution reduction and carbon reduction collaborative pilot unit. achieving waste valorization and cascading utilization. The project reduced
wastewater discharge by 40 m3/h.Case Rizhao Base Implements New Semi-Negative-Pressure Benzene Removal Tower for Coal Gas Purification
Rizhao Base implemented a new semi-negative-pressure benzene removal Case Rizhao Base Advances Wastewater Resource Utilization Achieving Water Conservation and Harmless Disposal
tower for coal gas purification using steam as the heat source for crude
Rizhao Base focused on wastewater resource utilization implementing multiple technological modifications to achieve
benzene distillation to eliminate emissions of nitrogen oxides sulfur dioxide cascading wastewater utilization and consumption. Continuous casting wastewater was treated through multi-stage
and particulate matter generated from the combustion of refined coke oven reaction and sedimentation tanks utilizing "dual-alkali" and "defluorination" technologies for reuse in steelmaking
gas and blast furnace gas achieving environmental improvement goals. evaporative coolers as a substitute for fresh water achieving zero discharge from continuous casting wastewater.Additionally cold rolling acidic wastewater was used in the steel slag hot briquetting process consuming 185000 m3 of
acidic wastewater annually substituting for fresh water in cooling and slag quenching operations saving 750000 tonnes
of water annually. This achieves resource utilization and harmless disposal of acidic wastewater significantly reducing
industrial fresh water consumption and improving water resource utilization efficiency.Wastewater Discharge
Going forward the Company will continue consolidating wastewater zero discharge achievements deeply advancing water utility
Shandong Iron and Steel has formulated and improved the "Regulations on Wastewater Discharge Control and Management and the
Measures for the Operation Supervision and Management of Integrated Wastewater Treatment Stations" in accordance with national centralized control center construction conducting water balance testing and achieving high-quality wastewater zero discharge.laws and regulations. The Company actively implements the concept of the "Great Protection of the Yellow River" follows the work The Company will develop "two lists and one table" (toxic and hazardous substance list critical locations and equipment list on-
philosophy of "separation of rain and sewage water conservation and emission reduction at the source and full realization of zero site investigation record table) continuously optimizing lists based on actual production field conditions. The Company will optimize
and improve soil and groundwater self-monitoring point layouts track changes in monitoring data trends and prevent soil and
groundwater pollution and deterioration.
42 432025 Sustainabil ity Report Pollutant Emissions
Impact Risk and Opportunity Management
Strengthening Energy Conservation and Environmental Protection Training and Publicity
Pollutant emissions' impacts on company production and operations are primarily reflected in operational costs and corporate image.The Company leveraging its "company-level professional department production facility" three-tiered environmental management The Company actively conducts enterprise-wide ecological civilization training and publicity month activities enhancing employee
network systematically manages the impact risks and opportunities of pollutant emissions. ecological environmental awareness and capability. In 2025 utilizing World Environment Day the Company launched an energy
conservation and environmental protection publicity month calling for company-wide energy conservation and environmental
protection publicity activities supporting the construction of Beautiful Shandong Steel and Beautiful China. Meanwhile the
Risk Opportunity Company conducted specialized training on hazardous waste standardized management online monitoring management and
others through organizing expert lectures and participating in industry conferences. Steel City Base conducted 2 large-scale
● training sessions with over 500 participants; Rizhao Base organized 4 environmental protection training sessions. I nvestment in advanced environmental protection
equipment and technology can improve corporate
● R egulatory and compliance risk: non-compliant environmental performance and corporate image Case Rizhao Base Environmental Protection Promotion with Community and Property Management
emissions may result in regulatory fines or even
●
production suspension for remediation Reduc ing po l lu tant emiss ions may qual i f y for
environmental tax incentives During the energy conservation and environmental protection publicity month Rizhao Base partnered with Kuian
● E nvironmental impact and reputational damage: pollution Community and Bona Property Management to conduct environmental protection promotion activities in the Shandong
● E stablishing sudden environmental event emergency
incidents or sudden environmental events may attract Steel residential area promoting citizen ecological environmental behavioral standards and inviting citizen representatives
public attention and damage corporate image response plans and conducting emergency drills can to visit Rizhao Base to personally experience the new image of modern green steel enterprises.enhance environmental risk response capability and
prevention levels
Enhancing Response Capabilities
Shandong Steel adheres to safety and environmental protection bottom lines classifying non-compliant emissions environmental
penalties and other environmental protection risks as major company risks. The Company invites professional agencies to identify
and resolve environmental protection risks formulates environmental emergency response plans and conducts drills strengthens
environmental protection publicity and training and advances clean production initiatives to strengthen management of various
environmental protection risks and enhance environmental risk response capability. Targeting stakeholders including community
residents the Company establishes normalized environmental monitoring and communication mechanisms proactively disclosing
environmental information and responding to community concerns. During the reporting period the Company experienced no
significant community complaints triggered by environmental pollution.Advancing Cleaner Production
Environmental Emergency Plans and Drills
Shandong Steel actively promotes the creation of cleaner production environmentally friendly enterprises and both Steel City
The Company establishes an "Emergency Response Plan for Sudden Environmental Events" building and perfecting emergency Base and Rizhao Base are China's steel industry cleaner production environmentally friendly enterprises. During the reporting
mechanisms for sudden environmental events to enhance the Company's capability and prevention level in responding to sudden period the Company optimized production processes and operational procedures employed clean raw materials advanced
environmental pollution incidents. The Company conducts emergency drills for material spills fires environmental facility failures cleaner production and process control technologies and consolidated cleaner production achievements. All major air pollutant
radiation accidents and other sudden environmental events. In 2025 Steel City Base organized 34 emergency response drills for emission indicators exceed Grade 1 standards of the cleaner production evaluation index system. Steel City Base passed the
sudden environmental events with cumulative duration of approximately 47.2 hours and approximately 760 participants; Rizhao Base national Ministry of Industry and Information Technology "Green Factory" re-examination.organized 50 emergency drills with cumulative duration of approximately 50 hours and approximately 600 participants. Drills covered
critical risk areas including wastewater quality anomalies wastewater treatment facility failures radiation source loss and hazardous Clean Transportation Ratio Further Increased
waste spills employing realistic scenarios to focus on verifying plan practicality command system coordination and rescue team
practical capability achieving full-coverage risk prevention and comprehensive emergency response capability enhancement.Case Rizhao Base Radiation Source Theft Emergency Response Drill In 2025 Steel City Base added 28 new-energy electric traction 100
vehicles 9 electric dump trucks 10 electric forklifts and 2
electric loaders. Rizhao Base increased new-energy electric 90 87.45%
In September 2025 Rizhao Base's Plate Plant organized a specialized radiation emergency response drill simulating
vehicle transport by 2 million tonnes raising new-energy
scenarios of radiation source theft and thickness gauge signal interruption. When operators discovered abnormalities 81.74%
electric vehicle transport proportion to 40.13%. By the end of the
they promptly reported them. The control room rapidly activated the specialized emergency response plan coordinating 80
reporting period Steel City Base achieved a clean transportation
with multiple departments to secure the scene establish cordons and preserve evidence. Various units coordinated
ratio of 81.74% and Rizhao Base 87.45% both exceeding the
effectively and interfaced with superior departments ensuring standardized handling with no secondary risks. The drill 70
80% target required for Grade-A Environmental Performance
verified plan operability strengthened personnel emergency response and inter-departmental coordination capabilities
Enterprises.and enhanced awareness of radiation safety risk prevention and emergency reporting standards. 60
Steel City Base Rizhao Base
44 452025 Sustainabil ity Report Waste Management
Metrics and Targets Waste Management
In 2025 the Company fully completed annual pollutant emission targets set at year-beginning as well as mandatory environmental
protection indicators and anticipated targets. Pollutant comprehensive compliance rate construction project environmental
Shandong Steel strictly complies with laws and regulations including the "Solid
protection "Three Simultaneities" execution rate and environmental facility synchronized operation rate all reached 100%. Major
Waste Pollution Prevention and Control Law of the People's Republic of China"
and above environmental pollution accidents were zero environmental administrative penalties were zero. Sulfur dioxide nitrogen
and in accordance with the "Pollution Control Standard for Storage and Disposal Comprehensive utilization rate of
oxides particulate matter chemical oxygen demand and ammonia nitrogen per-tonne-steel emissions complied with total pollutant
of General Industrial Solid Waste" (GB18599-2020) has established "Solid Waste solid waste resources:
discharge control requirements. Factory environmental air quality remained stable and the Company continued maintaining Grade-A 100%
Management Measures" "Hazardous Waste Management Measures" "Hazardous
Environmental Performance Enterprise status across all operations.Waste Management Standards" and "Hazardous and General Industrial Solid Waste
Category 1 Material Disposal Management Measures." Through source-based
Indicator 2025 Target Completion Status Compliant disposal rate: 100%
waste reduction control and professional recovery and utilization management the
Continued Grade-A Company achieves 100% legal and compliant disposal or utilization of solid waste
Environmental Performance Company-wide "Maintain Grade-A" Environmental Performance and hazardous waste with continuously improving resourceful utilization levels.across all operations Recycling ratio: 98.82%In 2025 the total amount of waste generated by the Company was 11.1052 million
tonnes with a recycling and utilization rate of 98.82%. Among them the generation
Pollutant Emissions Compliance Rate 100% 100% volume of general industrial solid waste was 10.9842 million tonnes 100% of
which was recycled or disposed of by entrusted entities; the generation volume of
Construction Project Environmental hazardous waste was 121000 tonnes 100% of which was disposed of in compliance
Protection "Three Simultaneities" 100% 100% by qualified third-party enterprises.Execution Rate
Environmental Facility Synchronized
100%100%
Operation Rate Indicator Unit 2024 2025
Clean Transportation Ratio 80% and above 80% and above Scrap Steel Recovery Rate % 100 100
Environmental Administrative Total Waste Generation 10000 tonnes 833.95 1110.52
Zero Zero
Penalties
——Generation volume of general industrial
10000 tonnes 795.34 1098.42
Solid Waste Resourceful Utilization or solid waste
100%100%
Harmless Disposal Rate Recycling and utilization volume of
10000 tonnes 794.47 1097.47
Emissions of sulfur dioxide nitrogen oxides general industrial solid waste
In compliance with total
particulate matter chemical oxygen demand
Pollutant Emissions pollutant discharge control ——Generation volume of hazardous waste 10000 tonnes 38.61 12.1
and ammonia nitrogen comply with total
requirements.pollutant discharge control requirements.Harmless treatment volume of hazardous waste 10000 tonnes 38.61 12.1
Indicator Unit Permitted Discharge 2025 Actual Emissions Recovered and Utilized Waste Ratio % 95.27 98.82
Total Particulate Matter Emissions Tonne 10531.16 3948.11
The Steel City Base has actively promoted the reduction of steel slag. For various types of steel slag from different sources such
Total Sulfur Dioxide Emissions Tonne 6638.1 2219.22 as converter red slag splashing slag desulfurization slag residual pouring slag and electric furnace red slag the Company has
reduced steel slag generation at the source by adopting high-quality lime increasing slag retention conducting refined steelmaking
Total Nitrogen Oxides Emissions Tonne 13019.86 5678.85 operations strengthening internal primary sorting of splashing slag and precisely controlling residual pouring volume according to
Chemical Oxygen Demand (COD) Emissions different steel grades. During the reporting period the comprehensive utilization rate of solid waste resources reached 100%.Tonne 219 91.23
in Wastewater
Ammonia Nitrogen Emissions in Wastewater Tonne 21.9 2.95 Case Efficient Utilization of Converter Steelmaking Dust Sludge Briquetting
Biochemical Oxygen Demand (BOD) Emissions Steel City Base continuously optimized converter steelmaking dust sludge briquetting utilization gradually consuming
in Wastewater Tonne / / previous inventory sludge. Combined with iron-to-steel ratio adjustments and hot metal temperature conditions
across regions the Base in accordance with the overall approach of inventory effective control ultimate utilization in
Total Nitrogen (TN) Emissions in Wastewater Tonne 65.7 39.46 steelmaking and appropriate process fine-tuning established differentiated briquetting utilization target plans and
Total Phosphorus (TP) Emissions in formed utilization models to achieve efficient circular reuse of dust sludge.Tonne 2.19 1.33
Wastewater
46 472025 Sustainabil ity Report Energy Utilization
The Rizhao Base focuses on building a "Zero-Waste Factory" and has formulated a three-step strategy of process reengineering
intelligent revolution and gene remodeling and has incorporated energy conservation and environmental protection indicators into Energy Utilization
departmental performance assessment. A cross-departmental "Zero-Waste Task Force" has been established to integrate production
technical and environmental protection resources and promote internal collaborative disposal by drawing on advanced experience. Governance
A variety of solid wastes such as cold-rolled iron oxide pellets are reused on-site without being transported out of the plant and
rolling line sludge is recycled independently reducing the outsourced disposal of hazardous wastes and continuously improving the Shandong Steel's energy management framework consists of three
comprehensive utilization rate of solid wastes. In the steel slag treatment process the converter steelmaking process is optimized levels: company-level department-level and facility-level. The
and low-slag smelting is adopted so that the steel slag output per tonne of steel keeps decreasing. Company's Management/Executive Management serves as the decision-
making level for energy management responsible for coordinating and
deciding major company energy matters. The Energy and Environmental
Rizhao Base Three Major Solid Waste Reduction Measures Management Department serves as the management/supervisory level
comprehensively responsible for company energy management work
including revising and improving company energy management systems
Converter establishing annual energy conservation work plans and supervising
Flux Substitution Bottom Raw Material
Quality implementation. Other departments and production facilities are Implementation Blowing
Improvement responsible for implementing specific energy work. Both Steel City Base Optimization
and Rizhao Base have achieved ISO 50001 Energy Management System
certification with 100% certification coverage. Energy Management System Certification
Using lightly-roasted dolomite The bottom blowing mode of the converter Diversified scrap steel procurement The Company strictly abides by national laws and regulations and
to substitute for lightly-roasted has been changed from clustered type to has formulated such management systems as the "Energy Conservation Target Management Measures" "Energy Review and with clear standards and all molten
magnesia balls total flux consum- annular gap type bundle form to ring-gap Improvement Management Measures" "Energy Performance Parameter Management Measures" "Energy Statistics and Monitoring iron slag shall be thoroughly rem-
ption reduced to 41 kg/t lowering form with annular gap type large bottom Management Measures" and "Energy Dispatching Management Measures". Adhering to the philosophy of "System Concept Scientific
total slag volume. blowing promoting the rate of carbon- oved to reduce slag carryover in hot Concept Value Concept" and the energy conservation approach of "Systematic Energy Conservation Scientific Energy Utilization
oxygen reaction in the smelting process metal. and Efficiency Improvement" the Company takes management-based energy conservation collaborative energy conservation and
reducing endpoint oxygen content by technology-based energy conservation as the starting points to challenge the limit of energy consumption and regards energy
approximately 40 ppm reducing total iron efficiency improvement as an important path to achieve green and low-carbon transformation.in slag by 1.1% and lowering slag volume.Strategy
Case Rizhao Base Actively Creating "Zero-Waste Factory" Ultimate Energy Efficiency
The Company has continuously deepened the ultimate energy efficiency improvement project. More than 74% of the productionRizhao Base systematically advanced a three-tiered "reduction-reuse- capacity at both the Steel City Base and Rizhao Base exceeds the benchmark energy efficiency level. The Steel City Base’s “Dualregeneration" management system reducing per-tonne-steel solid waste Carbon Best Practice Energy Efficiency Benchmark Demonstration Plant" has entered the public notice procedure. The Rizhao Basegeneration by 6.4% and achieving full-process digitalized waste reduction was successfully recognized as a “Dual Carbon Best Practice Energy Efficiency Benchmark Demonstration Enterprise" in 2024 wonwith steelmaking steel slag and hot rolling shear loss reduced by 14% and the title of “Energy Efficiency Leader" in the iron and steel industry in Shandong Province in 2025 and was selected into the 2025 List
20% year-on-year respectively. of “Energy Efficiency Leaders "in Key Industries publicized by the Ministry of Industry and Information Technology with its converterThe Company has adopted the innovative dual-track model of “in-plant process awarded the “Leader" title.recycling + social collaboration "consuming 1 million tonnes of socialscrap steel annually. It has pioneered a “real-time generation and real-time clearance "dynamic zeroing model for hazardous waste and built a Steel City Basegrid-based storage system consisting of “on-site hazardous waste bins+ comprehensive warehouses”. Relying on intelligent technologies the Company has realized full-life-cycle traceability Steel City Base actively advanced energy-conservation technology application cumulatively reducing comprehensive energy
and visual monitoring of hazardous waste and increased the reuse rate of waste ceramic balls by more than 50%. An consumption per tonne of steel by 44 kg standard coal equivalent over three years. The Base formulated the Energy System
environmental performance reward system has been established and ecological education activities have been carried out Cost Reduction and Efficiency Increase Three-Year Action Plan sorting out various energy-conservation measures for
improving gas utilization efficiency reducing electricity consumption improving waste heat recovery and utilization reducing
to build a comprehensive solid waste treatment and resource recycling system.fresh water consumption and minimizing wastewater treatment and continuously deepening energy efficiency improvement work.Standardized Hazardous Waste Management
Rizhao Base
Shandong Steel strictly aligns with the National Hazardous Waste List and implements full-process control over hazardous
waste generated in the production process including waste mineral oil and mineral oil-containing waste waste activated carbon Rizhao Base built an integrated "process energy conservation + technological innovation + management optimization"
polychlorinated (brominated) biphenyl waste waste acid waste alkali and various distillation residues generated in the coke and system. Starting in May 2024 the base launched comprehensive three-dimensional grid-based extreme energy efficiency
coke by-product recovery process. The Company adheres to the principle of "prevention first addressing both root and symptoms diagnostic work establishing 59 process-specific energy conservation projects and eight general technology categories with
anticipated technology-based energy conservation of 182000 tonnes of standard coal equivalent. During the reporting period
and standardized management" implementing the disposal principles of "clear division of responsibilities with each bearing the base formulated and released the 2025 Extreme Energy Efficiency Creation Leadership Action Plan systematically sorting
responsibility" and "reduction resourceful utilization and harmless treatment" for the standardized management and safe disposal key energy conservation measures across management-based technology-based and process-based energy conservation
of hazardous waste. dimensions and advancing 16 energy conservation projects among which 8 were commissioned cumulatively realizing
In accordance with the requirements of the Pollution Control Standard for Hazardous Waste Storage (GB1859 7-2023) the Company 45000 tonnes of standard coal equivalent technology-based energy conservation. At present the converter blast furnace and
sintering processes maintain a 100% benchmark achievement rate for energy consumption. The converter process has been
has built standardized hazardous waste temporary storage rooms for the temporary storage of hazardous waste. According to the awarded the Shandong steel industry and national-level energy efficiency "Leader" designation with multiple key indicators
annual hazardous waste management plan the Company tenders to qualified third parties for disposal using methods including C5 including per-tonne-steel comprehensive energy consumption and converter gas recovery consistently maintaining leading
R4 R9 and D10 with the entire process being legal compliant traceable and verifiable. domestic levels.
48 492025 Sustainabil ity Report Energy Utilization
Rizhao Base comprehensively advanced gas extreme recovery utilization and efficient value-added utilization reducing blast furnace
Case Rizhao Base Blast Furnace 2 and Converter 2 Honored as "Champion Furnaces"
gas venting rate to 0.05% a 37.5% decrease from 2024's 0.08%. Converter gas recovery reached 0.94 GJ/t a 0.02 GJ/t increase year-
on-year. Surplus gas supplies self-generation power plants with co-firing gas ratio of 12.2%. The base established a coke oven gas
In July 2025 the benchmarking competition results for national key large steel production equipment energy conservation utilization value-maximization model prioritizing coke oven gas for liquefied natural gas (LNG) and synthetic ammonia production
and consumption reduction were announced. Rizhao Base's Blast Furnace 2 was honored as a "Champion Furnace" achieving efficient carbon-containing resource utilization and reducing annual carbon emissions by approximately 28000 tonnes. In
Converter 2 was honored as a "Champion Furnace" and Sintering Machine 2 was honored as a "Pioneer Furnace." 2025 the LNG process utilized 590 million m3 of coke oven gas.Improving Self-Generated Power
Case Rizhao Base Converter Process Achieves Provincial Steel Industry and National Energy Efficiency "Leader" Recognition
Power generation of Gangcheng Base: 3.27 billion kWh
Steel City Base extremely enhanced self-generated power. In
2025 self-generated power reached 3.27 billion kWh with a self-
In recent years Rizhao Base's converter process energy generation ratio of 76% an increase of 3 percentage points year-
consumption indicators continuously improved. In 2025 on-year. Rizhao Base follows the principle of "matching heat supply Proportion of self-generated power: 76%
Rizhao Base sorted 1180 key data points across 17 to demand making full use of heat energy matching temperature
categories and through scientific data and significant to application and realizing cascaded utilization" and has built
energy conservation achievements became the provincial a cascaded utilization system of "power generation – process Waste heat and residual energy power generation of
steel industry benchmark for converter process energy heat – domestic heat – waste heat storage". In 2025 the power Rizhao Base: billion kWh
efficiency while being selected for the 2025 key industry 1.091generation from waste heat and residual energy reached 1.091
energy efficiency "Leader" enterprise list jointly released billion kWh and the power generation per unit product remained
by the Ministry of Industry and Information Technology at an advanced industry level.National Development and Reform Commission and
State Administration for Market Regulation.Rizhao Base implemented 5 converter energy conservation measures completed intelligent renovation of steel ladle bakers
to improve energy efficiency and equipment stability and innovatively applied low-carbon resourceful smelting technology
with jointly tackled technical projects receiving first prize in the National Machinery Metallurgy and Building Materials Case Steel City Base Advances 1.2 Million Tonne Pellet Plant Waste Heat Recovery and Utilization Project
Industry Employee Technical Innovation Achievement Awards. The base simultaneously completed 10 related renovations
improving converter gas recovery calorific value.Steel City Base's 1.2 million tonne pellet plant waste heat recovery and utilization project is advancing steadily. The project
Additionally the base established 5 lean management and control models implemented energy metering management includes vertical cooling furnace coolers blowers steam transmission pipelines electrical distribution systems perimeter
systems achieved 100% equipping of converter process energy metering instruments and relied on new converter hot water supply piping and steam pipes. Hot pellet ore is loaded into closed vertical furnace chambers through large-
equipment advantages for precise management and control further optimizing process energy efficiency. angle chain-bucket elevators. High-temperature flue gas undergoes dust reduction through cyclone separators with
portions entering waste heat boilers for steam recovery and portions entering denitrification supplementary heating
furnaces for combustion support. Upon completion the project will recover 87100 tonnes of steam annually reduce gas
consumption by 2% and decrease carbon emissions by 31800 tonnes.Collaborative Energy Conservation
Shandong Steel fully leverages the Baosteel integrated synergistic support platform to deepen collaborative cooperation and solidly
advance synergistic energy conservation and value creation work achieving remarkable results in key areas such as energy recovery
and utilization continuously improving the enterprise's energy utilization efficiency and supporting green low-carbon development.Focusing on the core goal of energy conservation and consumption reduction Steel City Base actively implemented a number of Renewable Energy Expected Power Consumption Structure of
synergistic support projects strengthened the implementation of energy-saving measures effectively exerted synergistic advantages Rizhao Base in 2026
Shandong Steel actively explores renewable energy utilization.and achieved significant energy-saving results providing strong support for the enterprise's carbon and consumption reduction.Steel City Base conducted on-site surveys of factory buildings
With the help of the Baosteel synergistic platform Rizhao Base has orderly advanced relevant optimization and upgrading projects
and structures calculating a total roof area of approximately 1.5
realizing two-way empowerment of safe production and energy efficiency improvement which not only firmly holds the bottom line of
million m2 across the entire zone with an estimated photovoltaic
safe production but also effectively improves the operational energy efficiency of equipment further consolidating the foundation for
installation area of over 600000 m2. During the reporting period
the enterprise's green development. Green Power
the construction of a 14.49 MW photovoltaic power generation Conventional
Power
project commenced with expected commissioning in 2026. The 28.3%
Efficient Waste Heat Recovery Base established a research task force to conduct in-depth 71.7%
research on green electricity and green certificate trading rules.Shandong Steel through implementing comprehensive full-coverage and all-dimensional energy conservation renovations
Rizhao Base plans a 28.3% green electricity consumption ratio
continuously advances waste heat and residual energy extreme recovery technology. Steel City Base maintains zero flaring of blast
in 2026 achieving a breakthrough "zero" in green electricity
furnace gas and coke oven gas with extreme converter gas recovery completing 0.78 GJ/t annually. The base constructed steam
consumption through the purchase of green certificates.pipeline from the medium section production line area to the old plant area integrating large heating furnace waste heat steam into
converter waste heat power generation utilization eliminating steam venting reducing annual steam venting by 70000 tonnes and
reducing CO2 emissions by 7800 tonnes.
50 512025 Sustainabil ity Report Energy Utilization
Water Resource Utilization Water Conservation and Utilization Measures
Water Resource Management System
Steel City Base adheres to the policy of "source reduction process cascading end treatment
Shandong Steel strictly implements the national Water Intake Permit Management Measures establishing a "top-level coordination and recovery utilization" and builds a water-saving model of "diversified resource development
hierarchical responsibility and universal participation" water resource management organizational framework. The company systematic consumption reduction and refined management and control". Reclaimed water reused:
management level serves as the decision-making level the Energy and Environmental Management Department as the management/
supervisory level and the energy power plants and related facility departments as the implementation level with clear departmental 7.92 million m3
responsibilities at each level forming a closed-loop management mechanism. The Company established Water System Management In terms of management it built a dynamic water intake model conducts
Measures Water Supply Consumption and Water Resource Management Measures and other systems improved the statistical
accounting and metering system and incorporated water consumption and conservation indicators into performance evaluation to regular water balance testing improves the three-tiered water metering
strengthen responsibility implementation. network to achieve precise control. Coking wastewater reuse
In terms of water source expansion it recycled 7.92 million cubic meters of rate:92%
Strengthening Planning and Water Source Protection reclaimed water in 2025 the coking wastewater recycling rate exceeded 92%
reducing wastewater discharge by 466000 tonnes annually and collected
Wastewater emission
The Company strictly adheres to water intake (consumption) quota rainwater to supplement production water.declaration rationally plans and calculates water intake and takes water reduction:466000
according to plans. For new construction modification and expansion In 2025 In terms of system optimization it advanced process cascading water use and tonnes
projects water conservation facilities are built concurrently. Combined circulating water recovery and utilization implemented equipment and process
with the Yellow River Protection Law of the People's Republic of China the Company's total water consumption transformation and a number of measures saved more than 1 million tonnes
Shandong Yellow River Basin Ecological and Environmental Protection was 45.07 million m3 of fresh water annually.Specialized Plan and the Company's water resource management targets
and plans Shandong Steel comprehensively advances the "Great Yellow
River Protection" initiative comprehensively strengthening water-saving
technology research development and application implementing multiple with fresh water consumption at 41.22
million m3. Rizhao Base relies on the integrated water system management and control platform to realize
water conservation measures and projects and continuously improving full-process refined control of water use and dynamic analysis of process water use efficiency
water resource utilization efficiency.timely rectifying water leaks and providing data support for water-saving technological
Neither the Steel City Base nor the Rizhao Base involves key protected Fresh water saved: 3The fresh water consumption per ton of steel
areas and they earnestly fulfill their ecological protection responsibilities. transformation and indicator optimization. million tonnes
The Steel City Base is located in the Yellow River Basin giving priority to was 2.26 m3
the use of surface water and unconventional water to reduce groundwater
exploitation and strengthen water source protection. In the future it will It explored a seawater desalination water-saving path and built a seawater Wastewater reuse rate
firmly implement the requirements of the Opinions on Comprehensively the water recycling rate remained above desalination project with a daily capacity of 20000 m
3 which converts seawater
Promoting Ecological Protection and High-Quality Development of the 98.48%. into industrial water through advanced membrane treatment technology saving for the whole plant:
Yellow River Basin and continuously tap water-saving potential. The Rizhao 3 million tonnes of fresh water annually and taking into account both water 100%
Base implements differentiated water supply and source water reduction conservation and ecological protection.management setting a benchmark for ecological protection in the steel
industry. The Base advanced wastewater resource utilization purifying wastewater into
pure water for reuse in furnaces through more than 60 process steps. At present
Case Rizhao Base Intelligent Water-Saving Demonstration the factory-wide wastewater recycling rate reaches 100% the per-tonne-steel
fresh water consumption leads the industry and the annual recycled water
Rizhao Base has deeply cultivated the field of industrial water- volume is equivalent to that of the West Lake.saving and become a model for regional water resource
protection. Its developed "Steel Rolling Turbid Circulating
Water System Equipment Treatment Capacity Improvement Water-Saving Culture Publicity
Technology" was selected as a typical case in the Catalogue
of Industrial Water-Saving Technologies Processes and
Equipment Encouraged by the State (2025 Edition) by the The Company attaches great importance to training all employees
Ministry of Industry and Information Technology. This on water use efficiency to enhance water-saving awareness across
technology addresses the pain points of industrial turbid the enterprise. The Company carries out a series of activities in 5 special training sessions
circulating water treatment in the industry achieving dual improvement of water-saving and production stability through conjunction with important nodes such as World Water Day and China
optimization such as synergistic treatment and equipment upgrading. At the same time it improved the water system Water Week. In 2025 the Company organized 5 specialized training
control and realized zero wastewater discharge during blast furnace maintenance. The Base upgraded the intelligent sessions and 13 online promotions. It creates a good atmosphere 13 online publicity activities
water management phase one through intelligent enhancement adding an intelligent dispatch module clearing water of "water conservation by everyone everywhere" through posting
consumption information across processes improving the factory-wide water dispatch response speed by 50% and slogans and holding special activities.fortifying the operation and maintenance defense line coupled with intelligent inspection. It established a three-tiered
water circulation system with a 100% wastewater recycling rate providing a practical sample for the steel industry.
52 532025 Sustainabil ity Report Circular Economy
Impact Risk and Opportunity Management Circular Economy
The Company's production and operation consume various energy sources including water electricity coal and gas. The impacts
of energy utilization on company production and operations are primarily reflected in operational costs and corporate image. The
Company leveraging its "company-level professional department production facility" three-tiered energy management network Shandong Steel actively leverages circular economy industrial cluster advantages establishing a standard system encompassing
systematically manages the impacts risks and opportunities of energy consumption and resource utilization. five recycling chains: solid waste treatment water resource cascading utilization gas resource utilization waste heat cascading
utilization and coal chemical product deep processing achieving resource-efficient utilization.Risk Opportunity Solid Waste Recycling
● Investment in equipment upgrade and renovation utilizing The Company actively advanced rotary kiln fines return-to-production utilization blast furnace slag resourceful utilization and high-
advanced energy-conservation technology can reduce value utilization of carbon-containing and iron-containing resources such as coke-making dust ash and scale. Solid waste resourceful
● R egulatory and compliance risk: energy consumption
energy consumption lower enterprise operational costs utilization levels continuously improve with achievement of 100% resourceful utilization of blast furnace slag and iron-containing
above relevant standards unauthorized water intake
and enhance environmental performance and corporate dust sludge high-value utilization of desulfurization slag and effective promotion of cross-industry solid waste resource cycling and
and use may result in regulatory fines
image utilization.● R esearch and development of new low-carbon energy
● Active development of renewable energy optimizing
sources (such as hydrogen energy) may increase
enterprise energy structure supporting enterprise carbon
company R&D investment
reduction and enhancing enterprise competitiveness Strengthening Rotary Kiln Fines Return-to-Production Utilization
● E nvironmental impact and reputational damage risk:
● S cientific energy management and utilization benefits
if energy-related pollution incidents occur it will In accordance with rotary kiln fines generation conditions and zero-inventory management requirements
establishing a positive image winning the trust of
attract public attention and damage corporate image the Company researched and optimized sintering charging models and increased rotary kiln fines utilization.customers and the public and enhancing enterprise
industry influence and brand value During the reporting period rotary kiln fines return-to-production utilization reached 65900 tonnes.Blast Furnace Slag Resourceful Utilization
Metrics and Targets
The Company constructed slag micro-powder production lines achieving 100% resourceful utilization
Shandong Iron and Steel tracks and monitors indicators such as comprehensive energy consumption per tonne of steel in real time.of blast furnace slag.In 2025 the Company’s comprehensive energy consumption per tonne of steel was 563.64 kg of standard coal per tonne of steel and
fresh water consumption per tonne of steel was 2.26 m3 per tonne of steel both meeting the annual targets.Dust Ash/Sludge Recovery and Utilization
Company Future Resource Utilization Targets The Company continuously promoted steelmaking dust ash briquetting return-to-steelmaking utilization.Various zinc-containing dust ashes were processed through rotary kilns for return-to-sintering utilization.Through increasing comprehensive resource utilization efforts reducing external disposal ratio Dust ashes with minimal harmful elements were directly returned to sintering. achieving 100% utilization
particularly improving bulk solid waste return-to-production utilization rate and product conversion of iron-containing dust sludge.rate and creating "zero-waste factories." By 2030 the Company aims to achieve solid waste return- High-Value-Added Desulfurization Slag Utilization
to-production utilization rate of 38% or above reduce per-tonne-steel comprehensive energy
The Company independently developed desulfurization slag graphite carbon extraction technology achieving
consumption by 4.5% compared to 2025 and reduce per-tonne-steel fresh water consumption by
1% compared to 2025. Improve water resource comprehensive utilization efficiency reduce external new breakthroughs in desulfurization slag processing technology with annual desulfurization slag processing
wastewater discharge from Steel City Base and achieve Rizhao Base high-quality wastewater zero capacity of 100000 tonnes enabling extraction of over 3000 tonnes of graphite carbon with purity
discharge targets. exceeding 90% annually and achieving high-value-added desulfurization slag utilization.Exploring Cross-Industry Solid Waste Resource Utilization
The Company actively explored new models for cross-industry solid waste resourceful utilization. Through
technological innovation and process optimization the Company achieved consumption of red mud generated
in the aluminum electrolysis industry within the steel industry. In 2025 the Company consumed 124900
tonnes of red mud effectively promoting cross-industry solid waste resource cycling and utilization.
54 552025 Sustainabil ity Report Ecosystem and Biodiversity Protection
Packaging Materials The green coverage rate of the Steel City Base
has been raised to 28.36% with continuous
improvement of the ecological environment. Greening Milestones of Steel City Base
Shandong Iron and Steel strictly implements steel packaging standards. Each production plant has formulated specific management
The Dawenhe National Wetland Park (AA) at the
and usage rules for packaging materials in light of packaging quality and business needs. Adhering to the principles of reduction and
Steel City Base is a model of integrated factory-
recyclability the Company has reduced the consumption of packaging materials by adopting reduced packaging improving the control Increased factory green coverage rate to 28.36% achieving
urban governance home to wild animals such as
precision of packaging equipment and increasing the use of recyclable packaging materials. In 2025 the total consumption of various continuous improvement of the ecological environment
white storks egrets and mallards which vividly
packaging materials was approximately 40000 tonnes.demonstrates the beauty of biodiversity.Case Steel City Base Green Action Protecting Ecological Environments
In March 2025 Steel City Base with the theme of "Laying a Solid Foundation for
Green Development and Striving to Create a New Situation in the Steel Industry"
organized a 2025 volunteer tree-planting activity planting more than 1000
Weight-Reduction Packaging Adopting Circular Materials Improving Equipment Control Precision
saplings. The sapling combination followed the principle of "greenery visible year-
round flowers visible three seasons distinct layering" selecting northern tree
Using high-strength materials achieves Implementing a packaging material Enhancing strapping equipment control species such as persimmon cherry blossom and dwarf cypress to enhance the
both ensuring packaging quality and substitution strategy keeping pace with precision such as length and width ecological landscape quality of the factory and its surrounding areas. Through
reducing packaging material usage. industry development trends increasing cutting precision for various packaging related activities 64500 m2 of supplementary planting was completed with increased environmental investment and
Detailed segmentation of strapping recycled packaging material usage materials reducing overlap quantity remarkable results in the factory's greening environment.length categories reduces the overlap improving the packaging material and thereby saving packaging material
length per strapping and minimizes circular utilization rate and reducing consumption.waste. environmental impact.Rizhao Base is a coastal steel production base surrounded by 2.1 million m2 of ecological green corridors with plantings of 150000
trees and 500000 shrubs attracting more than 20 migratory bird species. It has transformed from a manufacturing facility to a green
landmark with a "steel plant botanical garden". The base has successively received honors including "AAA-Level Industrial Tourism
Scenic Area" "National Green Factory" and "Steel Industry Green Development Benchmark Enterprise". Relying on 1.8 kilometers
of natural coastline it has built a steel cultural-tourism landmark and become a regional green name card. It has received a total of
Ecosystem and Biodiversity Conservation more than 200 visiting batches actively demonstrating the achievements of green intelligent manufacturing to the society.Biodiversity is the foundation of human survival and development closely related to food safety quality of life economic development
and disease prevention. Shandong Steel strictly complies with international national and regional biodiversity protection laws and
regulations taking active measures to ensure all business activities comply with regulatory requirements and proactively avoiding AAA-level Industrial Tourist National-level Green Factory Benchmark Enterprise for Green
Attraction Development in the Iron and Steel
operations in high-biodiversity-value areas. Simultaneously the Company strictly adheres to ecological red lines refraining from Industry
construction near national ecological protection areas and taking concrete action to maintain ecological balance.During the reporting period the Rizhao Base was selected into the first list of environmental protection facilities open to the public
by the Ministry of Industry and Information Technology. Nine distinctive sites were opened including the Intelligent Control Center
2050mm hot rolling production line and coastal ecological restoration demonstration spot forming an industrial tourism system
integrating science education cultural experience and red education. In the future it will showcase the achievements of green
transformation through regular open activities.
56 572025 Sustainabil ity Report
03 Social Responsibility The Company continues to deepen its innovation-driven development strategy strengthening its development capabilities and practical
achievements in R&D system construction digital and intelligent transformation supply chain security assurance and product quality
enhancement. At the same time the Company consolidates data security safeguards focuses on protecting employee rights and
Innovation-Driven Development interests and actively practices social responsibilities such as rural revitalization and community co-development. Through multi-
dimensional collaborative development the Company continuously enhances its core competitiveness drives high-quality development
Intelligent Manufacturing to greater depths and achieves alignment between enterprise development and social value.Supply Chain Security
Product and Service Safety and Quality
Data Security and Privacy Protection
Employees
Occupational Health and Safety
Social Welfare
58 592025 Sustainabil ity Report Innovation-Driven Development
Innovation-Driven Development Strategy
Shandong Steel continues to deepen the coordinated development of the Jinan Steel City Base and Rizhao Base integrating
comprehensive resources including location capital technology and talent. Focusing on five major product categories—thick plates
section steel special and superior steel rebar and hot/cold rolling products—the Company strengthens the competitiveness of
Shandong Steel places innovation at the core of its strategy advancing in the directions of "high-end high-efficiency intelligent and advantageous products such as plates section steel and special and superior steel. Concentrating on advanced steel material R&D
green" by establishing an open and collaborative R&D system driving product upgrades and process innovation and injecting strong breakthroughs in key common technologies and digital and intelligent transformation the Company drives innovation resources to
momentum for the sustainable development of itself and the industry. converge on core fields and key links achieving synchronized enhancement of innovation value and industrial value and facilitating
the steel industry's transition toward high-end manufacturing and green low-carbon development.Governance Impact Risk and Opportunity Management
The Company integrates risk prevention and opportunity capture throughout the entire technology and innovation process
The Company continues to build a technology and innovation management system with clear responsibilities and authority establishing a comprehensive and multi-level risk and opportunity management system. It precisely assesses and mitigates various
collaborative sharing efficient operations and vibrant energy. Oriented toward value creation and with project topics as the potential risks in R&D management and technology maintains the bottom line of innovation development and proactively explores
vehicle the Company focuses on the core responsibilities of "advanced steel material new product R&D key common technology and integrates development opportunities from internal and external resources and policy enablement. This optimizes innovation
development and economic strategy research". Through a flat organizational structure unified management professional integration resource allocation ensures controllable risks and effective opportunity utilization and provides safeguards for the implementation of
a n d i n tegrated operations the Company enhances professional R&D capabilities promotes collaborative technological breakthroughs the technology and innovation strategy.across bases cultivates industry experts and distinctive innovation teams and builds an integrated R&D system that "aggregates and
Risks Risk Description Mitigation Measures
empowers conducts unified research serves the front line operates efficiently and creates value". The Planning and Technology
Department is the responsible department for the Company's technological innovation while the Shandong Iron and Steel Research Strengthen multi-dimensional assessment and full-process verification on the
Institute/Technology Center and the Rizhao Company Iron and Steel Research Institute are the R&D implementation institutions. demand side. In the project initiation stage conduct in-depth research on market
Focusing on key links such as project initiation fund usage evaluation and incentive patent application and achievement reporting demand and on-site application scenarios to enhance the practicality and site-
fitting of R&D outcomes. Establish an industry technology research system to
the Company has formulated and revised 11 management systems including the "Scientific Research Project Management R&D direction deviates from market demand track cutting-edge technological developments and trends in the international
Measures" "New Product Development Management Measures" "Scientific Research Project Evaluation and Incentive Standards" Technological R&D site requirements or industry trends easily steel field ensuring R&D direction aligns with industry mainstream. Deepen
"Patent Management Measures" and "Scientific and Technological Achievement Management Measures" continuously optimizing Direction Risk causing ineffective investment and waste of coordination and collaboration with downstream users and site operations
management processes and clarifying responsibility divisions to achieve standardization and efficiency in technology and innovation R&D resources. jointly conduct project-based R&D to achieve precise matching between R&D
management. demand and practical application. Through pilot and intermediate-scale tests
progressively verify process feasibility and economic viability strictly control
The Company has established multi-level technology and innovation platforms at national provincial and municipal levels including R&D investment pace and avoid large-scale blind investment causing resource
a National Enterprise Technology Center and Shandong Provincial Key Laboratory and has built joint laboratories and collaborative loss.innovation centers with key domestic universities research institutes and downstream customers fully integrating internal and
Technology barrier breakthroughs face
external R&D resources to provide solid platforms for product development and technological breakthroughs. difficulties. Core processes or equipment Strengthen full-element assurance for technology breakthroughs. In the project
for advanced steel depend on imports initiation stage review the overall level of the project team to ensure project
Technology
with long R&D cycles and high costs objectives match the team's overall capability. Apply digital technologies such as
Bottleneck Risk
easily causing R&D progress lag due to digital twin for process parameter simulation and verification reducing trial-and-
Science and TechnologyInnovation Management System unsolved technical problems or changed error costs in actual production.of Shandong Steel
1 implementation conditions. National-level Technology Innovation Platform
Introduce professional scientific research project management informatization
Lack of professional scientific research
R&D System Management Systems tools build a digital management platform covering the entire R&D process Management Structure management systems resulting in
11 achieve real-time monitoring of R&D progress transparent data management ● Flat structure Collaborative technological ●F ormulation and Revision Provincial/Ministerial-level Technology R&D Management c u m b e r s o m e R & D m a n a g e m e n t ● and cross-departmental collaboration and improve R&D management efficiency.
breakthroughs across bases of Multiple Management Efficiency Risk processes and low efficiency making it
●Unified management Establish a standardized technical documentation library and knowledge
Cultivation of industry experts Systems Innovation Platforms difficult to achieve efficient tracking and ● management system normalize R&D data archiving sharing and succession
●Professional integration control of R&D processes.●Distinctive innovation teams and prevent knowledge discontinuity in core technologies.● Integrated operations
2 Opportunities Utilization Initiatives Municipal-level Technology Innovation Platforms
Taking advantage of the unified deployment opportunity for
Promote the application of scientific research project management systems to
information technology construction within the Group company
achieve real-time monitoring of R&D progress data sharing and collaboration
initiate the development of a scientific research management
and improve R&D management efficiency.Platform Construction 6 system. High - tech Enterprises
Multi-level technology and innovation platforms; establishment of joint
laboratories and collaborative innovation centers with key domestic and foreign
Using academic societies and industry associations as important platforms for
universities research institutes and downstream customers cooperation deepen external technical exchange and industry collaboration
Leveraging the opportunity of executive changes in various
actively organize and participate in high-end academic conferences and technical
academic societies and industry associations participate
seminars promote the sharing and transformation of R&D achievements within
in high-end academic conferences and technical exchange
the industry strengthen industry talent exchange and capacity building and
meetings.provide intellectual support for the Company's technology innovation upgrade and
industry high-quality development.
60 612025 Sustainabil ity Report Innovation-Driven Development
Cultivation of Innovation Talent Case Leading the Formulation of Intelligent Manufacturing Industry Standards
The Company has revised technology and innovation management systems In 2025 the Company obtained 13 China Machinery
In 2025 the Company led the formulation of 3 industry standards in the field of intelligent manufacturing including YB/T
such as the Scientific Research Project Management Measures and Scientific
6393-2025 "Technical Requirements for Intelligent Control System for Converter Production" YB/T 6394-2025 "Technical
Research Project Evaluation and Incentive Standards building a multi- Metallurgy and Building Materials Industry Requirements for Intelligent Control System for Ladle Refining (LF)" and YB/T 6396-2025 "Technical Requirements for
dimensional evaluation system and position performance assessment model employee innovation Online Steel Plate Contour Detection System" systematically standardizing the design development and application
with a prominent focus on value creation and optimizing incentive mechanisms
requirements of intelligent control systems for related processes which is of significant importance for the intelligent
to effectively stimulate innovation vitality. In 2025 the Company strictly adhered
manufacturing transformation and upgrading of the steel industry.to academic and ethical standards upheld professional ethics practiced including 1 special first prize 2 first prizes
high-quality technology innovation requirements and fostered a culture of
technology serving good and established supporting mechanisms. Focusing
on key core technology breakthroughs through major technology campaigns 3 second prizes and 7 third prizes Scientific and Technological Innovation Achievements
and "challenge and reward" initiatives the Company accelerated the cultivation
of leading talent and innovation teams in practice continuously stimulating The Company continuously focuses on practical demand from "sites and markets" to conduct process and product R&D achieving
talent innovation potential. In 2025 the Company won 1 gold award and 2 silver awards in the "Elite Talents Strengthening Shandong" breakthroughs in multiple key material fields supporting high-end manufacturing and green transformation.Shandong Province Youth Innovation and Efficiency Exchange and Display Activity.Section Steel Field
In 2025 the Company continued to increase R&D investment with total R&D investment of 3538 million yuan representing 5.26%
of main business revenue. A total of 151 scientific research projects were initiated with 1 national key R&D project application and 1 Anchoring on the directions of high-end differentiation green and series development the company strengthens the multi-
Taishan Industrial Leading Talent Project application in Shandong Province. functional advantages of H-section steel builds distinctive features of special-shaped section steel with complex cross-sections and
continuously consolidates leading advantages in section steel for marine engineering mechanical manufacturing and rail transit.Marine/offshore engineering section steel has achieved breakthroughs in core technologies of low-temperature resistance high
strength and toughness and high cleanliness developing high-performance section steels such as Q460MD C390-6 and Q355NF Intellectual Property Protection leading customer material upgrades. Section steel for mechanical applications pioneered unbalanced compensative rolling theory
conquering large-size highly asymmetric cross-section forming and property integrated control technology with high-end track steel
The Company has established an intellectual property management framework with "leading department coordination departmental
for super-large equipment breaking foreign monopolies and multiple types of gantry section steel such as C142 being launched
synergy and full-staff participation" ensuring that intellectual property management covers the entire R&D production and globally for the first time supporting independent and controllable core materials for domestically-made equipment. Maglev track
operation processes. The Planning and Technology Department as the leading department for intellectual property management section steel has solved surface quality control challenges through rolling process innovation filling international gaps.comprehensively oversees the application maintenance and other management of various types of intellectual property including
patents software copyrights and trademarks. Focusing on core intellectual property types and in combination with the Company's
Confidentiality Management Measures the Company has formulated specialized management systems including the Patent
Management Measures Technical Secret Management Measures Software Copyright Registration and Management Measures
and Trademark Management Measures and is actively promoting the construction of an intellectual property management system
aligned with GB/T 29490-2013 Enterprise Intellectual Property Management Norms forming a refined system covering the entire
process of "creation acquisition and maintenance".In 2025 the Company filed 339 patent applications including 277 invention patents and 62 utility model patents. As of the end of the
reporting period the Company cumulatively held 1704 valid patents including 1174 invention patents.Formulation of Industry Standards
Special Steel Field
The Company actively participates in the formulation and revision of standards at various levels leading industry normative The Company concentrates efforts on new energy vehicles wind power and molds industries increasing development of high-end
development through its technical capabilities. In 2025 the Company chaired and participated in the formulation of 21 standards varieties and leading industry customers. Deepening supply chain collaborative breakthroughs with new energy vehicle products
among which it chaired 2 national standards 3 industry standards and 2 group standards; and participated in 6 national standards 3 successfully entering supply chains of leading enterprises such as Chery BYD and SAIC; developing a complete series of wind power
industry standards 2 group standards and 3 local standards. steel with gearbox steel passing certifications from high-end customers such as Envision Energy DeGeMa and Nanjing High-Tooth
achieving stable batch supply; H13 series hot work mold steel covering a wide range of specifications with rolled materials below
200mm featuring defect preservation capability achieving significant success in electroslag ingot domestic substitution.
Case Leading the Formulation of National Standard GB/T 46214-2025 Hot-Rolled H-Section Steel for Bridge Steel Structures
In August 2025 the National Standard GB/T 46214-2025 Hot-Rolled H-Section Steel for Bridge Steel Structures led by
the Company was officially issued. As an important foundational standard in the bridge steel structure field this standard
precisely connects steel material standards with engineering construction standards further perfecting China's technical
standard system for bridge steel structures providing technical basis for structural design units to conduct design
material selection and optimize structural solutions and strongly promoting the development and innovation of China's
bridge steel structures.
62 632025 Sustainabil ity Report Innovation-Driven Development
Thick Plate Field In 2025 the Company focused on technological innovation development targets coordinating the advancement of technical R&D
achievement transformation and innovation management work with scientific and technological innovation activities steadily
Advancing the breakthrough of special plate material domesticization
progressing according to plan and all annual targets fully achieved. The Company obtained 1 first prize and 1 second prize of the
consolidating leading advantages in energy-use steel industry. Leading
Metallurgical Scientific and Technological Award; 2 Shandong Provincial Science and Technology Awards; 48 Shandong Provincial
the market with 420 MPa high-strength and toughness wind power steel
Metallurgical Science and Technology Progress Awards including 13 first prizes; 1 first prize of the Inner Mongolia Autonomous
supporting large-scale crude oil storage projects with Q490RW oil tank steel
Region Science and Technology Progress Award; and 1 second prize of the Liaoning Provincial Science and Technology Progress
promoting R&D of TMCP-state coal machinery equipment steel accelerating
Award.green and low-carbon transformation of traditional energy equipment;
achieving batch supply of ultra-high-strength steel Q890-960; BS450E/
F-XGKY high-toughness wear-resistant steel breaking foreign monopolies
applied to super mining equipment in the Arctic Circle at -50°C ultra-low temperature environment; freeze-thaw resistant structural
steel for plateau permafrost achieving domestic first launch.Case Full-Specification Nickel-Based Steel Products
The Rizhao Base has successfully achieved batch stable
production of full-specification nickel-based steel products
of various grades such as 9Ni 7Ni 5.5Ni and 5Ni
achieving a major breakthrough in high-performance steel
manufacturing and application. The products were selected
in the 2025 Top 10 Scientific and Technological Innovation
Achievements of Shandong Province.The Company has conquered key technologies such Number Project Name Award Name Award Level Award-Winning Unit (Ranking)
as ultra-pure smelting and thick plate performance
uniformity building a green and efficient ultra-large width-
to-thickness ratio coil rolling process system. Products Vanadium-Nitrogen Microalloyed Advanced Shandong Provincial Science and Technology Yinshan Profile Steel
1 Steel Material Green Manufacturing Key Second Prize
are adapted to ultra-low temperature environments ranging from -101°C to -196°C with steel plate thickness tolerance Technology and Industrialization Award (1st Position)
controlled within ±0.05mm with main performance indicators reaching the international leading level providing core
materials for critical fields such as the energy industry and supporting independent and controllable supply chains in
the high-end manufacturing field. Ultra-Large Width-to-Thickness Ratio Thin-
Specification Medium-Heavy Plate Furnace Shandong Provincial Science and Technology Rizhao Base2 Second Prize
Among these ultra-thin nickel-based steel developed by the Rizhao Base was successfully applied to the world's largest Coil Rolling Line Core Technology Innovation Award (1st Position)
single-unit liquefied natural gas (LNG) storage tank with a capacity of 270000 m3 in Zhuhai Guangdong. Compared with and Industrialization Application
conventional products the inner wall weight reduction of the storage tank reaches up to 37% reducing welding on the
tank body shortening construction cycles and saving manufacturing costs achieving a new breakthrough in ultra-low High-Strength Wind Power Steel High-Purity Inner Mongolia Autonomous Region Shandong Steel
temperature material manufacturing and application of medium-thick plate steel products in Shandong Province. 3 Electromagnetic Regulation Key Technology First Prize
Development and Application Scientific and Technological Progress Award (2nd Position)
Innovation Technical Exchange 4 Tundish Ring Outlet Argon Blowing Green Liaoning Province Scientific and Technological Shandong Steel Metallurgy Technology R&D and Application Second PrizeProgress Award (3rd Position)
The Company adheres to the philosophy of openness and collaboration striving to build an "innovation chain – industry chain – supply
chain" integration system. Through integrating resources from all parties the Company stimulates innovation vitality and promotes
Hot Continuous Rolling High-Strength Steel Grade China Iron and Steel Industry Association Rizhao Base
high-quality industry development. Strengthening synergy and technical cooperation with Baowu organizing participation in technical 5 Quick Transition and Stable Rolling Intelligent and Chinese Society for Metals Metallurgical First Prize
(1st Position)
exchange meetings on Baowu long-product R&D and industry development collaboration and steelmaking processes organized by Optimization Control Technology Development Scientific and Technological Award
the China Baowu Scientific and Technological Association and Steelmaking Committee. The Company actively hosts and participates
in various industrial technology innovation exchange activities co-building an innovation ecosystem with universities research Large-Specification Low-Temperature- China Iron and Steel Industry Association
institutes downstream customers and peers exploring low-carbon and intelligent transformation pathways and promoting supply 6 Resistant H-Section Steel for Ships and Marine
Shandong Steel
Engineering Key Preparation Technology and Chinese Society for Metals Metallurgical Second Prize
chain collaborative upgrading and high-quality development. Research and Product Development Scientific and Technological Award
(1st Position)
Indicators and Targets
Looking ahead the Company will focus on two core directions—decarbonization and intelligent transformation—accelerating
The Company adheres to the philosophy of "high-end-driven technology-led "concentrating efforts on building strategic product research and exploration of cutting-edge technologies and their industrialization application striving to overcome technological
advantages of "section steel special and superior steel thick plates hot rolling and cold rolling "comprehensively advancing the bottlenecks in key links and exploring feasible transformation and upgrade pathways. The Company will continue to actively host
high-end distinctive and specialized development of products. The Company persists in the strategy of "low cost for mature products and deeply participate in various industrial technology innovation exchange activities further strengthening synergistic collaboration
differentiation for high-end products and series development for core products" continuously improving the proportion of premium with universities research institutes downstream customers and industry partners jointly building an open symbiotic and vibrant
steel and high-end customers. By the end of 2030 the Company plans to maintain R&D investment at above 5% possess a batch of innovation ecosystem. By deepening close cooperation and resource integration along the supply chain promoting coordinated
key technologies and leading products with independent intellectual property rights achieve an upgrade in product quality and grade upgrade and value enhancement across the entire chain and jointly building a safe efficient green and sustainable modern
rank among the first echelon of the domestic steel industry in overall technical level reach international advanced level in some industrial system the Company will contribute solid strength to promoting high-quality development of the industry and economic
fields and strive to become a leader in steel technology. society.
64 652025 Sustainabil ity Report Intelligent Manufacturing
Intelligent Manufacturing Case Thick Plate Online and Offline Identification Platform Deployment Empowering Intelligent Production
The thick plate online and offline identification platform in the
thick plate workshop of the Plate and Strip Plant at the Steel City
The Company actively implements the national digital economy development strategy and the requirements of the "dual carbon"
Base has been successfully put into use in the heat treatment
goals grasps the trend of intelligent upgrading of the steel industry takes "AI + Steel" as the core promotes the deep integration of zone equipping the production line with "intelligent eyes".data-driven and intelligent decision-making builds an intelligent manufacturing system and drives high-quality development. Relying on 25 sets of high-precision vision systems the platform
can identify the status of thick plates in real time and send
offset data solving the problem of errors in traditional manual
Construction of Digital and Intelligent Organizational Framework operation effectively avoiding the risks of decreased product yield
and equipment damage realize real-time monitoring of the entire
production process promote the innovation of production models
With AI as the technological core and "data-driven + intelligent decision-making" as the pathway the Company leads intelligent
and significantly improve production line efficiency.transformation establishing the "AI + Steel" core strategy promoting deep integration of AI technology with intelligent operations
digital operations and smart decision-making. In 2025 the Company established an AI Digital Intelligence Department clarifying
functions such as technology origination data center and project coordination while simultaneously formulating the "AI + Steel
Case Rizhao Base Awarded the Title of Excellent Smart Factory
Scenario Application Promotion Plan" establishing a solid organizational foundation for transformation.The Rizhao Base's "Smart Factory for High-Quality Steel
Digital and Intelligent Transformation Strategy and Achievements Plates with Full-Process Integrated Application of Artificial
Intelligence" has been selected as a 2025 Excellent-Level Smart
Factory by the Ministry of Industry and Information Technology.With "digital and intelligent transformation" as the core strategy the Company has constructed a systematic intelligent manufacturing The project promotes the in-depth integration of Al and the
promotion system spanning top-level design organizational change basic infrastructure scenario application to talent cultivation. entire steel manufacturing process realizes the replacement
During the reporting period the Company planned 38 scenarios and deployed 20 applications covering core scenarios such as of manual labor by machines in high-risk positions and
achieves intelligent control of the whole production process.iron area management and steelmaking smelting. Among these the iron smelting centralized control system was selected in the It has also established a carbon accounting and carbon
intelligent manufacturing solution recommendation directory for the steel industry reducing coal gas consumption by 5% year-on- footprint management system practices green and low-carbon
year; the steelmaking mini-AI assistant was locally deployed alleviating the shortage of high-skill talent and assisting the converter development and sets an industry benchmark.end-point carbon-temperature dual-hit rate to exceed 90%.In January 2025 the Company's independently developed
Molten Steel Smelting Intelligent Control System Based Digital and Intelligent Talent Cultivation
on Data Analysis won the second prize in the intelligent
system software track at the Fourth Shandong Province New Focusing on digital and intelligent transformation needs the Company
Material Industry Intelligent Manufacturing Competition cultivates digital and intelligent talent through multiple initiatives.held by the Shandong Province Department of Industry and The AI Digital Intelligence Department in collaboration with the Youth
Information Technology and other institutions. Research and League Committee conducts the "AI + Steel Youth Innovation Toward
Application of Blast Furnace Charging Process Optimization the Future" campaign organizing 40 teams and 200 young employees
to participate conducting 6 technical trainings and sharing sessions
Based on Discrete Element Method won the second prize covering over 300 person-times stimulating innovation vitality.in the provincial intelligent manufacturing competition and Benchmarking against leading enterprises the Company organizes
the Company was successfully evaluated as a "provincial business backbone exchange and learning consolidating information
intelligent manufacturing excellent scenario" and a technology construction foundation. In the system testing phase nearly
"provincial morning star factory" significantly enhancing the Company's influence in the intelligent manufacturing industry. 100 operation trainings were conducted achieving full-staff coverage
improving business operation proficiency. Surrounding the upgrading
of the integration of informatization and industrialization management
Case Company's "Shandong Steel Xing Yun" Smart Logistics Platform Launch system the Company organized AAA-level specialized trainings comprehensively enhancing employees' digital literacy and
professional capabilities.In September 2025 the Company's "Shandong Steel Xing Yun" Case AI + Steel Innovation Work Type Skills Competition
smart logistics platform was launched leveraging Internet of
Things and AI technology to achieve full-process visual monitoring Seizing the "AI + Steel" transformation opportunity the Company included AI + steel manufacturing scenario design and
intelligent dispatching and "single-vehicle bidding." The platform application in the first-level work type category of the Company's Sixth Employee Occupational Skills Competition for
constructed a private fleet pool with 3850 vehicles stimulating the first time attracting many young employees to compete. The competition was centered on core content including AI
carrier vitality through innovative settlement mechanisms application scenario design across the entire steel production process intelligent equipment operation and optimization
achieving "heavy going and heavy returning" and reducing empty- etc. Prior to the competition matching specialized training was conducted inviting industry experts to explain AI
running rate. First-order transportation cost was reduced by 2% technology application cases and practical techniques in the steel industry. This competition not only tested employees'
promoting logistics digital and intelligent transformation helping digital skill levels but also discovered a batch of young talent with AI application potential reserving core strength for
the enterprise reduce costs and improve efficiency. enterprise intelligent manufacturing transformation gaining wide recognition from employees.
66 672025 Sustainabil ity Report Supply Chain Security
Supply Chain Security Supply Chain Risk Management
The Company incorporates supply chain risk management into its enterprise development strategy aiming to ensure supply chain
As a core support for the sustainable development of an enterprise Shandong Steel consistently adheres to the supply chain stability improve supply chain efficiency and reduce supply chain risks. The Company has formulated documents such as the Notice
management philosophy of "safety and stability collaborative efficiency and green low-carbon" deeply integrating ESG requirements on Standardizing Tendering and Public Procurement Review Process Management and the Notice on Raw Material Supplier Online
into the full life-cycle supply chain management. Through establishing a standardized management system perfecting the full- Management Operation in PLMS continuously standardizing business processes and establishing supply chain risk identification
process control mechanism and strengthening collaborative empowerment the Company continuously enhances supply chain evaluation supervision and response mechanisms through market research supplier evaluation logistics monitoring digital
resilience and sustainability building a solid defense for industry chain and supply chain security. platforms and other means ensuring the timeliness and effectiveness of risk management and comprehensively preventing and
controlling supply chain risks.Supplier Management System
Responsible Mineral Management Supplier Clean and Compliant Procurement Digital Platform
The Company has established a supply chain management organizational system with clear classification and well-defined Practices
responsibility and authority. The Procurement Center provides unified management of bulk raw material procurement while
equipment and materials procurement is managed through a professional management platform. A Supplier Review Committee has
been established as the highest responsibility decision-making body composed of procurement center management responsible
for reviewing and deciding on supplier admission performance evaluation and major ESG matters ensuring the sustainable
development direction of the supply chain from a strategic perspective.The Company has established a systematic supplier management system formulating management systems including the
The Company has established T h e C o m p a n y wo r k s w i t h The Company continuously advances procurement
Raw Material Supplier Management Provisions Raw Material Supplier Comprehensive Management System On-Site Evaluation
a r i g o ro u s s u p p l y c h a i n cooperative partners to build digitalization transformation fully leveraging
Implementation Provisions (Trial) Raw Material Supplier Evaluation Standards Equipment and Materials Procurement Management
management system ensuring a "sunny and transparent" the centralized procurement scale advantages
Measures Goods Supplier Performance Evaluation Standards and Goods Supplier Audit Standards for bulk raw materials and
that all procured raw materials i n d u s t r i a l s u p p l y c h a i n of Shandong Iron and Steel Group and Baowu
equipment and materials standardizing the entire process of supplier admission audit evaluation and tiered management. In the
and components come from organizing the signing of "Clean Group relying on digital procurement platforms
relevant management measures the Company explicitly commits not to procure conflict mineral raw materials from conflict-affected
legal and reliable channels. and Integrity Agreements" including the Sunshine Sales and Purchase
and high-risk regions practicing the commitment of responsible procurement.The Company commits not to communicating to suppliers Management In format ion Plat form Raw
The Company implements procurement management processes covering the entire supplier life cycle embedding ESG-related use any conflict minerals and the philosophy of upholding Material Procurement Logistics Control System
requirements throughout the entire management process. requires suppliers to commit business ethics and maintaining (PLMS) and Procurement Supply Chain System
that their supplied products do integrity and honest business (PSCS) efficiently coordinating the centralized
not use conflict minerals from practice bottom line. In 2025 procurement of bulk raw fuels equipment
● Supplier admission must meet basic conditions including legal qualifications as well as ESG conflict-affected and high-risk the supplier clean and integrity and spare parts engineering equipment and
Admission requirements such as environment occupational health and safety and information security. Through regions. agreement signing rate reached materials achieving resource sharing sunshine
and Due admission due diligence on-site audits and other methods the Company conducts preliminary 100% urging suppl iers to procurement cost reduction and efficiency
Diligence screening and evaluation of potential suppliers. improve quality and participate enhancement thus improving supply chain service
in clean co-construction. quality and enhancing risk prevention and control
capabilities.● On-site audits are conducted for important suppliers conducting second-party audits based on
standards such as the Raw Material Supplier Comprehensive Management System On-Site Evaluation
Implementation Provisions forming audit reports. The Company has established a dynamic assessment
On-Site mechanism covering monthly and annual evaluations. Evaluation dimensions not only include traditional Looking ahead Shandong Steel will target building a more resilient more responsible and more competitive supply chain ecosystem
Audit and performance aspects such as price quality delivery and service but also innovatively incorporate continuously deepening the full-life-cycle ESG management of suppliers perfecting the supplier ESG evaluation and incentive
Evaluation sustainable development indicators such as green and low-carbon. In 2025 a total of 142 suppliers
accepted annual due diligence audits. The rate of suppliers passing the three system certifications of mechanisms; strengthening supply chain risk prevention and control capabilities continuously deepening clean co-construction
quality management system environmental management system and occupational health and safety and collaborative innovation with upstream and downstream enterprises strengthening data-driven risk early warning capabilities
management system reached 66.92%. enhancing supply chain rapid response and recovery capabilities and laying a solid foundation for supply chain security for
sustainable high-quality development.● B ased on comprehensive evaluation results suppliers are classified into five levels: A B C D and
Grading and E for dynamic management. For suppliers with negative behaviors measures such as reducing Fair Treatment of Small and Medium-Sized Enterprises
Withdrawal business volume suspending new business downgrading and even banning are taken according to the
Mechanisms seriousness of the case so as to ensure supply chain security. During the reporting period 42 suppliers Shandong Steel has established a unified e-procurement platform that ensures transparent procurement operations and controlled
were suspended from cooperation due to failure to meet compliance standards and upon strict review processes while continuously standardizing platform procurement behaviors to comply with standard procedures. Throughout
potential suppliers rejected for non-compliance accounted for 1.88%.the procurement process the Company consistently adheres to the principle of honest cooperation in dealing with all types of
suppliers equally safeguards the participation rights of all SMEs and creates a fair competitive environment for SMEs to participate
in procurement activities. At the same time the Company actively responds to the requirements of the Regulations on Ensuring
● The Company emphasizes communication and collaborative capacity building with suppliers. Through
Supplier Payment of Funds to SMEs promptly and fully pays funds due to SMEs and effectively protects the legitimate rights and interests of hosting supplier training meetings specialized exchange and discussion sessions and other methods
Capability the Company promotes its sustainable development philosophy and requirements shares best practices SMEs.Building and jointly enhances the ESG management and technical level of the supply chain.
68 692025 Sustainabil ity Report Product and Service Safety and Quality
Product and Service Safety and Quality In terms of standardization management system the Company continuously promotes a five-year position standardization initiative builds an "8+1+N" standard system develops more than 4000 operation cards covering all processes innovatively applies the
"Four Questions and Four Observations" working method and the SDCA cycle mechanism and promotes implementation through
the "Thousand-Hundred-Ten" initiative The initiative has earned recognition from Baosteel as a benchmark and strengthened the
foundation of quality.Shandong Steel has always viewed product quality and safety as the foundation for corporate survival and development. The Company
adheres to the quality philosophy of "quality creates excellence excellence supports brands and brands create value" establishes
quality standards aligned with sustainable development goals implements comprehensive quality control throughout all processes Note: The "8+1+N" standard system consists of: 8 core modules defining position responsibilities 1 operation card
and across all personnel continuously improves product quality continuously cultivates and builds a quality brand matrix and
p r o v i d es customers with high-quality products. standardizing actions and N single-point lessons addressing specific issues
Quality Management The "Thousand-Hundred-Ten" initiative: optimizing 1000 operation standards producing 100 standard videos
establishing 10 demonstration positions.Quality Management System
Guided by sustainable development the Company integrates excellent quality into its core strategy and builds a quality governance Quality Risk Control and Management
structure with clear responsibilities and a top-down approach. The quality management system centers on three major dimensions—
"strategic coordination customer focus and data loop closure"—and is highly aligned with the "green intelligence and lean Based on quality "consistency" management the Company builds a quality risk control and management system for the entire
operations" strategy and the requirements of "integration of two systems" (informationization and industrialization). In 2025 based on product lifecycle. Through systematic identification assessment and response it effectively prevents and controls product quality and
IATF 16949 and GB/T 19001 (ISO 9001) standards the Company developed revised and published the Quality Management Manual safety risks. During the reporting period the Company did not experience any major product quality and safety accidents.which systematically clarifies quality policies objectives and responsibilities at all levels and strengthens quality control across all
Product Quality Risk Identification and Assessment
personnel and processes.The Company strictly complies with laws and regulations such as the Product Quality Law of the People's Republic of China and The Company systematically identifies risks across the entire process from product design and development raw material
benchmarks against international advanced standards. Products have obtained certifications from the EU PED CPR Japanese procurement production and manufacturing to delivery and after-sales. For technical challenges it conducts specialized
JIS Korean KS and nine national classification societies. Since 2007 the Steel City Base laboratory has maintained continuous identification and the technical team performs specialized assessment and response to major risks. Through "daily tracking weekly
accreditation under CNAS (ISO/IEC 17025) and its test results have international mutual recognition validity providing solid support adjustments and monthly optimization" it continuously monitors production volatility risks forms quality problem lists and problem-
for product quality. solving projects establishes special problem-solving groups and advances the optimization of process parameters technical
modifications and the strengthening of standardized operations.Product Design and Development Quality Improvement
The Company adheres to innovation-driven development focuses on the high-end premium and differentiated route and
incorporates requirements for high performance high reliability and environmental protection into product development. It
improves product quality through process innovation and process optimization and all new products undergo strict trial production
Q960E High-Strength Structural Heat-Treated Steel Plate obtained the "Taishan Quality" certification and inspection to ensure that performance meets standards. The Rizhao Base has revised the "New Trial Product Development
Large-Diameter Long-Distance Oil and Gas Transportation High-Strength and High-Toughness Management Method" to further standardize the product development process.Pipeline Steel Hot-Rolled Coil Plate was selected as "Shandong Manufacturing Luchain Premium Process Quality Supervision and Audit
Products"
The Company establishes an internal audit and management review improvement mechanism and implements a
Internal "quality gate" management model. Through auditing to identify problems closed-loop rectification and standard
Audit and optimization it achieves continuous quality improvement. In 2025 the Company conducted joint internal audits
Continuous
Improvement with Baowu Group for the first time promoted closed-loop problem management by formulating rectification
Offshore Engineering Steel Products Obtain Nine National Classification Societies' Certification and Are Applied to schedules and simultaneously conducted weekly inspections of the systems of each unit integrating auditing
Case Global Equipment into daily management to improve quality management levels.The EH460Z35 ship plate and offshore engineering steel
developed by the Company passed the joint certification Supply Chain The Company implements a strict supplier admission evaluation process constructs a linkage model through Quality
from nine national classification societies in one go Management "coke-iron integrated management reform" to control raw and fuel material quality from the source and
achieving complete coverage of shipbuilding and offshore ensures the overall quality level of the supply chain.engineering steel plates in the series with a yield
strength of 690 MPa and below. This product provides
material solutions for shipbuilding and marine equipment
Quality The Company advances quality digitalization and intelligent transformation implementing real-time monitoring
manufacturing enterprises and has won high recognition Digitalization and automatic adjustment of key process parameters and in-depth analysis of quality data through technological
from customers. Construction means such as quality design informatization platforms and intelligent control platforms.
70 712025 Sustainabil ity Report Product and Service Safety and Quality
Case Developing Quality Design Informatization Platform to Improve Quality Planning and Control Capabilities Customer Responsibility
Leveraging the newly established manufacturing Guided by customer value Shandong Steel optimizes its service system precisely identifies customer needs upgrades service
management system the Company developed experience and builds a mutually beneficial and win-win cooperation ecosystem. The Company steadily advances its transformation
a quality design informatization platform that toward becoming a "comprehensive solution service provider" achieving symbiosis co-prosperity and coordinated development with
enables precise customer standard identification customers.scientific establishment of process standards and
other capabilities advancing quality design toward Customer Service System
informatization process-based management
and standardization. In 2025 the quality design The Company adheres to a customer-centric approach systematically optimizes its customer service system and has revised
informatization platform was applied to five major 11 systems including the Customer Classification and Maintenance Strategy Management Method and the Steel Product Quality/
product series—section steel thick plate special and
Quantity Dispute Management Method to strengthen the foundation of service management. Leveraging the "three-in-one"
superior steel rebar steel and commodity billet—with
a total of 1881 new metallurgical standards added covering the entire process from hot metal pretreatment to product synergy mechanism of marketing production and research and development it continuously builds a cooperation model of "one
release for shipment. This significantly enhanced quality planning and control capabilities. agreement one list one center". It comprehensively implements a large-account manager system focusing on "Five-Heart Service"
commitments and builds an end-to-end full-lifecycle customer service system covering joint research and development customized
production quality collaboration rapid dispute response and supply chain optimization. This effectively supports strategic customers
in achieving import substitution cost reduction and efficiency improvement and product upgrades while co-building a safe efficient
Product Traceability and Recall Mechanism and sustainable iron and steel industry ecosystem.Adhering to the "customer-centric" philosophy the Company establishes a comprehensive product monitoring and customer feedback
closed-loop management process and formulates clear product recall procedures and contingency plans. Through systems such
as the "Quality Problem Assessment Rules" and "Quality Accident Management Standards" it ensures effective system operation. Trinity Collaborative Mechanism of Collaboration Cooperation
Through routine quality inspections and market problem reviews the Company continuously enhances process control capabilities.Marketing Production and R&D Mechanism Model "One Agreement One List One Center"
Quality Culture Development
The Company consistently adheres to the core concept of "quality is the lifeline of the enterprise" anchors to quality management
system standards such as IATF 16949 builds a multi-level and comprehensive quality culture development system promotes all Case "Five-Heart Service" Empowers Cooperation and Promotes Green and Intelligent Development
personnel to transition from "passive acceptance of inspection" to "active prevention of defects" and empowers the Company's core
competitiveness through quality.The Company strengthens the foundation of quality through routine training. In 2025 it conducted 21 quality management- In 2025 the Company held a strategic user conference and deepened strategic cooperation with the "Five-Heart
related training programs with content covering system standards quality tools and position-specific skills implemented on a Service". With its precision manufacturing capabilities the Company controlled the tolerance of cold-rolled coil to
functional and hierarchical basis. It focuses on organizing specialized training for internal auditors and external "Six Quality Tools" 0.01mm and achieved a 23% weight reduction of high-strength steel for new energy vehicles meeting the precision
training continuously strengthening the construction of a professional talent pool. At the same time it systematically promotes
and lightweight requirements of high-end manufacturing; implemented a regional supply assurance model to shorten
the implementation of Six Sigma projects and develops employees' data-driven improvement capabilities through methods such as
DMAIC. In terms of mechanism guarantees the Company continuously improves its quality assessment and incentive system refines customers' inventory cycles; organized a joint technical team to reduce customers' comprehensive costs and shorten
departmental and position-specific quality indicators and strengthens positive guidance. Through the coordination of systems the R&D cycle; established a technical support mechanism and assigned exclusive customer managers to respond
processes and culture it effectively promotes employees to develop conscious behaviors of "operating according to standards actively to customers' technical consulting and after-sales needs. During the strategic user conference the Company signed
reporting and actively participating in improvements" achieving a deep-level transformation of quality culture from ideological long-term cooperation agreements with many customers to jointly promote the application of green low-carbon and
advocacy to behavioral habits.intelligent manufacturing technologies.Case "Quality Month" Multi-Dimensional Empowerment for Quality Improvement
In 2025 the Company launched the "Quality Month" special
initiative with the theme of "Deepening Quality to Strengthen
Foundations and Casting Premium Products". The initiative
disseminated the "customer-centric" philosophy through
multiple channels conducted standardized "fault-finding"
work and collected 1347 improvement suggestions; practiced
the "downstream is customers" philosophy and completed 28
cross-process mutual visits and visits to 37 external customers.At the same time it organized activities such as knowledge
competitions and case sharing to promote the visual and
narrative dissemination of quality concepts and fostered a strong organizational atmosphere of "everyone values quality
and everyone creates quality".
72 732025 Sustainabil ity Report Product and Service Safety and Quality
Customer Experience and Feedback Standardizing Customer Feedback
The Company focuses on optimizing customer experience standardizing feedback and addressing complaints advancing services The Company deepens the implementation of the "Customer Satisfaction
from passive response to proactive solutions and continuously improving customer satisfaction and loyalty. Engineering" and "Four Advantages One Strategy" classification service
and establishes a rapid response channel for quality disputes. In customer In 2025 the composite score of customer
Optimizing Customer Experience satisfaction management it conducts assessments using stratified quota satisfaction evaluation reached
sampling methods and precisely captures customer needs around five core 90.1
dimensions: brand image market promotion effectiveness product quality
service experience and customer requirements. In 2025 the customer
The Company builds a three-level service mechanism of senior management mutual visits satisfaction assessment achieved a comprehensive score of 90.1 points. The resolution rate of quality objection complaints
technical service and account manager tracking. It assigns dedicated large-account managers
High-Efficiency In the area of feedback closed-loop management the Company establishes stood at 100%.Service Response to strategic priority customers launches multi-channel coordinated rapid response processes and improves its customer feedback closed-loop management mechanism
optimizes production through spare inventory schedules logistics scientifically prioritizes standardizes complaint handling procedures and response time standards
delivery lists and ensures on-time delivery. and formulates specialized disposal procedures for product quality disputes
with clear professional departmental responsibility allocation and coordination
mechanisms. It achieves a 100% resolution rate for quality dispute complaints effectively protecting customer rights and interests.Deploying the "IEC-S Smart Innovation" client and mobile APP enables end-to-end
independent operations including order submission fund matching delivery tracking and Case Strengthening Customer Response and Enhancing Service Quality
Service Process
Intelligentization dispute submission. This shifts information acquisition from passive waiting to proactive
engagement. The system features a user-friendly interface and simple operation effectively
In December 2025 the Company held a special meeting on the
addressing the pain points of lengthy manual inquiry processes and information opacity.operation of the customer satisfaction management system
focusing on customer needs and feedback governance and
clarifying the construction goals of the full-process customer
The Company forms production-sales-research integrated teams to go deep into customer satisfaction management system. It deployed work around
Service Interface sites and carry out diverse services such as specialized training. Using precise service
improving service capabilities strengthening collaborative
Precision interface as a lever it strongly promotes the strategic transformation from product orientation linkage and promoting closed-loop problem solving tested the
to customer value orientation and realizes the comprehensive upgrade of the service model. effectiveness of the system operation through special tests and
continuously optimized customer services to improve customer
satisfaction and comprehensive service value.Case Section Steel "Spot Supermarket" Mode Innovation Empowers Service Upgrade Customer Rights Protection and Compliant Marketing
Positioning itself as the preferred comprehensive solution service Shandong Steel adheres to the principles of compliant operations honest service and responsible marketing. It deeply integrates
provider for section steel the Company focuses on customers within compliance requirements into the entire product promotion and service process. It standardizes product labeling instructions and
500 kilometers advancing a "one-stop" delivery and sales model. In warnings relies on truthful information in marketing eliminates false guidance effectively protects customer legal rights and
March 2025 the first order of "section steel spot supermarket" delivered promotes sustainable development of marketing business. During the reporting period the Company experienced no customer data
496 tonnes of section steel to a key project within 72 hours. Meanwhile information leakage events network information security-related incidents or events that harmed customer rights.
Qingdao achieved full-process one-stop distribution and Jining jointly In 2025 the Company systematically conducted compliance training and organized 31 activities and specialized training sessions
established a research institute with over 10 high-end products under strengthening compliance capabilities through multi-form practical training and closed-loop management. During the reporting
development collaboration volume breaking 10000 tonnes achieving period a cumulative total of 5638 people participated in training with a total duration of 53480 hours strengthening the foundation
win-win results through speed and quality. for compliant operations.Case Deepening Technical Collaboration and Co-Cultivating Rich Annual Results
In May 2025 the food-grade premium tin plate joint laboratory co-built by
the Rizhao Base and Yulan was unveiled. The laboratory centers on technical
collaboration focuses on product research and development quality and
process optimization and serves as an innovation engine spanning the entire
chain from "material research and development-manufacturing-application."
74 752025 Sustainabil ity Report Data Security and Privacy Protection
Data Security and Privacy Protection Technology Protection System Upgrade
In 2025 the Company comprehensively upgraded its security technology system. It deployed the scalable
detection and response platform XDR above the security situation awareness platform to enhance threat
Following the principle of "equal emphasis on security and development" Shandong Steel builds a safety protection system covering detection and response capabilities; built a network security supervision platform to achieve centralized
the entire data lifecycle and achieves strategic transformation from passive defense to proactive governance. Through optimizing Technology monitoring of subsidiary security events; optimized wide area network firewall policies strengthened access
Protection permission management and implemented virus scanning intrusion prevention and other protective measures organizational structure improving system standards and advancing technology system construction it forms a systematic for boundary traffic.information security governance landscape.Data Governance System Construction Network Security Protection Upgrade
The Company optimizes firewall policies strengthens access permission management and implements virus
scanning and intrusion prevention for external traffic. At the same time through specialized risk assessments
The Company uses systematic construction as a lever to advance data governance and information security management it identified issues such as low antivirus software coverage and promoted time-limited remediation raising the
strengthening the foundation for digital transformation. In 2025 it established the new AI and Data Intelligence Department Network antivirus installation rate to 95%. Through system hardening and governance the Company's network security
responsible for data and model governance system construction and the overall management of network and information system Security protection capabilities have been significantly enhanced.security. Simultaneously it improved the implementation of the information security organizational management system built a
three-level architecture from the decision-making to management to execution levels clarified responsibilities at each level and
formed a coordinated and efficient data security management mechanism. Emergency Response Capability Development
The Company adopts a "pilot-rollout" approach to implement the data governance system. The Rizhao Base and Shanxin Software In 2025 the Company developed new information security incident emergency response plans that match
were the first to establish comprehensive data governance systems. The Steel City Base published the "Big Data System Construction actual working conditions clarified personnel allocation and disposal procedures and organized emergency
and Data Governance Management Method" building a systematic and standardized support framework that enables data drills for "Trojan Infection Leading to Phishing Information Dissemination Event Response" covering three
management to follow procedures and be evidence-based. Emergency relevant departments. These drills tested the scientific validity and feasibility of emergency plans enhanced
Response cross-departmental coordination capabilities and established standardized response procedures.In January 2025 the Company issued the "Network Security Management Measures" to refine business processes. In accordance
with the "Data Security Law of the People's Republic of China " the "Personal Information Protection Law of the People's Republic
of China" and other laws and regulations the Company established a cross-departmental compliance working group to carry out Network and Information Security Training
regular data risk assessment and compliance audit.The Company upgraded its information security training system added risk management and decision security
training for management levels and strengthened specialized practical training courses for technical positions.It conducted company-wide information security knowledge popularization focusing on improving technical
personnel's professional capabilities such as vulnerability mining and emergency response. Through simulated
Case Shanxin Software Data Governance Practice
Network and phishing attack drills it enhanced employees' risk identification and response capabilities strengthening
Information the foundation of security protection. In 2025 the Company organized 3 relevant training sessions with the
As a pioneer in the Company's data governance Shanxin Software has passed DCMM Level 2 certification and obtained Security employee information security training coverage rate reaching 100% comprehensively improving all employees'
the Information Security Management System Certification ISO/IEC 27001:2022 and the Information Technology Service awareness and capabilities of data security protection.Management System Certification ISO/IEC 20000-1:2018. It has established a standardized data classification and
grading management mechanism realizing full-lifecycle traceability of core data providing replicable and promotable
practical experience for the Company's data governance and has been successfully selected into the list of key
enterprises for network and data security in Shandong Province and the list of technical support units for network and Case The Company Strengthens Confidentiality Education and Builds a Solid Security Defense Line
data security in Jinan City.In May 2025 the Rizhao Base organized relevant
personnel to conduct tra in ing at the Rizhao
Confidentiality Education and Training Platform.Trainees studied the important guiding spirits of
confidentiality work watched warning education
videos intuitively understood the leakage risks
of common equipment strengthened polit ical
responsibilities and risk awareness improved the
confidentiality capabilities of all staff and consolidated the defense line of compliant governance and information security.Network and Information Security Risk Prevention Privacy Protection
The Company strictly complies with laws and regulations including the "Law of the People's Republic of China on the Protection
The Company constructs a comprehensive risk prevention system through technology upgrade risk assessment and remediation of Personal Information" and formulates comprehensive "Network Security Management Methods." It adheres to the principles of
emergency plan development and drills effectively enhances security protection capabilities and safeguards network and information legality justification and necessity and protects personal information throughout its entire lifecycle through strict technological and
security. administrative measures such as encryption and access control. It safeguards user information-related rights and establishes an
During the reporting period the Company had no information security leakage incidents throughout the year. emergency mechanism for security incidents. During the reporting period the system operated continuously and effectively with no
major personal information security incidents.
76 772025 Sustainabil ity Report Employees
Employees Impact Risk and Opportunity Management
The Company establishes a routine risk and opportunity identification mechanism and regularly assesses potential challenges
Shandong Steel upholds the philosophy that "talent is the first resource and talent advantage is the core advantage of the enterprise" and opportunities in employee management employee development and organizational change. It formulates scientific response
regarding employees as the company's most valuable asset. The Company focuses on talent team building optimizes recruitment strategies and strengthens the talent foundation for high-quality enterprise development.development promotion and care across all links and achieves co-creation of value and win-win growth between employees and the
enterprise. Identification Area Risk Opportunity Response Measures
Governance Leveraging industrial upgrade Strengthen ideological guidance and and intelligent manufacturing
protect employee rights. Deepen the
During industry restructuring and transformation continuously
"Wanxiang Gengxin" compensation
The Company has established a cross-departmental talent management coordination mechanism of "CCP committee leadership HR- enterprise transformation and improve the talent developm- reform strengthen performance
upgrading the stage-by-stage ent system revitalize internal
led direction union guarantee and league committee coordination". The Human Resources Department comprehensively oversees orientation and implement pay-for-
Human Resources mismatch between employee positions enhance skill human resource strategy planning recruitment and allocation compensation and benefits employee training and development performance. Build a three-level talent sk i l l adaptat ion dynamic training and build career
performance management and labor relations. To ensure the effective implementation of policies and comprehensive protection of and Employee Stability pool of "core-backbone-potential" position. adjustment and career paths to ensure stable
implement dynamic management and
employee rights each subsidiary company under the Company is equipped with professional human resources specialists forming a development expectations impacts employment and growth for precise development. Establish platforms
standardized and professional human resource management network covering the entire company. At the same time the Company's team stability and organizational employees strengthening such as labor competitions and company-
effectiveness organizational cohesion and
Board of Directors has established a Budget Compensation and Assessment Committee to guide and supervise the standardized wide position innovation to provide growth sustainable development
operation of the Company's compensation system and ensure the scientificity and impartiality of key decisions such as compensation opportunities for skilled talentcapability
incentives.Cross-departmental Linkage Mechanism Employee Rights
Compliant Employment and Diversity
Human League
Party Committee Trade union The Company strictly complies with the "Labor Law of the People's Republic of
resources-led committee
leadership support China" and other laws and regulations. It builds a sound and closed-loop labor In 2025
implementation coordination contract management system focusing on three dimensions: anti-discrimination
and diversity child labor prevention and forced labor prevention. It adheres to the the Company's labor contract signing
principle of "fairness justice and inclusive diversity" strictly prohibits any form
of employment discrimination forced labor and workplace harassment firmly rate reached 100%
eliminates child labor standardizes recruitment control procedures selects and
employs outstanding college graduates implements employment support policies
Strategy for discharged military personnel and optimizes flexible introduction of external with no major labor disputes.experts. It truly guarantees equal employment rights for all groups of people and
Adhering to the principle of "talent first" the Company focuses on building a high-level talent hub in the steel mainstream business aligns with the core requirement of industrial reform to "strengthen the workforce
deepens human resource system reform and works to cultivate and develop a workforce with an optimized structure reasonable and ensure fair employment."
distribution and excellent quality. Through deepening the "Wanxiang Gengxin" compensation reform building a market-oriented
compensation distribution system strengthening talent recruitment systematic development and value-oriented performance Talent Recruitment
evaluation the Company fully activates human resources and improves organizational effectiveness.In 2025 the Company revised the "Employee Performance Management Method" "Position Salary System Implementation Rules" Anchoring to the goal of building a high-level talent hub in the steel mainstream business the Company establishes a management
"Position Annual Salary System Implementation Rules" "External Expert Recruitment Management Method" "Human Resource system of "precise talent recruitment systematic talent development scientific talent utilization and ecological talent retention." It
Allocation Management Method" "External Recruitment Management Method" and "Staffing Management Method" while establishes a talent pipeline and dynamic talent pool to ensure that talent reserves precisely match strategic development. Focusing
simultaneously optimizing eight work systems including the "Employee Position Innovation Management Method" and "Union Fund on "high-tech cutting-edge and scarce" areas such as production processes and technology it widens talent recruitment channels
Revenue and Expenditure Management Method." These comprehensively cover recruitment compensation and benefits performance
improves flexible talent recruitment mechanisms recruits key talents to solve technical and process difficulties and supports key
management position innovation and union operations ensuring that the systems are highly aligned with the "Labor Law of the
People's Republic of China" and the "Labor Contract Law of the People's Republic of China" with a 100% annual system compliance team building with specialized incentive plans to enhance the Company's core competitiveness through talent effectiveness.execution rate. In 2025 the Company recruited a total of 16 new employees including 10 college graduates. The Company actively fulfilled its social
responsibility by accepting and placing 6 discharged military personnel.
8 Items 5 Major 100% 0 Cases Compensation and Benefits
Revision of Systems Covered Fields Compliance Rate Legal Disputes The Company has optimized and improved its compensation system and revised performance management and compensation
Completion of Revision of Recruitment Compensation System Implementation Major Labor Dispute systems including the "Employee Performance Management Measures ""Implementation Rules for the Post Salary System " and
Core Personnel Systems Performance Management Compliance Rate Cases "Implementation Rules for the Post Annual Salary System " implementing the requirement of "safeguarding labor and economic
etc. rights and interests" in the reform of the industrial worker team construction throughout the whole process. Adhering to the principle
of "grading by post setting salary by grade matching people with posts and adjusting salary with post change " the Company breaks
the restrictions of fixed ranks establishes a salary promotion system for employees with vertical promotion and horizontal grade
advancement and forms a dynamic adjustment mechanism in which employees' salary levels increase with value contribution and
78 792025 Sustainabil ity Report Employees
career development truly achieving steady growth in employees' income. Upholding Core training programs are conducted through classified and tiered
the principle of "value creation and value sharing " performance-based compensation approaches. The first-line operations focus on skill-level evaluation
is tilted preferentially to profit-creating units and high-tech and skilled talents further In 2025 training in core processes such as steelmaking rolling and ironmaking In 2025
stimulating employees' enthusiasm for innovation and creation. with over 600 participants and cultivation of 252 senior workers
In terms of welfare the Company has been continuously improving its security level the employee social insurance technicians and above. Eight-phase equipment inspection personnel Total Training Hours: 4.1391 Million
and service convenience. In 2025 the Company optimized supplementary medical coverage rate reached 100% capability enhancement training was conducted inviting experts for
insurance coverage items and service procedures and implemented the "Four- Hourstheoretical and practical teaching covering 552 inspection personnel at
Season Care" inclusive services to effectively enhance employees' sense of gain in all levels. In the management technology area it held young and middle-
compensation and welfare. In 2025 the employee social insurance coverage rate the average annual paid leave days aged backbone training classes and middle management leadership Employee Training Coverage:
reached 100% and the average annual paid leave days per employee were 9.6 days. 100% 100%
Meanwhile the Company promoted the upgrading of "three rooms one hall and one per employee were 9.6 days development seminars covering 45 young backbones and 43 middle
station " improved various living facilities in the plant area upgraded the intelligent managers respectively strengthening change awareness and leadership培训覆盖率
bathroom system and optimized the working and living environment for employees. It capabilities.also established an urgent affairs handling mechanism to quickly respond to employees' demands effectively enhancing employees' Deepening the reform of industrial workforce development and building a
sense of belonging and happiness. high-quality workforce. Maintaining typical leadership and demonstration
effects the Company actively cultivates and selects advanced models and We will deepen the reform of the industrial
high-skilled talent. In 2025 the Company commended 20 labor models worker team development and build a high-
and 30 excellent employees at this level; 18 people received group-level quality workforce."Shandong Steel Labor Model" and "Shandong Steel Craftsman" titles;
34 people were selected for the Shandong Iron and Steel Group 2025
Grade based Person-position Create value model workers outstanding employeesfirst batch high-level talent support plan; Zhao Shilong received the "Qilu 20 30
on position matching Share value
Master Craftsman" title Yu Hui received the "Qilu Craftsman" title Liu commended at the
Wenping received the "Qilu Most Beautiful Worker" title; Li Zigao received company level
the "Great Country Craftsman" talent title achieving Shandong Steel's
"zero breakthrough" in this honor. The Company received Shandong 18 individuals awa- 34 employees selected
Salary based Salary adjustment with Province's "May 1st Labor Award." It held a high-skilled talent team
on grade position change rded group-level model for the echelon developm-
building promotion conference and continuously fostered a strong worker and master ent program
atmosphere of "respecting labor advocating skills and striving to be craftsman titles
advanced."
Democratic Management and Communication
Continuously promoting company-wide position innovation focusing
The Company improves its democratic management system achieves full coverage of grassroots employee representative on key indicators such as employee participation rates and average number of outstanding results per person. Through improved
conferences (ERCs) and uses ERCs and delegation leader liaison meetings to deliberate and vote on major matters ensuring process management and achievement incentive mechanisms employees cumulatively implemented and completed 28700 projects
employees' information access participation expression and supervision rights. It truly implements the core requirement of throughout the year. It organized annual excellent project and advanced individual selections held an all-staff position innovation
industrial workforce development reform to "guarantee the master status". It builds a diversified two-way communication mechanism commendation ceremony and carried out activities to present awards at positions commending 145 excellent projects and 8
forming a closed-loop management model. To date it has implemented 79 employee representative proposals responded to and
innovation pioneers. It held an all-staff position innovation competition organized themed seminars implemented 12 key problem-
handled over 160 suggestions and comments with response rates and satisfaction rates both reaching 100%.solving topics and commended 12 excellent innovation teams.It innovatively held "Speak Out Express Ideas and Promote Development" democratic symposiums providing on-site responses to 13
issues and written replies to 7 issues. It established a "submit suggestions with one click" opinion collection network and combined
with quarterly surveys formed full-process closed-loop management substantially enhancing employee sense of achievement and
happiness.Career Development
Promotion and Development
Breaking through traditional hierarchical barriers the Company establishes a career development mechanism with vertical
integration and horizontal linkage. Employees can develop vertically along one sequence or horizontally transfer between different
sequences based on work needs position characteristics and their own strengths. It integrates industrial workforce development
reform "career development" requirements into the promotion system establishing a three-channel promotion mechanism of
management technical business and operations maintenance for industrial workers. It promotes job rotation for key positions and
training positions for excellent personnel broadening talent development pathways; through channels such as ERCs and democratic
symposiums it protects employee rights strengthens team stability foundation and aligns with compliance and governance
requirements.Employee Development
In line with the principle of "on-demand classified and phased "the Company has coordinated and planned the annual employee
training plan and built a training system covering all employees and running through their career. Focusing on key positions and
core competencies the Company has carried out precise and systematic training programs. In 2025 the total annual training hours
of employees reached 4.1391 million with 100% employee training coverage 100% professional skill training coverage and 100%
leadership training coverage.
80 812025 Sustainabil ity Report Employees
Strengthening skill competition empowerment. The Company held the second employee professional skill competition and youth Case National Tug-of-War Championship Victory and Culture Sports Festival Empowerment
technical competition and the Rizhao Base held the sixth employee professional skill competition promoting new skill improvement
for employees. In the metallurgical industry group leader comprehensive skill competition held by the Shandong Federation of
Trade Unions the Company won a group second prize with 7 people receiving individual awards. A series of competitions effectively In November 2025 the Company fielded a team for the 2025 National Tug-of-War Championship and through solid
stimulated employees' enthusiasm for learning skills and practicing capabilities cultivated a large number of skilled talents for the training and perfect teamwork achieved a historic best result of 2 gold and 1 silver medals. This not only demonstrated
Company and formed a craftsman talent pipeline with clear levels and excellent business competence. the tenacious and hard-working spirit of Shandong Steel employees but also used cultural and sports activities as a
bridge to unite the strong synergy of company-wide collaborative advancement.Case Rizhao Base Holds Sixth Employee Professional Skill Competition
In July 2025 the Rizhao Base successfully held the sixth
employee professional skill competition. The competition featured
23 job categories including AI + steel manufacturing scenario
design applications with over 2600 employees participating
and 125 people commended for being technical leaders and
technical experts. Through pre-competition training and position-
specific drills the event used competition to promote learning
training and advancement providing a platform for employee
skill improvement comprehensively strengthening employee
competency and job performance capabilities and laying a solid
talent foundation for enterprise high-quality development.Company Holds High-Skilled Talent Team Development Promotion Conference and Second
Case Employee Professional Skill Competition Summary and Commendation Conference Highlights of Cultural and Sports Activities
In November 2025 the Company held a high-skilled talent
team development promotion conference and second employee
professional skill competition summary and commendation
conference. The meeting focused on talent development
craftsman spirit cultivation and skill competition empowerment
commending excellent skilled talent and deploying talent building
work.This employee professional skill competition and youth technical
competition featured 21 job categories divided into preliminary
and final stages with over 6000 employee participations. A total of
21 technical leaders and 153 technical experts were commended.
Through competition-driven learning and talent development
it laid a solid talent foundation for enterprise high-quality
development.The First "Baolan Good Voice" Youth Singer Competition The First Series of Activities of the Staff Culture
and Sports Festival
Employee Well-being and Care
Deepening the construction of a happy and harmonious enterprise the Company practices the philosophy of "sitting on the same
bench with employees" and uses "doing practical things for employees" as a lever. Through thematic research it identified 51
practical matters of which the Company prioritizes 10 and departments implement 41 all completed by the end of the year. Shift
optimization comprehensive health checkups charging pile construction and other matters received widespread employee approval
substantially enhancing employees' sense of achievement and belonging. The Company established a "six-line guarantee" precision
assistance system covering specialized assistance routine relief mutual assistance and supplementary medical dimensions with a
total of over 310000 yuan in relief funds distributed throughout the year achieving comprehensive benefit coverage.Strengthening precise care and cultural empowerment the Company regularly conducted "Four-Season Delivery" activities
distributing cooling supplies benefiting 9000 employee visits; organized 319 first-line employees and labor models/craftsmen to
participate in recuperation and rest programs; enriched cultural and recreational activities by holding the first employee culture and
sports festival series activities organizing 8 mass sports competitions such as group walks with over 4500 employee participations. 2025 Culture Sports and Arts Festival Opening Ceremony and Employee Healthy Walking Activity On-Site
The Company held employee children "Innocent Wisdom Empowered Growth" practical activities and the first "Baolan Good Mini-Marathon Employee Healthy Walking Activity
Voice" youth singer competition balancing employee and children needs and enriching employee leisure time; cultural and sports
associations and grassroots units conducted over 200 team-building activities fostering a harmonious and uplifting cultural
atmosphere.
82 832025 Sustainabil ity Report Occupational Health and Safety
Focusing on the needs of female employees young employees
and other groups the Company implemented "twice-yearly Occupational Health and Safety
screening for two cancers" for female employees completing
4674 screening visits throughout the year. It conducted 19 Shandong Steel is firmly committed to the safety philosophy of "putting people first and life first" continuously deepening the three-
quality education and position competition activities with year action plan for safety production "fundamental remediation" perfecting the occupational health and safety management system
3 units receiving recognition as the "13th National Book- rigorously implementing the full-staff safe production responsibility ensuring high-level safety to support the Company's high-quality
Fragrant March 8" excellent organizational units and 1 female development and wholeheartedly protecting the health and safety of employees and stakeholders.employee receiving the "Qilu Most Beautiful Worker" title. For
young employees it provided growth and socializing platforms Governance
held "Fate on Qixi·Steel is Good with You" social activities and
organized 5 outdoor team-building sessions covering over 300 The Company has established the Work Safety Committee as its highest decision-making and deliberative body with six specialized
people effectively protecting the rights and interests of all Company Held Celebration of Women's work safety committees underneath. The Safety and Security Department implements safety management functions; production units
groups. Day Commendation Conference at all levels implement localized safe production responsibility systems. Through promoting "one position one checklist one position
one assessment" and cause-tracing investigation mechanisms the Company strengthens full-staff safety responsibility and solidifies
the foundation of safety management.Metrics and Targets
In 2025 through implementing a precise talent development mechanism building a value-oriented assessment and distribution Security Department
mechanism and a company-wide innovation mechanism the Company achieved significant results in talent team building providing
a solid talent guarantee for sustainable development. Notably professional skill-level evaluations were conducted for at least 300
employees and at least 5 people were independently cultivated and selected for national and provincial talent programs.Steel City Base Rizhao Base
Indicator Unit 2025
Total Employee Count Person 18844
Male Employee Count Person 16670
Female Employee Count Person 2174
Female Employees in Management Positions Person 30
Employees Aged 30 and Below Person 2070
Employees Aged 30-50 Person 10790
Employees Aged 50 and Above Person 5984
Employee Turnover Rate % 0.6 The Company implements a tiered inspection mechanism that links supervisory performance with the "Safe Production Performance
Assessment Responsibility Statement" dynamically coordinating the annual safety reward assessment in accordance with the "Safe
Male Employee Attrition Rate % 0.57 Production Supervision and Management Measures." This effectively clarifies hierarchical responsibilities addresses performance
gaps and enhances managers' occupational health and safety competency.Female Employee Attrition Rate % 0.03
Strategy
Employee Work-Related Injury Insurance Coverage Rate % 100
The Company integrates occupational health and safe production targets deeply into its overall development strategy which is
Labor Contract Signing Rate % 100 reviewed and approved by the Work Safety Committee. Upon approval these targets are transformed into concrete implementation
plans with corresponding resources allocated to ensure their achievement. The Safety and Security Department continuously
Proportion of Employees Receiving Regular Performance and Career
% 100 improves the safety management system through regular monitoring periodic assessment and dynamic optimization effectively
Development Evaluations addressing risk challenges and supporting the Company's sustainable high-quality development.Occupational Health and Safety Management System
Looking ahead the Company will continue to deepen cadre and talent team building establish a scientific cadre pipeline and
continuously inject vitality into high-quality development. The Company will comprehensively advance improvement of human resource The Company firmly establishes the philosophy of "life first safety-oriented development" rigorously implements occupational
efficiency improve talent development and growth mechanisms and continue to do well in employee welfare and rights protection health and safety laws and regulations actively advances the three-year action plan for safety production "fundamental remediation"
work mobilizing the tremendous force that drives the enterprise forward. comprehensively deepens the full-staff safe production responsibility system strengthens "one person with dual responsibilities"
and "three management three must-dos" and continuously perfects the dual-prevention mechanism of safety risk classification
management and hidden hazard investigation and treatment.
8485
Armed Security Office
Fire Technology Office
Safety Supervision Office
General Safety Office
Public Security Office
Fire Control Management Office
Fire and Rescue Brigade
Special Equipment Inspection
Station
Safety Technology Office
Safety Supervision Office
Safety Management Office2025 Sustainabil ity Report Occupational Health and Safety
In 2025 while maintaining the effective operation of the ISO 45001/OHSMS occupational health and safety management system the Fire Prevention and Emergency Management
Company completed the revision of 41 safety management systems and improved the performance evaluation methods for various
production units achieving precise alignment between safety regulations laws and actual risks. In accordance with the "Grading The Company has established a standardized emergency drill mechanism that clarifies the drill cycles standards and requirements
and Scoring Standards for Work Safety Standardization of Industrial and Commercial Enterprises "the Company constructed a basic for comprehensive emergency response plans and specialized emergency response plans. On-site disposal plans must ensure
safety documentation list consisting of 12 elements and 125 detailed rules. full-coverage drill implementation with special attention to the effectiveness of emergency response plan drills involving major
During the reporting period the Steel City Base passed the secondary standardization review and verification of Shandong Province's hazard sources. Simultaneously the Company promotes routine "four-not" emergency drills to effectively validate each unit's on-
safe production standards. The Rizhao Base maintains the tertiary standardization level and continues to promote the extension of site emergency response capability and continuously strengthen the safe production defense line. In 2025 the Company conducted
standardization requirements to related parties through self-assessment achieving integrated safety management. drills for 11 comprehensive emergency response plans 67 specialized emergency response plans and 954 on-site disposal plans
comprehensively enhancing the level of emergency response
and risk prevention and control.In terms of fire management the Company strictly
implements the work policy of "Prevention first combination
of prevention and fire fighting". It organizes fire safety
inspections identifies 169 fire hazards and completes
closed-loop rectification. In 2025 the Company organized
10 fire safety education and training sessions achieving the
goal of "zero occurrence" of major fire accidents for the year.Case The Company Successfully Hosts Jinan Emergency Drill
In June 2025 the Company hosted a high-standard emergency response drill for steel enterprises in Jinan simulating
Rizhao Base blast furnace hearth burnthrough. The drill simulated hazardous situations triggered by abnormal blast furnace
operations and personnel entrapment scenarios. The enterprise rapidly activated emergency response plans
established command structures to coordinate rescue operations and various task forces coordinated seamlessly
to complete rescue and treatment exercise tasks efficiently and successfully conclude the exercise on schedule
demonstrating the Company's commitment to public safety governance.Case Rizhao Base Organizes Fire Prevention Facility Hazard Elimination Campaign
In January 2025 the Rizhao Base established a cross-departmental
task force to launch a six-month fire prevention facility hazard
elimination campaign. The task force established a "daily dispatch
- weekly advancement - monthly evaluation" management system
comprehensively coordinating various workshops procurement
Steel City Base - Laiwu Iron and Steel Group Yinshan Section Steel Co. Ltd. departments construction supervision and maintenance units
to thoroughly address existing fire equipment and facility hazards
including missing equipment offline linkage failures frequent
false alarms and aging equipment. The reliability and operational
efficiency of critical fire prevention equipment and facilities
including fire alarm systems automatic fire suppression systems water systems and linkage control systems have all
been significantly improved.Related Party Management
The Company strictly implements "four unifications" control standards for related parties implements precise control around "six
links" and improves the safety performance evaluation mechanism for cooperative suppliers. The Company has formulated the
"Cooperative Supplier Safety Management Standards" and implemented an admission system to strengthen upstream management.In 2025 the Company identified and corrected 498 related party hazards established a blacklist system to remove non-compliant
Shandong Steel units related parties' violations decreased year-on-year and safety performance continued to improve steadily.
86 872025 Sustainabil ity Report Occupational Health and Safety
Impacts Risks and Opportunity Management The "Smart Security" System of Rizhao
Base has been fully put into use and deeply
integrated into daily safety management
The Company manages safety risks with scientific approaches clarifying the objectives of ensuring safe production reducing
hidden hazards and enhancing employee safety awareness. Taking the three-year action plan for safety production "fundamental driving a key transformation of the Company's
remediation" as an opportunity the Company improves its responsibility system deepens intelligent control and builds multiple safety management model from traditional
quantitative measures and specialized initiatives to fortify the essential safety defense line protecting safe production operations and paper-based to modern digital and intelligent.employee safety. The system covers 25 functional modules
including objective management institutional
Risk and Opportunity Identification Response Measures responsibilities system development training
capacity contractor safety occupational
Optimize the responsibility system dynamically update duty performance
Intensifying industry competition with some health labor protection articles "Three
checklists and achieve full coverage of quarterly safety evaluations by plant
units neglecting safe production in cost S imul tane i t ies" management spec ia l
leaders; implement hierarchical assessment clarify responsibility boundaries
reduction and efficiency improvement efforts equipment hazardous chemicals major
and improve the timeliness of duty performance.hazard sources fire safety maintenance Rizhao Base "Smart Security" System
Integrate safety targets into company strategy achieve 100% execution rate operation emergency management dual
Increasingly stringent environmental and safety
of "three simultaneous" requirements for construction projects; complete
compliance standards upgraded regulatory prevention mechanism accident management safety performance of duties and safety performance forming a full-domain digital
assessment and filing of hazardous chemical major hazard sources pass
requirements increased compliance investment and intelligent safety management and control system.secondary safety production standardization re-evaluation by Shandong
and operation and maintenance pressures
Province
Conduct monthly major hazard screening and achieve dynamic clearance of
Key field risks such as hazardous chemicals and
hazards complete safety essential transformation; empower risk early warning Case Special Equipment Safety Management and Control Practice
high-temperature molten metals are complex
through intelligent upgrading achieve 100% major hazard placard supervision
with difficult-to-manage dynamic risks
rate In 2025 the Company obtained the qualification for special equipment inspection station completed the modification
and cancellation of 381 lifting machinery and regular inspection of 423 units and carried out diagnostic inspections to
Strengthening Safety Risk Management rectify 135 hidden dangers. It organized 70 training sessions for special type of work certification and re-examination
with 3212 person-times trained ensuring that the certification rate of special equipment operators reached 100%
The Company adheres to a "zero tolerance for safety violations" bottom line focusing on "three major and the equipment itself as well as its safety accessories and protection devices were always in sound and effective
Advancing Safety hazard sources" including molten metals coal gas and hazardous chemicals to break through pain operation.Production points in industry safety management. The Company innovatively constructs a management and
Fundamental control system of "smart prevention enablement closed-loop defect elimination cultural radiation and
Remediation collaborative prevention" driving safety management toward active prevention and precise strategic
implementation. The Company has implemented the "one plan three-list" approach to achieve safety
risks that are preventable controllable and traceable.Occupational Health Protection
The Company strictly implements "three simultaneous" safety management for construction projects
completes procedural handling of key projects and special safety assessments for hazardous chemical- The Company strictly complies with occupational health management regulations and has constructed a comprehensive occupational
Full- related enterprises. Centering on major events and critical production phases the Company intensifies health protection system covering the full work process rigorously managing pollutant emissions across all production and operation
Process Risk key link inspections and supervision to resolve management coordination blind spots. The Rizhao
Prevention and Base in response to risks in the Mid-term Maintenance of Blast Furnace No.2 optimized plan review stages to ensure stable compliant discharge and effectively prevent adverse impacts on employees. During the reporting period the
Control and team allocation conducted six specialized training sessions for personnel supervising high-risk Company experienced no occupational health damage incidents caused by pollutant emissions.operations implemented grid-based supervision and "offline + online" full-process monitoring to ensure
maintenance safety and controllability. In 2025 the Company comprehensively advanced detection and closed-loop remediation of dust high-temperature and other hazard
factors completed noise reduction transformation projects strictly implemented labor protection regulations and coordinated health
In 2025 the Company adheres to a problem-oriented approach identifying and correcting hidden hazards check-ups covering new hires current employees and departing workers totaling 9145 person-times. The Company adjusted 28
through multiple channels including specialist inspections routine audits and technical monitoring
Strengthening employees with occupational contraindications and achieved 100% participation rate and 100% establishment rate for employee across work processes equipment and facilities personnel operations and work environment aspects.Closed- The Company has established a comprehensive management mechanism implementing placard-based health records. The Company reported zero new occupational disease cases throughout the year establishing a multi-dimensional
Loop Hazard supervision and dynamic clearance of major hazards. The Rizhao Base conducted targeted specialist occupational health and safety defense line.Rectification inspections in electrical high-temperature molten metal and confined space fields comprehensively
completed multi-dimensional hazard rectification and prevented and mitigated operational safety risks.In 2025 the Company implemented 31 safety essential technology transformation projects advancing
coal gas cabinet safety instrumented systems construction to eliminate waste gas transmission safety 9145 100% 0
Deepening hazards. The Rizhao Base launched the intelligent safety protection system which comprehensively
Intelligent covers all requirements of safety production standardization and dual-prevention mechanisms Number of health monitoring Physical examination New occupational disease
Safety integrating video surveillance safety production risk monitoring and early warning special equipment
Construction management dangerous operation control systems and other functions. The system has solidified
physical examinations participation rate cases
the Company's specific safety management measures into the system enabling dynamic risk early Health file establishment rate
warning and scientific decision-making while enhancing the standardization and intelligence level of
safety management.
88 892025 Sustainabil ity Report Occupational Health and Safety
Safety Culture Construction Metrics and Targets
In 2025 the Company optimized its safety culture
construction system with multi-dimensional enabling across In 2025 the Company achieved the core safety production goals of "Six Zeroes" and "Seven 100%". It resolutely prevented all kinds
precision technology and full-staff participation as the core 2.0329 2022476 of liability accidents such as general and above production safety accidents and major and above fire accidents consolidating the million yuan hours
realizing universal safety training coverage through tiered fundamental defense line for occupational health and safety production.training innovative forms thematic activities and skills Total training investment Workplace safety training
competitions. amounted Short-Term Targets (2025)
Adhering to the safety concept of "putting people first" the
Company has built a comprehensive and multi-level safety Achieving Safe Production "Six Zeros" Completing "Seven 100%" Compliance Tasks
culture system. With systematic training and distinctive
activities as the starting point the Company promotes the Zero general or above production safety 100% compliance rate for "three simultaneous" requirements
rooting of safety culture. Focusing on improving safety 175922 100% accidents (safety and occupational health) in construction projects
capabilities and fostering a safety atmosphere throughout Employee participations The safety training coverage 100% testing rate for special equipment safety and technical Zero major or above fire accidents
the year the Company has achieved 100% coverage of safety conditionsrate stood
training for all employees through diverse forms such as Zero major or above equipment accidents 100% certification rate for special operation personnel in
special training experiential teaching themed activities and Zero major or above production accidents actual work assignments
skills competitions. 100% safety training and education rate for employees and Zero major or above traffic accidents for which related parties
In 2025 the Company continued to increase the total investment in workplace safety training strengthened employees' risk the Company bears primary responsibility
awareness operational procedures and emergency response capabilities organized security personnel to complete special training 100% physical examination rate for workers in positions
with toxic/harmful exposure
on human rights policies and procedures and built a strong ideological line of defense and practical foundation for workplace safety. Zero related party accidents for which the
Company bears primary responsibility 100% testing rate for occupational disease hazard factors in
work environments
Case Leading with Distinctive Thematic Activities to Foster Strong Safety Atmosphere 100% implementation rate for hazard rectification
The Rizhao Base has implemented the "Safety Guardian" initiative
conducting hazard investigation and remediation through the Medium- and Long-Term Development Roadmap
"Safe Production Cup" competition as a carrier and continuously
advancing routine labor protection supervision and inspections.The Base has launched the "Zero-Violation Shift Team" creation Continuously deepen the three-year action plan for safety production "fundamental remediation"
and assessment activities promoting company-wide hazard constructing a normalized mechanism for dynamic clearance of major accident hazards and substantially
source identification and standardized work implementation. Medium-Term Targets elevating the Company's intrinsic safety level. Perfect the "people protection technology protection (1–5 Years) engineering protection and management protection" four-in-one risk prevention and control system
The Steel City Base promotes experiential training utilizing VR/AR forming a comprehensive and multi-level safety protection landscape and promoting normalization and
simulation of high-risk scenarios expanding the coverage of its standardization of occupational health and safe production management.sensory experience center services. In 2025 the Base organized
6834 participants in experiential training.
Establish a forward-looking safety prevention and control system that surpasses industry standards
achieving comprehensive upgrading of the occupational health and safe production governance system
Long-Term Targets from "tangible coverage" to "deepened operations." Using benchmark leadership to advance industry
(5+ Years) development building a demonstration model in occupational health and safe production management and
Case The Company Launches the "Joint Operation * Family-Caring Safety Assistance" Work Safety Practice Activity providing solid safety assurance for the Company's sustainable development.The Rizhao Base Hot Rolling Mill Trade Union jointly with the
Safety Management Office conducted the "Joint Operation *
Family-Caring Safety Assistance" activity. The activity invited
employee family members to tour production lines and innovation The Company received the 2025 Shandong Province Emergency Management Popular Law Knowledge Competition
workshops incorporating electrical safety explanations Excellent Organization Award and achieved excellent results in the Fourth "Safe and Sound Cup" Municipal
interesting Q&A and family safety letter readings combined
Managed Industrial and Commercial Enterprise Safety Production Knowledge Competition.with children's talent performances and hazard-finding puzzles.Using family affection as the bond the activity integrated safety
concepts into work and life weaving a dense safe production
protection network and solidifying the safety foundation for the Looking forward the Company will advance with a sense of responsibility that "leaves room for concern at all times" and execution
realization of the enterprise's phased targets. power that "has certainty in all matters" solidly promote the final phase of the three-year action plan for safety production
"fundamental remediation" and systematically advance comprehensive upgrading across five dimensions of responsibility system
implementation risk prevention and control foundation assurance science and technology enabling and culture building.
90 912025 Sustainabil ity Report Social Welfare
Social Welfare Community Co-Building
Shandong Steel adheres to the principle of "originating from society giving back to society" using party building as the guide
Shandong Steel upholds the core values of "co-creation co-progress and co-prosperity" deeply integrating the fulfillment of social deepening enterprise-local integration through paired co-building livelihood assistance and outcome sharing establishing a
responsibility into enterprise strategy and daily operations. The Company systematically advances rural revitalization community standardized community management system with long-term mechanisms ensuring implementation.co-building volunteer service and charitable donation work actively fulfilling social responsibilities effectively responding to social The Company ensures the deep integration of party building work and community governance through institutionalized governance
concerns and contributing enterprise strength to achieve social harmony and sustainable development. mechanisms establishing a multi-dimensional governance network covering industrial resource downward flow precise assistance
and joint construction of love libraries significantly enhancing community governance effectiveness and resident happiness.Rural Revitalization
The Company actively responds to the national Rural Revitalization strategy transforming enterprise resource advantages into Case Steel City Base Pairs with Local Community in Co-Building to Enhance Community Governance Effectiveness
strong momentum for rural development through multiple measures including dispatching resident first secretaries implementing
the "Warm-Hearted Benefit to Farmers" livelihood project and conducting consumer-driven assistance writing new chapters in Using party building as the bond the Steel City Base pairs with the local community in co-building to enhance governance
integrated enterprise-local development. effectiveness. The second party branch of the bar mill rolling steel workshop leverages technical expertise to reinforce
Precise Assistance with Heart-Warming Support for Villagers aging dangerous bridges addressing resident traffic safety concerns; organizes "agricultural benefit public welfare
promoting development" activities establishing agricultural product sales platforms and provides material assistance to
To thoroughly implement Jinan's "tens of thousands families in difficulty through the "clothing and books building dreams" public benefit initiative. The organization office first
going to villages thousands of villages improved" branch focuses on caring for children with special needs coordinating with social forces to conduct warm companionship
project the Company dispatched outstanding cadre activities effectively enhancing residents' sense of gain safety and happiness.Liu Defeng to serve as resident first secretary of
Xiaxiashang Post-Village under Wenyuan Subdistrict
Steel City District. In 2025 the Company made
multiple visits to the village providing material
support for the "Happiness Canteen" donating warm Public Welfare Activities
clothing to lonely elderly residents during Chinese
New Year and delivering essential livelihood supplies
such as rice flour and cooking oil to families in The Company continuously improves its public welfare and charity management system using volunteer service organizations such
difficulty effectively conveying enterprise care. as "Love Alliance" and "Little Raindrops" as carriers conducting diverse public welfare activities and transforming the enterprise's
social responsibility into concrete social service action."Warm-Hearted Benefit to Farmers" Livelihood Project Supporting Rural Development Exam Support
The Company actively fulfills social responsibility achieving remarkable results in consumer-driven assistance industrial During the national college entrance examination in June 2025 the Company Communist
tourism and livelihood supply heating. Youth League Committee set up "Caring Exam Support Service Points" at Laigang High
School and Laiwu No.4 High School built cool rest areas and provided free mineral water
Consumer-Driven Assistance Boosting Agricultural Income exam stationery and other supplies to candidates and parents. The thoughtful services
eased the tense atmosphere before exams and escorted dreams.The Company actively fulfills its social responsibilities implements poverty alleviation through consumption and supports
the comprehensive advancement of rural revitalization. Through the labor union the Company purchased 1100 portions Scholarship-Driven Dream Realization
of featured agricultural products from Xinjiang worth more than 106700 yuan. It carried out the "Coolness in Summer"
campaign and purchased more than 12500 kilograms of watermelons from Juye County Heze City the village stationed by The Rizhao Base Iron Smelting Plant "Love Alliance" volunteer service team actively
the First Secretary of the Group which was well-received by local melon farmers. fundraises dedicating funds specifically to scholarship donations for two children from
impoverished families in Bishiguo Village Lanshan District. The initiative genuinely helps
children overcome practical difficulties in their pursuit of education supporting them
Industrial Tourism Driving Research-Study Tourism to study with peace of mind and pursue dreams with confidence demonstrating the
enterprise's social responsibility through concrete action.The Company fully leverages the resource advantages of the Rizhao Base as a national AAA-level industrial tourism scenic
area actively conducting industrial research-study activities attracting significant numbers of students and social groups to Caring for and Respecting the Elderly
visit and effectively promoting deep integration of cultural tourism and rural economy.The "Little Raindrops" Charity Association of the Special Steel Plant of Steel City Base has continuously provided volunteer services at
institutions including Wenhe Nursing Home in Gangcheng District Jinan City offering daily care and spiritual comfort to lonely elderly
Waste Heat Heating Benefits People and Assists Agriculture people and warming their later life with company. By the end of 2025 the "Little Raindrops" Charity Association had conducted more
than 50 volunteer services paired up to support 18 disadvantaged families in surrounding areas served over 2000 people including
The Company extends its green and low-carbon development philosophy to people’s livelihood. Utilizing zero-carbon waste lonely elderly people disabled children and community residents and raised a total of 174900 yuan in relief funds. With concrete
heat from industrial production the Company provides clean heating for 10 residential communities in Taoluo Town Rizhao actions the Company fulfills its social responsibilities conveys corporate warmth and contributes to building a harmonious and
City covering an area of 300000 square meters radiating to 18 administrative villages and benefiting more than 5000 friendly community environment.households and over 700 breeding households. It has become a vivid model of industry nurturing agriculture and urban areas
supporting rural areas.
92 932025 Sustainabil ity Report ESG Key Data Table
Appendix Indicator Unit 2023 2024 2025
Responding to Investor Questions NOS 356 375 269
ESG Key Data Table3
Investor Relations Questionnaires NOS 1 1 1
Economic Performance Indicators Number of Regular Announcements NOS 4 4 4
Indicator Unit 2023 2024 2025 Number of Temporary Announcements NOS 49 80 100
Operating Revenue Ten Thousand Yuan 9047506.18 8209409.31 6725282.45 Proportion of Independent Directors Serving as Independent % 0 0 0
Directors in More than 3 Listed Companies
Profit / (loss) before tax Ten Thousand Yuan -9821.6 -250718.71 48472.36
Proportion of Independent Directors Serving as Directors in
%000
More than 6 Listed Companies
Total Tax Payment Ten Thousand Yuan 86721.45 91809.81 183928.77
Percentage of Directors Receiving Anti-Commercial Bribery
Total Cash Dividends (Including Tax)4 Ten Thousand Yuan 32096.55 12038.52 7998.74 % 100 100 100and Anti-Corruption Training
Cash Dividends per 10 Shares Yuan 0.3 0.11 0.08 Percentage of Management Receiving Anti-Commercial
%100100100
Bribery and Anti-Corruption Training
Social Contribution Value per Share Yuan/Share 0.45 0.25 0.66
Percentage of Employees Receiving Anti-Commercial Bribery
%100100100
and Anti-Corruption Training
Proportion of Operating Sites That Have Conducted Internal
Governance Performance Indicators Audits/Risk Assessments for Business Ethics Issues to the % 100 100 100
Total Number of Operating Sites
Indicator Unit 2023 2024 2025
Environmental Performance Indicators
Proportion of Independent Directors % 43 44 44
Proportion of Female Directors % - 11 11 Indicator Unit 2023 2024 2025
Number of Board Meetings Times 11 16 13 Environmental Management
Hundred Million
Number of Meetings of the Strategy Planning and ESG Committee Times 1 3 1 Environmental Protection Investment 4.2 11.72 11.5Yuan
Number of Meetings of the Risk Management and Audit Committee Times 4 7 6 Number of Environmental Pollution Incidents Case 0 0 0
Environmental Protection Fines Incurred During the Ten Thousand
Number of Meetings of the Budget Compensation and Appraisal
Times 2 2 1 Fiscal Year Yuan
000
Committee
Coverage Rate of Environmental Protection Training % 100 100 100
Number of Meetings of the Nomination Committee Times 2 8 6
Environmental Performance Rating(Grade A is the
highest level of environmental performance rating) A A A
Frequency of Performance Releases Times 3 3 3
Proportion of Operations Certified by Environmental % 100 100 100Management System
Investment Bank Strategy Meetings Sessions 1 2 3
Proportion of Operations Certified by Energy Management % 100 100 100
System
Hosting Investor Visits Persons 16 46 19
Energy Utilization
3 In 2025 the Company acquired 100% equity interest in Yinshan Section Steel. Compared with previous years the relevant data have
Tonne of
been adjusted to include Yinshan Section Steel due to the change in consolidation scope. Energy Consumption 8058786.11 7052242.49 10289308.09
Standard Coal
4 The total dividends for 2025 equal the actual cash amount used by Shandong Steel to repurchase shares during the year. According Hundred Million
to Article 8 of the Shanghai Stock Exchange’s Self-Regulatory Guidelines No.7 for Listed Companies-Share Repurchase when a listed Self-generated Electricity 31.62 30.61 43.61kWh
company repurchases shares via centralized bidding or tender offer with cash consideration the amount spent on share repurchases
during the year shall be regarded as cash dividends and included in the calculation of the annual cash dividend ratio.
94 952025 Sustainabil ity Report ESG Key Data Table
Indicator Unit 2023 2024 2025 Social Performance Indicators
Water Resources Utilization Indicator Unit 2023 2024 2025
Total Annual Water Consumption Ten Thousand m3 4258.83 4135.02 4506.83 Employees
Total Number of Employees Person 16535 16031 18844
Fresh Water Consumption Ten Thousand m3 3481.06 3174.79 4121.98
Number of Male Employees Person 14573 14181 16670
Water Recycling and Reuse Rate % 98.3 97.04 98.48
Number of Female Employees Person 1962 1850 2174
m3 / Tonne of
Fresh Water Consumption Intensity 2.34 2.125 2.26
Crude Steel Number of Employees Aged 30 or younger Person 2029 2018 2070
Ten Thousand
Total Waste Water Discharge 646.4 674.1 546.26
Tonnes Number of Employees Aged 30-50 Person 11222 9556 10790
COD Discharge in Waste Water Tonne 133.03 124.43 91.23 Number of Employees Aged 50 or older Person 3284 4457 5984
Ammonia Nitrogen Discharge in Waste Water Tonne 1.64 3.343 2.95 Number of Ethnic Minority Employees Person 130 91 143
Pollution Emissions Number of Employees with Disabilities Person 51 41 74
Particulate Matter (PM) Emissions Tonne 3677.96 2658.81 3948.11 Proportion of Employees with Disabilities % 0.31 0.26 0.39
Sulfur Dioxide (SO2) Emissions Tonne 1520.72 1404.19 2219.22
Number of Veterans Recruited Person 3 5 6
Employees Turnover Rate % 0.35 0.57 0.6
Nitrogen Oxides (NOx) Emissions Tonne 3545.07 4083.57 5678.85
Turnover Rate of Male Employees % 0.22 0.48 0.57
Solid Waste
Turnover Rate of Female Employees % 0.04 0.09 0.03
Ten Thousand
Total Waste Generation 930.60 833.95 1110.52
Tonnes
Investment Amount of Employee Work Safety Liability Ten Thousand
Ten Thousand 103.85 98.42 107.91
General Waste Generation 893.46 795.34 1098.42
Tonnes Insurance
5 Yuan
Ten Thousand
General Waste Recycled 892.06 794.47 1097.47 Investment Amount of Employee Work-Related Injury Ten Thousand
Tonnes 2000.27 2221.16 2111.77
Insurance Yuan
Ten Thousand
General Waste Disposal 1.4 0.87 0.95
Tonnes Employee Work-Related Injury Insurance Coverage Rate % 100 100 100
Ten Thousand
Hazardous Waste Generation 37.14 38.61 12.1
Tonnes Labor Contract Signing Rate % 100 100 100
Ten Thousand
Hazardous Waste Harmless Treatment Volume 37.14 38.61 12.1
Tonnes Proportion of People Covered by Collective Agreements % 100 100 100
Waste Recycling Rate % 95.86 95.27 98.82 Number of Labor Dispute Cases Cases 0 0 0
Cleaner Production Number of Discrimination and Harassment Related Cases 0 0 0
Incidents
Scrap Steel Recovery Rate % 100 100 100
Proportion of Employees Receiving Anti-Discrimination
%100100100
Comprehensive Utilization Rate of Steel Slag % 100 100 100 and Anti-Human Rights Infringement Training
Greenhouse Gas Emissions Social Insurance Coverage Rate % 100 100 100
Direct (Scope 1) Greenhouse Gas Emissions tCO e 24512877 24821339 29932954 Total Number of Female Employees on Parental Leave Person 169 158 1772
Return Rate and Retention Rate of Female Employees on
Indirect (Scope 2) Greenhouse Gas Emissions tCO2 e 2670937 2331860 2214487 % 100 100 100
Parental Leave
Total Greenhouse Gas Emissions (Scope 1 and Scope 2) tCO2 e 27183814 27153199 32147441 Number of Assisted Employees in Difficulty Person 193 352 459
5 Data for 2023 and 2024 have been restated due to changes in statistical scope.
96 972025 Sustainabil ity Report ESG Key Data Table
Indicator Unit 2023 2024 2025 Indicator Unit 2023 2024 2025
Average Annual Paid Leave Days Per Employee Day 9 9.5 9.6 Total Number of Illegal and Regulatory Violations
Concerning Health and Safety Labeling of Products and Cases 0 0 0
Services Provided
Employee Satisfaction % 100 100 100
Complaint Resolution Rate % 100 100 100
Employee Training Coverage Rate % 100 100 100
Customer Satisfaction Score 89 90 90.1
Total Employee Training Hours Hour 4071062 4102890 4139127
Total Number of Illegal and Regulatory Violations
6 Concerning Customer Privacy Cases 0 0 0Average Training Hours Per Employee Hour 85 99 92
Proportion of Employees Receiving Regular Performance Supplier Management% 100 100 100
and Career Development Assessments
Total Number of Suppliers NOS 2564 1980 2231
Occupational Health and Safety
Proportion of Suppliers in the Mainland % 100 100 100
Hundred
Total Safe Production Investment 1.28 1.2 1.15
Million Yuan Green Procurement Proportion of Materials and Spare % 100 100 100
Parts
Proportion of Safe Production Investment in Operating
%0.140.140.11
Revenue Proport ion of Local Equipment and Mater ia ls % 72.54 61 27.52
Procurement
Hundred
Safety Training Investment Cost 0.04 0.03 0.02
Million Yuan Data Security and Privacy Protection
Number of Safe Production Accidents Cases 0 0 0 Number of Information Security Leakage Incidents % 0 0 0
Number of Work-Related Deaths (In-House Employees Coverage Rate of Data Security/Customer Privacy
Person 0 0 0
and Dispatched Workers) Protection Related Training
Case 100 100 100
Work-Related Injury Rate % 0 0 0 R&D and Innovation
injuries R&D Investment
Ten Thousand
Yuan 285519.33 270779.22 353770.24
per million
LTIFR (Lost Time Injury Frequency Rate) 0 0 0
hours Proportion of R&D Investment in Operating Revenue % 3.16 3.3 5.26
worked
Number of R&D Personnel Person 1776 1747 2036
Working Days Lost Due to Work-Related Injuries Day 0 0 0
Proportion of R&D Personnel % 10.47 10.9 10.8
Number of Participants in Safe Production Training Person-Times 156450 188912 175922 Number of Invention Patents Applied to Core Business
PCS 686 979 1174
Operations
Total Safe Production Training Hours Hour 1356201 2265481 2022476
Number of Invention Patents Applied PCS 548 544 277
Occupational Health Examination Coverage Rate % 100 100 100
Number of Invention Patents Granted PCS 426 381 208
Number of New Occupational Diseases Person 0 0 0
Number of Software Copyrights PCS 19 13 2
Safety Risk Protection Training Coverage Rate % 100 100 100
Rural Revitalization and Social Contribution
Products and Customer Service
Amount of Compensation Involved in Major Liability Investment in Rural Revitalization
Ten Thousand
Yuan 49.8 9.8 10.67Ten Thousand
Accidents Related to Product and Service Safety and 0 0 0
Quality Occurred During the Reporting Period Yuan Number of Volunteer Service Participants Person 3078 3425 3592
Specific Amount Involved in Customer Privacy Leakage Ten Thousand
Incidents 0 0 0Yuan Volunteer Service Hours Hour 64638 54354 53370
Average Volunteer Service Hours Per Person Hour 21 16 15
6 Calculation Formula for Average Training Hours per Capita = Σ (Training Hours per Session × Number of Participants per Session) ÷ Σ
Number of Participants per Session
98 992025 Sustainabil ity Report GRI Standards Index
GRI Standards Index
Disclosure Item Corresponding Section
Shandong Steel compiled this report with reference to GRI Standards for the period
Instructions for Use
January 1 to December 31 2025. Corporate Governance
2-15 Conflicts of interest
Business Ethics
GRI Standards Used GRI 1: Foundation 2021
2-16 Communication of critical concerns Corporate Governance
2-17 Collective knowledge of the highest governance body ESG Governance
Corporate Governance
2-19 Remuneration policies
Disclosure Item Corresponding Section Employees
Corporate Governance
GRI 2: General Disclosures 2021 2-20 Process to determine remuneration
Employees
2-1 Organizational details Company Overview Chairman's Message
2-22 Statement on sustainable development strategy
ESG Governance
2-2 Entities included in the organization’s sustainability reporting About This Report
Business Ethics
2-3 Reporting period frequency and contact point About This Report 2-23 Policy commitments
Supply Chain Security
About Shandong Steel
2-4 Restatements of information
ESG Key Data Table Business Ethics2-24 Embedding policy commitments
Supply Chain Security
2-5 External assurance Not Applicable
Compliance and Risk Management
About Shandong Steel 2-25 Processes to remediate negative impacts
Product and Service Safety and Quality
2-6 Activities value chain and other business relationships Supply Chain Security
Product and Service Safety and Quality ESG Governance
2-26 Mechanisms for seeking advice and raising concerns
Employees Business Ethics
2-7 Employees
ESG Key Data Table
2-27 Compliance with laws and regulations See various topics in the report
Occupational Health and Safety
2-8 Workers who are not employees
Supply Chain Security About Shandong Steel2-28 Membership associations
Innovation-Driven Development
Corporate Governance
2-9 Governance structure and composition
ESG Governance 2-29 Approach to stakeholder engagement ESG Governance
2-10 Nomination and selection of the highest governance body Please refer to the Company's 2025 Annual Report 2-30 Collective bargaining agreements Employees
2-11 Chair of the highest governance body Please refer to the Company's 2025 Annual Report GRI 3: Material Topics 2021
2-12 Role of the highest governance body in overseeing the management
Please refer to the Company's 2025 Annual Report 3-1 Process to determine material topics ESG Governance
of impacts
3-2 List of material topics ESG Governance
2-13 Delegation of responsibility for managing impacts Please refer to the Company's 2025 Annual Report
ESG Governance
3-3 Management of material topics
2-14 Role of the highest governance body in sustainability reporting ESG Management Addressing Climate Change
100 1012025 Sustainabil ity Report GRI Standards Index
Disclosure Item Corresponding Section Disclosure Item Corresponding Section
GRI 201: Economic Performance 2016 GRI 302: Energy 2016
201-1 Direct economic value generated and distributed ESG Key Data Table 302-1 Energy consumption within the organization ESG Key Data Table
201-2 Financial implications and other risks and opportunities due to ESG Governance 302-3 Energy intensity ESG Key Data Table
climate change Addressing Climate Change
302-4 Reduction of energy consumption Energy Utilization
201-3 Defined benefit plan obligations and other retirement plans Employees
302-5 Reductions in energy requirements of products and services Energy Utilization
201-4 Financial assistance received from government Please refer to the Company's 2025 Annual Report
GRI 303: Water and Effluents 2018
GRI 203: Indirect Economic Impacts 2016
303-1 Interactions with water as a shared resource Energy Utilization
203-1 Infrastructure investments and services supported Social Welfare and Community Benefit
303-2 Management of water discharge-related impacts Energy Utilization
203-2 Significant indirect economic impacts Social Welfare and Community Benefit
303-3 Water withdrawal ESG Key Data Table
GRI 204: Procurement Practices 2016
303-4 Water discharge ESG Key Data Table
204-1 Proportion of spending on local suppliers Supply Chain Security
303-5 Water consumption ESG Key Data Table
GRI 205: Anti-Corruption 2016
GRI 304: Biodiversity 2016
205-1 Operations assessed for risks related to corruption Business Ethics
304-1 Operational sites owned leased managed in or adjacent to
205-2 Communication and training about anti-corruption policies and
Business Ethics protected areas and areas of high biodiversity value outside Ecosystem and Biodiversity Protection
procedures
protected areas
205-3 Confirmed incidents of corruption and actions taken Business Ethics
304-2 Significant impacts of activities products and services on
Ecosystem and Biodiversity Protection
biodiversity
GRI 207: Tax 2019
304-3 Habitats protected or restored Ecosystem and Biodiversity Protection
207-1 Approach to tax Tax Management
304-4 IUCN Red List species and national conservation list species with The core business of the company has limited
207-2 Tax governance control and risk management Tax Management habitats in areas affected by operations relevance to this information or it is of low materiality
207-3 Stakeholder engagement and management of concerns related to GRI 305: Emissions 2016
Tax Management
tax
305-1 Direct (Scope 1) GHG emissions ESG Key Data Table
207-4 Country-by-country reporting Please refer to the Company's 2025 Annual Report
305-2 Energy indirect (Scope 2) GHG emissions ESG Key Data Table
GRI 301: Materials 2016
The core business of the company has limited
305-3 Other indirect (Scope 3) GHG emissions
Energy Utilization relevance to this information or it is of low materiality
301-1 Management of material topics
Circular Economy
Addressing Climate Change
305-4 GHG emissions intensity
301-2 Recycled input materials used Circular Economy ESG Key Data Table
Addressing Climate Change
301-3 Reclaimed products and their packaging materials Circular Economy 305-5 Reduction of GHG emissions ESG Key Data Table
102 1032025 Sustainabil ity Report GRI Standards Index
Disclosure Item Corresponding Section Disclosure Item Corresponding Section
The company's production and business activities do Employees
305-6 Emissions of ozone-depleting substances (ODS) 403-6 Promotion of worker health
not produce ODS Occupational Health and Safety
305-7 Nitrogen oxides (NOx) sulfur oxides (SOx) and other significant air Environmental Compliance Management 403-7 Prevention and mitigation of occupational health and safety impacts Occupational Health and Safety
emissions ESG Key Data Table directly linked by business relationships
403-8 Workers covered by an occupational health and safety management
GRI 306: Waste 2020 Occupational Health and Safety
system
306-1 Waste generation and significant waste-related impacts Waste Management Occupational Health and Safety
403-9 Work-related injuries
ESG Key Data Table
Waste Management
306-2 Management of significant waste-related impacts
Circular Economy Occupational Health and Safety
403-10 Work-related ill health
ESG Key Data Table
306-3 Waste generated ESG Key Data Table
GRI 404: Training and Education 2016
306-4 Waste diverted from disposal ESG Key Data Table
Employees
306-5 Waste directed to disposal ESG Key Data Table 404-1 Average hours of training per year per employee ESG Key Data Table
GRI 308: Supplier Environmental Assessment 2016 404-2 Programs for upgrading employee skills and transition assistance
Employees
programs
308-1 New suppliers that were screened using environmental criteria ESG Governance
404-3 Percentage of employees receiving regular performance and career Employees
308-2 Negative environmental impacts in the supply chain and actions ESG Governance development reviews ESG Key Data Table
taken ESG Key Data Table
GRI 405: Diversity and Equal Opportunity 2016
GRI 401: Employment 2016
Employees
405-1 Diversity of governance bodies and employees
Employees ESG Key Data Table
401-1 New employee hires and employee turnover
ESG Key Data Table
GRI 406: Non-Discrimination 2016
401-2 Benefits provided to full-time employees that are not provided to
Employees
temporary or part-time employees 406-1 Incidents of discrimination and corrective actions taken Employees
401-3 Parental leave ESG Key Data Table GRI 407: Freedom of Association and Collective Bargaining 2016
GRI 402: Labor-Management Relations 2016 407-1 Operations and suppliers in which the right to freedom of Employees
The company currently has no major operational association and collective bargaining may be at risk Supply Chain Security
402-1 Minimum notice periods regarding operational changes
changes
GRI 408: Child Labor 2016
GRI 403: Occupational Health and Safety 2018
408-1 Operations and suppliers at significant risk for incidents of child Employees
403-1 Occupational health and safety management system Occupational Health and Safety labor Supply Chain Security
GRI 409: Forced or Compulsory Labor 2016
403-2 Hazard identification risk assessment and incident investigation Occupational Health and Safety
409-1 Operations and suppliers at significant risk for incidents of forced Employees
403-3 Occupational health services Occupational Health and Safety
or compulsory labor Supply Chain Security
403-4 Worker participation consultation and communication on Employees
GRI 410: Security Practices 2016
occupational health and safety Occupational Health and Safety
403-5 Worker training on occupational health and safety Occupational Health and Safety 410-1 Security personnel trained in human rights policies or procedures Occupational Health and Safety
104 1052025 Sustainabil ity Report Topic Disclosure Index
Disclosure Item Corresponding Section Topic Disclosure Index
GRI 413: Local Communities 2016 Guidelines No.14 of Shanghai Stock Exchange for Self-Regulation of Listed
413-1 Operations with local community engagement impact assessments Environmental Compliance Management Companies — Sustainability Report (Trial) Topic Disclosure Index
and development programs Social Welfare and Community Benefit
The company has not identified any operations with Dimension No. Topic Clause Location
413-2 Operations with significant actual and potential negative impacts on
actual or potential significant negative impacts on
local communities
local communities 1 Climate Response Articles 21-28 Addressing Climate Change
GRI 414: Supplier Social Assessment 2016
2 Pollutant Discharge Article 30 Pollutant Emissions
Supply Chain Security
414-1 New suppliers that were screened using social criteria
ESG Key Data Table 3 Waste Disposal Article 31 Waste Management
414-2 Negative social impacts in the supply chain and actions taken Supply Chain Security Ecosystem and Biodiversity 4 Ecosystem and Biodiversity Protection Article 32
Protection
Environmental
GRI 415: Public Policy 2016 Environmental Compliance
5 Environmental Compliance Management Article 33
Management
The core business of the company has limited
415-1 Political contributions
relevance to this information or it is of low materiality 6 Energy Utilization Article 35 Energy Utilization
GRI 416: Customer Health and Safety 2016 7 Water Resource Utilization Article 36 Energy Utilization
416-1 Assessment of the health and safety impacts of product and service
Product and Service Safety and Quality
categories 8 Circular Economy Article 37 Circular Economy
416-2 Incidents of non-compliance concerning the health and safety
ESG Key Data Table 9 Rural Revitalization Article 39 Social Welfare and Public Good
impacts of products and services
10 Social Contributions Article 40 Social Welfare and Public Good
GRI 417: Marketing and Labeling 2016
417-1 Requirements for product and service information and labeling Product and Service Safety and Quality 11 Innovation Article 42 Innovation-Driven Development
417-2 Incidents of non-compliance concerning product and service Product and Service Safety and Quality 12 Ethics of Science and Technology Article 43 Not Applicable
information and labeling ESG Key Data Table
Social 13 Supply Chain Security Article 45 Supply Chain Security
Product and Service Safety and Quality
417-3 Incidents of non-compliance concerning marketing communications
ESG Key Data Table 14 Equal Treatment of SMEs Article 46 Supply Chain Security
GRI 418: Customer Privacy 2016 Product and Service Safety and
15 Product and Service Safety and Quality Article 47
Quality
418-1 Substantiated complaints concerning breaches of customer privacy Data Security and Privacy Protection
Data Security and Privacy
and losses of customer data ESG Key Data Table 16 Data Security and Customer Privacy Article 48 Protection
GRI 419: Socioeconomic Compliance 2016 17 Employees Article 50 Employees
419-1 Non-compliance with laws and regulations in the social and The company has not violated laws and regulations
18 Due Diligence Article 52 ESG Governance
economic area in the social and economic sphere
19 Stakeholder Engagement Article 53 ESG Governance
Governance
Anti-Commercial Bribery and Anti-
20 Article 55 Business Ethics
Corruption
21 Fair Competition Article 56 Business Ethics
106 1072025 Sustainabil ity Report Feedback Form
Feedback Form
Dear Reader：
Thank you for reading this report. To continuously optimize the company's ESG management system enhance sustainable
development capacity and improve the quality of report disclosures we sincerely hope to hear your opinions and suggestions. We
earnestly ask you to evaluate this report despite your busy schedule. Your feedback will be an important basis for our improvement
efforts. Please help us complete the following feedback form and submit it in the designated manner. We express our most sincere
gratitude for your support and assistance!
Shandong Iron and Steel Co. Ltd. ESG Work Office
Contact Address: No. 99 Fuqian Street Gangcheng District Jinan
Telephone: 0531-77920789 Email: sdgt600022@126.com
Postal Code: 271104 Fax: 0531-77920798
1.Which category of stakeholder do you belong to
□ Shareholders and Investors □ Company Management □ Employees □ Customers □ Suppliers
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□ Others (please specify)
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Open-Ended Questions
1.What suggestions do you have for improving Shandong Steel's sustainable development and ESG efforts
2.What do you think are the shortcomings of this report
3.What additional sustainable development and ESG-related information do you think this report should disclose
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Sustainability Report
2025 Shandong Iron and Steel Co. Ltd
Sustainability Report
2025 Sustainability Report Shandong Iron and Steel Co. Ltd.
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