2024
Sustainability Report
Hengli Petrochemical Co. Ltd.Address: 31F Block B Victory Plaza No. 52 Xingang Road Renmin Road Subdistrict
Zhongshan District Dalian Liaoning Province China
Tel: +86 411 3986 5111
Website: https://www.hengli.com/invest/hlsh
Hengli Petrochemical Co. Ltd.AnnualTable of Contents
Table of Contents 02 Energy Conservation & 04 Insightful Innovation & Annex
Sustainable Green Digital Intelligence
Development Safeguard
About the Report 01 Climate Change Response 33 Optimizing R&D Systems 69 Annex I: Index of GRI Standards 87
Message from the Chairman 03 Environmental Compliance Management 39 Empowering Innovative Achievements 70 Annex II: Sustainability Reporting Index 88
About Hengli Petrochemical 05 Pollutant Emissions Control 41 Advancing Digital and Intelligent 73 Annex III: Summary of Key Performance 89
2024 at a Glance 09 Water Resource Management 47 Development Indicators
Sustainability Management 13 Clean Technological Opportunities 49 Intellectual Property Protection 74 Feedback 92
Ecosystem and Biodiversity Protection 50
01 Steady Operations & 03 Safe Operations & 05 People Orientation &
Sound Governance Sustainable Growth Social Contribution
Corporate Governance Structure 21 Product Quality and Safety 53 Human Resource Management 77
Compliance Risk Management 23 Customer Service Management 55 Employee Training and Development 79
Adhering to Business Ethics 25 Sustainable Supply Chains 56 Rural Revitalization 84
Communication with 27 Work Safety Management 59 Social Value Contribution 85
Stakeholders Chemical Safety 64
Data Security and Protection 66HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 01 I 02
Data Description
Report Preparation Statements Data sources used in this report include public data from government agencies the
actual operational data annual financial data as well as internal statistical reports of
the Company. The financial data in this report is expressed in RMB. For any discrepan-
About the Report cy between this report and the financial statements the financial statements shall prevail. This report is prepared in both Chinese and English. In case of any discrepan-
cy the Chinese version should prevail.This report is the Sustainability Report issued by Hengli Petrochemical Co. Ltd. to the
public. Prepared in accordance with the principles of objectivity standardization
transparency and comprehensiveness it provides a detailed disclosure of the Abbreviations
Company’s environmental social and governance (ESG) practices and performance
in 2024. Through this report Hengli Petrochemical aims to further strengthen In this report for the convenience of presentation and readability the following terms
engagement with all sectors of society enhance public and investor understanding have the meanings set forth below (unless the context otherwise requires):
and support and advance the Company’s sustainability initiatives.Abbreviations Reference
Scope of Report
Hengli Petrochemical the Company we or us Hengli Petrochemical Co. Ltd.Hengli Group Hengli Petrochemical Co. Ltd.This report focuses on “Hengli Petrochemical Co. Ltd.” and includes its branches and
subsidiaries. Unless otherwise specified the scope of this report aligns with the scope Hengli Chemical Fiber Jiangsu Hengli Chemical Fiber Co. Ltd.of the Company’s annual report. Kanghui New Material Kanghui New Material Technology Co. Ltd.Hengke Advanced Materials Jiangsu Hengke Advanced Materials Co. Ltd.Period of Time Hengli Petrochemical Chemical Hengli Petrochemical (Dalian) Chemical Co. Ltd.Hengli Petrochemical Refining Hengli Petrochemical (Dalian) Refining Co. Ltd.This report covers the period from January 1 2024 to December 31 2024 (the Hengli Petrochemical (Dalian) Hengli Petrochemical (Dalian) Co. Ltd.“Reporting Period”). To improve comparability and forward-looking insights certain Deli Chemical Fiber Jiangsu Deli Chemical Fiber Co. Ltd.sections include appropriate historical data or forward-looking statements. This
Susheng Thermal Power Suzhou Susheng Thermal Power Co. Ltd.report is released on an annual basis consistent with the financial year.Jiangsu Xuanda Jiangsu Xuanda Polymer Materials Co. Ltd.Basis of Preparation Hengli Petrochemical (Huizhou) Hengli Petrochemical (Huizhou) Co. Ltd.Hengli Petrochemical (Dalian) New Material Hengli Petrochemical (Dalian) New Material
Technology Co. Ltd.Shanghai Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 14 -
Sustainable Development Report (for Trial Implementation)
Shanghai Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 4 -
Preparation of Sustainable Development Reports Confirmation and Approval
Corporate Sustainable Development Disclosure Standards—Basic Standards (for
Trial Implementation) The Board pledges to exercise oversight over the contents of this report ensuring its
Guide to Corporate Social Responsibility Reporting in China (CASS-ESG 6.0 absence of any false records or misleading representations and assuming responsi-
published by the Chinese Academy of Social Sciences bility for its truthfulness accuracy and completeness.Sustainable Development Goals (SDGs) of the United Nations Access to the Report
Sustainable Development Reporting Standards (GRI Standards) of the Global Sustain-
able Development Standards Board This report is published in electronic format. You may access and download the digital
version from the Sustainable Development section of the Company’s official website
Guidelines for Climate-related Financial Disclosures issued by Task Force on (https://www.hengli.com/invest/hlshindex=4) or the Shanghai Stock Exchange
Climate-related Financial Disclosures (TCFD) website (www.sse.com.cn).HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 03 I 04
Message from
the Chairman
The year 2024 marks the 75th anniversary of the People’s Republic production technology achieving international leadership.of China and the 30th founding year of Hengli. Hengli Petrochemi- “Leader” title for four years with outstanding water efficiency Focusing on core industrial chain technologies the Company
cal has fully implemented the new development philosophy performance. Hengli Chemical Fiber was recognized as a actively collaborates with the Dalian Institute of Chemicalsteadfastly advanced industrial synergy to new heights accelerat- “Green Development Leader in the Yangtze River Delta Ecologi-Physics Chinese Academy of Sciences. The establishment ofed progress on the “green track” and taken multiple measures to cal Green Integration Demonstration Zone”. Following Hengli the “Hengli-DICP Research Institute” provides strong support
steadily pursue the “carbon peaking and carbon neutrality” goals Petrochemical (Dalian) Hengli Petrochemical Refining Hengke for rapid commercialization of research outcomes and injects
injecting strong momentum into the stable operation of national Advanced Materials Hengli Chemical Fiber and Hengli powerful momentum for future innovation.industry and economy. These achievements would not have been Petrochemical Chemical Kanghui New Material was designated
possible without the support of every colleague who cares about Strengthening Safety Defenses to Consolidate the Foundation as a national “Green Factory”. So far six subsidiaries of theand contributes to the Company’s development. On behalf of of Development. Safety is the cornerstone of company develop- Company have been recognized as national-level “Green Facto-Hengli Petrochemical I extend our sincerest gratitude to all! ment and fundamental to high-quality growth. We consistently ries”.uphold the principle of “life first safety foremost” strictly imple-
Adhering to Compliance as the Bottom Line and Deepening ESG Putting People First and Embracing Social Responsibility. ment production safety responsibilities and advance the HSEDevelopment. The Company continuously improves its gover- “Talents drive enterprise success; a strong workforce builds a system to build a comprehensive multi-layered safety manage-nance mechanisms and internal control systems strengthening strong company”. Talent is the primary resource for an ment framework. By strengthening risk source control continu-
the foundation of standardized governance. We enhance enterprise’s development. We strengthen team building unite ously improving intrinsic safety standards and implementing
standardized operations and investor relations management to employee efforts optimize talent development and stimulate rigorous safety measures we deepen hazard identification and
effectively communicate company value and increase market innovation. By improving recruitment mechanisms we attract rectification to prevent accidents. Regular fire drills and safety
recognition. Committed to shareholder returns we reinforce value outstanding talents to the Hengli family and enhance training training enhance employee awareness and emergency
management and maintain stable dividend distributions. By incentives to build a high-quality workforce. Simultaneously we response capabilities fortify the production safety line and
strictly adhering to business ethics strengthening risk control and actively contribute to communities foster harmonious coexis-safeguard the Company’s high-quality development. This
audit supervision we strive to create a clean efficient and compli- tence and support local prosperity. We firmly believe that only allows employees to work with peace of mind and society to
ant operational environment providing robust support for by putting people first can we unite hearts and achieve shared trust us with confidence laying a solid foundation for achieving
high-quality development. progress between enterprise and society.long-term stability and sustainable development.Innovation as the Engine to Inject Vitality into Development. “We Advancing with a Sense of Mission and Reaping the Rewards of Upholding Green Principles to Promote Circular Development.either don’t do it or we do it the best.” In 2024 the Company Perseverance. Looking ahead to 2025 Hengli Petrochemical will Green is the eternal foundation of enterprise development and
achieved breakthroughs in multiple technologies and products continue to steadfastly pursue the path of high-quality develop-our responsibility in ecological civilization construction. Weacross the entire industrial chain addressing industry bottlenecks ment comprehensively enhance ESG management consoli-consistently implement the philosophy that “clear waters andand filling market gaps. As of December 31 2024 Hengli date the “Heng” spirit and gather the “Li” strength continuous-lush mountains are invaluable assets” integrating green and
Petrochemical has obtained a total of 1676 patent authorizations. ly writing new chapters for Hengli Petrochemical and contribut-low-carbon practices throughout company strategy and opera-
Hengli Petrochemical Chemical’s high-density polyethylene pipe ing Hengli’s wisdom and strength to building a beautiful China!tions. Driven by technological innovation we optimize industrial
material 23050 obtained PE100 grade certification marking its structure develop circular economy and build resource-effi-
domestic leading level. Hengli Chemical Fiber achieved mass cient environmentally friendly models. By creating green supply
production of ultra-fine fiber 27D/144f with a single filament chains through process optimization technological upgrades
weight of only 0.18 g per 9000 m. Hengke Advanced Materials’ smart energy management and clean energy adoption weproject on “Industrialization of New Disperse Dyeable Polyester establish efficient resource utilization systems making green aand Its Fiber at Normal Pressure” passed the scientific and techno- distinctive feature of high-quality development. In 2024 three
logical achievement appraisal by the China National Textile and companies in Hengli (Dalian Changxing Island) Industrial Park Hengli Petrochemical Co. Ltd.Apparel Council with overall technology reaching international were consecutively awarded the national energy efficiency Fan Hongwei the Chairwoman
advanced levels and its 10000-ton continuous polymerizationHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 05 I 06
Fundamentals of Hengli Petrochemical
20 MTPA Refining CapacityBusiness Layout
Company Profile Headquartered in Dalian China Hengli Petrochemical
operates upstream with 20 million tons of refining 1.5
Established in November 2002 with a Changxing Island Nantong Suqian million tons of ethylene and 5 million tons of coal chemical 1.5 MTPA Ethylene Capacity
registered capital of RMB 7.04 billion Yingkou Huizhou and the Yangtze River capacity. It is the world’s largest PTA producer and is
Hengli Petrochemical Co. Ltd. operates Delta Integrated Demonstration Zone committed to building the world’s largest production
in a wide range of fields including oil aspiring to become a world-class full-in- capacity for functional fibers films and plastic new
refining petrochemicals aromatics dustry-chain supplier of new chemical materials with seven major production bases across
Registered Capital olefins PTA ethylene glycol civilian and materials. Hengli Petrochemical has China.industrial fibers engineering plastics deployed high-quality efficient produc- 5 MTPA Coal Chemical Capacity
polyester films and biodegradable tion capacities and supporting utilitiesRMB7.04 billion plastics covering both production and characterized by “large-scale installa-consumer needs for high-end chemical tions massive production capacityraw materials and various new chemical integrated structure advanced technol-materials. The Company is the first in the ogy environmental sustainable develop- 16.6 MTPA PTA Capacityindustry to achieve a fully integrated ment and comprehensive facilities”industrial chain from “crude oil-aromat- across the entire polyester and newics olefins-PTA ethylene glycol-polyes- chemical materials industrial chain.ter new materials” as a listed company. Whether in terms of single-unit scale
total capacity or production processes
The Company currently boasts four
Revenue the Company leads the industry. Pursu-global benchmark-level production ing a development path that balances
236.273 capacity clusters: a 20 million tons per RMB market differentiation high-end billion annum (MTPA) integrated refining and technology large-scale installations and Hengli (Yingkou) Industrial Park
chemical project a 5 MTPA modern coal integrated operations Hengli
chemical plant a 1.5 MTPA ethylene Petrochemical possesses a long-estab- Hengli (Huizhou) Industrial Park
project and seven industry-leading PTA lished market and technology innovation
plants with a combined capacity of 16.6 mechanism. Its R&D capabilities and new
MTPA. These assets have successfully product innovation lead the industry
addressed upstream “chokepoint” 1with four subsidiaries - Hengli Chemical
operational challenges breaking through 2Fiber Deli Chemical Fiber Hengke
raw material supply bottlenecks and Advanced Materials and Kanghui Newestablishing a modern industrial system Hengli (Dalian Changxing Material - certified as “Nationalintegrating “world-class petrochemical Island) Industrial ParkNet Profit High-Tech Enterprises”.refinery + modern coal chemical
7.053 facilities”. This system serves as a strate- “Building a world-class enterprise and RMB billion gic platform supporting the creating an internationally renowned 3“oil-coal-chemical integration” strategy brand”. Hengli Petrochemical continues 4while the Company maintains compre- to uphold the spirit of “craftsmen
5hensive production capacity layouts in building the nation” driving innovation 6
downstream advanced chemical materi- as its core engine. Focusing on its main
als sectors such as differentiated fibers business and leveraging upstream
functional films engineering plastics and resources and downstream market
biodegradable materials. This dual-track experience the Company vertically Hengli (Nantong) Industrial Park Hengli (Suqian) Industrial Park
structure creates a systematic industrial extends its industrial chain layout in newframework featuring both a “large-scale chemical materials serving nationalchemical platform” and “new material advanced manufacturing and consump- 6extension” capabilities. With over 30000 tion upgrades. Through breakthroughs inemployees and a “National Certified core technology manufacturing process-Enterprise Technology Center” the es and scale advantages Hengli
Company’s competitiveness and product Petrochemical promotes high-quality
brand value rank among the top in the development in the real economy
global industry. advancing new industrialization and Hengli (Suzhou) Industrial Park Hengli (Yangtze River Delta) Industrial Park
steadfastly pursuing the “Hengli Dream”
Headquartered in Dalian China Hengli of industrial patriotism.Petrochemical operates seven produc-
tion bases across Suzhou DalianHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 07 I 08
Industrial Layout
From “a drop of oil” to “a strand of fiber” we have achieved full industrial chain development
with a “platform + new materials” approach. Remaining firmly rooted in our core business
and committed to real economy development we began in the polyester fiber industry and
progressively addressed industry “chokepoint” challenges. We continue to expand in fiber
film plastic and other new chemical materials while advancing toward an integrated
upstream petrochemical refining and coal-chemical platform. This has established our
systematic industrial structure featuring a “large-scale chemical platform” and “new materi-als extension”.Refining Coal Chemical Polyester New
Segment Segment PTA Segment Materials Segment
Refined Oil Products (Gasoline Diesel Jet Fuel)
Civil and Industrial Filament "High-end Polyester" Industrial Chain
BOPET Films Functional Films (e.g. MLCC films) "Functional Films" Industrial Chain
Heavy Reformate PX PTA
Naphtha Aromatics Lithium Battery Separator Films Process Protection Films "New Energy Materials" Industrial Chain
Petroleum Benzene
PBS PBAT Biodegradable Plastics Modified Biodegradable Plastics
Light PBT Resin Modified PBT
Naphtha
Styrene PS
"Biodegradable Materials" Industrial Chain
Crude Oil Ethylene Glycol ABS
Ethylene
Ethane HDPECracking BDO
Maleic Anhydride
Polypropylene
Succinic Acid
Butadiene
PTMEG "High-end Fiber" Industrial Chain
n-Butane
Adipic Acid
Propylene Acetone Isopropanol "Engineering Plastics" Industrial Chain
Dehydro- Polypropylene Bisphenol APropane genation Phenol
PC
Isobutane Chemicals MTBE
Formaldehyde POM
Iso-octane
DPC
Methanol Acetic Acid
Chemical Coal-to-
Coal Hydrogen Hydrogen Ethylene Oxide DMC "New Energy Materials" Industrial Chain
Oxygen Ethanolamine Ethylenediamine "High-end Fine Chemical Intermediates" Industrial Chain
Air Liquid Argon
Separation Synthetic
Ammonia Nitric AcidNitrogenHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 09 I 10
2024 at a Glance
Performance Highlights
Steady Operations & Sound Energy Conservation & Sustainable Safe Operations & Sustainable Growth Insightful Innovation &
Governance Green Development Digital Intelligence Safeguard
100 Carbon emission targets set: Over research visits received By 2026 energy-saving projects are expected to
1 0 information security and privacy protection violation 3779 R&D personnelreduce emissions by no less than million tons of
3 earnings briefing sessions held CO? cumulatively RMB 530 million invested in workplace safety RMB 1.703 billion in R&D investment
Carbon emission intensity
100% (24.20% year-on-year growth) employee coverage in business 228.21 tons CO? equivalent/million RMB
ethics training
Water consumption intensity 3776 chemical safety drills conducted 2 postdoctoral research stations
100% business ethics audits across all 3727.37 tons/million RMB
operational locations 100% customer complaints resolved 1676 cumulative patents held
Annual water savings from reclaimed water reuse
equipment
34.2737 Product qualification rate million tons
99.63% People Orientation & Social
Reclaimed water reuse rate Contribution
75.3%
RMB 715 million spent on employee benefits
General waste disposal rate
99.99% 1555 employee volunteers participating
in community activities
Total environmental protection investment Occupational health checkup rate
375 million RMB 100%
Renewable energy consumption Total employee training hours
324023.02 tons of standard coal 424600 hoursHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 11 I 12
Honors and achievements in 2024 2
Honor Time Honor Winner Honor Name Awarding Authority 1 3
January 2024 Hengke Advanced Materials Jiangsu Provincial Labor Brand Jiangsu Provincial Department of Human Resources
and Social Security
Three products obtained carbon
April 2024 Kanghui New Material footprint certification and obtained the Green Product Service Voluntary Certification Center
Product Carbon Footprint Certificates
Green Development Leader in the Jointly issued by Jiangsu Ecology and Environment
June 2024 Hengli Chemical Fiber Yangtze River Delta Ecological Green Department Shanghai Ecology and Environment Bureau
Integration Demonstration Zone Zhejiang Ecology and Environment Department and
Demonstration Zone Executive Committee
Hengli Petrochemical
Chemical Hengli
July 2024 Listed in the Energy Efficiency Leader
Ministry of Industry and Information Technology National
Petrochemical Refining and Enterprises in Key Industries Development and Reform Commission and State
Hengli Petrochemical Administration for Market Regulation
(Dalian)August 2024 Jiangsu Xuanda Obtained the “GRS (Global Recycled Textile ExchangeStandard)” Certification
August 2024 Jiangsu Kanghui Jiangsu Jiangsu Provincial Intelligent Jiangsu Provincial Department of Industry and
Xuanda Manufacturing Workshop Information Technology
Hengke Advanced Materials
September 2024 Jiangsu Provincial Five-Star Cloud Jiangsu Provincial Department of Industry and Jiangsu Kanghui New Enterprise Information Technology
Material
Five-Star Gold Award for Social
September 2024 Hengli Petrochemical Responsibility of China’s Manufacturing Times Responsibility 40 Forum Think Tank
Listed Companies
“Contract-Honoring & Creditworthy”
October 2024 Deli Chemical Fiber Suqian Enterprise Credit Management Association
Enterprise
Kanghui New Material Liaoning Provincial Single Champion Liaoning Provincial Department of Industry and October 2024
Manufacturing Enterprise Information Technology
November 2024 Hengli Chemical Fiber Jiangsu High-Reputation Trademark Jiangsu Trademark Association
Jiangsu Kanghui High-tech Enterprise Office of the Leading Group for National High-Tech November 2024
Enterprise Certification Management
National AAA-Level Certification for
Jiangsu Kanghui Nantong Kanghui Zhongguancun IT and Real Economy Integration
45
November 2024 Integrated Industrialization and Development Alliance
Informatization Management System
Hengli Petrochemical Best Practice Case for Listed Company November 2024 China Association for Public Companies
Sustainable Development
November 2024 Hengli Petrochemical Best Practice Case for Listed Company China Association for Public Companies
Board of Directors 1 “GRS Global Recycled Standard” 2 Best Sustainable Develop-
Certification ment Practice Certificate for
December 2024 Kanghui New Material National Green Factory Ministry of Industry and Information Technology Listed Companies
“Jiangsu Premium” Brand Certification Jiangsu Quality Development Committee Office and December 2024 Deli Chemical Fiber
other departments
Hengke Advanced Materials Jiangsu Provincial AAA-Level Quality Jiangsu Provincial Market Supervision Administra-
3 National AAA-Level Certification for 4 Five-Star Gold Award for
December 2024
Credit Enterprise tion and Development & Reform Commission Integrated Industrialization and Social Responsibility of
Informatization Management China’s Manufacturing
Jiangsu Kanghui Jiangsu Provincial Postdoctoral Jiangsu Provincial Department of Human Resources
System Listed Companies
December 2024
Innovation Practice Base and Social Security
Listed in the 2024 Key Water-Using Ministry of Industry and Information Technology
December 2024 Hengli Petrochemical Refining Enterprises & Industrial Parks Water Ministry of Water Resources National Development 5 Jiangsu High-Reputation
Efficiency Leader List and Reform Commission and State Administration Trademark Certificate
for Market RegulationHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 13 I 14
Sustainability Management Sustainability Governance Framework
Hengli Petrochemical actively practices sustainability concepts continuously improves sustainability governance frameworks Hengli Petrochemical has established a three-tier ESG governance structure covering decision-making management and
and management systems and is committed to deeply integrating sustainability into company strategy decision-making execution layers. The Board of Directors serves as the highest decision-making body with the Strategy and Sustainability
and daily operations. The Company consistently addresses and responds to stakeholder expectations strengthens commu- Committee implementing coordinated ESG management mechanisms. This framework develops sustainability plans
nication and collaboration with value chain partners and society and jointly promotes the achievement of sustainability conducts regular evaluations reviews progress and ensures alignment with internal sustainability principles and objectives.goals.Sustainability Strategy
Decision- ● Approve ESG strategies plans and goals
Making Level Board of Directors proposed by the ESG Task Force
To realize Hengli Petrochemical’s long-term development objectives the Company deeply embeds sustainability across ● Supervise the Company’s ESG performance
every segment of its value chain. By aligning its operations with the UN Sustainable Development Goals (SDGs) it actively comprehensively and assume its accountability
drives coordinated economic environmental and social progress making lasting contributions to a green sustainable
future. The Company focuses its sustainability efforts on five key areas: Steady Operations & Sound Governance; Energy ● Review annual ESG reports and other major
Conservation & Sustainable Green Development; Safe Operations & Sustainable Growth; Insightful Innovation & Digital ESG-related matters
Intelligence Safeguard; People Orientation & Social Contribution
Steady Operations & Sound Governanc Strategy and Sustainability
Committee ● Lead and execute ESG initiatives
Management ESG Task Force ● Propose ESG strategies plans and goals
Level
● Identify and manage ESG risks and opportunities
CEO Secretary of Board of
Directors and Industrial Park Heads ● Monitor ESG performance and goal implementa-
tion
People Orientation & Energy Conservation &
Social Contribution Sustainable Green
Development
Sustainability
Strategy
ESG Executive Task Force ● Communicate with stakeholders identify materi-
al ESG topics and organize ESG training programs
Implementation Office of Board of Directors
Level Functional Department Heads of ● Organize the preparation of annual ESG reports
Subsidiaries and other ESG disclosures
● Oversee topic-specific management
Insightful Innovation & Safe Operations & ● Organize the development of specialized ESG
Digital Intelligence Safeguard Sustainable Growth work plans
Hengli Petrochemical Sustainability ● Coordinate and implement ESG initiatives
Governance Framework ● Monitor and report ESG indicators regularlyHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 15 I 16
SDGs Initiatives of the Enterprise Communication with Stakeholders
The Company aligns its development philosophy with the UN 2030 Sustainable Development Goals (SDGs) establishing a The Company places high importance on communication and engagement with stakeholders. We continuously expand and
comprehensive ESG management framework to advance its sustainability strategy and contribute to ESG progress through improve communication channels and frequency with stakeholders refining internal sustainability management through
concrete actions. feedback to gain their support and trust thereby driving continuous improvement in social responsibility management.Dimension Chapters Hengli Petrochemical’s SDG-aligned measures SDGs
Stakeholders Topics of Concern Communication Channels and Methods
● Analyze climate risks and opportunities Company announcements
implementing mitigation and adaptation Improvement of corporate governanceShareholders and Compliance information disclosureTimely information disclosure
measures Company website disclosuresInvestors Sustainable development capabilities Annual ESG report release
Performance growth and returns
Energy Conservation & ● Enhance carbon emission management Improve sustainable development
Low-carbon Sustainable Green
Mission (E) ● Standardize water resource management Diversity and anti-discriminationDevelopment Upholding the rights and interests of employees Employee feedback collection and response
● Strengthen pollution prevention and control Employees Broaden career development pathways Employee welfare distribution
● Develop clean technologies Comprehensive compensation and benefits
Regular health checkups
Occupational health and safety Emergency response drills
● Optimize energy management systems
Satisfaction surveys
Innovation and R&D
Customer complaint channels
Customers High-quality products Supplying high-quality service
● Strengthen chemical safety management After-sales supportSafety Industry exchange meetings
Management Safe Operations & ● Improve safety production management
Sustainable Growth Compliant operation Complying with laws and regulations(S) ● Building sustainable supply chains Government and Pay taxes in accordance with the law Proactive tax payment
Risk management Strengthen internal controls
Regulatory Agencies Business ethics Government supervision
Anti-monopoly measures Regular disclosures
● Promote digital and intelligent transfor-
mation Anti-bribery measuresS&T Insightful Innovation & Uphold business ethicsSuppliers and Partners Anti-monopoly measures Transparent procurement
Innovation Digital Intelligence ● Contributing to industry development Integrity and cooperation Jointly fulfill social responsibilities
Mutual benefit
(S) Safeguard ● Strengthen industry-academia-research
Environmental compliance
collaboration Support public welfare and charity Public benefit activities
Communities Contributing to community development Provide employment opportunities
Energy conservation and emission reduction Strengthen pollution prevention
● Carry out public welfare volunteer
activities
● Focus on developing industrial assistance Materiality Assessment
programs
Social ● Improve employee health and safety Hengli Petrochemical continuously improves the process of identifying and assessing material sustainable development topics.Responsibility People Orientation & systems By regularly aligning with the Company’s development goals and business direction we understand stakeholder demands
(S) Social Contribution ● Conduct skills enhancement training through diversified channels analyze and evaluate sustainable development topics and respond promptly and effectively to
stakeholder expectations and opinions striving to meet their needs and achieve mutual benefits.● Pay attention to female employee rights
● Enhance talent recruitment systems
● Establish open employee feedback Management of Materiality
channels
Material topics serve as focal points for the Company’s sustainable development management aiming to better and fully
● Strengthen compliance risk management understand the concerns of internal and external stakeholders thereby integrating the Company’s sustainable development
● Adhere to standardized governance management practices with stakeholder demands and expectations.through the General Meeting of Shareholders In 2024 we followed the material topic assessment process of “stakeholder communication - identifying a list of sustainableCorporate
Steady Operations & Board of Directors and Board of Supervisors development topics - stakeholders’ engagement in evaluation - establishing a material topic matrix - topic confirmation and GovernanceSound Governance ● Improve ESG governance structure reporting” to conduct stakeholder research in an orderly manner. We systematically identified key ESG topics and future (G) development directions for the Company continuously using a “dual materiality” approach to assess topics from both “finan-● Conduct regular business ethics audits cial importance” and “impact importance” perspectives and mapped an ESG material topic matrix:
● Enhance anti-corruption compliance
managementHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 17 I 18
Hengli Petrochemical ESG Material Topic Matrix
Communications Maintain regular communication with investors customers government agencies and other Moderate Materiality High Materiality
with stakeholders recording their concerns and specific content and responding to their demands.stakeholders 14 6 Environment
Social
29
8
26 Governance
413
dentifying a Based on the Company’s business development strategy and industry characteristics and 20 27
list of considering domestic and international regulatory policies global and local ESG standards 9
sustainability mainstream ESG rating requirements peer benchmarking and stakeholder feedback we 7 5 30
topics identified 30 potential ESG topics with financial or impact importance through systematic 23 25
evaluation and analysis providing a scientific basis for formulating the Company’s ESG strate- 15 24
gy. 12 11
110
28
The Company prepared stakeholder questionnaires based on the list of potential material topics 19 16
Stakeholders’ targeting: Shareholders and investors employees customers government and regulatory
engagement 17agencies suppliers and partners communities etc. Through stakeholder surveys and expert
in evaluation scoring results the Company assesses the impact significance and financial materiality of each 2
issue. In 2024 the Company collected a total of 1519 questionnaires. 3
21
22
Establishing Based on survey results combined with regulatory disclosure requirements sustainable
a material development practices of the Company industry characteristics etc. the Company conducts 18
topic matrix quantitative analysis on the assessment results of impact significance and financial materiality
presenting the overall priority of each issue through a matrix format. We have identified a total
of 21 topics with dual high significance and 8 topics with dual medium significance.Low Materiality
Topic The Company’s management level reviews the annual material topic assessment results
confirmation incorporates internal and external feedback to confirm the significance and impact of identified
and reporting issues and will truthfully reflect the Company’s performance on relevant topics in reports. Financial Materiality
High-materiality Issues
6. Toxic Emissions and Waste 11. Supply Chain Security 29. Anti-Bribery and Anti-Corruption
8. Energy Utilization 14. Chemical Safety 26. Compensation
4. Pollutant Emissions 13. Safety and Quality of Products and 27. Tax Transparency
Services
5. Water Resource Utilization 30. Anti-Unfair Competition
15. Data Security and Customer Privacy
7. Environmental Compliance Management Protection 23. Ownership and Control Rights
9. Circular Economy 20. Innovation-Driven Development 24. Board of Directors
1. Carbon Emission 12. Employees 25. Accounting
10. Clean Technological Opportunities
Medium-materiality Issues
2. Product Carbon Footprint 16. Responsible Investment 28. Due Diligence
3. Environmentally Impactful Financing 17. Communications with Stakeholders
19. Contribution to Society
21. Equal Treatment of Small and
Medium-Sized Enterprises
22. Financing Availability
Impact Materiality01
Corporate Governance Structure 21
Compliance Risk Management 23 Steady Operations &
Adhering to Business Ethics 25
Communication with Stakeholders 27 Sound GovernanceHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 21 I 22
Corporate Governance Structure Case
Hengli Petrochemical Wins “Best Practice Case for Listed Company Board of Directors”
Hengli Petrochemical actively practices the concept of sustainable development by continuously improving its sustainability gover-
nance framework and management system. The Company is committed to deeply integrating the principles of sustainability into its
corporate strategy business decision-making and daily operations. Hengli Petrochemical remains attentive to the expectations and The Company’s Board of Directors and management level have always prioritized company
demands of all stakeholders continuously strengthening communication and collaboration with value chain partners and broader governance and internal control strictly complying with laws regulations and industry
society to jointly advance the achievement of sustainable development goals. standards continuously improving governance levels and committing to standardized
operations and ethical management. These efforts have laid a solid foundation for sustain-
Governance Model able high-quality development and empowered the Company’s pursuit of excellence. With innovative measures and outstanding performance in board operations HengliPetrochemical was honored with the “2024 Best Practice Case for Listed Company BoardHonored with the “2024 Best Practice CaseThe Company has established a “Three-Meeting One-Level” governance structure strictly adhering to the Company Law of of Directors”. for Listed Company Board of Directors”
the People’s Republic of China (hereinafter referred to as the “Company Law”) the Securities Law of the People’s Republic of
China and the Shanghai Stock Exchange Listing Rules and other laws and regulations. It continuously improves management During the reporting period the Company organized training sessions for all directors supervisors and senior management on topics
systems for the general meeting of shareholders the Board of Directors and the board of supervisors forming a company such as financial fraud risk prevention warning cases of illegal shareholding reductions interpretation of M&A and restructuring
governance mechanism with clear powers and responsibilities effective checks and balances scientific decision-making and policies market value management and public opinion management organized by the Dalian Listed Companies Association. Simul-
coordinated operations among power decision-making supervisory and management bodies. Sound company governance taneously independent directors participated in specialized training sessions organized by the Shanghai Stock Exchange including
provides a strong guarantee for the Company’s steady development and effectively protects the legitimate rights and interests “Follow-up Training for Independent Directors” and “Key Points and Suggestions for Anti-Fraud Duties of Independent Directors ofof the Company and its shareholders. Listed Companies”. These training sessions effectively enhanced the governance team's understanding of the latest regulatory
During the reporting period the Company’s governance status complied with relevant laws regulations and normative requirements in the capital market improved their awareness of standardized operations and competency in performing their duties
documents for listed companies. and laid a governance foundation for the Company’s high-quality development.Note: For detailed information on Hengli Petrochemical’s “Three-Meeting One-Level” governance structure please refer to the 2024 Annual Report.Remuneration Management
Board Diversity The Remuneration and Appraisal Committee under the Board of Directors continuously improves the remuneration manage-
ment for the Board of Directors Board of Supervisors and management team establishing a scientific and effective incentive
The Company fully recognizes the important role of board diversity in promoting sustainability and enhancing overall company and restraint mechanism. The Remuneration and Appraisal Committee reviews the directors’ remuneration plan and senior
strength. Adhering to the principle of diversity the Company selects board members by comprehensively considering factors management’s remuneration allocation scheme which are then submitted to the Board of Directors for approval. Directors’
such as gender age professional knowledge and industry experience resulting in a professional structure that brings diversi- remuneration is subject to approval by the General Meeting of Shareholders. Information on relevant senior management
fied experience and expertise to contribute positively to the Company’s comprehensive decision-making. remuneration is publicly disclosed.To promote the implementation of sustainable development initiatives the Company sets scientific performance indicators in
Risk Management Expert key areas of focus including but not limited to carbon emissions water resource management quality management and
business ethics and links ESG performance indicators with the remuneration of relevant directors and senior management to
At the level of the Board of Directors Liu Jun serves as the Company’s Risk Management Expert. With deep expertise in risk facilitate normalized ESG management. The Company evaluates directors supervisors and senior management in accor-
management and extensive industry experience the Expert supervises the Company’s comprehensive risk management dance with the Remuneration Management System of Hengli Petrochemical Co. Ltd. and determines remuneration allocation
system to ensure the establishment and operation of appropriate risk oversight management and internal control mecha- based on evaluation results.nisms promoting the Company’s long-term strategic goals.
2024 Remuneration of Hengli Petrochemical Senior Management Personnel:
Key Performance
Fixed Remunera- Variable Remuneration Total Remuneration
Board members: 8 directors including 1 female director and 3 independent directors Name Position tion Before Tax Before Tax Before Tax(RMB 10000) (RMB 10000) (RMB 10000)
（with rich professional experience and backgrounds in petrochemicals financial auditing law and risk manage- Wang Zhiqing Director General Manager 108.00 72.00 180.00ment）
Li Feng Director Deputy General Manager Secretary of 118.79
Board of Directors 92.66 26.13
Percentage of Indepen-
Committee Composition of Directors Liu Dunlei Director Deputy General Manager 104.15 44.64 148.79dent Directors (%)
Audit Committee Wu Yongdong (Chairperson) Liu Jun Gong Tao 66.67% Liu Xuefen Director Deputy General Manager 115.38 42.68 158.06
Nomination Committee Liu Jun (Chairperson) Xue Wenliang Liu Dunlei 66.67% Liu Qianhan Deputy General Manager 79.76 29.50 109.26
Remuneration and Assessment Zhang Wenyu Deputy General Manager
Committee Xue Wenliang (Chairperson) Wu Yongdong Li Feng 66.67%
52.2919.3471.63
Strategy and Sustainable Development Note: Variable remuneration is determined based on the completion of sustainable development assessment indicators including but not limited to carbon Fan Hongwei (Chairperson) Xue Wenliang Li Xiaoming 33.33%
Committee emissions water resource management quality management and business ethics.Note: For details on the operations of the board’s specialized committees please refer to the 2024 Annual Report.HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 23 I 24
Compliance Risk Management Hengli Petrochemical continuously enhances internal control and risk management capabilities regularly study-ing and deploying key oversight tasks to achieve full coverage of oversight over directors supervisors seniorStrengthening management and all employees. The Company’s internal audit is divided into three phases: “year-start planningInternal Audit - mid-year implementation and reporting - year-end feedback and review”.Deepening Risk Management Processes
At the beginning of each year the Internal Audit Department is responsible for formulating
The Company continuously improves its institutional system enhances internal control and risk management capabilities the annual audit work plan and submitting it to the Chairman for review. The scope of internal
strengthens standardized management firmly adheres to institutional red lines and risk baselines ensures alignment between audit covers 100% of Hengli Petrochemical’s operating sites including procurement sales Year-start
business development and risk control capabilities and guarantees sustained stable and healthy company development. The production safety and environmental protection and business ethics in various industrial planning
Company has established a relatively sound and comprehensive accounting system financial management and risk control parks ensuring that each subsidiary of Hengli Petrochemical receives internal audit at least
and major decision-making internal control management systems which are effectively implemented and meet the Compa- once a year.ny’s current development needs. Simultaneously the Company will continuously update and improve relevant systems based
on development conditions to ensure healthy and stable operations. The Internal Audit Department audits each industrial park according to the annual audit work
plan and promptly issues audit reports and targeted management optimization suggestions
Internal Control System Construction based on the audit results. The work plan of the Internal Audit Department can be adjusted in Mid-year a timely manner based on actual conditions. For key projects in the actual operations of Hengli
implementation Petrochemical as well as in the event of reported issues the Internal Audit Department
and reporting organizes special audits and continuously follows up on rectification work.During the reporting period the
Company strictly complied with Internal Control System
various laws and regulations The Internal Audit Department continuously follows up on the progress of implementing
such as the Company Law rectification measures by the audited work hours and summarizes the annual audit results
Basic Norms for Enterprise and reports them to the Chairman at the end of each year.Internal Control Shanghai Stock Year-end
Exchange Listing Rules and General Meeting of feedback and
Self-regulatory Guidelines of Shareholders review
Shanghai Stock Exchange for
the Companies Listed on the
STAR Market of the Shanghai Management of Related Party Transactions
Stock Exchange No.1 –
Standardized Operation as well
as the Company’s internal The audit evaluation results will be incorporated into the annual assessment of each subsidiary. In order to regulate related
control systems to regulate Board of Directors Board of Supervisors party transactions (RPTs) and avoid conflicts of interest the Company has formulated the Related Party Transaction Manage-
operations and manage risks. ment System (Revised in 2022) which clearly stipulates that RPTs should not harm the legitimate interests of the Company
The Company has established a Responsible for establishing and effectively Responsible for supervising the and non-connected shareholders and ensures that transaction behaviors follow the principles of fairness impartiality
rigorous internal control implementing the internal control system internal control system established and openness and equal and paid with fair and reasonable pricing. When the Board of Directors/General Meeting of Shareholders
management system continu- in accordance with the provisions of the implemented by the Board of enterprise internal control standard system Directors. deliberates on RPT matters the connected directors/connected shareholders must withdraw from voting and may not
ously optimizing and improving and evaluating its effectiveness. exercise voting rights on behalf of other directors/shareholders reducing the impact of conflicts of interest on judgment or
internal control systems based
on industry characteristics and independence. At the same time the Board of Supervisors the Audit Committee of the Board of Directors and independent
actual business operations. This directors strengthen supervision and review of RPTs to ensure their compliance and fairness.provides reasonable assurance During the reporting period there were no instances of the Company’s directors supervisors or senior management using
for the legality and compliance Audit Committee RPTs to harm the interests of the Company or its shareholders.of the Company’s operations
asset security and the authen- Note: For details on related parties and RPTs please refer to the 2024 Annual Report.Responsible for supervising and evaluating
ticity and completeness of the Company’s internal audit system and its
financial reports and related implementation and control management.information promoting overall
improvements in operational Tax Transparency
efficiency and effectiveness and Hengli Petrochemical Internal Control System
safeguarding the interests of the The Company strictly abides by the Law of the People’s Republic of China on Enterprise Income Tax and the
Company and all shareholders. Pay Taxes Law of the People’s Republic of China on Tax Collection and Administration and other relevant laws and
in Accordance regulations as well as applicable laws in overseas operating locations conscientiously fulfills its tax obliga-
The Company regularly engages external auditors to conduct annual audits of internal controls resulting in an Internal Control with the tions and establishes sound tax management systems and processes clarifying the responsibilities and
Audit Report.The Company’s internal control system is sound reasonable and effectively implemented without any material Law authorities of each department in tax management to ensure standardized and standardized tax manage-
deficiencies. For more information on the Company’s internal control and internal control audit please refer to the 2024 ment. The Board of Directors serves as the highest management level to review the Company’s tax strategy.Annual Report of Hengli Petrochemical Co. Ltd. or company announcements.Tax Risk In daily tax-related matters tax management personnel at all levels conduct reviews and external tax and
Preven- financial intermediary agencies are hired to provide consulting and guidance effectively reducing tax-related
tion risks. To ensure tax compliance reduce tax risks and optimize tax management in 2024 the Company hired
external tax and financial intermediary agencies to conduct tax health checks for the past three years.HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 25 I 26
Tax risk self-inspections are carried out on a regular basis to timely identify and correct potential tax risk issues. Tax supervision is Hengli Petrochemical attaches great importance to the creation of a clean culture and the building of compliance capabilities
embedded in daily management making tax management an important part of the Company’s daily operations. The director in and is committed to ensuring fair competition. Key positions and key links personnel sign the Letter of Responsibility for Clean
charge of the finance and tax line and the person in charge of accounting will manage and supervise tax-related matters before Business Management with the Company to demonstrate their understanding and compliance with the Company’s business
during and after the events. ethics standards. All senior management personnel and all employees (including interns) are required to participate in
The Company continues to strengthen the construction of its tax team including departmental tax-themed learning organizing business ethics and anti-corruption related training every year.external on-site training and online training promoting a good learning atmosphere internally enhancing the compliance awareness
of relevant personnel in paying taxes in accordance with the law and enhancing the compliance ability of tax management.Company-wide Business Ethics Training
Key Performance
0 During the reporting period Hengli Petrochemical conducted business ethics education and training for all senior manage-There were major tax-related litigation and arbitration matter. ment personnel and all employees (including interns) of its subsidiaries.
For the Company’s directors the Company conducts anti-corruption policy promotion and training through annual summa-
Case ries; for management key positions and ordinary employees (including interns) the Company conducts targeted special
training activities such as clean business practices themed training financial training and management training and
Hengli (Huizhou) Industrial Park Held “Talking about New Quality Productivity” Thematic Activity for promotes anti-corruption policies on job-related corruption bribery acceptance and other behaviors.Tax and Enterprise Youth
The event was jointly organized by the Daya Bay District Taxation Case
Bureau and Hengli Petrochemical (Huizhou) and other companies.During the event tax youth provided targeted guidance on tax incen- Hengli (Dalian Changxing Island) Industrial Park Carried out Clean Compliance Education
tives that encourage technological innovation and support enterprise
development based on the actual situation of the enterprises and In December 2024 Hengli (Dalian Changxing Island) Industrial Park carried out a one-month clean compliance educa-
answered tax-related questions raised by the youth representatives of tion. Enterprise leaders finance procurement main production equipment and ordinary employees (including interns)
the enterprises in detail. This event built a tax-enterprise youth all received clean compliance education watched the anti-corruption themed documentary Continuous Efforts In-depth
exchange platform in the form of team building proactively delivering Promotion and consciously accepted ideological education on party discipline and national laws profoundly warning
precise services to enterprises and contributing youth wisdom to cadres and employees to be awe-inspiring cautious and abide by the bottom line. All employees of Hengli Petrochemi-
fostering the development of new quality productivity. Tax and Enterprise Youth Exchange Tax Incentives cal (including interns) participated in the training online throughout the process.Adherence to Business Ethics
Business Ethics System Construction
Hengli Petrochemical has always attached great importance to integri-
ty building and anti-corruption strictly abides by relevant laws and Key Performance
regulations issued the Business Ethics and Anti-Corruption System
Statement and formulated the Anti-Corruption and Anti-CommercialBribery Management System and other regulations adhering to a “zero 100% business ethics auditstolerance” policy towards corruption. As the highest management level
for business ethics matters the Audit Committee supervises and across all operational locations
Clean Business Practices Thematic Education and Training
regularly reviews the Company’s business ethics and anti-corruption
related matters and leads the Company to conduct a business ethics Case
audit once a year.The Internal Audit Department formulates a detailed annual internal Hengli (Huizhou) Industrial Park Carried out Internal Anti-Corruption
audit plan every year and carries out anti-corruption related audit Key Performance
activities for major business links such as procurement sales logistics In October 2024 Hengli (Huizhou) Industrial Park held an important meeting on
warehousing quality inspection and engineering construction. During refined management and anti-corruption which was attended by managers at
the reporting period we conducted audit projects related to business 100% of suppliers have signed the level of team leader and above. The lecture focused on the two themes of
ethics such as audits of construction projects under construction how to prevent duty crimes of enterprise employees and strengthen internal
accounts receivable and procurement activities in various industrial the Letter of Responsibility for Clean information security management aiming to further consolidate the manage-
parks with a rectification rate of 89% for identified issues and will Business Practices. ment foundation accelerate the process of refined management strengthen
continue to promote rectification work. During the reporting period internal anti-corruption and ensure the sustainable and healthy development
the Company was not involved in any anti-corruption related of the Company. Internal Anti-Corruption Meeting
litigation.The Company requires all suppliers to sign the Letter of Responsibility Note: For more information on business ethics please refer to the “Sustainable Development Column” at https://www.hengli.com/invest/hlshindex=4
for Clean Business Practices and sets relevant clauses in the contract
requiring suppliers to strictly adhere to the bottom line of anti-corrup-
tion and maintaining integrity.HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 27 I 28
Whistleblower Protection Mechanism Communication with Stakeholders
The Company’s Internal Audit Department is responsible for the overall work of clean reporting. After receiving a report the
Internal Audit Department conducts a preliminary assessment and classifies and handles it according to the department’s
jurisdiction the nature of the reported matter the degree of violation and whether it meets the verification conditions. After Information Disclosure Channels
preliminary verification by the investigation team a handling opinion is formed. Meanwhile the Company ensures that the
relevant handling results are promptly communicated to the whistleblower and continuously followed up. The Company has formulated the Information Disclosure Management System the Accountability System of Major Errors in
Annual Report Information Disclosure and other systems. In accordance with the information disclosure process it carries out
various information disclosure with high quality follows the principles of truthfulness accuracy completeness timeliness and
fairness guarantees the timeliness and effectiveness of announcement disclosure and safeguards the legitimate rights and
Key Nodes of the Whistleblowing Process (Strict Confidentiality of
Whistleblower Information Throughout the Process) interests of all shareholders. During the reporting period the Company achieved zero errors in information disclosure.Key Performance
Whistleblowing Whistleblowing Preliminary
occurrence receipt assessment During the reporting period the Company disclosed 68 interim announcements and 4 periodic reports.The Internal The Company’s information disclosure for 2023-2024 received the highest rating of A from the Shanghai Stock The whistleblower
Audit Depart- After receiving a whistleblowing report the Internal reports the matter Exchange.ment promptly Audit Department classifies and handles it based on through whistleblow-
receives and the department’s jurisdiction the nature of the ing channels
registers reported matter the degree of violation and whether
whistleblowing it meets the verification conditions. After preliminary Communication with Investors
matters verification a preliminary handling opinion is formed
The Company attaches great importance to investor relations management revises and improves the Investor Relations
Report Assistance in In-depth
Management System (Revised in 2023) continuously carries out investor relations management strengthens continuous
formation investigation investigation positive and effective communication mechanisms with investors institutions analysts news media and other market forces
actively responds to reasonable demands of shareholders continuously promotes the establishment of a long-term stable
and mutually trusting relationship between the Company and investors builds an efficient and transparent communication
Upon completion of the The Internal Audit Department has the The Internal Audit Department platform enhances investors’ understanding and recognition of the Company and builds consensus.investigation the Internal right to require departments and personnel conducts in-depth investigations into
Audit Department involved in the investigation to provide whistleblowing matters through
compiles a written report explanations and clarifications on matters methods such as visits and surveys Company Official
and handling opinions related to the investigation. Meanwhile reviewing materials from the Website Official
and reports them to the external audit institutions or other investigated units and departments Wechat Public
Company’s Chairman and institutions and functional departments and materials provided by whistleblow-
relevant management may be hired to assist in the investigation ers and other relevant sources Account SSE
as needed On-site E-Interactive
Researches
Platform
Investor
Communication
Channels
Periodic Investor
Reports Hotline and
Whistleblowing Channels Email
Hotline 0512-63838399 R eporting Address Victoria Plaza Building B Floor 31 Gangx- Performance ： ：
Whistleblowing email：jubao@hengli.com ing Road Gangxing Community Renmin Road Subdistrict
Briefings
Zhongshan District Dalian Liaoning Province
Key Performance During the reporting period Hengli Petrochemical received a total of
more than 100 visits for research participated in 56 brokerage firm
The Company encourages employees at all levels and companies with business dealings to report various corrupt behaviors strategy meeting roadshows and held 3 performance briefings compre-In 2024 the Company held 6 investor
to the Company through telephone email letters and other channels. During the process of accepting and investigating hensively strengthening shareholder confidence and ensuring that the open exchange meetings and
various whistleblowing reports the Company strictly keeps confidential the whistleblower’s name department company Company’s market capitalization remained at the forefront of the indus-
name and other information and strictly prohibits disclosing it to the reported person or their unit. In cases of illegal disclo- 87 try in 2024.interacted times on the SSE
sure of whistleblower information or retaliation against whistleblowers serious handling of any retaliatory behavior in accor- e-interaction platform.dance with relevant regulations is implemented to provide maximum protection to whistleblowers.HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 29 I 30
Case Protection of Shareholders’ Rights and Interests
Onsite Performance Briefing The Company attaches great importance to providing reasonable investment returns to investors strictly implements share-
holder dividend return plans and profit distribution policies in accordance with relevant laws and regulations and other require-
In May 2024 the general manager secretary of Board of Directors ments actively rewards investors and continuously improves investor satisfaction and sense of gain. While taking into account
chief financial officer and independent director of Hengli Petrochemi- sustainable development the Company has always maintained a relatively high proportion of cash dividends and profitcal actively participated in the live broadcast event of the “2023 distribution has always been continuous and stable. Since its reorganization and listing in 2016 the Company has distributedAnnual Report Shanghai Stock Exchange Main Board High Dividend a total of RMB 25.539 billion in dividends (including planned dividend amounts for 2024) accounting for 41.52% of cumulativeand Heavy Return Collective Performance Briefing” organized by the net profits attributable to shareholders significantly exceeding the supporting funds raised by the Company from the capital
Shanghai Stock Exchange. They interacted and communicated with market.investors on the Company’s operating performance development In addition to enhance the transparency of the Company’s cash dividends and form a stable shareholder return mechanism
strategy and financial indicators for 2023 and the first quarter of its Board of Directors has actively introduced the Five-Year Shareholder Return Plan (2020-2024) which provides a detailed
Shanghai Stock Exchange Main Board High Dividend and
2024 as well as cash dividend plans. Heavy Return Collective Performance Briefing plan for its cash dividend policy over the next five years based on factors such as the profitability and business development
plans sharing the Company's growth dividends with investors.Case
Live Broadcast Event Let’s Investigate Together Company Cash Dividend Situation
In June 2024 Hengli Petrochemical participated in the live broadcast event Let’s Investigate Together jointly organized Key Performance 2022 2023 2024
by the Shanghai Stock Exchange and CCTV Finance. Through on-site visits investors experienced up close a Cash Dividend Per Share (RMB) / 0.55 0.45
world-class petrochemical park that is “excellent internally and beautiful externally”. In the investor exchange session
the Company’s general manager secretary of Board of Directors chief financial officer and deputy general manager in Total Cash Dividends Distributed (Tax Included) 200023.95 387150.49 316759.49
charge of production engaged in face-to-face and frank communication with investors on operating conditions (RMB 10000)
financial indicators project progress ESG dividend plans and other aspects providing sufficient answers and achiev-
ing good communication effects. Proportion to Net Profit Attributable to Shareholders of the
Listed Company in Consolidated Financial Statements (%) 86.27 56.07 44.97
Note: The amount of cash dividends distributed in 2022 includes the amount of cash used to repurchase shares which is included in cash dividends.In the future as projects under construction are successively completed and put into operation the Company will combine
actual operating conditions and development plans coordinate the dynamic balance between business development perfor-
mance growth and shareholder returns continuously improve the “long-term stable and sustainable” shareholder value
return mechanism allow shareholders to truly experience the Company’s development achievements and enhance the sense
of gain of investors.Investor Investigation Activities The event Let’s Investigate Together02
Climate Change Response 33 Energy Conservation &
Environmental Compliance Management 39
Pollutant Emissions Control 41
Water Resource Management 47 Sustainable Green
Clean Technological Opportunities 49
Ecosystem and Biodiversity Protection 50 DevelopmentHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 33 I 34
Climate Change Response CCUS/CCU Strategy and Implementation Plan
Based on the characteristics of the petrochemical industry Hengli Petrochemical is mainly committed to the chemical utilization of
As a benchmark enterprise in the petrochemical industry Hengli Petrochemical is fully aware of the vital significance of responding to CO2. It plans to achieve the recycling and utilization of 480000 tons of CO2 by 2030 through a series of new projects. The specific
climate change for protecting the global environment promoting economic stability and achieving social equity and actively implementation plan is as follows:
responds to the global call to address climate change. Adhering to the concept of green development the Company is committed to
reducing greenhouse gas emissions improving energy efficiency and promoting the application of clean energy through technologi- Adoption of CO2 to Produce Raw Materials for New Energy Battery Electrolytes
cal innovation. We have adopted a series of emission reduction measures to actively respond to the challenges brought by climate A CO? flash evaporation system was added to the coal-to-hydrogen low-temperature methanol washing process
change and contribute to the global low-carbon economic transformation. delivering high-purity CO? gas with over 98% concentration to the DMC production unit as feedstock for manufac-
turing electronic-grade DMC PC and other chemical products. The system was put into operation in April 2024
Climate Risk Management and has cumulatively achieved resource utilization of over 80000 tons of CO? for chemical production.Risk Management
Governance Hengli Petrochemical attaches great importance to the risks posed by climate change and has established a comprehensive climate
change risk assessment and management system. We regularly conduct climate change scenario analysis and stress tests to identify
In terms of governance Hengli Petrochemical has always adhered to high-end intelligent and green development and and evaluate potential impacts of climate change on our operations financial conditions supply chain and other aspects while formu-
continuously carried out climate change governance regarding climate change-related governance as one of the core issues lating corresponding response measures.of sustainable development strategies. During the reporting period we have established a scientific governance structure and
clarified the division of responsibilities at all levels. Climate Change Risk Identification
The Company has established a climate change governance system led by the Board of Directors. The Board members have
deep industry experience are able to accurately identify and manage risks ensure the effectiveness of climate risk manage-
ment and formulate climate action strategies suitable for its long-term development. Risk Category Risk Description Countermeasures
Extreme weather events such as typhoons heavy rainfall
and floods may significantly impact our production The Company closely monitors extreme weather
● As the highest leadership the Board of Directors has operations including risks like equipment damage warnings develops scientific and effective emergency
ultimate responsibility for climate change-related risks transportation disruptions and supply chain interruptions plans enhances emergency drills regularly inspects Decision-making Acute Risks
Level and opportunities.that could reduce output and increase operational costs production facilities promptly upgrades equipment to
thereby compressing profit margins. Moreover extreme eliminate potential hazards and maintains adequate
● The Board of Directors has established a Strategy weather may trigger secondary disasters or production disaster prevention supplies.and Sustainable Development Committee which is accidents threatening personnel safety and ecological
responsible for overseeing ESG management environment while causing economic losses that further
including climate risk identification assessment increase operational expenditures.Management Level and management and regularly reports to the
The main responsible persons Board of Directors on climate change topics. The Company encourages subsidiaries to identify regional
(general managers) of each subsid- climate risks and vulnerabilities while incorporating
iary and the leaders of each climate response measures into infrastructure develop-
department internally form a Chronic risks from global warming such as rising average ment. Furthermore we intensify R&D and application of
carbon management leading ● Composed of personnel from the temperatures sea level increases and precipitation pattern Chronic Risks green low-carbon technologies improve resource
group which is responsible Implementation Level Safety and Environmental Protection changes may lead to higher operational costs increased utilization efficiency gradually reduce dependence on
for supervising and equipment maintenance expenses and additional Department and other relevant natural resources and regularly conduct climate change
guiding the Company’s investments required for energy structure adjustments.departments responsible for awareness education for stakeholders to promote
daily carbon emission organizing and carrying out carbon low-carbon environmental concepts.management. emission monitoring carbon
Climate Risk Governance Framework emission data management Under the “Carbon Peaking and Carbon Neutrality” policy We vigorously implement various energy-saving measures
and verification as well as background increasingly stringent government carbon and have developed a CCU strategy and implementation
training and publicity. Policy and Legal Risks emission requirements for the petrochemical industry are plan proposing a series of new projects to reduce
leading to higher corporate investments in energy-saving greenhouse gas emissions and promote green low-carbon
technological upgrades and compliance management development.costs.Strategy
With global heightened focus on climate change and We persistently drive R&D and production of low-carbon
Hengli Petrochemical actively responds to the national “dual carbon strategy” and integrates the green and low-carbon sustainability consumer preferences are gradually shifting Market Risks products while continuously enhancing clean energy
development concept into its development strategy. When formulating overall development strategies and making major toward green low-carbon products and services. This trend product and service capabilities.may impact enterprise operational costs and revenues.decisions the Company attaches great importance to the goals of the Paris Agreement the 2030 Agenda for Sustainable
Development and other international conventions and relevant dual carbon policies of the Chinese government conducts
research and analysis on the impact of relevant policies and helps the Company better grasp development opportunities and To meet technological requirements for low-carbon We actively develop carbon management training economic transition the Company needs to continuously programs focusing on cultivating internal carbon
avoid risks. Technology Risks strengthen energy conservation and renewable energy management professionals to establish talent foundations
utilization implying higher R&D costs. for green low-carbon development.In the industrial production process the Company strictly adheres to laws and regulations such as the Measures for the
Management of Carbon Emission Trading (Trial) and the Guidelines for the Accounting and Reporting of Greenhouse Gas
We emphasize cooperation and communication with
Emissions from China's Petrochemical Enterprises (Trial) and has formulated the Carbon Emission Management System the Reputation Risks As stakeholders increasingly focus on corporate climate stakeholders actively addressing their concerns through
Greenhouse Gas Management Procedures and other systems to standardize greenhouse gas emission management actively actions companies must take relevant measures to avoid multiple channels.reputational impacts.explore alternative paths for fossil energy sources such as coal oil and natural gas and is committed to reducing greenhouse
gas emissions.Physical Risks Transformational RisksHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 35 I 36
Indicator and Objective
Hengli Petrochemical proactively fulfills climate change responsibilities commits to promoting low-carbon transition and
supports national carbon peaking and carbon neutrality targets. In 2024 referencing international climate action target-set-
ting methods and climate-related initiatives Hengli Petrochemical established climate-related indicators and targets based
on operational conditions. Moving forward we will continue to take green development as our foundation and responsibility
as our duty working with all parties toward a harmonious future between humanity and nature.Hengli Petrochemical Climate Targets Hengli Petrochemical (Dalian) Energy Hengli Petrochemical Refining
Efficiency Frontrunner Energy Efficiency Frontrunner
Target Type Carbon management objectives
Carbon Peaking 2030
Carbon Neutrality 2060 No.1 in purified terephthalic acid industry No.1 in paraxylene industry
By 2026 energy-saving projects are expected to reduce emissions by no less than 1 million tons of
CO2 Emission Reduction CO? cumulatively. Unit product energy consumption Unit product energy consumption
Carbon Emission Intensity Reduction Projected 1 percentage point decrease in carbon emission intensity per unit output value by 2026.Considering
Cumulative additional CO? recovery and utilization of 160000 tons by end-2026 projected 25.99 kgce/t 200.14 kgoe/tCO2 Recovery and Utilization 2024 as 480000 tons by 2030.baseline year
Green Electricity Usage Scale Projected cumulative additional green electricity usage of 2 million MWh annually (wind power) by
2028.
Green Energy Coverage Rate Projected achievement of 100% renewable energy coverage across all major production and operational units by 2030.Hengli Petrochemical Chemical
Energy Efficiency Frontrunner
Actions in Climate Risk
No.1 in ethylene industry (using naphtha as feedstock) No.2 in ethylene glycol industry (using
Energy Management System ethylene as feedstock)
Unit product energy consumption Unit product energy consumption
In compliance with national energy laws and regulations including the Energy Conservation Law of the People’s Republic of
China the Electric Power Law of the People’s Republic of China and the Energy Standardization Management Measures the 544.27 kgoe/t 321.40 kgoe/t
Company has established internal management systems such as the Energy Management System and Energy Targets Indica-
tors and Management Plan System to strengthen energy management and continuously improve energy conservation.We have established a scientific energy management system where subsidiaries form energy management committees
(energy conservation leadership groups) led by general managers/management representatives with technical optimization
departments (management offices) serving as energy conservation authorities and all departments carrying out relevant
work according to energy management system requirements.An annual energy conservation target management system was built decomposing and setting annual energy consumption
quota targets for production units/facilities evaluating monthly energy consumption target completion supervising imple-
mentation of energy optimization improvements to ensure efficient system operation and conducting regular energy perfor-
mance assessments to ensure departmental accountability and continuous improvement of energy performance goals.During the reporting period Hengli Petrochemical’s ISO50001 energy management system certification and GB/T23331
energy management system certification had covered six major subsidiaries including Hengke Advanced Materials and
Kanghui New Material.In July 2024 the Ministry of Industry and Information Technology National Development and Reform Commission and State
Administration for Market Regulation announced the 2023 List of Energy Efficiency “Frontrunner” Enterprises in Key Industries
with Hengli Petrochemical Chemical Hengli Petrochemical Refining and Hengli Petrochemical (Dalian) consecutively making
the list for four years winning energy efficiency championships in ethylene paraxylene and purified terephthalic acid indus-
tries while ethylene glycol also led industry energy efficiency. Hengke Advanced Materials Hengli Petrochemical (Huizhou) Kanghui New Material Hengli Petrochemical Hengli Petrochemical Chemical
Refining (Dalian)HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 37 I 38
Case
GHG Emissions 2023 2024 Compressor Waste Heat Heating Retrofit
Greenhouse Gas Emissions Scope 1 (tCO2e) 31167270.46 47201832.47 To maximize energy utilization and lower operational costs Hengli (Nantong) Industrial Park upgraded its residential
boiler heating system replacing biomass pellet combustion with waste heat from industrial compressors. Upon
Greenhouse Gas Emissions Scope 2 (tCO2e) 1677849.77 6718552.07 measurement the project saves 2970 tons of biomass pellets annually equivalent to 1871 tons of standard coal.Greenhouse Gas Emission Intensity (tCO2e/RMB million) 139.89 228.21
Note 1: Based on operational characteristics the Company's greenhouse gas emissions mainly come from direct emissions (Scope 1) including fossil fuel combustion and
industrial processes and indirect emissions (Scope 2) from net purchased electricity and heat. Case
Note 2: The above statistical data covers Hengli Petrochemical (Dalian) Hengli Petrochemical Refining Hengli Chemical Hengli Petrochemical (Dalian) New Material Kanghui
New Material Susheng Thermal Power Hengke Advanced Materials Jiangsu Xuanda Deli Chemical Fiber and Hengli Petrochemical (Huizhou). Tail Gas Scrubbing System Optimization
Note 3: Carbon emission intensity = Greenhouse gas emissions/Operating revenue
Hengli Petrochemical (Huizhou) optimized two tail gas scrubbing systems by introducing a chemical agent to absorb CO?
from emissions converting it into sodium carbonate for reuse in production. This reduces annual CO? emissions by about
1600 tons while lowering costs.
Energy Management Initiatives
Energy Energy-Saving Energy
structure technological information
adjustment Caseupgrades management
Novel Ethylene Cracker Furnace Tube Upgrade
Gradually reduce reliance on The Company plans to achieve Continuously enhance the energy
traditional fossil fuels such as coal energy conservation and management system by develop- The NH1949 high-temperature alloy furnace tubes with anti-coking properties were put into operation in the No. 10
by optimizing energy consump- consumption reduction goals by ing an intelligent energy service cracker of Hengli Petrochemical Chemical’s 1.5 million-ton/year ethylene unit marking its ethylene cracker furnace
tion structures through the use of optimizing process operating platform for real-time monitoring tubes as globally leading. This domestically produced furnace tube will significantly reduce carbon emissions and opera-
biomass natural gas and other parameters partially retrofitting and analysis of energy consump- tional costs. Applied to the 64 W furnace type Hengli Petrochemical Chemical was selected by the National Develop-
alternatives. equipment and implementing tion data optimizing energy ment and Reform Commission as one of China’s first pilot units for this technology with expected annual benefits
waste heat recovery projects. management measures and exceeding RMB 7.437 million and annual CO? reduction of 869 tons.improving energy efficiency.Energy Conservation and Emission Reduction
Case
Case
Energy Conservation Awareness Enhancement Campaign
Esterification Steam Waste Heat Recovery
Kanghui New Material installed new electric chillers to replace some of the original lithium bromide chillers reducing
energy costs. After implementation the project saves approximately RMB 11 million annually in steam and electricity
costs with an estimated reduction of 3500 tons of standard coal equivalent in comprehensive energy consumption per
year.Case
M-921 Efficiency Optimization
Hengli Petrochemical (Huizhou) modified its tail gas drying system by discontinuing E1/2-920B and switching to
low-pressure steam for heating reducing medium- and high-pressure steam usage. This adjustment allows one heat Energy Conservation and Emission Reduction Education
exchanger to be shut down while maintaining original performance cutting CO? emissions by 3435.72 tons annually.HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 39 I 40
Environmental Compliance Management Environmental Management System Certification
Environmental Management System During the reporting period the Company and its manufacturing subsidiaries involved have 6 companies that have passed the ISO 14001 Environmental Management System Certification.Hengli Petrochemical recognizes that environmental management is not only a reflection of enterprise social responsibility but
also a core pillar of sustainability. We understand that every effort to protect the environment is a commitment to the futureand every act of ecological respect is a gift to future generations. Adhering to the development philosophy of “Green HengliEcological Hengli Harmonious Hengli” we drive innovation-led green growth to fulfill our environmental mission contributing
to clear skies and a beautiful homeland.We strictly comply with laws and regulations such as the Environmental Protection Law of the People’s Republic of China Water
Pollution Prevention and Control Law of the People’s Republic of China Air Pollution Prevention and Control Law of the People’s
Republic of China and Environmental Impact Assessment Law of the People’s Republic of China. Subsidiaries formulate HSE
systems like the Environmental Protection Management System Environmental Protection Management Assessment System
and Environmental Monitoring Management System tailored to their operations ensuring rigorous environmental manage-
ment. Meanwhile the Company has established an environmental protection organizational structure promoted environmen-
tal protection management further enhanced the construction of the environmental management system and is committed
to building a modern enterprise that saves resources and is environmentally friendly.Safety and Environmental
Protection Department Inspection Center
Organize the implementation of Carry out environmental monitoring
environmental protection policies and statistically analyze monitor data
and guidelines and supervise
environmental monitoring
Environmental
Management
Structure
Various Departments Various Workshops
Publicize and implement environmen- Implement related clean production in Environmental Certification of Some Subsidiaries
tal protection policies and carry out the workshop
environmental protection
Honors
Case Six factories under the Company have been awarded the national “Green Factory” title including Hengli
Petrochemical (Dalian) Hengli Petrochemical Refining Hengli Chemical Fiber Hengke Advanced MaterialsEmergency Plan Training for Sudden Environmental Incidents Hengli Petrochemical Chemical and Kanghui New Material; Deli Chemical Fiber was awarded the “JiangsuGreen Factory” title.Hengli Petrochemical prioritizes the prevention and response to
environmental emergencies establishing a comprehensive contin-
gency system with regular specialized training. Through simulations
and case studies we enhance employees’ risk identification and
emergency response capabilities ensuring swift and effective control
during incidents. The Company is also equipped with advanced
monitoring equipment and emergency supplies and cooperates with
external professional institutions to optimize the scientificity and
operability of emergency response plans.Site of Emergency Drill for Sudden Environmental IncidentsHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 41 I 42
Pollutant Emissions Control
The Company has established a comprehensive and efficient pollution prevention and control management system. Through regular
monitoring and supervision mechanisms it ensures that pollutants such as waste gas wastewater and waste generated during
production and operation meet the requirements of national laws and regulations and local laws and regulations where the factories
are located.To promote green transformation and sustainable development of the enterprise and meet the expectations of investors and
stakeholders the Company has formulated environmental protection goals and action measures for 2030 based on pollutant
emissions and environmental management in 2024 combined with industry standards and policy requirements.Environmental Targets
Annual reduction Annual reduction Annual reduction Annual reduction Annual reduction Zero environmen-
in chemical in ammonia in sulfur dioxide in nitrogen oxide in emissions of tal negative
oxygen demand nitrogen emissions by no emissions by no toxic and harmful incidents
(COD) emissions emissions by no less than 1% less than 1% air pollutants maintained
by no less than less than 1% such as mercury
1% arsenic and lead
by no less than
12341%56
Environmental Impact Assessment and Audit
The Company has always regarded environmental protection as one of the core strategies for sustainability. To ensure compli- Actions in Pollutant Reduction
ance with environmental protection laws and regulations during production and operation and continuously improve environ-
mental management the Company regularly conducts comprehensive environmental audits on all operational sites.During the reporting period we conducted multiple environmental audits covering 100% of operational sites cooperating For COD
with professional auditors to conduct investigations in terms of environmental regulations and compliance pollutant
emissions and resource utilization and implemented rectifications for all identified issues with a rectification rate of 100%. Optimize wastewater treatment processes to improve treatment efficiency; strengthen wastewater reuse to
reduce discharge.In addition the Company attaches importance to environmental management system certification hiring external third-party
certification bodies to conduct annual surveillance audits of the Company’s ISO 14001 Environmental Management System
and also conducted expansion audits during the reporting period. At present the Company and its manufacturing subsidiar- For ammonia nitrogen
ies involved have 6 companies that have obtained ISO 14001 Environmental Management System Certification covering Enhance wastewater pretreatment to remove pollutants such as ammonia nitrogen; improve ammonia nitrogen
100% of operational sites. removal efficiency of wastewater treatment facilities.
For sulfur dioxide and nitrogen oxides
Optimize combustion processes to reduce generation of sulfur dioxide and nitrogen oxides; strengthen operation
Indicator Unit 2024 management of flue gas desulfurization and denitrification facilities.Total Environmental Investment RMB 100 million 3.75
For toxic and hazardous air pollutants
Environmental Incidents Case 0
Strengthen raw material management to reduce use of toxic and hazardous substances; enhance waste gas
Incidents of Violation of Laws and Regulations in the Environmental Field Case 0 purification treatment.Compliance Rate Observed in Pollutant Monitoring % 100
Operation Rate of Environmental Protection Facilities % 100 For water emissions
Compliance Rate of “Three Simultaneities” in Environmental Protection for Construction Projects % 100 Optimize production processes to reduce water consumption; strengthen wastewater reuse and recycling.HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 43 I 44
Management of Wastewater Management of Waste Gas
Hengli Petrochemical places high importance on whole-process control of wastewater management. Through advanced In terms of waste gas management we strictly follow laws and regulations such as the Law of the People’s Republic of China
wastewater treatment technologies and refined management methods we ensure full compliance of wastewater discharge on the Prevention and Control of Atmospheric Pollution formulate relevant management systems such as the Waste Gas
standards. The Company strictly complies with laws and regulations such as the Law of the People‘s Republic of China on the Emission Management System and the Pollutant Emission Management System and build efficient waste gas collection and
Prevention and Control of Water Pollution. All subsidiaries have formulated the Wastewater Pollutant Management Measures treatment devices. Advanced technologies such as low-nitrogen combustion catalytic oxidation and adsorption purification
(Implementation Rules) to strengthen wastewater management. are adopted to ensure that pollutants are discharged up to standard. Meanwhile we continue to optimize the technological
process promote the replacement of clean energy and improve the green level of the production process. In addition the
Company has established a real-time online monitoring system to dynamically analyze emission data and relies on an intelli-
Indicator Unit 2024 gent management platform to achieve continuous improvement in environmental performance.The waste gas emissions during the production and operation of the Company mainly come from organized emissions in the
Wastewater Emissions Ton 26303994.81 factory production process. The main pollutants include volatile organic compounds (VOCs) in process waste gas as well as
Wastewater Emissions Intensity Ton/RMB 1 million 111.33 sulfur dioxide (SO2) and nitrogen oxides (NOx) in flue gas from gas-fired boilers. During the reporting period the waste gas
generated by the Company was discharged up to standard after treatment by environmental protection facilities.COD Emissions Ton 663.33
Ammonia Nitrogen Emissions Ton 3.29
Total Phosphorus Emissions Ton 3.54
Indicator Unit 2024
Total Nitrogen Emissions Ton 152.96
Sulfur Dioxide (SO2) Emissions Ton 1877.62
Note: For discharge status of subsidiaries listed as key environmental supervision units by environmental protection authorities please refer to Hengli Petrochemi-
cal’s 2024 Annual Report. Nitrogen Oxides (NOx) Emissions Ton 4466.01
Particulate Matter Emissions Ton 440.46
Relying on intelligent monitoring platforms and high-standard treatment processes we optimize resource utilization from
production sources and achieve wastewater reduction through closed-loop water circulation systems. For treatment we Volatile Organic Compounds (VOCs) Emissions Ton 695.34
adopt internationally leading pretreatment biological treatment and advanced purification technologies to ensure wastewa-
ter discharge fully exceeds national standards. The Company has established a dynamic monitoring mechanism conducting Note: For discharge status of subsidiaries listed as key environmental supervision units by environmental protection authorities please refer to Hengli
regular internal water quality testing and third-party compliance audits. Through data transparency and problem traceability Petrochemical’s 2024 Annual Report.management we continuously improve governance efficiency.During the reporting period wastewater discharge from the Company and its subsidiaries all met national treatment Case
standards. We have further increased our wastewater reuse rate to industry-leading levels demonstrating our commitment to Activated Carbon Tail Gas Purification Equipment Renovation
“cherishing every drop of water” through concrete actions.Kanghui New Material upgraded the spray tower tail gas technology in the PET-X and PET-Y workshops adding a
Case set of activated carbon tail gas purification equipment. The original single washing tower treatment process was
upgraded to advanced technology with three-stage demisting and two-stage activated carbon adsorption
Ecological Monitoring devices effectively adsorbing and removing harmful gases volatile organic compounds (VOCs) and other pollut-
ants in the tail gas and converting them into harmless substances before discharge.The sewage treatment plant in Hengli (Dalian Changxing Island) Industrial Park applies embedded integrated
sewage treatment technology. The COD of the treated sewage is below 15mg/L which is far better than the
national standard. The reclaimed water reuse rate exceeds 80%. The industrial production water in the plant Case
undergoes multiple purification processes and is tested for water quality treatment effects through aquatic plants
and ornamental fish bioindicators to achieve safe wastewater discharge. RTO Waste Gas Treatment Device in Sewage Treatment Plant
The RTO waste gas treatment device in the Sewage Treatment
Case Plant of Hengli Petrochemical Refining has completed optimi-
zation and transformation work and was successfully put into
Heat Medium Regeneration Wastewater Treatment operation. As a part of energy conservation environmental
protection and green development of the Sewage Treatment
Hengli Chemical Fiber has completed the liquid phase heat medium regeneration treatment of the EFG zone heat Plant this device plays an important role in the treatment of
medium system. This heat medium regeneration adopts a new process using vacuum distillation methods to low-concentration and high-volume organic waste gas. With a
simultaneously separate and remove light and heavy components. A simple cooling and collection device is added purification efficiency exceeding 99% it can treat 18000 m3/h
to the wastewater generated by the regeneration equipment to enable wastewater recycling and significantly of waste gas. Over the past two years of operation it has
reduce wastewater generation. reduced VOCs emissions by nearly 500 tons. Sewage Treatment Plant of Hengli Petrochemical RefiningHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 45 I 46
Management of Solid Waste Circular Economy
Hengli Petrochemical consistently attaches great importance to the management of solid waste and has formulated the Solid Hengli Petrochemical upholds the core philosophy of green recycling and sustainable development continuously exploringWaste Management System to continuously optimize its management processes. Adhering to the principles of “reduction and putting into practice innovative approaches. By adopting industry-leading green product design technologies we striveresource utilization and harmless treatment” we have established rigorous procedures for classified collection standardized to reduce environmental impact at the source and promote the transformation of our products toward greener and more
storage and scientific disposal of solid waste. We actively introduce advanced resource recycling technologies to promote the circular models.circular utilization of waste.We have successfully built and operated multiple efficient and intelligent systems for energy and waste recycling. These
systems have significantly advanced the reduction recycling and harmless treatment of solid waste thereby enhancing Case
resource utilization efficiency and substantially reducing environmental pollution. In addition we regularly conduct training
sessions on waste reduction and emergency drills to ensure full compliance with waste management regulations and to Innovative R2R Process Leading the Green Circular Economy for PTA Residue
strengthen employees’ environmental awareness and sense of responsibility.Hengli Petrochemical successfully launched the world’s first
residue recovery system in the PTA industry—known as the
R2R unit—which enables in-depth recovery and treatment of
Key Performance oxidation residues. Since the implementation of this project
the amount of solid waste generated during the PTA produc-
tion process has been significantly reduced. The R2R unit can
General solid waste generated general solid waste disposed recover approximately 14000 tons of benzoic acid and around
3343982.76 3000 tons of CMB (catalyst) annually effectively minimizing tons 3343923.46 tons solid waste generation while maximizing resource utilization.
PTA Residue Recovery and Recycling Project
hazardous waste generated hazardous waste disposed Case
148360.38 tons 147167.31 tons Waste Liquid Incinerator Accelerating the Harmless Disposal of Solid Waste
The waste liquid incinerator at Hengli Petrochemical Chemical
Factory adopts a high-temperature thermal oxidation process
that effectively decomposes organic compounds in waste gas
Case and liquid while minimizing the formation of NOx. NOx is
further converted into nitrogen through SNCR and SCR
Hazardous Waste Safety Training reactions. The heat generated from incineration is recovered
by a waste heat boiler which produces high-pressure super-
To enhance employees' awareness and skills in hazardous waste heated steam at 440°C and 3.6 MPa for use in the high-pres-
management and ensure the safe disposal of hazardous waste sure steam pipeline network.Hengli (Dalian Changxing Island) Industrial Park organized a Waste Liquid Incinerator Unit
hazardous waste safety training session. The training focused on
the fundamentals of solid waste and hazardous waste manage-
ment with several internal and external experts invited to deliver Case
lectures. The training covered key aspects such as the classifica- Overhead Off-Gas Waste Heat Cooling Project
tion labeling collection storage transportation and disposal of
hazardous waste. It also incorporated real-world case studies to
explain relevant laws regulations and standards pertaining to Hengli Chemical Fiber's waste heat cooling project efficiently utilizes waste heat from the overhead vapor of the
hazardous waste management. esterification column in the polyester unit. Through heat exchangers the waste vapor is converted into hot water Hazardous Waste Safety Training Session in Progress
which serves as the heat source for chillers. This project makes effective and rational use of existing energy
resources and achieves significant energy savings. Currently 6 sets of waste heat cooling systems have been put
into operation in the polyester department.HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 47 I 48
Water Resource Management
Water Conservation and Management
We strictly comply with the Water Law of the People's Republic of China and other relevant laws and regulations and have formulated
water resource management systems such as the Water Conservation Management System the Water Usage Statistics Management The Company places great emphasis on enhancing water-saving awareness and standardizing water management integrat-
System and the Water Metering Management System based on applicable legal and regulatory requirements. These measures aim to ing it as a key component of its sustainability management system. To raise awareness among all employees the Company
continuously strengthen water management optimize water usage structure and minimize water consumption at the source thereby regularly conducts water-saving awareness campaigns and training sessions. These efforts include the use of internal publica-
reducing operational risks associated with water scarcity. tions promotional posters and themed activities to disseminate water conservation knowledge promote the concept of
green water usage and foster a culture of active participation in water-saving initiatives. Furthermore the Company incorpo-
Management Structure of Water Resource rates water conservation targets into departmental performance evaluations. A clear incentive and accountability system for water management has been established linking performance assessments to water-saving responsibilities to ensure
effective implementation.To ensure the orderly and standardized implementation of water conservation efforts the Company has actively established
and continuously improved its water resource management structure. The Chairman oversees the overall management of Case
water resources while the General Manager and Deputy General Manager are responsible for the strategic direction and
performance supervision of water resource management. Water Conservation Awareness Training
Water usage indicators are also incorporated into the performance evaluations of the heads of each subsidiary reinforcing theimplementation of water resource management across all aspects of production and daily operations. In response to the national call for water conservation Hengli Chemical Fiber launched the “Water Saving Startswith Me” employee awareness program. A series of training and educational activities—including water conserva-
At the beginning of each year subsidiaries formulate corresponding annual water intake plans and monthly allocation sched- tion lectures and micro-education initiatives—were organized. More than 6000 employees participated covering
ules. A dedicated water conservation management department monitors water usage conducts regular benchmarking and over 80% of the workforce.analysis and reports the analysis results to the Company's senior management.Actions in Water Conservation Indicator Unit 2024
Technological Water-Saving Measures Total Freshwater Consumption 10000 tons 13331.88
The Company actively implements water-saving initiatives with technological efforts focused on process and equipment Quantity of Municipal Water Purchased 10000 tons 298.63
optimization water recycling water balance testing and intelligent management. Surface Water Withdrawal 10000 tons 12969.43
Ground Water Withdrawal 10000 tons 63.81
Through a series of technological innovations optimizations and equipment upgrades the Company Total Water Consumption 10000 tons 88067.75
achieves water savings at the source.Water Consumption Intensity tons/RMB 1 million 3727.37
● Seawater Closed-Circuit Cooling System: Replacing traditional open cooling towers the system in Hengli (Dalian Changxing Island)
Process and Industrial Park saves 9900 tons of industrial water per hour. Recycled Water Consumption 10000 tons 125468.64
Equipment ● Low-Temperature Waste Heat Seawater Desalination Technology: Hengli (Dalian Changxing Island) Industrial Park produces 35
Optimization Annual Water Saved via Reclaimed Water Facilities 10000 tons 3427.37million tons of freshwater annually using this technology.● Optimized Heat Exchange Network: Recovering low-grade heat for use in by-product steam production or desalinated water Reclaimed Water Reuse Rate % 75.30
heating thereby reducing the demand for cooling water.Note 1: Reclaimed Water Reuse Rate = (Wastewater Treated – Wastewater Discharged) / Wastewater Treated × 100%.Note 2: Data covers Hengli Petrochemical (Dalian) Hengli Petrochemical Refining Hengli Petrochemical Chemical Hengli Petrochemical (Dalian) New Material
● Reclaimed Water Treatment Unit in the Water Treatment System: The sewage treatment plant is equipped with a specialized RO Kanghui New Material Susheng Thermal Power Hengke Advanced Materials Jiangsu Xuanda Deli Chemical Fiber and Hengli Petrochemical (Huizhou).concentrate treatment line composed of “ozone + denitrification biofilter + aerated biofilter + post-ozone + V-shaped filter + activatedcarbon filter” ensuring that all treated wastewater can be directed into the reclaimed water unit.Water Recycling ● Reclaimed Water Reuse: Wastewater from cooling systems air conditioning systems and desalination units is collected
categorized and treated for reuse. The overall reuse rate exceeds 75% significantly reducing the consumption of fresh water. Hengli Petrochemical Refining – Industry Leader in Water Efficiency
1 Unit water withdrawal per product● Regular Water Balance Assessments: The Company regularly conducts water balance testing including inspections for leaks in the Ranked No.water supply network to promptly detect and control anomalies. in modern coal chemical industry 1.12 Water recycling rate m3/t (primarily seawater） 99.96%
● Optimization Plans: Based on the results of water balance testing targeted water-saving rectification and optimization plans are
Water Balance developed.Testing Unit water withdrawal per product
Ranked No. 1
in petroleum refining industry Water recycling rate
● Installation of Flow Meters and Online Analyzers: Real-time monitoring of water flow and quality helps quickly identify and resolve 0.174 m3/t 98.69%
issues ensuring the efficient use of water resources.● Extensive Use of Data Analysis Tools: Water usage data is analyzed to identify potential areas for water savings providing a scientific
Intelligent basis for decision-making and further optimizing water resource recycling and utilization.ManagementHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 49 I 50
Clean Technological Opportunities Ecosystem and Biodiversity Protection
Amid the sweeping transformation of industrial structures driven by China’s “dual carbon” goals Hengli Petrochemical has proactively Ecosystem Protection
embraced the clean energy transition with a forward-looking perspective. The Company regards green technological innovation as a
core engine for driving high-quality development.The Company strictly adheres to national laws and industry regulations related to land management such as the Law of the
People's Republic of China on the Prevention and Control of Soil Pollution. An annual environmental monitoring plan is
developed and qualified third-party environmental monitoring agencies are commissioned to conduct groundwater
Indicator Unit 2024 sampling and testing every six months and soil sampling and testing annually. In addition to strengthen the identification
and assessment of potential soil and groundwater risks the Company has internally established the Soil Risk Identification
PV Generation kWh 167314264.28 and Remediation Responsibility System and formed an Environmental Hazard Identification and Remediation Task Force to
regularly carry out internal risk assessments. During the reporting period the compliance rate of characteristic pollutant
Wind Power kWh 49555000.00 monitoring in soil and groundwater at all Hengli Petrochemical operating sites reached 100%.Biogas Power Generation kWh 149663.00
Biomass Fuel tce 297351.85 Case
Total Renewable Energy Consumption tce 324023.02 Ecological Buffer Zone for Treated Effluent in the Hengli (Nantong) Industrial Park Environ-
mental Protection Project Officially Commissioned
The ecological buffer zone project for treated effluent in the
Case Hengli (Nantong) Industrial Park Environmental Protection
PV Power Generation Project was designed with full consideration of ecological
balance and environmental protection principles focusing on
Kanghui New Material has utilized the existing plant rooftops and the preservation and restoration of natural ecosystems. The
parking areas to collaborate with State Power Investment Corpora- system adopts the “three lows and two highs” approach:
tion in constructing the largest PV power generation project in utilizing the height differences among five pools to create
Liaoning Province. In 2024 the project generated a total of 45.4554 flowing water that increases dissolved oxygen levels; using an
million kWh of electricity equivalent to 5586.47 tons of standard automatic irrigation system to spray treated effluent onto
coal and reduced CO? emissions by approximately 15363 tons. terrestrial plants; and improving water quality through plant Ecological Buffer Zone for Treated Effluent in the
root filtration as well as the decomposition of ammonia Environmental Protection Project
PV Power Generation System Installed on the Rooftop of
Kanghui New Material Plant nitrogen and other substances by aquatic plants and microbial communities. Additionally aquatic plants and
ornamental fish serve as bioindicators to evaluate the effectiveness of water treatment. The commissioning of this
project marks a solid step forward in the ecological development of the Nantong Industrial Park.Case
Integrated PV-Storage-Charging Facility Biodiversity Conservation
At the Hengli (Nantong) Industrial Park the total installed PV capacity
has reached 106.5 MW with over 100 million kWh of green electricity Hengli Petrochemical places great importance on biodiversity conservation by adopting green production processes and
generated annually resulting in a reduction of 60000 tons of carbon efficient resource utilization to minimize damage to natural habitats. The Company regularly conducts ecological assess-
emissions. To efficiently absorb green power and ensure grid stability ments to identify and protect biodiversity hotspots and actively participates in ecological restoration projects such as
during peak periods Hengke Advanced Materials has commissioned wetland conservation and vegetation restoration to promote ecological balance. Hengli Petrochemical remains committed
the second phase of its 20 MW/40 MWh energy storage project. The to fulfilling its environmental responsibilities and contributing to the protection of global biodiversity and the health of ecosys-
total storage capacity now stands at 40 MW/80 MWh. The system tems.can discharge up to 40000 kW of load during two peak periods per Case
day and charge once during off-peak and flat-rate periods. During
summer peak electricity pricing it can achieve up to three charge/- “Protecting Marine Resources and Creating a Better Environment”—Marine Stock
discharge cycles daily effectively meeting part of the production PV Power Generation Project at Hengli (Nantong) Industrial Park Enhancement and Ecological Compensation Release Program
power demand alleviating peak load pressure and reducing
electricity costs. On June 19 2024 in an effort to further protect marine biolog-
ical resources improve the marine ecological environment
and promote biodiversity Hengli Petrochemical (Huizhou)
Case organized a joint party-labor-youth ecological compensation
and stock enhancement release activity under the themeEnergy Structure Improvement “Protecting Marine Resources and Creating a Better Environ-ment.” This initiative also aimed to raise employees’ awareness
Hengli Chemical Fiber has actively implemented coal-to-gas conversion and biomass boiler construction projects to of aquatic ecological protection.replace coal-based fuels. As of August 2024 the use of coal fuels has been fully discontinued replaced by biomass and
natural gas resulting in a reduction of fossil energy consumption by over 80000 tce. Marine Stock Enhancement and Ecological Compensation ReleaseHengli inc SUSTAINABILITYREPORT 2024 Annual Report
Product Quality and Safety 53 03
Customer Service Management 55
Sustainable Supply Chains 56
Work Safety Management 59 Safe Operations &
Chemical Safety 64
Data Security and Protection 66 Sustainable GrowthHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 53 I 54
Product Quality and Safety Case
Hengke Advanced Materials Awarded “Jiangsu Province Quality Credit AAA Enterprise”Quality Management System Hengke Advanced Materials places great emphasis on the leading role of quality credit and has developed a “ThreeComprehensive Three Focused” dual-direction quality control model throughout the entire process. This modelHengli Petrochemical adheres to the quality management philosophy of “Pursuing Excellent Quality Continuously Improving ensures comprehensive coverage of quality across all stages involving all employees and enabling full traceability.Management.” By implementing a total quality management strategy the Company is committed to delivering outstanding Hengke Advanced Materials has obtained certifications for nine related systems including ISO 9001 for quality
products and services. We strictly comply with the Law of the People's Republic of China on Product Quality and other relevant management ISO 14001 for environmental management OEKO-TEX for eco-friendly textiles and the integration
laws and regulations and have established a sound quality management system. This includes the formulation of various of information technology with manufacturing management (two-in-one AAA management system) amongproduct quality management policies such as the Product Standardization Management Policy to ensure that every stage— others. In 2024 Hengke Advanced Materials was recognized as a “Jiangsu Province Quality Credit AAA Enter-from R&D and production to after-sales service—meets the highest standards. prise.”
Upholding a spirit of craftsmanship and a pursuit of excellence the Company has developed a comprehensive quality manage-
ment system that covers the entire product lifecycle. We have formulated control procedures such as the Advanced Product
Quality Planning and Control Procedure Production Operation Control Procedure Nonconforming Product Control Procedure Digitalization of Product Quality Control
Customer Satisfaction Management Procedure and Continuous Improvement Management Procedure ensuring the effective-
ness of quality management. In addition we actively adopt external product quality management systems and maintain high The Company continues to explore digital quality management to more accurately and efficiently identify and resolve product
standards to drive high-quality development. During the reporting period 7 subsidiaries including Kanghui New Material and quality issues thereby enhancing both product quality and production efficiency.Hengli Petrochemical Chemical passed the ISO 9001 Quality Management System certification.Case
Kanghui New Material Establishes a Digital Quality Management System for Polyester Film
Kanghui New Material has implemented a fully digital MES
system throughout the workshop production process. From
production to the final packaging of polyester film rolls all
stages are traceable and relevant production information is
accessible. The system provides a visual display of key data
such as inspection results length width thickness and weight
of finished and semi-finished products. In the event of a quality
issue with a film roll relevant data from each production stage
can be retrieved for root cause analysis enabling traceable
Polyester Film Digital Quality Management System
management and timely identification of problem points to
take appropriate corrective measures.Empowering Employees Through Quality Training
Quality Management System Certificates of Selected Subsidiaries
Hengli Petrochemical places great importance on quality training and has established a three-tier training system at the
Company department and team levels. Through a variety of formats—such as online courses on-site workshops and
Whole-Life-Cycle Quality Management hands-on drills—the Company effectively enhances employees' quality awareness and professional skills. Additionally Hengli Petrochemical organizes quality-focused initiatives such as Quality Month and quality competitions to encourage employee
We focus on the core principles of “Prioritizing Quality and Promoting Continuous Improvement” and have established a innovation and the sharing of quality management ideas. These activities have engaged nearly 500 employees fostering
comprehensive lifecycle quality management system covering product R&D production sales and after-sales services. This collective efforts to elevate the Company’s product quality standards.system ensures that every stage meets high-quality standards. In production quality risk management we follow a rigorous Case
risk management process that includes risk identification risk assessment risk control risk communication and risk auditing
ensuring that each step is effectively executed. In the sales and after-sales service stages we continuously optimize product Hengli Chemical Fiber Product Quality Training
performance and service quality through customer feedback mechanisms and regular quality follow-ups.In 2024 Hengli Chemical Fiber organized specialized training
Product Recall Management sessions focused on quality tools such as QC and FMEA. These
targeted trainings significantly enhanced employees' quality
The Company strictly follows internal policies such as the Nonconforming Product Control Management Policy to identify and
awareness and professional capabilities. As a result of the
handle nonconforming products. We also conduct regular product recall simulations to evaluate and verify the effectiveness of
initiative the product nonconformity rate saw a marked
our recall procedures ensuring product quality is protected. During the reporting period no large-scale product recall events
decline while customer satisfaction continued to rise.occurred.Product Quality Training Session in ProgressHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 55 I 56
Customer Service Management Sustainable Supply Chains
Upholding the management philosophy of “market-oriented and customer-centered” the Company continuously optimizes its
customer service system. It has established a comprehensive sales process and after-sales service mechanism guided by the Custom-
er Service Control Procedure enabling prompt response to and resolution of customer complaints and feedback. At the same time Supply Chain Management System
the Company strictly protects consumer information security strives to enhance customer satisfaction and reasonably meets
consumer needs. Hengli Petrochemical places great importance on supply chain security. We continuously optimize our supply chain manage-
ment system and enhance supplier management by establishing internal policies such as the Supplier Management System
and Bidding and Procurement Management System. These efforts strengthen risk control throughout the procurement process
Contract Customer Customer Satisfaction and provide strong support for the Company’s stable operations.Review Service Control
Procedure Procedure Survey Control The Company has also issued policies such as the Supplier Management Measures and Supply Chain Risk Management Procedure Measures clearly defining supply chain management procedures and risk control measures. In addition we have developed a
supply chain management platform to enable real-time information sharing and dynamic monitoring of supplier data
procurement plans and logistics thereby improving supply chain management efficiency.●Applies to the control of contract review ● Covers the entire product sales and service ●Applies to the monitoring and measurement of
processes. process. external customer satisfaction.●To ensure effective contract quality control all ● Implements the Company’s quality policy ●Customer satisfaction surveys help assess Implementing Transparent Procurement
product-related requirements must be clearly assists customers in properly using products whether the Company correctly understands and
adequately and reasonably defined. Through promptly addresses issues encountered during meets current and future customer needs and
contract review the Company confirms its ability to use and provides high-quality products and expectations. Based on the results the QHSE To prevent integrity risks at the source the Company signs Anti-Bribery Agreements with suppliers and conducts integrity
meet these requirements ultimately ensuring services to build a positive company image. management system is improved to continuously training for internal procurement personnel. Together these measures foster a clean and transparent procurement environ-
customer satisfaction. enhance customer satisfaction. ment. During the Reporting Period the signing rate of supplier integrity agreements was 100%.Systematic Assurance of Product and Service Quality
Principle of
Customer Complaints Resolution Mechanism Principle of Principle of openness and integrity checks and
transparency and balances discipline
Customer complaint
Yes
Receive complaint Salesperson receives the complaint
Confirm delivery status Each evaluation committee Evaluation criteria for bidding All personnel involved in
(check if within contract scope) Customer Complaint Handling Request Form member must participate and procurement must be fair procurement must perform
Management approval independently in the bidding and consistent and conclu- their duties with integrity and
The Company continu- No
Pre-sales Technical Support Department process. Technical and commer- sions must be objective and uphold self-discipline.ously improves its Analyze and clarify
responsibility cial evaluations are conducted in impartial.customer complaint
Analyze separate stages.handling mechanism by Non-quality related measurement anomalies Quality-related measurement anomalies
establishing a quality
complaint resolution On-site Transportation anomalies verification Customer factors Quality-related Supplier issues (third-party issues) (usage/storage) measurement anomalies (product/logistics)
process to ensure that Principle of Principle of Principle of
customer concerns are Formulate a If necessary reputation commercial traceable
handling plan On-site On-site addressed in an Customer investigation investigation safeguarding confidentiality procedures
organized and efficient acknowledgment On-site investigation report Third-party monitoring
manner thereby better
safeguarding customer Implement plan Management approval
Suggested Management
measures approval All parties involved in the All technical details Every step of the bidding and
No
rights and interests. Yes Handling plan bidding process must act patents and commercial procurement process must
Yes Customer acknowledgment diligently professionally and with quotations involved in the have standardized documen-
Implement plan integrity to protect the Compa- evaluation must remain tation and outcome records
Close the issue and ny’s reputation. strictly confidential. for audit and review purposes.archive the case
Summarize and archive Continuous improvement
Hengli Petrochemical Bidding Principles
Customer Complaint Handling Process Diagram
Customer Satisfaction Management Equal Treatment of Small and Medium-Sized Enterprises
The Company attaches great importance to customer satisfaction Hengli Petrochemical is committed to building a mutually beneficial and win–win supply chain ecosystem that supports the Key Performance
and actively promotes its management. It has developed the Custom- growth of small and medium-sized enterprises (SMEs) and jointly promotes high-quality industry development. We consis-
er Satisfaction Management Procedure and conducts satisfaction tently uphold the principles of equality and fairness in cooperation and place great importance on collaborative development
evaluations by distributing Customer Satisfaction Survey. The collect- During the reporting period the overall with SMEs. We have established transparent procurement and cooperation mechanisms to ensure that SMEs enjoy equal
ed feedback is analyzed and assessed followed by the preparation of customer satisfaction score was approximately opportunities in bidding contract signing and performance execution. In addition we provide technical support and training
satisfaction reports to guide systematic improvements. Additionally to help SMEs enhance their competitiveness. Regular supplier evaluations are carried out to promote their sustainable
the Company regularly organizes training for the Sales Department 96.71% development. We have also optimized payment processes to ease financial pressure on SMEs.covering sales procedures and business etiquette in order to enhance
employees' professional competence and service quality from
multiple dimensions continuously boosting customer satisfaction.Quality Complaint Resolution ProcessHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 57 I 58
Full-Life-Cycle Management Supporting Supplier Development
Hengli Petrochemical places great emphasis on the sustainable development of its supply chain and integrates ESG
The Company places great importance on full lifecycle management of the supply chain and has developed the Supplier principles into every aspect of supplier management. By regularly organizing ESG training and awareness programs the
Management Control Procedure aiming to build a green and sustainable supply chain system. Through a stringent supplier Company supports suppliers in strengthening their capabilities in environmental social and governance performance.admission mechanism we ensure that our partners meet company standards in areas such as production management Tailored training sessions are designed based on the specific needs of suppliers covering key areas such as green
quality control product performance and HSE management capabilities. We also conduct regular ESG evaluations of the production energy conservation and emission reduction compliant operations and social responsibility. These efforts
supply chain to drive continuous improvement among suppliers enhance efficiency and ensure transparency and account- help suppliers enhance their ESG awareness and practical competencies. In addition the Company promotes collabora-
ability throughout the supply chain. tive progress among suppliers through case studies experience sharing and other interactive formats working together
to build a sustainable and resilient supply chain ecosystem.Case
Admission Suppliers are scored and assessed based on production management quality control product
of
Suppliers performance and HSE capabilities. Certification in quality environmental and safety Regular ESG Training for Suppliers
management systems is a key criterion for admission.In November 2024 Hengli (Nantong) Industrial Park held a grandceremony for the delivery of the “Hengke 420 Oerlikon Barmag DTYMachines Project.” Mr. Tang Hui Executive Assistant of Nantong
Hengke DTY Division engaged in a dialogue with supplier BarmagSupplier Relevant credit materials submitted by different types of suppliers are reviewed and on-site on the themes of “innovation sustainability efficiency and energyaudit inspections are conducted when necessary followed by the issuance of the Supplier Investiga- conservation.” Both parties committed to jointly advancing techno-tion Report and Supplier Score Sheet. logical innovation and improving product quality. Sharing the Vision of “Innovation Sustainability Efficiencyand Energy Conservation” with Suppliers
Digitalized Supply Chain
Supplier Ongoing and periodic evaluations are carried out and results are recorded in the supplier
evaluation information database.Hengli Petrochemical leverages intelligent technologies to empower supplier management enhancing the overall efficiency of
the supply chain while further strengthening collaboration with suppliers. This digitalization supports the creation of a green
sustainable supply chain ecosystem laying a solid foundation for future growth.Supplier Suppliers are assessed on aspects such as strength quality and delivery performance. Based
categorization on the scores suppliers are graded as follows: Grade A: Increased procurement volume
Case
encouraged; Grade B: Regular procurement; Grade C: Requires coaching reduced procure-
ment or temporary suspension; Grade D: Nonconforming supplier to be eliminated. Intelligent Empowerment of Supplier Management
The Company’s AWMS (Advanced Warehouse Management System)
utilizes IoT technology to build a real-time platform for the status
tracking and timely sharing of material circulation at every stage. By
Supplier A supplier exit mechanism is in place. Suppliers with serious issues in contract performance or integrating various modules within the system Hengli Petrochemical
Exit legal disputes are removed from the conforming supplier list and disqualified from further has achieved control and tracking of the procurement process
cooperation. enabling visual and systematic management of materials.HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 59 I 60
Work Safety Management
Case
Work Safety Management System
Active Participation of Industrial Parks in Work Safety Month
Hengli Petrochemical adheres to the principle of “safety first prevention foremost and comprehensive governance” and
strictly complies with laws and regulations such as the Law of the People's Republic of China on Work Safety and the Law of
the People's Republic of China on Prevention and Control of Occupational Diseases. The Company has established a compre-
hensive safety management system by implementing internal safety regulations such as the Work Safety Reward and Punish- Hengli (Suzhou) Industrial Park Hengli (Dalian Changxing Island) Industrial
ment System Fire Safety Management System Construction Project '“Three Simultaneities” Management System and HSE conducted theoretical training Park conducted a comprehensive
Evaluation Management System. These measures have driven the standardization of work safety across all industrial parks and practical drills and safety hazard emergency drill for major hazard sources
established an effective work safety management system. During the reporting period the Company and its subsidiaries did inspections effectively improving aiming to test the scientific design and
not experience any fatal workplace accidents. employees' fire safety awareness practical operability of its emergency
and self-rescue skills during response plans and to continuously
The Company has set up a Work Safety Committee and work safety management organization clearly defining occupational emergencies. enhance emergency handling capabilities
health and safety production goals. It has also signed Safety Responsibility Agreement with employees to strengthen the work for major hazards.safety accountability system and awareness across all levels. Furthermore safety performance evaluations are tied to the
compensation of senior executives ensuring comprehensive protection of employee health and safety. Hengli (Nantong) Industrial
Park carried out an integrated
Each year the Company holds a senior management work conference during which the heads of subsidiaries sign and submit Hengli (Yangtze River emergency drill simulating a
the General Manager’s Work Safety and Environmental Protection Responsibility Statement. Delta) Industrial Park radiant coil leak in the furnace
chamber of the thermal oil
During the reporting period all subsidiaries successfully achieved their work safety targets. Subsidiaries such as Hengli organized safety
Petrochemical Chemical Hengli Petrochemical Refining Hengli Petrochemical (Dalian) and Kanghui New Material have education sessions and
heater testing firefighters’
knowledge competitions emergency response speed
obtained ISO 45001 Occupational Health and Safety Management System certification. to spark employees’ and improving early-stage
interest in learning about incident handling capabilities.Work Safety Management in 2024 work safety.Hengli (Suqian) Industrial Park
Hengli (Huizhou) Industrial Park organized “Work Safety Month”kicked off the 2024 “Work activities through various Indicator Unit ValueSafety Month” by anchoring formats including summer
key activities to designated safety training fire evacuation
Investment in Work Safety RMB 100 million 5.30 theme weeks. The entire drills firefighting skills competi-
Major Hazard Rectification Rate % 100 month featured safety
tions special safety rectification
campaigns hazard inspec- actions and safety awareness
Coverage Rate of Safety Education and Training % 100 tions emergency drills and video check-ins during pre-shift
Coverage Rate of Safety Risk Protection Training % 100 training programs to ensure
meetings.the concept of safety takes
The Number of Security Emergency Drills Times 1920 root across the enterprise. Hengli (Yingkou) Industrial Park invited senior safety
Number of Fatal Accidents Concerning Work Safety Times 0 experts to train over 240 mid- and senior-level
managers and safety personnel. It also held evacuation
Inspection Rate of Special Equipment % 100 drills in office buildings and conducted emergency
Certification Rate for Special Operations and Equipment Operators % 100 response exercises for tetrahydrofuran and biogas leaks
further reinforcing the Company’s work safety manage-
ment system.Establishment of Work Safety Culture
In accordance with the Law of the People's Republic of China on Work Safety the Emergency Response Law of the People's
Republic of China and the Management Measures for Work Safety Accident and Emergency Plan the Company has formulat-
ed a comprehensive Work Safety Accident and Emergency Plan. Through this the Company continues to improve its
emergency drill system regularly organizing drills and training sessions to enhance emergency management capabilities and
strengthen the foundation for work safety.Work Safety Month Campaign
June 2024 marked the 23rd National “Work Safety Month” themed “Everyone Talks Safety Everyone Knows EmergencyResponse — Keeping Life Channels Clear.” Hengli Petrochemical's industrial parks responded actively by organizing a wide Hengli (Suzhou) Industrial Park: Work Hengli (Dalian Changxing Island) Industrial Hengli (Suqian) Industrial Park
range of educational campaigns drills and safety rectification activities. These initiatives aimed to comprehensively improve Safety Skills Competition Park: Safety Drill in Progress
employees’ safety awareness and their ability to respond to emergencies.HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 61 I 62
Hazard Identification and Management
Active Participation in Emergency Drills Key Performance
Work safety is of paramount importance. Adhering to the principle The Company continuously improves its safety and health management system by formulating the Management System forof “safety first prevention foremost and comprehensive gover- During the reporting period the Accident Hazard Identification and Rectification and the Dual Prevention Mechanism Management System for Safety Risknance” the Company has strengthened its safety management Company conducted a total of Grading and Control and Hazard Identification and Rectification. Risk identification is conducted regularly at the workshop level
system deepened safety oversight enhanced safety training and 1920 each year with risk sources categorized by significance and corresponding tiered control measures developed thereby actively responded to emergency drills establishing a safety-ori- emergency drills effectively enhancing risk prevention and control capabilities.ented team characterized by zero violations zero hazards and zero Case
accidents.Electrical Safety Hazard Inspection in the Polyester G Zone of Hengli Chemical Fiber
Case
Hengli New Material Successfully Conducts Its First Company-Level Emergency Drill The electrical and instrumentation team in the Polyester G Zone of Hengli Chemical Fiber carried out a comprehen-
sive inspection of electrical equipment throughout the workshop in accordance with industry standards and theHengli New Material organized a “Major Hazard Source Company’s work safety management system ensuring safe stable and efficient production. During the inspectionProduction Safety Accident Emergency Drill” to comprehen- the team focused on key aspects such as the operational status of equipment insulation performance of wiring
sively evaluate the emergency response capabilities of its sensitivity of switches and reliability of grounding systems—ensuring all indicators met work safety standards.various teams. This marked Hengli New Material’s first-ever Upon identifying problems or potential hazards the team immediately formulated corrective actions designated
company-level emergency drill conducted in a “script-free” responsible personnel and set rectification deadlines to ensure that all hazards were addressed promptly and
simulation format. The exercise simulated a combustible gas effectively.leak at the base of propylene storage tank TK108-01 in the
tank farm area.Emergency Drill in Progress Key Performance
The Company conducted 529 company-level hazard inspections identifying 4477 company-level hazards;
Digital Safety Management
and 46850 workshop-level inspections identifying 30599 workshop-level hazards. The hazard
The Company actively promotes the deep integration of information technology with work safety management. Centered rectification rate reached 100%.around key elements of enterprise safety it has built a digital safety management platform aimed at enhancing the efficiency
and effectiveness of safety management through digital means.Case Fire Safety Management
Integrated Work Safety Supervision Through Information Systems to Drive Safety Enhancement
The Company places great emphasis on fire safety and the management of special equipment. It has established several
Hengli (Dalian Changxing Island) Industrial Park is vigorously internal regulations including the Fire Safety Management System Special Equipment Safety Management Measures and
advancing the integration of information technology with Safety Management System for Special Equipment and Operators to ensure compliance with legal responsibilities for the safe
hazardous chemical work safety management by developing a use of special equipment. These systems effectively prevent safety incidents and ensure rigorous control of work safety
digital safety management platform. This platform features management processes. During the reporting period the Company had a team of 569 safety management personnel in place.extensive applications comprising 109 functional modules
and over 360 specific functions seamlessly embedded into all ● Formation of a dedicated fire brigade
stages of production. It provides real-time monitoring of more Fire Safety
than 60 sets of equipment 124 major hazard sources and Management ● Establishment of a comprehensive fire equipment ledger with each piece of firefighting equipment
1964 control points. Additionally it enables real-time tracking assigned to a designated manager
of 6 fire stations and 40 fire trucks while connecting 6842 ● Implementation of fire safety education including annual fire drills for all employees
surveillance cameras to ensure comprehensive plant-wide Central Control Room
safety coverage. By adopting an intelligent management model the park achieves rapid on-site sensing precise
monitoring and efficient emergency response thereby establishing an integrated work safety information supervi- ● All special equipment operators are required to be certified and must strictly adhere to operating
sion system that empowers enterprise-level work safety management. Special procedures
Equipment
Management ● Regular inspections are strictly enforced including annual monthly and daily checks supported by
a complete and detailed equipment ledgerHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 63 I 64
Case Chemical Safety
Fire Extinguisher Training Drill
Chemical Management Policies
November 9 2024 marked National Fire Safety Day. In response to the theme “Fire Safety for All Life First” Deli
Chemical Fiber conducted a fire extinguisher training drill. During the activity the fire brigade provided a special The Company strictly complies with the Regulations on the Safe Management of Dangerous Chemicals and other relevant
briefing on the proper use of fire extinguishers and related precautions. The entire group of participating employ- regulations. It promotes the development of internal systems at its subsidiaries including the Hazardous Chemicals Safety
ees then engaged in hands-on fire extinguisher operations effectively enhancing their fire safety skills. Management System and the Hazardous Chemicals Loading and Unloading Safety Management System. These systems set
clear management requirements for the procurement storage use and disposal of chemicals. Additionally each workshop
maintains a hazardous chemicals management ledger implements hazard communication measures and conducts
emergency drills related to hazardous chemicals thereby safeguarding the safety and well-being of all employees.We focus on the core principles of “Prioritizing Quality and Promoting Continuous Improvement” and have established a
comprehensive lifecycle quality management system covering product R&D production sales and after-sales services. This
system ensures that every stage meets high-quality standards. In production quality risk management we follow a rigorous
risk management process that includes risk identification risk assessment risk control risk communication and risk auditing
ensuring that each step is effectively executed. In the sales and after-sales service stages we continuously optimize product
performance and service quality through customer feedback mechanisms and regular quality follow-ups.Hazardous Chemicals Management System
National Fire Safety Day Fire Extinguisher Drill in Progress
The Procurement Department conducts strict
Procurement evaluations of suppliers and prioritizes the purchase of environmentally friendly chemicals.Chemicals are procured based on production
Chemicals are categorized and
Key Performance process requirements and only conforming managed by zone according to their chemicals are selected. Suppliers are required to
57 properties with clear warning signs in provide Material Safety Data Sheets (MSDS) and In 2024 the Company’s fire safety team was equipped with fire place. Hazardous chemicals must be chemical safety labels or such documentation stored in dedicated warehouses tank must be obtained from relevant sources.
336 farms or storage rooms under the Storagetrucks and staffed by professional firefighters. supervision of designated personnel.
Highly toxic and drug precursorchemicals are managed under the In adherence to the principle of “those who use are“Five Duals” system—dual personnel accountable” the Company has established
delivering and receipt dual personnel
management etc. Usage
comprehensive safety operating procedures and
emergency response plans for precursor chemicals
and explosive-prone substances. Employees are
informed of potential hazards prevention
measures and emergency response protocols.Chemicals and chemical waste
must be classified stored and
disposed of in accordance with Transportation
national and local environmental
regulations.Emergency The Company has developed emergency
response response plans for chemical leaks fires and
other critical incidents and regularly organizes
drills for relevant personnel to ensure prepared-
ness.The Company conducts regular risk
assessments for both existing and Risk
newly introduced chemicals imple- assessment
menting appropriate hazard control
measures.Internal audits are conducted regularly to assess
Performance the compliance and effectiveness of chemical
assessment management practices. Based on audit findings
and external feedback the Company continu-
ously improves its chemical management
processes and policies.HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 65 I 66
Case Data Security and Protection
Installation of Hazard Warning Boards and “One MSDS One Label” System
Establishment of Information Security Management System
The Company has established an Information Security Management System and related protocols to ensure strict control over
the devices facilities and software systems connected to the Company's information systems. This system is designed to
guarantee the protection of corporate data security. Additionally each subsidiary of the Company has set up an information
security management department that is fully responsible for overseeing and managing information security ensuring that
information security is reliable controllable and manageable.Information Security Responsible for managing information
Working Group security and privacy protection during
data entry
Information Security
Leading Group
Harzardous Chemical Warning Boards “One MSDS One Label” System for Harzardous Chemicals
Emergency Response Handles and analyzes
Group information security incidents
Chemical Spill Incident Response and Prevention Information Security Risk Identification and Assessment
Hengli Petrochemical has established a comprehensive chemical spill
prevention and emergency response system. Through stringent risk assess- Key Performance We have established a comprehensive information security risk assessment system. Through regular scanning and vulnerabili-
ments and hazard identification protocols the Company ensures safety ty detection potential threats are identified and targeted protective measures are implemented. The Company strictly
across all stages—production storage and transportation. Regular employ- During the reporting period the enforces a data classification management system encrypting sensitive information during both storage and transmission.ee training sessions and emergency drills are conducted to strengthen Company conducted Advanced technologies such as firewalls and intrusion detection systems are deployed to create a multi-layered security
overall safety awareness and enhance incident response capabilities among protection network.all staff members. In addition Hengli Petrochemical has implemented a 3776 chemical safety Additionally the Company has developed protocols such as the Cybersecurity Emergency Response Plan to standardize the
structured accident reporting and review mechanism allowing for continual drills. procedures for handling security incidents within the Company's information systems. Regular drills and employee information
refinement of its safety management practices. With a firm commitment to security training are conducted to enhance our ability to prevent and control information security emergencies.achieving a “zero leakage” target Hengli Petrochemical works diligently to
protect its employees the surrounding community and the environment
upholding its corporate social responsibility. Information Security Management Strategies
The Company has developed a series of management measures focusing on physical security network security and other
Case aspects to continuously enhance the level of network and data security protection.Chemical Spill Emergency Drill at Hengli (Nantong) Industrial Park
In March 2024 Hengli (Nantong) Industrial Park organized a chemical spill emergency drill to enhance employees’
Information
awareness of risk prevention and their ability to perform self-rescue and mutual aid. All employees actively partici- security
pated in the drill. The exercise further reinforced the Company’s work safety baseline and significantly improved its control
emergency response capabilities. Physical Personnel
security access
control Network Enhance the Application control
security security security
Strengthen the control
management of control
information Strengthen
security including the personnel access
management of Strengthen network encryption Strengthen the management
physical security manage- backup and security of applica- ensuring security
environments ment including the recovery of data. tion systems measures for
including data security of network including the secure employees'
centers architecture configuration of access rights
hardware firewalls intrusion operating systems during onboard-
equipment and detection systems and the security ing and
uninterruptible etc. management of offboarding
Chemical Spill Emergency Drill in Progress power supplies databases. processes.(UPS).04
Insightful Innovation &
Optimizing R&D Systems 69
Empowering Innovative Achievements 70 Digital Intelligence
Advancing Digital and Intelligent Development 73
Intellectual Property Protection 74 SafeguardHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 69 I 70
Optimizing R&D Systems Empowering Innovative Achievements
R&D System Guarantee Highlight Products Overview
Hengli Petrochemical adheres to the “innovation-driven development” strategy and places great emphasis on innovation. The
Company continues to strengthen the management of the R&D system and has formulated relevant management policies During the reporting period Hengli Petrochemical continued to overcome technological challenges leading to the emergence
such as the New Product Development Management Procedures New Material R&D Center Laboratory Management System of many outstanding products.and Independent Innovation Reward Management Measures. These ensure the standardization of new product development
processes and the scientific management of laboratories enhancing the work efficiency and innovative capabilities of the R&D Case
team and providing a solid institutional guarantee for the development testing and promotion of new products.Hengli Chemical Fiber Develops Ultra-Fine Fiber
To encourage R&D and innovation Hengli Petrochemical has implemented a series of incentive measures that have motivated
all employees accelerating the pace of new product launches. In 2024 several of the Company's technologies reached indus- Hengli Chemical Fiber developed a new member of ultra-fine fiber with a single filament density of only 0.18 denier
try-leading levels. for the 27D/144f yarn. The weight of a 9000-meter-long filament is only 0.18 g. This ultra-fine polyester filament
is a benchmark variety that represents the international standard of fiber technology and competitiveness.Incentive system：
Establish a comprehensive innovation reward mechanism to recognize and reward individuals who have made
outstanding contributions in technological innovation standard publication and professional title evaluation. Case
New product (technology) development project rewards： Hengli Chemical Fiber Optimizes Polyester Filament Geotextile Materials
Encourage relevant personnel to participate in provincial-level (and below) new product development projects as Hengli Chemical Fiber optimized the spinning and fiber stretching stages successfully increasing the 5% elonga-
well as national-level new product identification with rewards given. tion strength by more than 30% compared to the original variety. This has allowed Hengli to surpass its competi-
tors in physical performance indicators within the geotextile field.Government funded project rewards：
Encourage related personnel in the Company to participate in government-funded projects and contribute to
regional economic development. Case
Patent and copyright rewards： Hengli Chemical Fiber Produces High-Strength Flame-Retardant Black Industrial Yarn Series
Provide one-time rewards to personnel who apply for and obtain patents motivating their contributions to Hengli Chemical Fiber produced a stable-performing high-strength flame-retardant black industrial yarn. Using
technological innovation. the new FZ/T50016-2023 twist rope method the flame-retardant oxygen index is greater than 28% (measured by
Participation in standard formulation and revision： ASTM D2863-2017 fabric method the oxygen index exceeds 32%). This yarn offers excellent flame-retardant
properties high strength and resistance to abrasion.Reward and encourage relevant personnel who participate in the formulation and revision of national industry
group local and enterprise standards as well as those who take the lead in these activities.Case
R&D Team Building Hengli Research Institute Launches Phosphorus-Based Copolymer Flame-Retardant Polyester Fiber
Hengli Research Institute successfully independently developed phosphorus-based copolymer flame-retardant
0.42% 0.56% polyester chips. Using environmentally friendly and non-toxic flame retardants terephthalic acid and ethylene
2.99%
5% glycol as the main raw materials the copolymerization technique was used to produce the polyester. The
13.5% flame-retardant fiber made from these chips achieves permanent flame resistance while also featuring low fuzz 57.87% high strength ease of dyeing and excellent dye stability. This innovation delivers both production efficiency and
product quality.Below Bachelor’s Degree
Bachelor’s Degree Case
Master’s Degree 38% Deli Chemical Fiber's Three Products Recognized as Patent-Intensive Products
38.71% Doctoral Degree 42.95%
Deli Chemical Fiber's High Uniformity Ultra-Fine Denier Polyester Fiber Micro-Fine Polyester Fiber and Hydrophilic
Key Performance Under 30 (exclusive) years old Quick-Drying Polyester Fiber were recognized as patent-intensive products. The Deli Chemical Fiber technical
30 (inclusive) to 40 (exclusive) years old team has overcome multiple technological bottlenecks in the fine denier filament production field achieving stable
mass production of fine denier filaments. The team has developed several new ultra-low denier and ultra-fine
1.703 40 (inclusive) to 50 (exclusive) years oldRMB billion in total in R&D investment denier products including 20D/72f 15D/12f and 5D/6f filling the domestic gap in ultra-fine denier production.
50 (inclusive) to 60 (exclusive) years old
60 years old or above
(24.20% year-on-year growth)HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 71 I 72
Case Industry-Academia-Research CollaborationHengke Advanced Materials Project Selected for “Nantong Major Scientific and TechnologicalAchievements Transformation Program” Hengli Petrochemical places strong emphasis on university-industry collaborative research striving to drive technological
innovation and sustainability through the deep integration of industry academia and research. The Company has establishedHengke Advanced Materials’ project titled “R&D and Industrialization of Functional Ultra-Warm Fibers for -35°C long-term partnerships with several renowned universities and research institutions to conduct joint research in areas such asExtreme Cold Protection” was successfully selected for the “Nantong Major Scientific and Technological Achievements green chemistry energy conservation and emission reduction and new material development.Transformation Program”. The project addresses the issues of low hollowness and poor mechanical performance in
conventional thermal insulation fibers and has made breakthroughs in key technologies such as low-swelling high-bulk Kanghui New Material in collaboration with Dalian University of Technology Shenyang University of Chemical Technology
fiber spinning stable continuous forming and drawing. Dalian University the Liaoning Academy of Agricultural Sciences and a total of 10 enterprises jointly established the Liaoning
Kanghui Petrochemical New Material Industry-Academia-Research Alliance. In 2022 the alliance was recognized by theDepartment of Science & Technology of Liaoning province as one of the “First Batch of Exemplary and Substantive Indus-Case try-Academia-Research Alliances in 2022”. In addition Jiangsu Kanghui New Material Technology Co. Ltd. was successfully
shortlisted for the “2024 Jiangsu Province Postdoctoral Innovation Practice Base” program marking a significant step forward
Hengke Advanced Materials Project Certified by the China National Textile and Apparel Council in the Company’s efforts in advanced materials R&D and talent development.The project “Industrialization of New Disperse Dye Normal-Pressure Dyeable Polyester and Its Fiber” developed by
Hengke Advanced Materials has passed the scientific and technological achievement appraisal by the China National Case
Textile and Apparel Council. The project has established a production capacity of 35000 tons per year for continuous
esterification and polymerization. Covering the full industrial chain from NEDDP chips production to spinning texturing Biodegradable Mulch Film
and dyeing/finishing the project demonstrates significant energy-saving and emission-reduction effects. Compared
with high-temperature dyeing normal-pressure dyeing saves 45–50% steam 14% water and 25% electricity while In 2024 Kanghui New Material collaborated with Shenyang Agricultural University on a joint research project titled
improving labor productivity by 22–23%. The project yields notable economic social and environmental benefits Application Effect and Ecological Impact Assessment of Biodegradable Mulch Film. The study focused on evaluat-
possesses independent intellectual property rights and has led to the development of four group standards. ing the application performance and ecological impact of biodegradable mulch films including assessments of
their effectiveness in cultivating typical crops and the ecological impact of film residues on soil biological systems.Driving Industry Development
Case
The Company actively participates in the formulation of national industry and group standards working closely with industry
peers to promote technological advancement across the sector. At the same time the Company engages in various exhibi- High-Strength High-Rigidity Biodegradable Polyester
tions industry forums and technical seminars to exchange ideas with industry leaders share best practices and continuously
absorb new knowledge and technologies thereby maintaining its innovative vitality. Also in 2024 Kanghui New Material and Shenyang University of Chemical Technology jointly undertook a project
under Yingkou’s Dual-Innovation Program for PhD Talent titled Development of High-Strength High-Rigidity
Case Biodegradable Polyester for Injection Molding and Film Blowing. The research targeted the copolymer modification
of PBAT (poly(butylene adipate-co-terephthalate)) to impart higher rigidity and strength aiming to meet industrial
Hengli Chemical Fiber Injects New Momentum into High-Quality Industry Development application needs for dual-use in injection molding and film blowing.Hengli Chemical Fiber plays an active role in driving industry progress having participated in the formulation of 41
standards to date including 19 national standards 21 industry standards and 1 group standard. During the reporting
period the General Manager of Hengli Chemical Fiber was selected as a member of the first National Technical Case
Committee for Standardization of Industrial Textiles. Additionally the Hengli Chemical Fiber was honored to serve as
the chairing unit of the Polyester Filament Yarn Branch of the China Chemical Fibers Association. Low Precipitation Refrigerant-Resistant Modified PBT
In another 2024 initiative Kanghui New Material cooperated with Dalian University of Technology to undertake a
Case key project under Yingkou's “Reveal the List” R&D program. The project titled Study on Low Precipitation Refriger-
ant-Resistant Modified PBT explored how different viscosities and terminal carboxyl group contents of PBT—
Active Participation in Industry Seminars produced by SSP process—affect precipitation behavior. By optimizing extrusion process parameters to reduce the
content of small molecules in modified PBT materials the project successfully developed an optimal formula and
processing technique for refrigerant-resistant PBT.Key Performance
The Company currently holds 6 national high-tech enterprises 1 nationally
accredited enterprise technology center and 2 postdoctoral workstations
Advanced Functional Materials & Equipment Industry Conference Thematic Forum on the Explosive Development of
Composite Current Collectors for Lithium BatteriesHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 73 I 74
Advancing Digital and Intelligent Intellectual Property Protection
Development The Company has established a series of procedural documents and management systems including the Intellectual Property Manual
Intellectual Property Acquisition Control Procedure Intellectual Property Maintenance Control Procedure and Intellectual Property Risk
Hengli Petrochemical remains committed to the deep integration of industrialization and informatization striving to build a fully Management Control Procedure. These efforts are part of building a comprehensive intellectual property (IP) management system
integrated intelligent ecosystem across the entire industry chain. By positioning “intelligent connectivity” as a key entry point for which includes well-defined IP policies and employee training materials.industrial upgrading and transformation the Company independently develops smart systems to continuously enhance intelligent
manufacturing throughout all stages of its operations. During the reporting period multiple subsidiaries of the Company received The Company’s intellectual property management is directly led by the general managers of each industrial park with close collabora-various intelligent manufacturing awards highlighting Hengli’s outstanding capabilities in this field and providing strong momentum tion across departments. Adhering to the management principles of “prevention first full-process involvement rapid response andfor future development. continuous improvement” the Company integrates IP protection into the entire product development cycle. It also collaborates with
renowned domestic IP agencies to ensure full-process involvement—from project initiation to post-launch maintenance—ensuring
Case that IP applications are submitted promptly and systematically.Intelligent Production Project for 400000 Tons of High-Performance Special Industrial Yarn Achieves Case
Full-Scale Production
Hengli Chemical Fiber Achieves Both Quantity and Quality in IP DevelopmentIn 2024 Hengli Chemical Fiber’s “intelligent production project foran annual output of 400000 tons of high-performance special Hengli Chemical Fiber focuses its IP work on the layout of key core technology areas. It has organized a series of techni-industrial yarn” reached full production. The project features interna- cal exchange meetings and IP seminars by inviting experts and senior agents from university-industry collaboration
tionally advanced equipment including solid-state polymerization partners such as Donghua University and Soochow University as well as from patent agencies and IP authorities. These
units multi-position spinning equipment for industrial yarn intelli- initiatives have effectively enhanced the Company’s internal capacity for patent creation and improved overall IP
gent surface inspection systems automated packaging and smart management.warehousing systems. These elements together form a fully
integrated intelligent factory.Hengli Chemical Fiber Intelligent Workshop for Industrial Yarn
Key Performance
Case
BOPET Intelligent Workshop Selected as a “2024 Jiangsu Provincial Intelligent Manufacturing Workshop” A cumulative total of 1676 authorized patents and
The BOPET intelligent workshop of Jiangsu Kanghui New Material 37 software copyrights.was selected for the “2024 Jiangsu Provincial Intelligent Manufac-turing Workshop” list. With its advanced intelligent production
equipment and highly efficient information management system
Jiangsu Kanghui New Material has been recognized with two provin-
cial-level intelligent workshops one municipal-level intelligent
workshop and the title of a provincial Five-Star Cloud-Enabled
Enterprise. Through the construction of intelligent workshops the Case
Company has achieved fully automated and intelligent processes
across the entire production chain—including order processing Intellectual Property Training
production scheduling product inspection packaging and storage Jiangsu Kanghui BOPET Intelligent Workshop
and delivery—leading to steadily improving economic benefits.Case
Hengke Advanced Materials Selected for Nantong’s “Digital and Intelligent” Microgrid Pilot Program
Hengke Advanced Materials was successfully selected for Nantong City’s “Digital and Intelligent” Microgrid Pilot
Program. The Company has established an intelligent microgrid featuring integrated PV and energy storage systems.By incorporating solar power into the park’s grid and leveraging energy storage along with auxiliary grid services the
system enables efficient clean energy allocation while delivering economic benefits and supporting the Company’s
green and low-carbon transition. In 2024 the Company saved nearly RMB 30 million in electricity costs by utilizing
solar power generation and peak-valley electricity pricing. Currently the Hengli (Nantong) Industrial Park has complet- Trademark and Brand Management Empowerment Camp Intellectual Property Training in Progress
ed construction of a 106 MW distributed PV system and a 40 MW/80 MWh behind-the-meter energy storage project.Multiple energy management platforms have been established covering energy consumption monitoring electricity
management PV power generation and energy storage control.05
Human Resource Management 77
Employee Training and Development 79 People Orientation &
Rural Revitalization 84
Social Value Contribution 85 Social ContributionHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 77 I 78
Human Resource Management Case
Kanghui New Material Held Two Job Fairs for Veterans
Employment Management Demonstrating a strong sense of social responsibility Kanghui New
Material cooperated with the Yingkou Veterans Affairs Office during
Hengli Petrochemical adheres to a people-oriented philosophy in talent development. In accordance with the Labor Law of the the reporting period to organize two dedicated recruitment fairs for
People's Republic of China (hereinafter referred to as the Labor Law) the Labor Contract Law of the People's Republic of China retired military personnel attracting over 300 attendees in total
and other relevant laws and regulations the Company has formulated its Human Resources Management System. Hengli is through on-site visits and presentations.committed to lawful employment practices signs Collective Contracts with employees and strives to create a healthy and safe Job Fair for Veterans
working environment. The Company ensures fair and equitable employment practices and compensation and strictly prohib-
its discrimination based on nationality gender age disability race religion or other factors. During the reporting period no
violations related to child labor or forced labor were identified. Employee Structure
Recruitment and Dismissal
The Company standardizes employee onboarding and offboarding procedures signs labor contracts with all employees in Key Performance
accordance with the law ensures equal employment and safeguards employees’ lawful rights and interests.Equal Opportunity In 2024 the Company had a total of 38300 employees with a social insurance coverage rate of
Hengli firmly opposes employment discrimination and ensures that employee recruitment and career development are not
influenced by gender nationality age religion marital status or other unrelated factors. 94.87% and a labor contract signing rate of 99.14%.Diversity and Inclusion Note: For detailed information on employee composition please refer to the Hengli Petrochemical 2024 Annual Report.The Company provides fair and equal employment opportunities and career development paths for women ethnic minorities
and candidates from diverse backgrounds. Compensation and Benefits
Reasonable Working Hours Adhering to the principles of external competitiveness and internal fairness the Company strictly complies with the Labor
In accordance with the Attendance Management Policy the Company reasonably arranges employees’ working and rest hours to Law the Social Insurance Law of the People's Republic of China and other relevant laws and regulations. It has established the
protect their legal rights to rest. Detailed Rules for Compensation Management System and the Employee Performance Appraisal Management Measures and
upholds the principle of equal pay for equal work. A compensation system has been developed that combines a base salary
Prohibition of Child Labor with variable and indirect components to provide employees with a fair and competitive compensation structure.A strict age verification process is implemented during recruitment to ensure that no individuals under the age of 16 are hired.Performance
Feedback and Employee
One-on-One Benefits
Elimination of Forced Labor Review Sessions
All work is arranged based on the principle of free will and the personal freedom of all employees is fully respected and protected. Performance Application
Evaluation of Allowances
and Performance
Appraisal Evaluation
Attracting Talents Results
Performance Bonuses
Hengli Petrochemical places great emphasis on talent development and is committed to expanding its recruitment channels to Process
attract professionals from diverse backgrounds. The Company has formulated the Personnel Appointment Management Measures Control in Performance
Performance
and the Newly-Recruited Personnel Appointment Management Measures (Interim) and offers employment and development oppor- Planning and KPI Management Development Basic Salary
tunities through various channels such as social recruitment campus recruitment university-enterprise cooperation internal
referrals and job rotation with the goal of building a diverse and dynamic workforce.Case “Two-Way Communication” in Performance Appraisals
Hengli Petrochemical Offline Recruitment Event in Progress The Company has established a four-tier performance management system continuously standardizing performance
management procedures and regularly conducting performance evaluations. The results of these evaluations are extensively
applied in the distribution of performance bonuses and the selection of outstanding employees fully leveraging the motiva-
tional function of the compensation system. Hengli Petrochemical places great emphasis on communication and feedback in
performance management. A “two-way communication” mechanism between managers and employees has been imple-
mented to ensure fairness and transparency in evaluation results.Each department publicly Employees who question If disagreements remain after HR will then consult with
discloses monthly their appraisal results may this communication department heads gather input
performance appraisal results initiate discussions with their employees may escalate the and report the matter to
recognizing outstanding department heads. issue by submitting feedback company management to
employees and communicat- or a written appeal to the HR determine whether a correction
ing with those who fall short to Department to the assessment is warranted.discuss corrective measures
and improvement plans. via email suggestion boxes
the official WeChat account
or the labor union.HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 79 I 80
Key Performance Conducting Skills Enhancement Training
In 2024 the total employee compensation paid: RMB 5.404 billion; the total
Case
employee benefits expenditure: RMB 715 million.HAZOP Professional Training Program
Employee Incentives The HAZOP professional training program at Hengli (Dalian Changx-
ing Island) Industrial Park was successfully concluded with over 300
The Company emphasizes the multi-channel professional development of employees and has established relevant systems participants from various specialties including process engineering
such as the Frontline Employee Promotion Management Measures Selection Management Measures for Positions Above Shift instrumentation equipment electrical and safety. The program
Leader and Specific Training Plans for Reserve Cadres. The Company has a comprehensive promotion system and incentive achieved a 100% conforming rate. The training course featured
mechanism in place. Through a series of talent development programs various special incentives suggestions reward lectures by instructors from the China Chemical Safety Association.programs outstanding employee awards and promotion rating systems the Company creates opportunities and platforms As an essential analytical method for identifying design flaws
for talent thereby effectively attracting nurturing retaining and utilizing talent. process hazards and operational issues the HAZOP training aimed
to systematically and professionally enhance the risk management
capabilities of the industrial park. Session of the HAZOP Professional Training Course in Progress
Professional
Technical Production Administrative Management Sales
Framework Framework Framework Framework Framework Case
Hengke Advanced Materials “Spider-Man Program”
* Chief Expert * Vice President of * Deputy General Manager * Deputy General Manager * Vice President of
Production Marketing The “Spider-Man Program” is a distinctive training initiative for
* Expert * Director * Director
* Production Director * Director frontline managers launched in 2017. Since its inception the
* Senior Technical Expert * Manager * Deputy Director
* Workshop Director * Senior Manager program has continuously evolved in terms of training content and
* Intermediate Technical * Deputy Manager * Manager
Expert * Engineer * Sales Manager operation model successfully developing a cyclical training* Head * Deputy Manager approach characterized by “1 year of classroom learning and 2 years* Junior Technical Expert * Shift Leader * Senior Salesperson* Staff * Head of post-training follow-up.” Adhering to its original intention of
* Technical Assistant * Senior Production Staff * Salesman
* Intern Staff building a high-caliber team of shift leaders and improving the
* Technician * Star-level Production Staff * Intern Salesperson effectiveness of frontline management the “Spider-Man Program”
* Intern Technician * General Production Staff has successfully completed nine training camps cultivating 390 shift
* Intern leaders and achieving full coverage of shift-level management Spider-Man Program – Featured Training Initiative
positions within the Company.Employee Training and Development Case
Inauguration of the Hengli (Dalian Changxing Island) Industrial Park Training Center
Establishing Career Development Pathways
The newly inaugurated Training Center at Hengli (Dalian Changxing
Island) Industrial Park highlights a professional distinctive intelli-
Hengli Petrochemical adheres to a “people-oriented” approach to talent development placing great emphasis on talent gent and scenario-based approach. It integrates five core training
cultivation. The Company has established a comprehensive talent development system that fosters the mutual growth of functions—cognition experience simulation hands-on practice
employees and the enterprise. Backed by multiple R&D teams with strong technical capabilities the Company actively creates and discussion—by effectively combining various training methods
platforms for employee growth and advancement. In terms of talent selection the Company has built a well-structured such as classroom instruction experiential learning and online
development pathway providing strong support for employees’ smooth career progression. education. With the official unveiling of the Training Center opera-
The Company emphasizes talent cultivation and has formulated the Personnel Training Management Measures. Relying on tions will gradually commence providing relevant training programs
platforms such as Hengli Business School and the online LINK Classroom and supported by the in-plant trainer system and to accelerate the development of high-quality technical talent for
training resource pool the Company has established a comprehensive talent development system that covers all employees the new era empower new productive forces and establish a talent Unveiling of the Hengli (Dalian Changxing Island) Industrial Park Training Center
enabling joint growth of employees and the enterprise. During the reporting period the Company conducted extensive development system with distinctive Hengli characteristics.employee training based on the annual training plan categorized by level type and position to promote mutual development.The training primarily consists of: onboarding training for new employees internal training under the annual training plan and
monthly department-level certified skills training. Key Performance
The Company also actively supports employees in enhancing their skills and educational qualifications promoting the Total employee training hours total training participants annual training expenditure
development of a learning-oriented enterprise. Hengli (Huizhou) Industrial Park in collaboration with the Huizhou Petrochemi-cal Association and the Sun Yat-sen University Huizhou Institute has launched an “In-service Employee Education Enhance-ment Program” offering customized end-to-end services to support employees in pursuing further education and degree 424600 hours 159008 RMB 10.1933 million
advancement. At the same time the Company actively promotes professional title policies encourages employees to apply
for job-related title evaluations assists in the preparation of application materials and provides full-process tracking to ensure
a smooth application process.HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 81 I 82
Employee Care and Well-being Diverse Employee Activities
Hengli Petrochemical is committed to providing all employees with comprehensive and competitive welfare benefits including Case
but not limited to social insurance and housing fund contributions paid leave cultural and sports activities and an employee
Dual Approach of Health Care and Cultural Enrichment
stock ownership plan. The Company actively enriches employees’ cultural lives consistently pays attention to the needs of to Enhance Employee Satisfaction
employees in difficulty and strives to enhance overall employee happiness and satisfaction.Hengke Advanced Materials places strong emphasis on corporate
culture development by adopting a dual approach of health care and
cultural enrichment. Comprehensive health check-ups provide a
safety net for employee well-being while red-themed education
Social insurance Statutory leave Holiday Overtime Annual health fosters ideological grounding. Competitive recreational activities
and house fund such as benefits allowances checkups help relieve stress and enhance team cohesion and public welfare
parental leave
and caregiving initiatives promote compassion and social responsibility compre- Employee Health Check-up
leave hensively enhancing employees' lives.Case
Chinese New Year Gala
Employee Mutual assistance Free shuttle Employee
activity center fund and bus service stock Hengli (Suqian) Industrial Park held a grand Chinese New Year Gala
and employee support ownership Employee Activity in Progress under the theme “A Prosperous Hengli One Big Family” aiming to
recreational programs program
events enhance employees’ sense of participation and belonging. The gala
blended traditional and modern elements with four rounds of prize
draws creating an engaging and festive atmosphere. The event
Women's Rights and Interests featured a variety of performances with high artistic expression. The
Hengli Petrochemical is firmly committed to the principle of gender equality and places great importance on safeguarding the successful hosting of the gala brought joy to the employees
Chinese New Year Gala Performance
rights and interests of female employees. The Company is dedicated to creating a fair and inclusive working environment for conveyed the Company’s care and injected new vitality into the
women. Through a well-established talent selection mechanism we ensure equal opportunities for women in recruitment cultural development of the industrial park.promotion and compensation while actively supporting their career development. We offer flexible work arrangements and
mother-and-child care facilities to help female employees balance their professional and family responsibilities. In addition Employee Communication and Engagement
regular women's health care initiatives are carried out to support their physical and mental well-being. Hengli Petrochemical
will continue to promote the protection of women’s rights and foster a diverse and sustainable development environment The Company places great importance on listening to employee opinions and suggestions.contributing to the building of a harmonious society.Annual satisfaction surveys are conducted through questionnaires to identify key factors influencing employee satisfaction.Case Based on survey results the Company promptly implements targeted improvements to address identified issues striving to
create a positive and fulfilling workplace environment that fosters a strong sense of belonging and well-being among employ-
“Caring for Female Workers Law by Your Side” Legal Awareness Campaign at Hengli (Huizhou) Industrial Park ees.A Labor Dispute Mediation Committee has been established to reinforce harmonious and stable labor relations. The Company
Hengli (Huizhou) Industrial Park places strong emphasis on caring for has also implemented an early warning and resolution mechanism for labor issues with clearly defined procedures for handling
female employees and organized a legal awareness campaign labor and personnel disputes ensuring effective conflict prevention and resolution.focused on women's rights. At the event educational materials were
distributed covering the Law of the People's Republic of China on the Case
Protection of Rights and Interests of Women and the Special Regula-
tions on the Labor Protection of Female Employees. Participants also Conducting Satisfaction Surveys
viewed public service videos on the protection of female employees’
rights. The campaign emphasized the promotion and dissemination
of laws and regulations related to employment rights labor rights
and the special protections afforded to female workers.Legal Awareness Campaign on Women’s Rights
Key Performance
During the reporting period return-to-work rate after maternity leave return-to-work rate after parental leave
100%100%
Employees Completing Satisfaction Survey QuestionnairesHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 83 I 84
Case Occupational Disease Prevention Performance in 2024
Establishing a Legal Consultation Office
Indicator 2024
Key Performance Incidence Rate of Occupational Diseases 0
Coverage rate of occupational injury insurance for employees 100%
Key Performance Indicator for 2024:
During the reporting period the overall employee Occupational Health Examination Coverage 100%
85.05 Occupational Hazard Factor Testing Rate 100%satisfaction rate reached % Investment in Occupational Injury Insurance for Employees (RMB 10000) 1918.75
Occupational Disease Prevention Awareness Week Activities
Case Rural Revitalization
Employee Rationalization Proposal Campaign Hengli Petrochemical regards supporting rural revitalization and consolidating the achievements of poverty alleviation as an unshirk-
able corporate social responsibility deeply integrating it into the Company’s development strategy. With industry as the brush and
To inspire a sense of ownership among employees and encour- responsibility as the ink Hengli Petrochemical paints magnificent landscapes across vast rural areas. While ensuring the Company’s
age the sharing of valuable insights and work experiences Deli healthy growth and sustained returns to investors Hengli actively undertakes social responsibilities supports rural revitalization and
Chemical Fiber launched an employee rationalization proposal public welfare causes and promotes sustainable economic and social development.campaign in January 2024. The initiative invited employees to
contribute suggestions focused on areas such as technological Case
innovation and management optimization based on their daily
responsibilities. The campaign successfully transformed Active Participation in Philanthropy
employees’ “golden ideas” into “golden fruits” of productivity
strengthening labor-management relations and significantly
enhancing employee engagement. This initiative fostered Hengli Petrochemical (Huizhou) Co. Ltd. actively participates in public welfare initiatives. During the 2024 “6·30” Rural
Employee Rationalization Proposal Campaign in Progress
proactive participation in the Company’s high-quality develop- Revitalization Campaign in Daya Bay Development Zone Hengli Petrochemical (Huizhou) pledged an idle land parcel in
ment journey. the zone for the construction of R&D and production facilities. This contributed to revitalizing unused land and support-
ing comprehensive rural development in the region.Occupational Health and Safety
Case
To proactively prevent work-related injuries and minimize employees’ risk of occupational diseases the Company has
developed a set of policies in accordance with the Law of the People's Republic of China on Prevention and Control of Occupa- Focusing on Industrial Assistance
tional Diseases and other relevant regulations. These include the Occupational Disease Hazard Prevention Responsibility
System the Occupational Health Surveillance and Records Management System and the Occupational Hazard Warning and
Notification System. The Company sets clear occupational disease prevention objectives and safeguards employee health and Kanghui New Material in response to the national rural revitalization
safety in the workplace through various measures. These include posting warning signs in areas with hazardous factors strategy leveraged its technical expertise in the chemical industry to
conducting regular occupational hazard testing distributing appropriate personal protective equipment (PPE) and organizing promote biodegradable mulch film in agricultural production. This
annual health check-ups for employees. not only addresses the white pollution caused by traditional plastic
mulch but also enhances the quality and yield of agricultural
Case products driving local agricultural industrial upgrading.Promoting Biodegradable Mulch Film to Support Industrial
Development
Occupational Disease Prevention Awareness Week at Hengli (Dalian Changxing Island) Industrial ParkHengli (Dalian Changxing Island) Industrial Park held a themed campaign titled “Prevention First SafeguardingOccupational Health” during the Occupational Disease Prevention Awareness Week. The campaign included the Key Performance
distribution of printed brochures posting of awareness posters the setup of an occupational health bulletin board
and assistance activities for occupational disease prevention. These efforts were aimed at enhancing employees’ Donations and public welfare investments rural revitalization investment
awareness of occupational health and improving their self-protection capabilities thereby effectively safeguarding
their occupational health rights and interests. RMB 1.08 million RMB 1.841 millionHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 85 I 86
Social Value Contribution
CaseHengli Petrochemical remains committed to its mission as a corporate citizen upholding the philosophy of “people-oriented creatinga better future together” and earnestly fulfilling its duty to serve society. The Company actively participates in community activities Volunteer Activities by the Dedicated Fire Brigade
supports community development engages enthusiastically in social welfare initiatives shares the fruits of development with the
society and contributes to social harmony stability and sustainable progress by taking practical actions. While fulfilling its internal fire prevention duties the dedicated fire
brigade of Hengke Advanced Materials also actively participates in
Case major public safety efforts organized by the local government such
as flood control and river patrols. The team regularly visits villages
Voluntary Tree Planting Activity schools and businesses to inspect for safety hazards and promote
fire safety awareness. These red-themed volunteer activities serve
On March 12 2024 in celebration of the 46th National Tree Planting as vital logistical support for emergency rescue efforts in Nantong
Day employees of Hengli (Huizhou) Industrial Park participated in a and significantly contribute to the safety and security of the island
voluntary tree planting event. The activity embodied the principle region. Volunteer Work by the Dedicated Fire Brigade
that “lucid waters and lush mountains are invaluable assets”
strengthening employees’ sense of responsibility and mission to
protect the ecological environment. It also reflected the Company’s Case
commitment to integrating green development into all aspects of
Jiangsu Kanghui Brings Warmth to Meidun Village
economic and social growth and supporting the ecological advance-ment of Guangdong Province. Voluntary Tree Planting Activity in Progress Jiangsu Kanghui launched the themed campaign “Bidding Farewell to the Old and Welcoming the New with Warmthbetween Villages and Enterprises” delivering care and support to underprivileged Party members and villagers in
Meidun Village. During the event the Company provided RMB 45000 in relief funds to 36 disadvantaged individuals.This initiative reflects Jiangsu Kanghui’s active fulfillment of social responsibilities and continued concern for rural
Case development.Voluntary Blood Donation CampaignOver the years Hengli Petrochemical has embedded social respon- Looking ahead Hengli Petrochemical will remain committed to its mission of “Serving the Country through Industry and Giving Backsibility into the fabric of its corporate development by continuously to Society” and will further devote itself to public welfare undertakings with greater enthusiasm and stronger action.organizing voluntary blood donation campaigns to spread the
warmth of life. Hengli Petrochemical (Dalian) has repeatedly receivedhonors such as the “Dalian Voluntary Blood Donation Promotion Key PerformanceAward” and the “National Voluntary Blood Donation PromotionAward.” Likewise Hengli (Nantong) Industrial Park has for many Altruistic Blood Donation Driveconsecutive years been recognized as a “Model Group for Voluntary Number of volunteer activities participated in by employees number of volunteers engagedBlood Donation” in Tongzhou District.On May 10 2024 in response to a critical shortage of type O blood in Dalian Hengli (Dalian Changxing Island) Industrial 89 1555
Park urgently mobilized employees with type O blood to donate helping to restore the city’s blood inventory to safe
levels. In October of the same year Hengli (Nantong) Industrial Park launched a series of themed blood donation drives total volunteer service hours
under the banner “Flowing Warm Blood Lighting Up the Light of Life.” The campaign drew participation from over 200
employees resulting in a total blood donation volume of 66200 milliliters—demonstrating the commitment of private
enterprises in the new era to fulfilling their social responsibilities through concrete action. 6934 hoursHENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 87 I 88
Annex I: Index of GRI Standards Annex II: Sustainability Reporting Index
Table of Contents GRI Standard Index Disclosure Requirements Corresponding Sections of This Report
Report Preparation Statements GRI2 Response to Climate Change Climate Change Response
About the Report GRI2
Pollutant Emissions Pollutant Emissions Control
Message from the Chairman GRI2
Waste Disposal Pollutant Emissions Control
About Hengli Petrochemical GRI2/GRI201
Ecosystem and Biodiversity Protection Ecosystem and Biodiversity Protection
GRI2/GRI201/GRI205/GRI302/GRI303/GRI305/
2024 at a Glance
GRI306/GRI403/GRI404/GRI413 Environmental Compliance Management Environmental Compliance Management
Sustainability Management GRI2/GRI3
Energy Utilization Climate Change Response
Corporate Governance Structure GRI2 Water Resource Utilization Water Resource Management
Steady Operations & Compliance Risk Management GRI2 Circular Economy Pollutant Emissions Controls
Sound Governance Adhering to Business Ethics GRI2/GRI205/GRI206
Communication with Stakeholders GRI2/GRI207 Rural Revitalization Rural Revitalization
Contribution to Society Social Value Contribution
Climate Change Response GRI302/GRI305 Optimizing R&D Systems Empowering Innovative Achievements Advancing Digital and Intelligent
Innovation-Driven Development
Environmental Compliance Management GRI307 Development Protection of Intellectual Property Rights
Energy Conservation Pollutant Emissions Control GRI302/GRI305/GRI306/GRI307
& Sustainable Green Supply Chain Security Sustainable Supply Chains
Development Water Resource Management GRI303
Clean Technological Opportunities GRI2/GRI301/GRI302/GRI303/GRI305 Equal Treatment of Small and Medium-Sized Enterprises Sustainable Supply Chains
Ecosystem and Biodiversity Protection GRI304
Safety and Quality of Products and Services Product Quality and Safety Customer Service Management
Quality and Safety of Product GRI416/GRI417 Data Security and Customer Privacy Protection Data Security and Protection
Customer Service Management GRI416/GRI417/GRI418
Employees Human Resource Management Employee Training and Development Employee Rights and Benefits
Safe Operations & Sustainable Supply Chains GRI2/GRI204/GRI205/GRI308/GRI409/GRI414
Sustainable Growth Work Safety Management GRI403/GRI410 Due Diligence Sustainability Management
Chemical Safety GRI203/GRI403
Communication with Stakeholders Communication with Stakeholders
Data Security and Protection GRI418
Anti-Bribery and Anti-Corruption Compliance Risk Management Adhering to Business Ethics
Optimizing R&D Systems / Anti-Unfair Competition Compliance Risk Management
Insightful Innovation & Empowering Innovative Achievements /
Digital Intelligence Safeguard Advancing Digital and Intelligent Development / Chemical Safety Chemical Safety
Intellectual Property Protection /
Clean Technological Opportunities Clean Technological Opportunities
Human Resource Management GRI2/GRI201/GRI401/GRI402/GRI405/GRI406/GRI408/GRI409
Note: As a company in the chemical industry Hengli Petrochemical considers the topic of “Technology Ethics” to be neither financially material nor of significant impact to
Employee Training and Development GRI203/GRI404 its operations.People Orientation & Social
Contribution Employee Rights and Benefits GRI2/GRI201/GRI202/GRI401/GRI405/GRI406/GRI408/GRI409
Rural Revitalization GRI203/GRI413
Social Value Contribution GRI203/GRI413
Index of GRI Standards GRI2
Sustainability Reporting Index /
Summary of Key Performance
Indicators /HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 89 I 90
Summary of Social Performance
Annex III: Summary of Key Performance Topic Indicator Unit 2024
Indicators Investment in Work Safety RMB 100 million 5.30
Coverage Rate of Safety Education and Training % 100
Summary of Environmental Performance Coverage Rate of Safety Risk Protection Training % 100
The Number of Security Emergency Drills Times 1920
Number of Fatal Accidents Concerning Work Safety Times 0
Work Safety Certification Rate for Special Operations and Equipment Operators % 100
Topic Indicator Unit 2024 Identification of Company-Level Hidden Hazards Times 529
Company-Level Hidden Hazards Identified Item 4477
Identification of Workshop-Level Hidden Hazards Times 46850
Sulfur Dioxide (SO2) Emissions Ton 1877.62
Workshop-Level Hidden Hazards Identified Item 30599
Nitrogen Oxides (NOx) Emissions Ton 4466.01
Waste Gases Hidden-Hazard Rectification Rate % 100
Particulate Matter Emissions Ton 440.46
VOCs Emissions Ton 695.34 Professional Firefighters Person 336
Fire Safety
Fire Trucks Units 57
Total Wastewater Emissions Ton 26303994.81
Wastewater Emissions Intensity Ton/RMB 1 million 111.33 Number of Violations of Information Security and Privacy Protection Case 0
COD Emissions Ton 663.33 Information Security
Wastewater Total Investment in Data Security RMB 10000 664.17
Ammonia Nitrogen Emissions Ton 3.29
Total Phosphorus Emissions Ton 3.54 Customer Complaint Resolution Rate % 100Quality and Safety
Total Nitrogen Emissions Ton 152.96 Product Percent of Pass % 99.63
Quantity of General Waste Generated Ton 3343982.76 Chemical Safety Chemical Safety Drills Conducted Times 3776
Quantity of General Waste Disposed of Ton 3343923.46
Solid Wastes
Quantity of Hazardous Waste Generated Ton 148360.38 Investment in R&D RMB 100 million 17.03
Innovation and R&D Cumulative Patents Held Case 1676
Quantity of Hazardous Waste Disposed of Ton 147167.31
Cumulative Number of Software Copyrights Case 37
Coal (Power Generation) Ton 9896975.58
Energy Natural Gas 10000 m3 35596.46 Total Number of Employees Person 38300
Consumption
Purchased Electricity MWh 5456209.20 Production Staff Person 28381
Sales Staff Person 373
PV Generation kWh 167314264.28 Technical Staff Person 5821
Wind Power kWh 49555000.00 Financial Staff Person 258
Adoption of Biogas Power Generation kWh 149663.00 Administrative Staff Person 1441
Clean
Energy Biomass Fuel tce 297351.85 Other Staff Person 2026
Total Renewable Energy Consumption tce 324023.02 Employees Doctoral Degree Person人 16
Master’s Degree Person 310
Total Freshwater Consumption 10000 tons 13331.88 Bachelor’s Degree Person 6103
Quantity of Municipal Water Purchased 10000 tons 298.63 College Degree Person 11844
Surface Water Withdrawal 10000 tons 12969.43 College Degree or Below % 20027
Ground Water Withdrawal 10000 tons 63.81 Employee Satisfaction % 60.03
Water Total Water Consumption 10000 tons 88067.75 Social Insurance Coverage Rate % 94.87
Resources
Water Consumption Intensity 10000 tons/RMB 1 million 3727.37 Percentage of Contract Workers RMB 100 million 99.14
Recycled Water Consumption 10000 tons 125468.64 Employee Compensation Payable RMB 100 million 54.04
Employee Welfare Fund 7.15
Annual Water Saved via Reclaimed Water Facilities 10000 tons 3427.37
Reclaimed Water Reuse Rate % 75.30 Total Hours of Employee Training Hour 424600
Greenhouse Gas Emissions Scope 1 tCO2e 47201832.47 Total Number of Persons Trained
Person 159008
Employee Training
Greenhouse Gas Emissions Scope 2 tCO2e 6718552.07 Per Capita Training Hours
Hour 2.67
Carbon Annual Training Expenditure RMB 10000 1019.33
Emission Total GHG Emissions tCO2e 53920384.54
Greenhouse Gas Emission Intensity tCO2e/RMB 1 million 228.21 Incidence Rate of Occupational Diseases % 0
Coverage Rate of Occupational Injury Insurance for Employees % 100
Total Environmental Investment RMB 100 million 3.75
Occupational Health Occupational Health Examination Coverage % 100
Environmental Incidents Case 0
Occupational Hazard Factor Testing Rate % 100
Environmental Incidents of Violation of Laws and Regulations in the Environmental Field Case 0
Protection Investment in Occupational Injury Insurance for Employees RMB 10000 1918.74
Evaluation Compliance Rate Observed in Pollutant Monitoring % 100
Operation Rate of environmental Protection Facilities % 100 Donations and Public Welfare Contributions RMB 10000 108.00
Compliance Rate of “Three Simultaneities” in Environmental Protection % 100 Investment in Rural Revitalization RMB 10000 184.10
for Construction Projects Volunteer Activities Number of Volunteer Activities Participated Times 89
Number of Volunteers Participating Person 1555
Volunteer Activity Hours Hour 6934HENGLI PETROCHEMICAL SUSTAINABILITYREPORT 2024 Annual Report hengli.com 91 I 92
Feedback
Summary of Governance Performance Thank you for reading the Hengli Petrochemical Co. Ltd. 2024 Environmental Social and Governance Report. To improve Hengli
Petrochemical's performance in environment society and governance further enhance our sustainability capabilities and levels and
strengthen communication with all sectors of society we sincerely hope that you will provide valuable feedback and suggestions on
our work and report at your convenience.Topic Indicator Unit 2024
Independent Directors in the Board of Directors Person 3
Female Directors in the Board of Directors Person 1
Corporate Governance Your Information Risk Management Expert Person 1
Percentage of Female Directors in the Board of Directors % 12.5 Name： Unit： Tel： Email：
Tax Management Major Tax-Related Litigation and Arbitration Matters Case 0
Multiple Choice (Please check √ in the appropriate box)
Coverage Rate of Business Ethics Audits in Operations % 100
Business Ethics Supplier Signing Rate of Integrity Agreements % 100
Employee Coverage in Business Ethics Training % 100
1. Your overall assessment of Hengli Petrochemical’s 2024 sustainability report：
Interim Announcements Disclosed Copy 68
Information Disclosure Periodic Reports Disclosed Copy 4 Good Average Needs Improvement I don't know
Communication with Stakeholders Number of Investor Open Communication Meetings Times 6 2. How do you think Hengli Petrochemical has performed in terms of customer service
Number of Interactions on the SSE E-Interactive Platform Times 87
Good Average Needs Improvement I don't know
3. How do you think Hengli Petrochemical has performed in terms of technological innovation
Good Average Needs Improvement I don't know
4. How do you think Hengli Petrochemical has performed in terms of industry development
Good Average Needs Improvement I don't know
5. How do you think Hengli Petrochemical has performed in terms of team building
Good Average Needs Improvement I don't know
6. How do you think Hengli Petrochemical has performed in terms of volunteer and public welfare activities
Good Average Needs Improvement I don't know
7. How do you think Hengli Petrochemical has performed in terms of environmental protection
Good Average Needs Improvement I don't know
8. Do you have any comments on Hengli Petrochemical’s performance in sustainability efforts
Good Average Needs Improvement I don't know
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