2022

Environmental Social and

Governance Report

Hengtong Optic-ElectricContents 01 02

Enhancing govern- Creating market-

About the Report 02 ance while putting leading quality

Message from the Chairman 04 responsibility first products

About Hengtong Optic-Electric 06

Corporate governance 18 R&D and innovation 26

Value Creation 10 ESG governance 19 Sustainable supply chain 29

Communication with stakeholders 20 Quality control 33

Risk control 22 Responsible marketing 35

Business ethics and anti-corruption 23 Customer services 36

Appendix 70

0304

Creating a green Cultivating high- 05

low-carbon future quality talents

on the principle Contributing to

of equality and community co-

diversity creation

Environmental management 40 Recruitment and retention 54 Highlighting responsibility 66

sense through participation in

Tackling climate change 41 Development and training 57

philanthropy

Energy management 44 Remuneration and benefits 60

Supporting sustainable 67

Water management 46 Communication and care 62 development according to

local conditions

Emission management 47 Health and safety 63

Advocating a green low- 68

Circular economy 50 carbon lifestyleHengtong Optic-Electric 2022 Environmental Social and Governance Report About the Report

About the Report

Overview Reporting Basis

This is the first Environmental Social and Gov- The Report is prepared mainly in accordance with Global Reporting Initiative (GRI) standards and

ernance Report (hereinafter referred to as the also the major concerns of ESG ratings released by Morgan Stanley Capital International (MSCI)."ESG Report") released by Jiangsu Hengtong

Optic-Electric Co. Ltd. (hereinafter collectively The contents of the Report are determined according to established procedures. The Report is

referred to as "Hengtong Optic-Electric" "our drafted on the basis of identifying and sorting important stakeholders and major ESG-related issues

company" "the Company" or "we"). Hengtong determining the boundaries of the Report collecting relevant materials and data preparing the

Optic-Electric is a listed subsidiary of Heng- Report according to relevant information and reviewing the information in the Report.tong Group Co. Ltd. (hereinafter referred to

as "Hengtong Group" or "the Group"). In the Reporting Scope and Boundaries

Report the Company's performance of duty The policies and data disclosed in the Report cover the Company and relevant subsidiaries with the

for major stakeholders such as shareholders same reporting scope as the Annual Financial Statement. Unless otherwise specified RMB is the

customers partners employees environments designated currency in the Report.and communities as well as environmental

social and governance results (hereinafter re-

ferred to as "ESG") are truthfully disclosed. Source of Information and Reliability Assurance

The data and cases disclosed in the Report are mainly sourced from the Company's statistical reports

Reporting Period and relevant documents which have been reviewed by relevant departments. The Board of Directors

affirms that the contents of this Report do not contain any false records or misleading statements and

The Report covers the work for the financial takes full responsibility for the authenticity accuracy and integrity of the contents thereof.year from January 1 2022 to December

31 2022 (the "reporting period" for short) We have followed an internal review process to give our stakeholders full confidence in the accuracy

but some contents thereof are extended as of the information reported. We will give serious consideration to adopting independent audit in the

appropriate to previous or subsequent years. future in accordance with the needs of Company's development and the overall environment.Confirmation and Approval

Reporting Cycle

The Report was approved by the Board of Directors on April 24 2023 following confirmation by the

The Report is an annual report. management.Language and Form of Release

About The Report is provided in both Chinese and English and an electronic version is made available for reference. In case of any inconsistency between the Chinese and English versions the Chinese version shall prevail. For details please browse the official website of Hengtong Optic-Electric: http://www.htgd.com.cn/.We value the opinions of stakeholders and welcome readers to contact us through the following

Report channels. Your feedback will help us further improve the Report and our sustainability performance. Email: htgd@htgd.com.cnTel.: +86 512 63430958

Address: 2288 Zhongshan North Road Wujiang District Suzhou City Jiangsu Province China

02 03Hengtong Optic-Electric 2022 Environmental Social and Governance Report Message from the Chairman

Message from the Chairman

2022 was a year of both opportunities and challenges for Hengtong initiatives such as process optimization and management and up-

Optic-Electric to further promote its policies of sustainable develop- grading of equipment and facilities among other measures.ment.In addition Hengtong Optic-Electric actively safeguards the rights

The key to Hengtong Optic-Electric's stable and sustainable develop- and interests of employees including their right to progress and de-

ment lies in a sound governance structure. Hengtong Optic-Electric velop.while continuously optimizing its governance structure on the prin-

ciples of independence transparency diversity professionalism and In accordance with its official pledge Hengtong Optic-Electric guar-

integrity has established the ESG Committee improved risk control antees the absence of discrimination and harassment in all areas of

capabilities and organized business ethics training programs in or- employee recruitment and management.der to create a clean and honest business environment. The Company prohibits the use of forced labor and child labor

In the midst of the global challenge of tackling climate change provides vulnerable groups with employment opportunities and

China is making every effort to achieve its carbon peak and carbon safeguards the rights and interests of all employees. All of these

neutrality goals. This drive is bringing unprecedented opportunities measures have been taken in order to create an equal diverse and

to enterprises offering them the possibility to create corporate value inclusive working environment. Meanwhile Hengtong Optic-Electric

and social value while pursuing growth. In the past year the offshore provides employees with smooth promotion channels and communi-

wind power (OWP) industry underwent a process of sustainable de- cation platforms with the aim of promoting the diversified develop-

velopment providing many opportunities for Hengtong Optic-Electric ment of talents.to develop new markets products and services. A journey of a thousand miles starts with a single step. The path to

Hengtong Optic-Electric adheres to the core strategy of making a sustainable development is long. In the future Hengtong Optic-Elec-

significant contribution to global energy transformation and digital tric will stay true to its original intentions and actively perform its

transformation with the ultimate purpose of accumulating the poten- duties showing a responsible attitude to shareholders the market in

tial of development. At present Hengtong Optic-Electric has formed general and other relevant stakeholders. At the same time Heng-

a full chain industrial development pattern spanning from product tong Optic-Electric will continue to engage in philanthropic charita-

development to delivery of solutions to operation and maintenance ble and community undertakings as the Company constantly seeks

services. By continuously increasing investment in innovative re- to forge ahead on the principles of openness cooperation co-con-

search and development and seeking out clean technology oppor- struction and sharing in order to advance sustainable development

tunities Hengtong Optic-Electric is capable of providing innovative both within industry and in society.and high-quality products and services in multiple fields such as Finally on behalf of the Board of Directors I hereby extend sincere

ultra-high voltage submarine cable transmission and wind power gratitude to all employees of Hengtong for their hard work and I

generation. This allows us to make ever more positive contributions would also like to express sincere thanks to our clients investors

to global sustainable development. partners regulators and general public for their trust help and sup-

Seizing on the opportunity of clean technology development Heng- port.tong Optic-Electric is focusing on energy conservation consumption

reduction and environmental management in all production and

operation processes. On behalf of the Board of Directors the ESG

Committee supervises and coordinates Hengtong Optic-Electric's

work in tackling climate change and conducting environmental and

energy management and has made every effort to improve Heng-

tong Optic-Electric's environmental performance through a series of

Cui Wei

Chairman

Hengtong Optic-Electric

04 05Hengtong Optic-Electric 2022 Environmental Social and Governance Report About Hengtong Optic-Electric

About Hengtong Optic-Electric Global business layout of Hengtong Optic-Electric

Hengtong Optic-Electric is committed to becoming a world-class provider of information and

energy interconnection solutions. With our National Enterprise Technology Center National Man-

ufacturing Innovation Center and other innovation platforms Hengtong Optic-Electric is commit-

ted to becoming the benchmark for industrial excellence in our field. Backboned by our strong

technical innovation capabilities and our best-in-class research and development in the fields of

communication electricity and new energy and with our intelligent manufacturing and green Germany

manufacturing projects our determination to achieve excellence in all areas is clear to see. All in

all Hengtong Optic-Electric is fully expecting to make a significant contribution to driving national

energy transformation and overall green development.In the context of global climate change with the continuous optimization of the optical communi- Spain

cation industry layout the steady grid construction in China and the rapid development of OWP

and other marine and new energy services Hengtong Optic-Electric in response to national

calls for "carbon peak and carbon neutrality" has further increased its strategic investment in the

core industries of communications and energy. Now Hengtong Optic-Electric has the capacity to

provide industry-leading products and solutions related to OWP marine communication optical

communication and smart grid and smart city solutions. Adhering to the business philosophy

of openness inclusiveness cooperation and win-win outcomes the Company is accelerating its

pace of constructing a truly international company. Portugal

With a total of 11 overseas industrial bases Hengtong Optic-Electric has continuously improved its Egypt China

global business layout market competitiveness and brand value and delivered products and ser-

vices to more than 100 countries and regions. Specifically Hengtong ranks among the top three

in the lists of "2022 World Top 10 Cable Manufacturers" "2022 World Top 10 Submarine Cable

Manufacturers" and "2022 World Top 10 Optical Fiber and Cable Manufacturers".India

Indonesia

Brazil

South Africa

Overseas industrial bases Countries and regions where our products and services are available

11100+

06 07Hengtong Optic-Electric 2022 Environmental Social and Governance Report About Hengtong Optic-Electric

Key achievements and honors

Environmental

performance

ESG Awards Awarded ISO 14001 Environmental Total water consumption of

Management System certification 250.435million kWh

covering all principal operations of green electricity purchased 2851777.00 cubic meters

Listed among China's First Industrial Total greenhouse gas emissions Total energy consumption Water consumption intensity

Carbon Peak "Leader" Enterprises (Hengtong Group) 339189.14 tonnes of CO2 equivalent 130269.75 tonnes of standard coal 6137.61 cubic meters/RMB 100 million

GHG emissions intensity Energy consumption intensity Helium recovery rate-reaching up to

Demonstration enterprises in 730.00 tonnes of CO2 equivalent/RMB 100 million 280.37tonnes of standard coal/RMB 100 million 70%

green design of industrial prod- National green supply chain

ucts (including two newly added National green management enterprises (including Social

in 2022) factories one newly added in 2022) performance

2 4 3 Employee turnover rate Per capita training hours Published 5 international standards and 359 domestic

National green products (including Provincial-level green factories 18.50 % 38.88 hours standards and approved for 1010 invention patents

one newly added in 2022) (including one newly added in 2022) 1994 utility model patents 51 appearance patents

7 4 Total training duration Number of work-related fatalities 197 PCT patents and 179 trademarks582539.04 hours 0

Collective contract Rate of screening new suppliers in Donated a total of 10.1448 million yuan

signing rate environmental and social performance

Global Human Settlements Green Energy Saving Technology (including a donation of 714900 yuan in kind and cash

Awards for Green Technology Innovation Award for the Chinese 100% 100% donations of 9.4299 million yuan)

(Product) Examples Communications Industry

Governance

performance

Established an Environmental Social and Governance (ESG) Committee

First Prize in the Science and Technology Highest SCI 3 (Supplier Composite Index)

Innovation Awards of the Chinese Society rating (Hengtong Optic-Electric) Trainees received business ethics and Coverage of business ethics and

for Optical Engineering awarded to anti-corruption training anti-corruption training

Jiangsu Hengtong Power Cable Co. Ltd.affiliated to Hengtong Optic-Electric 10776 71.96%

In May 2022 Hengtong won six major

China Telecom awards including the 2021

Supply Guarantee Contribution Award the

Emergency Relief Contribution Award the

Rural Revitalization Partner Award and the

A-level Product Supplier Award

08 09Hengtong Optic-Electric 2022 Environmental Social and Governance Report Value Creation

Value Creation Value created by Hengtong Optic-Electric through the

development of products and technologies

Always adhering to the concept of creating value for stakeholders Hengtong Optic-Electric is committed to maximizing value Constantly creating value for customers in the fields of communication

for all stakeholders while pursuing the highest quality development under the guidance of a win-win business philosophy. and energy Hengtong Optic-Electric provides industry-leading products

and solutions and fully leverages its advantages in terms of integrated

capacity of design R&D manufacturing assembly engineering sales

and services. Through our global industrial and marketing layout we

are committed to becoming a world-leading provider of information and

Value created by Hengtong Optic-Electric for different stakeholders energy interconnection solutions.In order to successfully achieve sustainable innovative development we need the support of investors partners employees Communication network service

communities and other stakeholders. At the same time we need to create value for them. Only in this way can we gain the

necessary dynamic momentum to keep moving forward. As a communication network company we are committed to enhancing

information interconnection. In terms of R&D of core technologies for next

generation communication industry applications we are focusing on cutting-

edge technologies and applications in the 5G communication and digital

communication fields but also continuously seeking to enhance the R&D and

integration of system solutions to meet the diverse needs of customers.In addition to the development of optical fiber technology we are constantly

enriching our products and services including transceivers and ODNs

supporting the construction of data centers and gigabit networks. Our ultra-

low-loss fiber laser fiber multimode fiber and other products strongly

Investors Partners Employees Communities support the construction of efficient 5G infrastructures. In addition we are

actively expanding the layout of smart water smart security IDC and smart

city solutions providing professional services to a wide range of diverse

clients.Hengtong Optic-Electric Hengtong Optic-Electric is Hengtong Optic-Electric Growth of Hengtong Op- We adopt a full-industry chain model that integrates "product-service-

remains steadfast in up- committed to becoming a has spared no effort to tic-Electric has driven the

holding integrity truthfully trustworthy global service create a community of development of surround- operation" in order to provide customers with more valuable products and

disclosing its operating provider of information shared future for both the ing communi t ies . Our services. We aim to jointly create a new era of the Internet of Things and

conditions and major in- and energy interconnec- Company and its employ- benevolent footprints of make greater contributions to enhancing information interconnection.cidents and steadfastly tion solutions. To this end ees where employees engagement are evident

safeguarding the rights we have always adhered enjoy a high-quality work- in a large number of phil-

and interests of share- to the following business ing environment and are anthropic undertakings all

holders and investors. The philosophies: an overriding provided with favorable around the world where

Company has further con- emphasis on quality a opportunities for maximiz- our charitable activities

solidated its industry lead- determination to provide ing their personal value are defined by a commit-

ing position and achieved customers with integrated while contributing to the ment to care for humanity

sus ta i ned and s t ab le advanced solutions based Company's development. to drive forward rural area Commercialization of new high-capacity optical fiber SDM transmission technology

growth by continuously on customized design and development and to pro-

improving the competitive- R&D-driven manufacturing vide educational support.ness of its products and a commitment to continu- Hengtong's commitment

services. At the same time ous quality improvement to the public good is driv- Network traffic will continue to increase rapidly following the meteoric rise of cloud computing and large-scale data centers.we have maintained our and to developing the en by a passion to com- As the main carrier of optical communication networks single mode fiber (SMF) is restricted by nonlinearities and bandwidth

focus on green develop- ent ire industr ia l chain prehensively push forward

ment to reduce the impact limitations of amplifiers which has already caused the communication capacity to approach the limit (100Tb/s). Multiplying according to the highest the harmonious develop-

of our business operations standards and require- ment of communities from the optical fiber transmission capacity multi-core fiber (MCF) can greatly improve the utilization rate of a single optical fiber

on the environment and ments. All the while we multiple perspectives. by increasing optical fiber cores and supporting C+L-band transmission which is a development trend for the next generation

to create optimized long- empower our partners in high-capacity optical fiber communication.term economic value for high-end manufacturing

investors. supply chains to further Hengtong Optic-Electric in conjunction with several universities and institutes is undertaking a key innovation project in the

promote industry develop-

ment. field of Space Division Multiplexing (SDM). Specifically through technical research on numerical modeling and simulation

few-mode multicore fiber fabrication technology fan-in and fan-out device fabrication technology and high-capacity optical

interconnection transmission systems we will make major technical achievements in high-capacity optical fiber transmission

software systems few-mode multicore fiber products and space-division/mode-division optical fiber devices thereby boosting

the commercialization of the new high-capacity optical fiber SDM transmission technology.

10 11Hengtong Optic-Electric 2022 Environmental Social and Governance Report Value Creation

Energy interconnection

As an energy interconnection company that relies on continuous research and innovation we have the capability to provide Dynamic submarine cable system for floating wind power (FWP)

solutions for the construction of smart grids OWP onshore wind power and photovoltaic power generation facilities across

the industrial chain as well as products and services related to high-voltage/ultra-high-voltage (UHV) power transmission and

special cable application. Meanwhile we will continue to focus on R&D in the field of new energy technologies including

floating OWP photovoltaic power generation systems and comprehensive energy application. FWP is an important part of deep-sea wind resources. As a

key part of FWP transmission the dynamic submarine cable

We aim to facilitate global clean energy development create greater value for sustainable development and provide a system is mainly used to connect static submarine cables

more friendly living environment. In addition to the investment and construction in energy interconnection we have applied between wind mills and those between wind mills and

our technological know-how to the fields of engineering construction rail transit and electrical equipment among others power collection outputs. To date Hengtong has successfully

demonstrating an ability to provide intelligent and efficient energy solutions for various industries. undertaken many projects in this domain around the world.Regarding this field which is full of opportunities and challenges we will continue to leverage our strengths to explore new China's first deep-sea FWP equipment "Fuyao" is also a

models of innovation and business together with our global partners as we seek to jointly boost the sustainable development demonstration project of deep-sea wind power. Equipped with

of the energy industry. a wind generator set it is currently the largest FWP equipment

in China which has a total weight (including the floating body

and the generator set) of more than 5000 tonnes and a

displacement of more than 15000 tonnes. Fuyao has filled

China's gap in the application of deep-sea FWP equipment in

Offshore oil field electricity substitution project waters with an average depth of over 65 meters becoming

another achievement for China in the field of deep-sea energy

development. As the only submarine cable supplier and

Hengtong Optic-Electric has undertaken a number of shore power projects through which onshore high-voltage electricity cable laying contractor for Fuyao Hengtong provided the first

is transformed and transmitted to offshore facilities through a shore power platform. We provide green power for various oil domestic high-voltage dynamic submarine cable used for sea

production and extraction platforms within the oilfield complex thereby greatly reducing electricity costs energy consumption depths of over 65 meters.and carbon dioxide emissions by changing the original electricity consumption mode. China’s deep-sea wind power demonstration project “Fuyao”

Cases of overseas application of dynamic cables

Wave energy driven dynamic cables for the CorPower project FWP dynamic cables for the X1 Wind project in Spain (an

in Portugal (an applied water depth of 75 meters) applied water depth of 90 meters)

12 13Hengtong Optic-Electric 2022 Environmental Social and Governance Report Value Creation

Empowerment for the Beijing 2022 Winter Olympics

OWP ultra-high voltage submarine cables and laying services The Beijing 2022 Winter Olympics showcased a wide range of wonderful sporting events to people all over the world. As one of

the main suppliers of the Games the Company took responsibility for the vital mission of ensuring stable electricity supply for

eight key venues of the Winter Olympics through delivery of relevant products and solutions to augment carefully planned core

The wind turbine generator with the world's largest unit capacity of 11MW for commercial purpose of the Jieyang systems. We are proud to say we contributed a significant amount of green and strong "momentum" for the Winter Olympics.Shenquan offshore wind power project II of State Power Investment Corporation Limited (SPIC) has been connected

to the grid for power generation.● Capital Indoor Stadium was built in 1968 and is China's first artificial indoor ice stadium. It played host to many major Chinese

UHV submarine cables sports events including the famous Sino-US "Ping-pong diplomacy" matches in the 70s and the Beijing 2022 Winter Olympics.Behind this continuous use of the Capital Indoor Stadium lie the wisdom and quality of Chinese products and solutions. Within

All submarine cables for this project are provided by Hengtong. only 40 days of being invited to submit a tender the Company successfully became the main supplier of electricity equipment and thanks to its sound designs and service solutions the Company successfully achieved all goals including supply of special

Specifically the supporting 220kV onshore cables provided by equipment. The electric transmission lines provided by the Company can be moved and dragged and can work normally at low

Hengtong are equipped with symmetrical temperature-sensing temperatures below 40 degrees Celsius while also meeting performance requirements for high flame retardancy.optical fibers and dedicated temperature-sensing safety warn-

ing devices. In addition the 66kV submarine cable provided by

Hengtong is equipped with a fireproof sealing module thereby

offering strong fire resistance. Also thanks to high levels of

water tightness air tightness explosion resistance and IP the

cable meets the strictest submarine environment requirements ● Genting Snow Park was specially built for freestyle skiing and snowboarding events Supplied clean electricity for

and has a service life of 30 years under all marine conditions. before the opening of the Beijing 2022 Winter Olympics and the Beijing 2022 Paralympic the first time in the Winter

Winter Games. Perfectly embodying the concept of "streamlining green and environmental" Olympics

the temporary buildings of the Park were all made of recyclable and renewable materials.All the products provided were green and safe. The Company successfully developed a

Submarine cable laying series of low-temperature and highly flame-retardant flexible products with prefabricated 100%

couplers which can be used for fast outdoor connection and can be freely combined

Hengtong Offshore Engineering Team was responsible for the for temporary energy supply regardless of length. The Company provided more than

laying of submarine cables for the Jieyang Shenquan offshore ten customized connection solutions for different venues and high-quality services for electricity supply for the Winter Olympics. In response to the call for holding a "Green

wind power project II. In spite of multiple difficulties such as Winter Olympics" we supplied 100% clean electricity for the first time.deep-water surges challenging construction timelines and fre-

quent typhoons the dedicated team successfully completed

the task thanks to careful planning and compliant construction.● The Zhangbei Renewable Energy Flexible DC Grid Test and Demonstration Project: Achieved green electricity

Making full use of the considerable wind power resources in the Zhangbei region with supply for the first time in

an annual average duration of 2400 hours we delivered green and clean energy to the the Winter Olympics

competition areas in Beijing Yanqing and Zhangjiakou achieving 100% green electricity

500kV UHV onshore cables supply for the first time in the history of the Olympics. To ensure efficient operation of

equipment units and transmission systems at Zhangbei Wind Farm the Company provided 100%

the necessary products and services including intelligent connectors for wind turbines

UHV products and supporting components. Relying on its digital and intelligent means

Located approximately 150 kilometers south of Tashkent (the capital of Uzbekistan) the 1500MW Gas-Fired Combined-Cycle Power the Company smoothly delivered the green electricity of Zhangbei Wind Farm to Beijing in

Plant project is an important livelihood project sponsored by the Uzbek government. Also it is a world-leading green environmental an energy-saving safe reliable and efficient manner.project for efficient energy conservation which is achieved by use of a gas turbine with the highest possible combustion tempera-

ture unit power and efficiency as well as the "zero discharge of wastewater" in its design. After being put into operation this project

can deliver over 36 million kWh electricity to the local power grid every day and will benefit millions of residents in Uzbekistan.●

In view of the high technical requirements for high-voltage Beijing-Zhangjiakou High-speed Railway: Traveling at speeds of 350 kilometers per hour the world's first intelligent high-speed railway the Beijing-Zhangjiakou High-speed Railway saw the operation of 40 pairs of trains and was used to transport

transmission and the considerable construction difficulties the athletes officials and ticket holders from around the world to the competition areas in Beijing Yanqing and Zhangjiakou every

Company provided high-quality 500kV UHV onshore cables day which was a vital element in ensuring the smooth staging of the Beijing 2022 Winter Olympics. The Company used smart

accessories professional technical services and comprehen- connection products and solutions for rail transit in the Hebei section and Beijing Changping section of the Beijing-Zhangjiakou

sive business and logistics services. The 500kV high-voltage High-speed Railway and provided services for energy transmission and intelligent warnings smart connection between signal

equipment and control devices and 5G signal coverage. In addition to meeting the original railway signal requirements our core

AC onshore cables are the most advanced in the world cur- communication and transmission products have been greatly improved in terms of impedance attenuation crosstalk and other

rently winning unanimous praise from customers. aspects through technological innovation. In various environments where strong electric field interference humidity and severe

cold were common they fully met the requirements for the very latest signal system equipment and with their strong anti-

interference capacity and fast transmission speed effectively improved overall system safety.

14 15Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

0Enha1ncing governance while

putting responsibility first

Corporate governance 18

ESG governance 19

Communication with stakeholders 20

Risk control 22

Business ethics and anti-corruption 23

16 17Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Corporate governance ESG governance

Hengtong Optic-Electric places great value on corporate governance and is committed to safeguarding the interests of all share- In order to strengthen the management of ESG matters and to better promote sus-

holders by maintaining and strengthening corporate governance conducting effective risk control and internal control and improving tainable development the Board of Directors is responsible for ESG risk control and

the transparency of the Board of Directors. On the basis of strictly complying with local laws and regulations and the management information disclosure and has made clear the overall policy of governance and

regulations of listed companies we are continuously seeking to improve our corporate governance structure in order to safeguard supervision underlying sustainable development at Hengtong Optic-Electric. During

the Company's development and shareholder rights and to actively respond to the concerns of stakeholders. the reporting period Hengtong Optic-Electric established the ESG Committee under

the Board of Directors. The ESG Committee is responsible to the Board of Directors

The shareholders' meeting the Board of Directors the Board of Supervisors and the Management of the Company all have their and reports directly to the Board of Directors. They shoulder the responsibility to

own respective powers and responsibilities but they maintain exemplary levels of professionalism and independence in business guide the Company's ESG strategy development and oversee the handling of ESG

personnel assets institutions finance and other areas. The Board of Directors consists of 12 directors including 4 independent affairs. In addition the ESG Working Group under the ESG Committee was estab-

directors each of whom has rich expertise and experience. In addition the Board of Directors consists of the Strategy and Devel- lished to coordinate the handling of daily ESG affairs. The ESG Working Group is

opment Committee the Audit Committee the Nomination Committee the Compensation and Assessment Committee and the ESG responsible to the ESG Committee and reports directly to it.Committee. Each committee has at least one independent director who has extensive experience and skills in areas like finance law

investment and risk control which ensures the independent transparent and effective operation of the Board of Directors. The duties of the ESG Committee include but are not limited to: identifying risks

opportunities and trends of sustainable development; setting and reviewing re-

sponsibilities vision goals strategies and policies of sustainable development;

ensuring the effective implementation of ESG policies approved by the Board of

Type Name Age Committees Industry Financial Risk Directors supervising the implementation of sustainable development strategies experts experts experts and integrating internal and external resources to carry out relevant work; mon-

itoring reviewing and evaluating ESG progress and performance according to

The Strategy and Development Committee internationally recognized industry indicators evaluating the performance of senior

Chairman Cui Wei 37 the Audit Committee the Nomination Committee the Compen- management according to related ESG indicators linking the Company's sustaina-

sation and Assessment Committee and the ESG Committee ble development with KPIs expected of senior management and gradually dealing

with and optimizing all aspects of ESG business. Through its design of multi-level

Director Qian Jianlin 50 The Nomination Committee the Strategy and Development incentives for employees the Company hopes to build a community of shared Committee futures where employees pursue a better life while contributing to the Company's

sustainable development.Director Bao Jicong 55 The Compensation and Assessment Committee the ESG Committee In the future the Company will further promote green development and establish

an ESG management system for sustainable development and a shared value

Director Yin Jicheng 50 The ESG Committee concept focusing on the major areas of low-carbon transformation sustainable

ecosystems technological research and innovation cultural and vision building

Director Li Ziwei 50 and risk control. We are committed to becoming an international group with

green sustainable and high-quality development and achieving harmonious de-

Director Sun Yixing 47 velopment and common progress between customers shareholders employees

society and nature.Director Tan Huiliang 41 The ESG Committee (Director)

Director Zhang Jianfeng 41 Audit Committee

Independent The Board of Directors

Director Chu Junhao 78 The Strategy and Development Committee

The Nomination Committee (Director)

Independent Cai Shaokuan 68 The Audit Committee the Compensation and Assessment Director Committee the Strategy and Development Committee and

the ESG Committee The ESG Committee

Independent The Audit Committee (Director)

Director Qiao Jiuhua 59 The Nomination Committee the Compensation and Assess-ment Committee the Strategy and Development Committee

The ESG Working Group

Independent Yang Junhui 51 The Compensation and Assessment Committee (Director)Director The Audit Committee the Nomination Committee

18 19Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Communication with stakeholders

Hengtong Optic-Electric places great value on the creation of social value. We are committed to establishing a harmonious Through effective and detailed communication with various stakeholders and comprehensive surveys Hengtong

and win-win development model based on the principles of transparency independence and responsibility. To this end we Optic-Electric has identified 16 important issues including three highly important issues: product quality and safety

have established and constantly sought to improve a mechanism for normalized communication and information exchange employee health and safety and data security and privacy protection. Based on this analysis Hengtong has drawn

with stakeholders actively responding to the concerns of stakeholders on major issues. The major stakeholders identified by up a matrix of major issues. The following issues will be disclosed herein to respond to the concerns of stakeholders.Hengtong Optic-Electric their main concerns and corresponding communication methods are as follows:

Stakeholders Main concerns Communication channels

v

●

● Employee health and safety Corporate Governance ● Business ethics Internal meeting Questionnaire survey● ●

● Product quality and safety ●

●

Employee care and benefits C areer development and

● Internal publications Collection of employees'

●

●

Data security and privacy pro- training of employees Employee interviews

opinions through internal

●

D iversity equity and inclu- and activities email platform call and ●

Employees tection siveness other methods Employee health and safety

Product quality and safety

● Product quality and safety

●

● Employee health and safety Supplier development and audit Data security and

●

Business ethics Conference of communication with suppliers ●

● Employee care and benefits privacy protection

● Data security and privacy protection Regular follow-up visits and evaluation of suppliers

●

Corporate Governance Questionnaire surveySuppliers ●

Corporate governance

Business ethics

● Product quality and safety ● Business ethics Career development and training of employees

●

● Employee health and safety ● D iversity equity and inclu- Client satisfaction survey

●

Career development and train- siveness Customer relation management platform●

●

ing of employees Supply chain management Customer hotline

Supply chain management Diversity equity and inclusiveness

●

Customers/consumers ● ● Employee care and benefits ● Corporate governance Media promotion

Exhaust gas management and emissions

Circular economy Energy management

● Energy management ● Product quality and safety Media interviews Water management●

● E xhaust gas management and ● D ata security and privacy

●

emissions protection Press release and announcement Waste management

●

Media ● Employee health and safety Supply chain management

Media promotion

●

Greenhouse gas emissions

● Product quality and safety ● Diversity equity and inclu- ● General meeting of shareholders

● Corporate governance siveness ● Activities of communication with investors

● Business ethics ● Employee health and safety ● Performance release and announcement

Investment institutions/

shareholders Community contribution and impact

●

● Energy management Product quality and safety

●

Waste management Data security and privacy ● ● Industry exchange and meeting

● Water management protection ● Supply chain management Industry exhibition and scientific research coop-●

● Employee care and benefits eration

●

Industry associations ● Employee health and safety

Business ethics

● Corporate governance

Importance to Hengtong Optic-Electric

● E xhaust gas management and

●

emissions Product quality and safety ● Field interviews and surveys

● Social issues Environmental issues Governance issues

● Greenhouse gas emissions Business ethics ●

●

Employee health and safety Corporate governance

Regular meetings

●

Governments/regulators

2021

Importance to external stakeholdersCultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Risk control Business ethics and anti-corruption

Hengtong Optic-Electric has formulated its Risk Control Policy in strict accordance with relevant laws and regulations such Hengtong Optic-Electric regards its mission to maintain a Electric regularly organizes special internal audits to learn

as the Supervision Law of the People's Republic of China and the Enterprise Internal Control Policy to enhance risk control clean and honest workplace and business environment with more about and guard against various unethical business

and internal control. Under the supervision of Hengtong Group Hengtong Optic-Electric has established a sound risk control the utmost seriousness. In accordance with relevant laws and conducts such as corruption bribery and fraud in order to

framework based on the COSO enterprise risk management framework. The Board of Directors and its Audit Committee are regulations the Company has formulated relevant rules and ensure the effective implementation of our business ethics

responsible for leading and arranging the overall work of risk management of the Company. regulations such as the Internal Audit Policy and the Work policies. Also we promptly investigate all problems discovered

Rules of the Audit Committee and clarified the requirements through audits and supervise the work of rectification and

for all directors in terms of business ethics. Specifically improvement to maintain the optimum environment for ethical

The Board of Directors the Board of Directors and the Audit Committee guide and business practice.supervise the work of business ethics and anti-corruption

Develop related risk management policies and guidelines while the Risk Management Committee and the Internal Audit In addition Hengtong Optic-Electric encourages its employees

Department are responsible for coordinating between various external stakeholders and the public to report any suspected

departments to eliminate bribery corruption fraud monopoly violations of business ethics and suspected corruption. In

money laundering and unfair competition among others. accordance with the Administrative Measures of Hengtong

Group for Disciplinary Supervision everyone is free to report

The Audit Committee Hengtong Optic-Electric regularly organizes lectures and any instances of code violations dereliction of duty or

training and also related examinations and it urges all unethical behavior on the part of any member of management

Review the policies developed by the Board of Directors listen to

reports from the Internal Audit Department and control overall risks employees (including part-time employees and contractors) or staff at Hengtong Optic-Electric without any prejudice

to learn and understand the Code of Business Conduct for to them personally and the reporting rules methods and

Employees of Hengtong Group. In addition Hengtong Optic- channels shall be made public to all employees.The Company firmly safeguards the safety and rights of whis- The Reporting channels of the

The Risk Management Committee The Internal Audit Department tleblowers by keeping confidential their personal information Internal Audit Department of

Identify assess and deal with risks according to Regularly audit risk management processes and procedures and providing corresponding rewards. We strictly investigate Hengtong Optic-Electric:

relevant policies approved by the Board of Directors and regularly report to the Audit Committee and deal with any violations of discipline derelictions of duty

and unethical behaviors and work together with employees to Email: htjubao@htgd.com.cn

create an environment that is clean and free from corruption.Framework of risk management During the reporting period no cases of corruption or bribery

occurred at Hengtong Optic-Electric. The anti-corruption train-

Taking this framework as its baseline Hengtong Optic-Electric has established a three-level risk prevention and control ing of the Board of Directors and employees is as follows: A lecture on integrity and self-discipline

mechanism to identify evaluate and deal with internal and external risks in many areas including but not limited to strategy given by a senior executive of Hengtong

market operations finance law and sustainable development. Number of Training Optic-Electric

trainees in Training

person times proportion

duration in

hours

In a lecture on integrity and self-discipline General Manager

Level-1 risk prevention Level-2 risk prevention Level-3 risk prevention The Board of Zhang Jianfeng of Hengtong Optic-Electric emphasized the im-

and control and control and control Directors 48 100% 48 portance of reinforcing awareness of integrity and honesty and

creating a good business environment. The need to establish the

concepts of integrity and diligence was stressed as integral to

Senior man-

Under the leadership of the Risk Under the leadership of the Audit The Board of Directors and 251 100% 502 improving the integrity of the risk prevention and control mecha-agement

Management Committee each Committee the Internal Audit shareholders' meeting regularly nism and to strengthening institutional control and assessment.functional department identifies Department regularly audits the evaluates the effectiveness of

and addresses daily operation risk management and control risk control measures to improve Hengtong Optic-Electric has consolidated its self-discipline fire-

risks in accordance with the situation of each department the Company's procedures of Mid-level

employees 567 100% 1134 walls and formulated the Ten Musts and Ten Prohibitions. To Company's risk management pol- assists and supervises the risk risk management internal control build a healthy ecosystem of work and entrepreneurship we

icies and relevant guidelines. Any management by each depart- and governance

risks that cannot be addressed ment and promptly reports risk have taken many measures including requiring key staff mem-

will be reported to senior man- loopholes (if any) to the Audit Ordinary bers to sign integrity and self-discipline agreements every year. In 9916 70% 19832

agement and the Board of Direc- Committee employees addition we require the signing of agreements stipulating good

tors for appropriate action. faith cooperation and honest co-building across the industrial and

supply chains in order to optimize the business environment for

private enterprises and create a clean business community.

22 23Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green

Cultivating high-quality Contributing to

putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

0Crea2ting market-leading

quality products

R&D and innovation 26

Sustainable supply chain 29

Quality control 33

Responsible marketing 35

Customer services 36

Hengtong Optic-Electric is committed to providing

customers with thoughtful services and market-leading

products. To this end Hengtong Optic-Electric continuously

improves product safety and quality ensures sustainable

supply creates a green supply chain and steps up R&D

and innovation. As a result we have established a stable

competitive advantage and made significant contributions

to national energy transformation and green development.

24 25Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green

Cultivating high-quality Contributing to

putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

R&D and innovation R&D achievements

Hengtong Optic-Electric regards R&D and innovation as the source and driving force of its sustainable development. Therefore As of the end of the reporting period Hengtong Optic-Electric had published 5 international standards and 359 domestic

the Company attaches great importance to the improvement of its R&D management system. Alongside our continuous standards and was granted 1010 invention patents 1994 utility model patents 51 appearance patents 197 PCT patents and

R&D and commitment to innovation we are actively promoting the transformation and upgrading of our global information 179 trademarks making it one of China's industry leaders in this respect.and energy interconnection systems in order to provide better solutions. Putting sustainable development and clean energy

development at the core of our strategy and business we firmly follow the path of innovative development and are making

positive contributions to global clean energy development.Optimizing R&D environment R&D breakthrough - Coilable optical fiber ribbons and cables

Based on our product lifecycle management (PLM) regulations such as the Policy for Ensuring Implementation During the reporting period the coilable optical fiber ribbons

the subsidiaries of Hengtong Optic-Electric at all levels of IPD 2.0 Program Administrative Measures for Technical and cables were developed by Hengtong Optic-Electric.have established a R&D management system with the Innovation and R&D Incentives and Management Rules Featuring proprietary special materials tooling and process

Integrated Product Development1 (IPD) system as the for Industry-University-Research Cooperation . We will molding the innovative products represented a technical

core. To comprehensively manage product development continuously seek to optimize our operations in three major breakthrough in the broadband business by addressing

and innovation we have formulated relevant rules and aspects: R&D processes organization and capacity building. the pain point of strained underground facilities. As such

Hengtong Optic-Electric became the only manufacturer in

China capable of manufacturing ROR-coilable optical fiber

ribbons in scale which in turn made us better positioned to

R&D processes further enhance our product quality and competitive edge

and expand growth potential.Hengtong Optic-Electric has established a management process of demand project approval and product

development according to actual conditions and further optimized the mechanism of R&D project approval and

review. Fixing eyes on R&D performance we promptly identify R&D deficiencies and continuously optimize them.R&D organization

Amid the R&D organization construction Hengtong Optic-Electric focuses on enhancing organizational synergy R&D breakthrough - Key Technology and

Expert recognition - Hengtong Optic-

Application of Heat-Resistant Aluminum Electric New Product Appraisal Meeting

between cross-departmental teams cultivating core R&D talents and building R&D culture. We are committed to Alloy Wires with New Aluminum-Coated

building a learning organization creating a strong R&D innovation atmosphere and improving R&D efficiency. Nickel-Molybdenum Alloy Steel Cores

At the Hengtong Optic-Electric New Product Appraisal Meet-

ing held by the China Electricity Council new technologies and

R&D capacity building products for UHV submarine cable transmission wind power The project of "Key Technology and Application of Heat-Resist- generation and intelligent warning developed during the re-

ant Aluminum Alloy Wires with New Aluminum-Coated Nick- porting period were unveiled and were unanimously praised

Hengtong Optic-Electric has set up an internal intellectual property database platform to facilitate the collection and el-Molybdenum Alloy Steel Cores" which Jiangsu Hengtong by over a hundred well-known experts in the power and en-

analysis of patent information during product development and to timely track and master the latest technological Power Special Conductor Co. Ltd. participated in has won ergy sectors from China Electric Power Research Institute and

innovation achievements and the intellectual property ownership of competitors so as to dynamically adjust the the Second Prize of Science and Technology Progress Awards Shanghai Electrical Cable Research Institute.direction and measures of product development. in 2021 at the New Technology Evaluation Conference of the

State Grid Smart Grid Research Institute. According to the Hengtong New Products Appraisal Opinions

Actively creating innovation platforms Hengtong Optic-Electric currently has 1 national enterprise technology center a total of 8 new products and technologies were launched

1 national postdoctoral research workstation 3 provincial postdoctoral innovation bases 3 academician workstations As reported this technology is oriented towards building green including 2 international market leading 4 internationally ad-

7 national and provincial key laboratories recognized by CNAS 40 provincial engineering technology research smart grids by developing new products and supporting tech- vanced and 2 domestic market leading innovations.

centers/enterprise technology centers/industrial design centers and 25 high-tech enterprises thereby providing rich nology which save energy and expand capacity. In this way it

academic resources and talents for technological research and breakthrough. can effectively boost grid transmission capacity and energy utili-

zation save transmission line corridors and reduce carbon emis-

sions from thermal power generation thus delivering substantial

1 Integrated Product Development. economic value and significant social benefits.

26 27Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Sustainable supply chain

Hengtong Optic-Electric plays a leading quality assurance role by maintaining a stable and green supply chain. On the one

hand we strictly manage suppliers in an effective manner through hierarchical management classified management flexible

tender and dynamic auditing processes thereby ensuring product quality. On the other hand we are constantly seeking

improvement in our sustainable supply chain by identifying and evaluating supply chain risks taking response measures

ensuring procurement compliance diversifying procurement channels and promoting stable procurement cooperation.Supplier management

Hengtong Optic-Electric has formulated a series of rules and regulations including the Supplier Access Regulations the

Supplier Management Regulations the Material Supplier Performance Assessment Standards the Procurement Tender

Management Regulations and the Procurement Execution Management Regulations in order to standardize and strictly control

all supplier access supplier assessment and logistics linkages.Supplier access

◆ C larifying access criteria: According to our clear criteria for suppliers' credit product quality production and delivery

capabilities environmental protection occupational health and safety and social responsibility fulfillment any suppliers

shall meet all such requirements and pass on-site audits before becoming our qualified suppliers.◆ S igning a framework agreement: Before cooperation we will enter into a procurement framework agreement with any

supplier in which a series of requirements for integrity assurance product quality intellectual property and supplier

assessment are specified.In order to protect our innovation and development

achievements Hengtong Optic-Electric has taken

the necessary measures to control the entire

lifecycle of intellectual property including creation Supplier management

application protection ownership and incentives

and management. We have established a sound ◆ H ierarchical management: By importance and procurement amount suppliers are divided

intellectual property management system and into four categories for which different but reasonable assessment frequencies will be

formulated a series of management rules including specified.the Intellectual Property Document Control

Procedure the Standard Work Management Policy ◆ C lassified management: By the type and nature of materials different audit frequencies

and the Technical Paper Management Policy. and management mechanisms are applied. Specifically we organize annual semi-

annual quarterly and monthly procurement of conventional materials through tender

In addition in order to further enhance intellectual and conduct flexible and normalized management. For key materials or strong suppliers

property protection and management awareness we organize negotiations and sign strategic agreements with them on an annual basis

among all levels of employees Hengtong Optic- to enhance cooperation viscosity and supply stability.Electric has invited external senior experts and

lecturers to organize special training in the area of

patent quality improvement and patent information

analysis and is taking steps to popularize intellectual Supplier elimination

property management knowledge every year.◆ E valuation and assessment: We organize monthly or quarterly assessments and on-site

audits of suppliers and divide them into four levels according to audit results and ratings: A

B C and D. We will continue cooperation with supplies with the ratings of A and B review

the qualification of C-level suppliers after urging them to make rectification and directly

terminate cooperation with D-level suppliers due to their unqualification.

28 29Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Supply chain risk Sustainable procurement

During the reporting period Hengtong Optic-Electric identified and evaluated our existing supply chain risks and found that Incorporating sustainable development into our supply chain management strategy and process we are committed to creating

the procurement of some materials and equipment was limited by deficiencies of certain suppliers. These included unstable a green sustainable supply chain and cultivating ecological partners. For effective supplier access we regularly review and

supply and lack of independent intellectual property rights in some technologies. To solve such problems Hengtong Optic- evaluate the suppliers' sustainability performance during detailed and comprehensive investigations into environmental and

Electric has taken some positive measures including diversifying supply sources developing independent supply technologies social conditions.and establishing more strategic supply relations.Diverse supply sources Environmental

During the reporting period the Company actively developed alternative suppliers in different regions looked for new suppliers ◆ H engtong Optic-Electric reviews and evaluates the suppliers' performance in many aspects including ISO14000

and cultivated existing suppliers to enhance their supply capabilities. environmental management system certification effective on-site environmental protection and waste management

development of environmental emergency plans and establishment of major environmental monitoring systems to

Independent supply technologies strength access and daily management of suppliers according to evaluation results.The Company has further improved its R&D and innovation capabilities accelerated its PCN (Porous Coordination Network) and

material localization processes and broken through some technological limitations in material development in cooperation with

existing suppliers. Social

Strategic supply relations ◆ H engtong Optic-Electric reviews and evaluates the suppliers' performance in ISO45001 occupational health and safety

management system certification recording of occupational safety training for employees identification of occupational

health hazards etc.In addition to material development in conjunction with existing suppliers we maintain in-depth communication and exchange

with key material suppliers and strong suppliers and keep strategic cooperation with them by signing strategic agreements on ◆ H engtong Optic-Electric has entered into the Agreement of Social Responsibility Fulfillment According to Ethical Standards

an annual basis. which requires all suppliers to respect employees and safeguard their health safety salary and welfare and the suppliers

as promised shall not hire child labor allow forced labor or have any conduct of coercion harassment or discrimination

against employees. During on-site audits we will review the suppliers' performance in such aspects.In addition Hengtong Optic-Electric has established a sound compliance system to prevent supply chain risks by regularly

analyzing and reviewing the actual conditions and specific demands of suppliers. Therefore during the reporting period the ◆ I n addition Hengtong Optic-Electric will sign the Integrity Co-constructing Agreement with the suppliers to jointly create a

Company organized targeted procurement personnel training and supplier visits. clean honest business environment.Procurement personnel training Supplier visits In the future the Company will further create a sustainable supply chain through the following four steps and work with our

suppliers to promote sustainable development:

During the reporting period in order to enhance the During the reporting period the Company identified

awareness and ability of procurement personnel to existing problems in the supply chain system and

deal with supply chain compliance risks the Company solicited suggestions for improvement. Visits to We will continue education and training of existing We will screen appropriate suppliers more rigorously

organized procurement system training customs AEO more than 40 suppliers took place and regular open suppliers enrich and improve the requirements and and select and evaluate them more according to their

(Authorized Economic Operator) training security communication lines were strengthened with the connotations of sustainable development in the performance in sustainability.

training procurement negotiation and skills training aim of gaining a clearer understanding of personnel Supplier Code of Conduct .for procurement personnel which deepened their venues products finance and other aspects. In

understanding of relevant rules and skills. addition through supplier visits we have found more

potential cooperation opportunities and enhanced our

suppliers' enthusiasm and loyalty thus further reducing

supply chain risks.We will organize special performance evaluation of We will give targeted assistance to our suppliers

suppliers in sustainability. after a thorough analysis of evaluation results to

ensure their continuous improvement in sustainability

together with us.

30 31Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Total suppliers Quality control

1267

Number of suppliers Excellent product quality is the cornerstone of our value creation and also a prerequisite for meeting customer needs.Hengtong Optic-Electric has passed the ISO 9001 quality management system certification comprehensively. In addition we

strictly control product quality through standard quality management in the production and development stage emergency

1182 1267 management of major quality accidents and training on product quality and safety.

◆ I n the production preparation stage Hengtong Optic-Electric will design quality indicators for each category of

customized products according to the internal Product Quality Indicator System. In addition following the principle

of equipment process similarity we will standardize product management according to quantitative indicators such

as key manufacturing process and raw material pass rates process and procedure (including characteristic indexes)

pass rates finished product and ex-factory pass rates external market complaints and quality accidents OEM pass

rate quality loss indicators and so on which lays a solid foundation for standard quality management.

51115

2

0340

Asian sup- American African European Oceanian Total suppliers having passed New suppliers subject

pliers suppliers suppliers suppliers suppliers the ISO 14001 certification to on-site audits ◆ T hrough effective prevention and control Hengtong Optic-Electric minimizes the occurrence of potential major

quality incidents. In addition we have developed optimal quality incident response plan and process to minimize

the negative impact of major quality incidents. During the reporting period there were no major quality incidents at

Percentage of new suppliers screened according to Percentage of new suppliers screened according to Hengtong Optic-Electric.environmental criteria social criteria

100% 100% Establishment of an Appointment for Incident reporting investigation team for Incident handling and accountability rectification and investigation punishment education

2 The response process of major quality incidents New suppliers mentioned herein only refer to suppliers of Class I and Class II materials introduced in 2022. Class I materials (leverage materi-

als) refer to the materials with a low procurement risk but with an annual procurement amount accounting for a large proportion of the total

procurement amount of the Company while Class II materials (key materials) refer to the materials with a relatively high procurement risk and a

relatively large procurement amount.◆ D uring the reporting period the central department

of Hengtong Optic-Electric organized a total of 38

quality related training sessions (about 150 hours)

in which nearly a thousand employees participated

which effectively enhanced their awareness of

safeguarding product quality.◆ D uring the reporting period Hengtong Optic-Electric

hosted the final Vocational Skills Competition and

the "Quality Month" event to encourage employees

to further improve their skills and workmanship

thus further consolidating the talent foundation for

Hengtong Optic-Electric to keep leading in quality.Quality related training sessions about

150hours

32 33Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green

Cultivating high-quality Contributing to

putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

In addition during the reporting period the Company

obtained a Level-4 intelligent manufacturing capability Responsible marketing

maturity certificate and showed compliance with national

standards of GB/T 39116-2020 and GB/T 39117-2020. This

indicates that Hengtong Optic-Electric has achieved a

certain level of automation digitization networking and Responsible marketing is vital for gaining customer trust seal authorization thus further enhancing the legal awareness

intelligence in manufacturing thus further ensuring process improving customer satisfaction creating a good business of all levels of our marketing personnel and avoiding any

standardization and effective product safety and quality environment and increasing brand influence. Therefore the legal risks. In addition the Company has opened up reporting

control. Company places great value on the regulation of marketing channels such as a complaint mailbox and an information

behavior and the training of sales personnel. We are reporting hotline at the General Manager's office in a move

committed to our pledge to adhere to compliant promotion to encourage internal and external stakeholders to report any

and sales and our responsibility to our customers is our suspected marketing activities while of course safeguarding

number 1 priority. The Company rejects utterly the practice the rights and interests of whoever makes the report.of making misleading descriptions or inappropriate and non-

objective evaluations of competitors. In view of existing or potential trade risks we have developed Level-4 intelligent manufacturing capability maturity certificate

relevant guidelines on the basis of establishing and improving

Alongside effective sales management we have organized our trade compliance management system and clarified the

special job briefings for marketing personnel to improve their sales management and operation requirements to prevent

overall quality. In addition we regularly issue promotional and reduce legal risks in trade and ensure compliant sales

Intelligent factory construction lean manufacturing and digital management warnings to ensure compliant marketing and to standardize and business activities.As a global service-oriented optical communication manufacturer Hengtong Optic-Electric a decade ago took the lead in

initiating intelligent factory construction lean manufacturing and digital management. We are sparing no effort to create an A reliable global partner

advanced intelligent manufacturing mode and an industrial innovation cluster featuring personalized customization networked

collaboration flexible production and visual manufacturing supervision. Through continuous integration and innovation of

cutting-edge technologies such as 5G communication artificial intelligence digital twins and blockchain among others

Hengtong has become a national Industrial Internet logo analysis demonstration enterprise and established cooperative Hengtong Optic-Electric has passed the authoritative certifi-

relations with more than 1500 upstream and downstream enterprises. In particular we have helped more enterprises to cation by Dun & Bradstreet a global data and analysis driven

achieve upgrade and transformation towards industrial digitalization and industrial networking. decision-making empowerment organization and obtained

the unique Dun & Bradstreet code of 545310872 as well as

Among the 2022 intelligent manufacturing demonstration factory projects of Jiangsu province the industry-leading and complete credit files and detailed credit reports. Hengtong

demonstrable "one network two platforms" intelligent factory of Jiangsu Hengtong Power Cable Co. Ltd. affiliated to Hengtong Optic-Electric was awarded a rating of 5A1 (the highest level)

Optic-Electric was awarded a place. by Dun & Bradstreet.The Company will continue to advance the intelligent construction of "one network two platforms". In other words relying Over the years Hengtong has passed multiple qualification

on the industrial Internet smart Internet of Things of State Grid and industrial Internet for enterprises we will speed up the certifications including Dun & Bradstreet certification which

smart and digital transformation of enterprises and set a benchmark for the digital and smart transformation and upgrade of provides guarantees to our global partners of our commitment

domestic industries. to integrity and our assurance of quality. In the future we will

continue to focus on creating value for our customers and es-

tablishing stable long-term and healthy business relationships

with our upstream and downstream supply chain partners so

as to promote the further development of our industry.Hengtong Optic-Electric was

awarded a rating of

5A1（the highest level）

by Dun & Bradstreet

34 35Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green

Cultivating high-quality

talents on the principle of Contributing to putting responsibility first quality products low-carbon future equality and diversity community co-creation

Customer services

In order to ensure the quality of customer service the Com- solve such problems quickly and effectively in order to improve The Company has established a strict confidentiality system in accordance with the Information Security and Confidentiality

pany has formulated a set of sound internal rules including customer satisfaction. During the reporting period the Com- Management Rules of Hengtong Group and set up a Confidentiality Committee to supervise and manage confidentiality related

the Aftersales Service Management Rules and the Emergency pany's customer satisfaction survey results showed that the work so as to strictly safeguard information security. In addition the Company is committed to reinforcing data security. To

Handling Management Rules. On the one hand Hengtong customer satisfaction score reached 96.02 (max score = 100).3 this end we have formulated the Technical Data Confidentiality Regulations. We have achieved encryption of customer privacy

Optic-Electric has developed a rapid response and emergen- layer by layer through the highest quality digital management in our ordering contract signing and other processes. We have

cy handling mechanism for customer complaints and major High customer satisfaction is a direct result of the Company's established specialized accounts for effective management and allocated different account permissions by level.market emergencies and drawn up the Special Process for service philosophy of "All-staff service to win the heart of

Customer Complaints Returns and Exchanges to reduce the customers with forever sincerity" allied to our sound service

impact and losses caused by emergencies and to improve support system. Services offered by Hengtong mainly include The Confidentiality Committee of Hengtong Optic-Electric mainly performs the following duties

the quality of customer service. On the other hand Hengtong after-sales and engineering services. In addition Hengtong

Optic-Electric has accurately identified existing problems and Optic-Electric has further improved its service efficiency and

difficulties commonly experienced by customers through our quality through full after-sales and engineering support servic- ◆ To implement national and industry-related policies laws and ◆ To review and supervise major matters related to the

annual customer satisfaction surveys and has taken steps to es for equipment and hardware. regulations concerning confidentiality. Company's confidentiality work.◆ To review the Company's deployments and annual work ◆ T o supervise the confidentiality work of each center/

An all-region after-sales service network has been formed and Through our specialized Engineering Service Department arrangements related to confidentiality. business department and sector.each service agency has a regional manager and an account equipped with professional engineers we provide strong

manager and a 24-hour free service hotline (8008282953) technical service support to customers in various regions so ◆ To provide confidentiality resources support and propel the

through which customers can inquire about product information that engineering issues can be resolved as quickly as possible. implementation of confidentiality work at the company level.and provide feedback on product use. In addition we provide Given that the products or services are still under guarantee

return visits training and other services to customers. We carry the Company will resolve quality problems caused by defects

out surveys and analysis of the services offered to customers in materials and improper manufacturing for free. Our technical

and their consumption needs on a quarterly basis. Through personnel will deliver timely field maintenance services and we Furthermore Hengtong Optic-Electric has formulated the Administrative Measures for Confidentiality and Non-competition

a targeted training system for customers we invite technical will recompense any economic losses incurred therefrom. After Agreement requiring employees in key confidential positions to enter into confidentiality agreements with the Company to

experts with theoretical and practical experience to provide free the guarentee has expired we guarantee a response within half

on-site installation guidance and technical training services for an hour upon receiving any notification of an issue and will ensure the security of data. In the event of any violation of the said agreement the Company shall be entitled to hold relevant

the technical personnel of our clients. immediately send technical personnel to the site to help with personnel accountable for breach of contract after verifying and providing relevant evidence through the allocation of internal

issue resolution to ensure that the optical cables we supplied and external resources.can return to normal usage in the shortest possible time period.During the reporting period the Company neither infringed upon any customer privacy nor lost any customer information.

3 Only the parent company of Hengtong Optic-Electric received the customer satisfaction survey.

36 37Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green

Cultivating high-quality Contributing to

putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

0Crea3ting a green

low-carbon future

Environmental management 40

Tackling climate change 41

Energy management 44

Water management 46

Emission management 47

Circular economy 50

The Company has always demonstrated a commitment to

advocating and following the path of green development.We have actively promoted sustainable commercialization

green transformation and green low-carbon energy

development and are devoted to making outstanding

contributions to the green and high-quality development

through the delivery of advanced products and technologies.We are committed to creating a green low-carbon and

sustainable future.

38 39Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green

Cultivating high-quality Contributing to

putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Environmental management Tackling climate change

The Company is dedicated to reducing the environmental have defined environmental protection as our long-term devel- Climate change is one of the most severe challenges transformation and reducing the impact of their operations

impact throughout the lifecycle of product design and manu- opment strategy. facing humanity in the 21st century. To protect our natural on the Earth against the background of increasing climate

facturing and to integrating the ethos of sustainable develop- ecosystem and ensure the sustainable development of change impacts. Actively advocating and practicing green

ment into each link. At present the Company has passed the ISO 14001 environ- our economy and society it is urgent to achieve carbon and low-carbon development the Company is actively

mental management system certification covering all principal neutrality by tackling climate change. Enterprises need to engaged in addressing climate change.We strictly abide by the Environmental Protection Law of the operations (100%) including the design of communication sys- play a supporting role in promoting low-carbon economic

People's Republic of China the Environmental Impact Assess- tem optical cables and submarine cables as well as environ-

ment Law of the People's Republic of China the Environmen- mental management activities and venues related to produc-

tal Protection Tax Law of the People's Republic of China and tion. Every year we regularly organize external audits to assess

other relevant laws and regulations as well as environmental our compliance with environmental laws our implementation Governance structure

regulations and rules related to overseas operations such as of environmental management policies and our risk control

the International Environmental Law the Environmental Liabil- measures in accordance with the ISO 14001 standard. In addi-

ity Directive (ELD) and the Industrial Emissions Directive. We tion we organize certificate renewal audits every three years. The Company has established a sound climate change risk governance framework. Specifically the ESG Committee coordinates

and reviews the work of dealing with climate change risk and is responsible for setting overall strategies and goals. In contrast

the ESG Working Group under the ESG Committee performs the duty of identifying and managing the Company's climate

Risk management change risks.To prevent and control potential environmental risk events

we have developed optimized reporting processes and Climate change risks

handling methods including a process for emergency

handling of environmental risks in which the control group

rescue group fire protection group evacuation group By analyzing the impact of climate change on the Company's operational strategy related business and finance we

vigilance group and monitoring group cooperate. have identified and evaluated climate change risks that may have an impact on the Company's operations according to

industry characteristics and business scope and have developed response strategies mainly in the area of physical risk

To effectively investigate and address environmental and transformation risk due to climate change in order to comprehensively promote green transformation and sustainable

pollution risks the Company has developed a response development.plan for environmental pollution emergencies and formed

a closed loop of tracking environmental problems and

hazards discovered through daily inspection. In addition Risk type Risk parameter Risk description Countermeasures

we regularly organize relevant emergency drills to find

deficiencies so as to continuously optimize the plan. During

the reporting period we did not violate any environmental Acute Extreme weather 1. Frequent occurrence of extreme

laws and regulations. risks events such as weather events will cause commuting

typhoons floods ex- inconvenience to employees trans-

treme high temper- portation obstacles and equipment

ature weather and failures thus resulting in discontinuity of

cold climates production and operation and ultimately

leading to a decrease in revenue 1. To implement the management per-

2. Typhoon and extreme cold might sonnel duty shift mechanism increase

cause damage to laid cables and other the frequency of weather forecast and

communication equipment detection and undermine the damage

caused by typhoons rainstorms etc.

2. To develop an emergency response

Physical plan for extreme weather events (such

risks Chronic The impact of 1. Slow changes in temperature and as typhoons rainstorms floods freez-

risks changes in temper- rainfall might lead to the relocation of ing rain snow and so on) and prepare

ature rainfall and some potentially affected sites of oper- emergency facilities in advance

sea level rise ating thus increasing operating costs

2. Slow rise in sea level might cause

malfunction of submarine optical ca-

bles due to pressure changes

40 41Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Risk type Risk parameter Risk description Countermeasures Carbon emission goals

Regula- Stricter emission In response to increasingly strict national 1. To learn and comply with relevant Hengtong Optic-Electric is committed to minimizing the Based on HioT an industrial Internet platform Hengtong

tions and disclosure manage- and international requirements for car- laws and regulations released by rele- impact of climate changes on corporate development has established an integrated energy management system

policies ment and compli- bon emission reduction regulators and vant regulators at home and abroad in

ance requirements investors require Hengtong Optic-Electric a timely manner and regularly identify particularly the impact of carbon emissions on the production through which we have realized automatic acquisition of

to disclose more information on emission applicable carbon emission policies and operation of the Company. Presently Hengtong Group has energy consumption information of electricity water natural

reduction goals measures and results. set the goal of "carbon peaking by 2028 and carbon neutrality gas industrial gases and so on and effectively monitored

This may cause a range of potential risks 2. To strengthen internal carbon by 2045" striving for a 40% reduction in comprehensive energy consumption and carbon emission during production.including delay in the progress of project accounting management and carbon

emission accounting in the production energy consumption per RMB 10000 output value and a 50% In addition we have realized unified management of carbon potentially heavy penalties and increasing

compliance costs process reduction in carbon dioxide emissions per RMB 10000 output emissions through a digital management platform through

value by 2028 compared with 2020. In active response to such which we can identify the direct and indirect sources of GHG

goals Hengtong Optic-Electric is formulating corresponding emissions from the Company and its member entities and

Tech- Low-carbon In response to climate change To explore low-carbon materials and action plans to achieve the carbon emission goals by means define the emission boundaries.nologies technology low-carbon materials will gradually technical transformation paths and of effective control of carbon emissions.transformation be substituted for existing products introduce efficient and energy-saving

and low-energy equipment and more technical means or production equip-

advanced energy-saving technologies ment GHG emissions4 Unit 2022

will further attract more investors and

policy support which might result in

reduced liquidity of existing assets

cost increase for low-carbon materi- Total GHG emissions (Scope 1+Scope 2) Tonne of CO2 equivalent (tCO2e) 339189.14

als and technical transformation and

other risks

GHG emissions (Scope 1) Tonne of CO2 equivalent (tCO2e) 80297.40

Change of With customers' increasing attention 1. To closely track and investigate

customer to climate change and low-carbon life changes in customer demand for GHG emissions (Scope 2) Tonne of CO2 equivalent (tCO2e) 258891.74

preferences Hengtong Optic-Electric will speed up energy-saving and green products and

low-carbon transformation but will face services and adjust the industrial layout

Transforma- many potential challenges including in a timely manner

tion risks GHG emissions intensity Tonne of CO equivalent (tCO e)/RMB100 million 730.00budget increase pressure from compet- 2 2

itors providing low emission products 2. To increase the budget for providing

and a decrease in market share and transformational products and services

demand for goods and services to meet customer needs and actively

analyze price fluctuation trends

Market

Rise in raw mate- The cost of resources such as energy 1. To actively explore energy-saving and

rial costs water and equipment will rise as a consumption reduction measures for

result of climate change which will production and achieve recycling of

increase the costs of raw materials resources as much as possible

procurement and transportation

2. To reach a consensus with partners

on low-carbon transportation to reduce

procurement costs

Repu- Investors are Stakeholders are increasingly concerned 1. To further disclose the requirements

tation increasingly con- about climate change issues. If we fail to for sustainable development and climate

cerned about nega- meet investors' expectations Hengtong change response to ensure compliance

tive feedback Optic-Electric might face risks such as

divestment and downgrading of related 2. To closely track the feedback of

ESG ratings customers and other stakeholders on

the requirements for addressing climate 4 T he greenhouse gas emissions of the Company mainly include direct emissions (Scope 1) and indirect energy emissions (Scope 2).change The Company performs carbon footprint accounting in accordance with ISO14064-1:2018 Specification with guidance at the organization

level for quantification and reporting of GHG emissions and removals . The GHGs mainly include carbon dioxide methane and nitrous

oxide. Furthermore the accounting is based on the average emission factor of state grid for 2022 specified in the Notice on Reporting

and Management of Greenhouse Gas Emissions of Power Generation Enterprises from 2023 to 2025 issued by the Ministry of Ecology and

Environment and the emission factor defined in the 2019 Refinement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories

issued by the Intergovernmental Panel on Climate Change (IPCC).

42 43Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Energy management

The Company regards it a necessity to achieve low carbonization of energy mainly by means of energy saving and

consumption reduction in production and operation process. The Company has further improved capabilities of refined Energy consumption5 Unit 2022

energy management and expedited the improvement of energy utilization efficiency by establishing and improving the energy

management system as well as the energy-saving and consumption reduction management mechanism reinforcing target Direct energy

assessment and process management and taking measures including process technology innovation equipment technology

Gasoline Liter 157017.59

transformation digital management etc.Diesel Tonne 5742.74

Optimization of preform Energy-saving transformation of Natural gas 10000 cubic meters 2667.76

manufacturing technology optical fiber drawing equipment Hydrogen 10000 cubic meters 29.46

Featuring a series of advanced technologies with the efficient By means of innovations in key technologies such as ultra- Propane Tonne 75.19

deposition technology as a representative one the Company high-speed drawing and full-process automatic control the Biomass particles Tonne 2367.00

has been continuously optimizing the preform manufacturing promotion and application of LED curing technology as well

process. It is hoped to achieve efficient environment-friendly as the optimization and transformation of public and auxiliary Direct energy consumption Tonne of standard coal 42550.36

and green technology development from the source of the in- facilities the Company has realized further reduction of energy

dustrial chain so as to better achieve green manufacturing in consumption in the optical fiber drawing process. During the Indirect energy

the optical communication industry chain. During the reporting reporting period approximately 2200 tonnes of standard coal Purchased electricity Kilowatt-hour 701999126.00

period approximately 5800 tonnes of standard coal consump- consumption and approximately 4300 tonnes of CO2 emis-

tion and approximately 9900 tonnes of CO2 emissions were sions were reduced due to such energy-saving transformation. Purchased green electricity Kilowatt-hour 250435000.00

reduced thanks to the process optimization.Purchased steam Tonne 15358.55

Indirect energy consumption Tonne of standard coal 87719.39

Energy-saving transformation of a produc- Total energy

tion line for continuous casting and rolling Green electricity purchase

Total energy consumption Tonne of standard coal 130269.75

The Company has significantly cut down the use of natural The Company has been optimizing the energy structure in an Energy consumption intensity Tonne of standard coal/RMB100 million 280.37

gas via furnace structure optimization and regenerative orderly manner and progressively increasing the proportion of

transformation of the continuous casting and rolling production renewable energy. During the reporting period the Company 5 T he comprehensive energy consumption is calculated based on the consumption

line. During the reporting period approximately 700 tonnes of purchased 250.435 million kWh of green electricity and of gasoline diesel natural gas hydrogen electricity and steam as well as the

standard coal consumption and approximately 1300 tonnes reduced CO2 emissions by approximately 142800 tonnes. conversion coefficient in the national standard General Rules for Calculation of

of CO2 emissions were reduced due to such optimization and Comprehensive Energy Consumption (GB/T 2589-2020).transformation.

44 45Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Water management Emission management

Water resources are vital for the survival of any lives on the Earth and are of great impor- Save of water annually The Company has actively promoted effective control improving technologies and management processes and

tance to build a community with a shared future for mankind. Regarding effective use of of emissions in strict accordance with related laws and optimizing the emission recycling system the Company is

water resources as the only approach to green transformation Hengtong Optic-Electric 42000 tonnes regulations such as the Environmental Protection Law of the capable of ensuring the reduction of exhaust gas wastewater

strictly abides by the Water Law of the People's Republic of China as well as other related People's Republic of China the Law of the People's Republic and waste emissions during production and operation. To

laws and regulations and internal water management rules. The Company aims to achieve of China on the Prevention and Control of Atmospheric satisfy the compliance requirements at various business sites

sustainable water management in the business operation and supply chain links and fun- Pollution the Law of the People's Republic of China on the the Company has set a goal of reducing the consumption

damentally reduce the impact of water scarcity on the environment by means of regularly Prevention and Control of Water Pollution the Law of the of waste emulsion per unit of production by 10% in 2022

monitoring and controlling risks related to water use standardizing the use consumption People's Republic of China on the Prevention and Control compared with 2020 for the purpose of consolidating the

and discharge of water resources and improving production water efficiency. of Environmental Pollution by Solid Waste. By continuously foundation for the Company's sustainable development.During the reporting period we actively carried out water-saving activities and conveyed

the water-saving concept to our employees through daily awareness promotion. The Com- Exhaust gas management

pany has installed sufficient water-saving facilities in our production plants and established

a rainwater collection and utilization system. The rainwater so collected is applied for

washing on-site equipment and vehicles and flushing roads so as to maximize rainwater While strictly complying with domestic and foreign exhaust gas emission standards the Company has set clear various

utilization and achieve efficient utilization of water resources. requirements for standardized production. In addition the Company makes efforts to control emissions from the source while

strictly monitoring the exhaust gas emission in the operation process.Furthermore we can save 42000 tonnes of water annually through internal recycling of

industrial water and centralized water treatment through the continuously improved water

circulation system.Process for treating dust and exhaust gas

Utilization of water resources Unit 2022

Total water consumption thousands of m3 2851.777 With a continuous investment the Company has made some remarkable achievements in environmental technology

transformation. For example the Company has substituted the former wet electrostatic dust removal process with the dry bag

Water consumption intensity m3/(RMB100Mn) 6137.61 dust removal process for treatment of tail gas from production of preform thereby reducing the use of precipitants PAC and

PAM for water treatment every year reducing the industrial wastewater discharged into the municipal sewage pipeline and

further converting wet sludge as general solid waste into the dust by-product SiO2 with economic value.Furthermore the Company has installed monitoring equipment at key emission sites for 24-hour video surveillance so as

to prevent risks such as damages to emission treatment equipment and performance degradation arising from any external

factors.

46 47Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green

Cultivating high-quality Contributing to

putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Wastewater management Waste management

The Company has formulated internal wastewater treatment rules strictly in accordance The number of non-com- In strict accordance with laws and regulations at home and abroad such as the Law of the The consumption of waste

with domestic and foreign sewage discharge standards and other related laws and regula- pliant emissions by the People's Republic of China on the Prevention and Control of Environmental Pollution by emulsion per unit of

tions international wastewater treatment and compliance discharge requirements as well Company was Solid Waste the Company has formulated the Procedures for Waste Control to coordinate production reduced by in

as industry conventions and regulations. and manage the links of waste collection storage transportation and treatment so as to 2022 compared with 2020

The wastewater of the Company mainly includes domestic sewage and industrial waste- 0 guarantee the compliant treatment and recycling of generated waste. The consumption of

water and the pollutants mainly include COD SS total phosphorus ammonia nitrogen waste emulsion per unit of production reduced by 10% in 2022 compared with 2020. 10%

etc. With strict control measures taken our quality of wastewater discharge is superior to

that required by regulators. In 2022 our wastewater detection values conformed to the Non-hazardous waste

requirements of GB8978-1996 and were included in the scope of pipeline requirements.Non-hazardous wastes of the Company mainly include scrap metal waste plastics waste paper packaging materials and other

We strictly control the generation and discharge of wastewater from source. For example wastes generated in the production process as well as office and kitchen wastes. By means of specialized waste collection

industrial wastewater is recycled by means of sedimentation degradation and separation stations at production and office sites the Company is capable of timely classifying wastes first and then transferring them to

in treatment facilities such as sumps sedimentation tanks drainage ditches septic tanks relevant town-level units for treatment.and oil separators in the production site while domestic sewage is discharged into the

municipal sewage pipeline for centralized treatment. Hazardous waste

During the reporting period the number of non-compliant emissions by the Company was 0.The hazardous wastes of the Company mainly include waste emulsions activated carbon and other toxic and harmful

substances generated in plants and administrative office areas which may have an adverse impact on the surrounding

environment. The Company strictly follows the hazardous waste treatment requirements and rules. Following uniform reporting

and collection the Company transfers the hazardous waste (via the full-life-cycle hazardous waste treatment system of Jiangsu

province) to qualified third parties for centralized disposal. The Company has achieved "zero emissions" of hazardous waste

and prevented secondary pollution to the environment.Discharge of waste liquid gas and solid Unit 2022

Wastewater discharge

Discharge of domestic sewage Tonne 36180.72

Hazardous waste

Waste emulsion Tonne 251.09

Activated carbon Tonne 1.40

Total discharge of hazardous waste Tonne 586.60

Non-hazardous waste

Discharge of general solid waste (recyclable) Tonne 117586.80

Total amount of recycled packaging materials Tonne 70894.86

Total amount of other wastes recycled Tonne 46691.94

Total amount of general solid waste (non-recyclable) Tonne 49939.22

Total amount of general solid waste generated Tonne 167526.02

48 49Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green

Cultivating high-quality Contributing to

putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Circular economy

The Company treats sustainability from a long-term and

open perspective. Advocating and promoting the concept

and model of low-carbon circular development and resource

recycling the Company has increased the use of recoverable The helium gas recycling rate

and recyclable materials to reduce dependence on raw has reached

materials. While reducing costs and increasing benefits the

Company proactively promotes green long-term development

to fundamentally mitigate the environmental impact arising 70%

from shortage of resources.In terms of tail gas treatment Hengtong Optic-Electric

through environmental technology transformation has reduced

the consumption of water resources in traditional processes In terms of recycling of raw materials the

and achieved the conversion from solid waste to industrial by- Company collects and purifies helium gas

products. through helium gas treatment devices for the

purpose of centralized recycling. Through reuse

In addition the Company promotes the recycling of transport of helium gas up to standard for equipment

pallets to reduce the generation of waste. operation the Company has improved the

helium gas recycling rate to 70%.Tail gas treatment

Hengtong has replaced the former wet

electrostatic dust removal process with the dry

bag dust removal process for treatment of tail

gas from production of preform. In addition we

have changed wet sludge as general solid waste

into the dust by-product SiO2 with economic

value.Transport pallets

The Company inspects classifies and disposes

of transport pallets in good conditions and

recycles them based on transport scenarios and

performance requirements so as to reduce the

generation of waste.

50 51Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green putting responsibility first quality products low-carbon future talents on the principle of

Contributing to

equality and diversity community co-creation

0Culti4vating high-quality talents

on the principle of equality and

diversity

Recruitment and retention 54

Development and training 57

Remuneration and benefits 60

Communication and care 62

Health and safety 63

Talent strategy serves as the most important strategy for

the development of a company and plays an important role

in improving its overall strength. Hengtong Optic-Electric

adheres to the people-oriented management philosophy and

safeguards the basic rights and interests of every employee.Through years of development we have established a sound

employment system. By providing abundant training resources

for employees and actively organizing various care activities

the Company has further upgraded talent competitiveness

and cohesion created a healthy and upward culture and

promoted the common development of the Company and our

employees.

52 53Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green

Cultivating high-quality

putting responsibility first quality products low-carbon future talents on the principle of

Contributing to

equality and diversity community co-creation

Recruitment and retention Fair recruitment

The Company adheres to the employment principles The Company is committed to eliminating discrimination in gender age region ethnic group family status marital status

of fairness impartiality diversity and inclusiveness religion disability sexual orientation social background etc. In recruitment and employment the Company strictly prohibits any

and abides by laws and regulations. Hengtong Optic- Number of employees by gender discriminatory descriptions or any discrimination behaviors acquire only necessary information and keep confidential personal

Electric has formulated the Recruitment Management privacy. Furthermore the Company actively provides job opportunities to vulnerable groups and safeguards the rights and

Measures according to the actual situation to strictly 11151 interests of female employees. The Company devotes to creating an equal diverse and inclusive employment environment and

regulate and control the recruitment and employment Male employees promoting the diversified development of the talent team.practices. During the reporting period the Company 3832 The Company actively provides job opportunities for vulnerable groups. Specifically we recruit disabled persons according to recruited talents from all sectors of society through recommendations from the district-level Disabled Persons' Federations and town-level Civil Affairs Departments by publishing

a series of channels including campus recruitment Female employees recruitment information on the website and participating in special job fairs for disabled persons. Furthermore the Company

social recruitment and internal promotion. With such follows the principle of equal pay for equal work and arranges suitable work for disabled employees according to their actual

efforts the Company has reserved many talents. Number of employees by age situation to better safeguard their rights and interests.We regularly analyze the gaps in existing human 4075

resources to develop an appropriate annual 30 and below

recruitment plan so as to ensure that the Company's Prohibiting child labor and forced labor

human resources can satisfy the demands for current 924930-50 years old

and future development.

1659 In strict accordance with related laws and regulations of China and other host countries the Company has formulated the

Above 50 Control Procedure for Prohibiting Forced Labor. The Company prohibits child labor forced labor and other illegal employment

behaviors including employment of anyone aged below 18 and strictly verifies each new employee's age and background to

Total employees ensure employment compliance. Once any employment violation is verified we will deal with it seriously in accordance with

14983 Number of employees by level the Company's internal rules. During the reporting period there were no incidents of child labor or forced labor. Person

251

Senior management

New employees 567

Mid-level employees

3474 Person 14165

Ordinary employees

Number of employees by region

Full-time employees

14456 12648 Person Employees of China Mainland

2335

Employees from abroad Hong Kong Macao and Taiwan China

Temporary or part-time employees

Number of employees by academic background

527 Person

9490

College degree or below

4820

Bachelor's degree

Disabled employees

633

366 Master's degree Person

40

Doctor's degree and above

54 55Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Labor union and collective labor agreements Development and training

To satisfy related requirements of employees for democratic management

and communication Hengtong Optic-Electric has drawn up internal Labor union Rate of signing collective Excellent talents are vital for the development of a company. Hengtong Optic-Electric always pursues the growth together with

management rules such as the Control Procedure for Freedom of coverage rate agreements with employees employees. We put forth effort to establish a systematic diversified and full-coverage talent development system to create

Association and Collective Bargaining Right in accordance with the

100 100 opportunities for sustainable growth of employees. Meanwhile we continuously expand channels for career development and requirements of the International Labor Organization. The Company % % promotion so as to facilitate employee ability improvement and talent team building.

fully respects employees' rights in association and collective bargaining

committing to creating a free open work platform for employees.Employee retention Talent cultivation

The Company spares no efforts to attract and retain talents and the performance in this regard is deemed as a key evaluation

indicator. Furthermore the Company strives to maintain industry competitiveness by improving the career development plan

Highly valuing talent cultivation the Company has

for employees adjusting and optimizing the compensation structure and intensifying communication with employees. Internal offline training

established related management rules and training

procedures such as the Training Management

Measures . Our online and offline training services

Employee turnover rate by gender Employee turnover are readily accessible to all employees. Specifically

rate by age Em-we intend to arrange over 36 hours of training per ployee External online training

13.65% employee every year on average. training

Employee turnover rate The employee training modes of the Company 8.75% include internal offline training external online

6.85% Specialized seminars skill and 18.50% training other specialized seminars sharing 4.88% knowledge sharing sessions case sessions regulation interpretation case study as study regulation interpretation etc.

2.93% well as other special training.

Male Female Age<30 30<=Age<40 Age>=40

Online Teaching Platform

To facilitate employees' learning at any time flexible adjustment of training

orientations as well as reasonable allocations of teaching resources Hengtong

Optic-Electric has established an online teaching platform.After the Company uploads the contents of specific offline courses in video

format to the online teaching platform the employees can download and learn

the courses online in a flexible manner thereby reducing the difficulty in time

arrangement for different employees.PC Training Platform Mobile training platform

56 57Enhancing governance while Creating market-leading Creating a green Cultivating high-quality Hengtong Optic-Electric 2022 Environmental Social and Governance Report talents on the principle of Contributing to putting responsibility first quality products low-carbon future equality and diversity community co-creation

To stimulate the enthusiasm of employees to accept external training so that they can improve their professional skills the

Company has provided the services of expense reimbursement related to external training. Breaking the "ceiling" of occupational promotion and further

improving the overall skill levels of employees

Improvement We joining hands with Shanghai Jiao Tong University have organized general managers to receive senior

of manage- business administration trainings for president-level executives; and join hands with Zhejiang University Always giving priority to talent strategy for development the Company has developed a development channel covering the

ment capabil- have organized the reserve talents of senior executives to receive advanced business administration overall career circle. By launching the Skilled Craftsman Award organizing professional skills competitions etc. we have

ities trainings. assisted skilled craftsmen for growth and success. For example with the help of the Company employee Wei Dong has

become a national-level skill master from an ordinary maintenance electrician. He has been successively awarded the honorary

titles such as "National Outstanding Professional and Technical Talents" "Jiangsu 333 High-level Talents" and "List of First

Batch of 29 Special-class Technicians" by the Department of Human Resources and Social Security of Jiangsu Province.Educational In conjunction with Wuxi Vocational Institute of Arts & Technology and other colleges we have organized

improvement frontline employees with college degree for educational improvement trainings.We encourage related skilled staff to receive external training (for welders electricians PMP project

Skills training managers etc.). Upon obtaining related certificates the employees can apply for reimbursing training expenses through the accounting system of the Company on the basis of submitting the approved

external training application form payment records etc.The Company proactively encourages multi-directional development of employees helping them to become composite

talents by enhancing their skills in multiple aspects. Hengtong Optic-Electric has established a comprehensive internal shift

mechanism and released the Work Shift Management Measures to push forward the work of internal work shift. We have

provided flexible work shift opportunities for reserve management talents in need of improving practical abilities line leaders in

need of improving their comprehensive management capabilities as well as key backbone staff in need of improving abilities

in communication learning and special skills. With these efforts we aim to fully establish advantages of the employees assist

them in identifying their potentials and inspire them to forge ahead.Total number of trainees Per capita training hours Performance evaluation

198506 Person-time 38.88 Hours

The Company has established an excellent personal perfor-

mance management and assessment system to ensure the

fair impartial and transparent performance evaluation of every

employee regularly from multiple aspects including learning

Total duration of training Per capita training hours ability leadership executive capability knowledge experience

(female employees)

etc. We have informed employees of performance evaluation

582539.04 Hours 39.20 results and improvement suggestions in a timely manner so Hours as to facilitate targeted improvement of their personal abilities.

During the reporting period all employees received regular

performance and career development assessments.Per capita training hours Furthermore we have developed an overall process for han-

Number of participants

(male employees) dling employee complaints. In particular if any employees

14983 raise objections to performance evaluation results etc. they Person 38.56 Hours may first communicate with their direct supervisor for reso-

lution. In case of failure they are entitled to file a petition to

their indirect superior or the Human Resources Department.And the latter is responsible for investigating the petition

Values for 2022 content coordinating related parties and giving the final

feedback to the applicants.

58 59Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green putting responsibility first quality products low-carbon future talents on the principle of

Contributing to

equality and diversity community co-creation

Remuneration and benefits

The Company is committed to improving the well-being of employees by improving compensation and welfare. In this regard

we have also continuously improved the compensation and incentive policies and taken the initiative to raise the incomes of Managerial and techni- Marketing Operating per- Personnel of logistical

employees. cal personnel (includ- personnel sonnel support and affairs

ing fresh graduates) handling

Employee compensation

Engage in unified job grade Adopt the model of remu- Adopt the remuneration Determine remuneration

management i.e. determin- neration based on business model based on piecework grades in accordance with

ing job grades of employees performance pay job grade- and timing determine the the average local market

Hengtong Optic-Electric is devoted to providing competitive For better business development the Company has developed by means of qualification based salaries to employees ski l l and post levels of wages and ensure the

compensation to the employees. It offers fair and guaranteed performance-oriented incentive plans and salary increase recognition selecting job on a monthly basis guar- employees in a reasonable alignment of salary levels

compensation to all employees according to their performance plans for all employees including managers technicians and coefficients according to antee the salary payment manner via skill evaluation with abilities of employees

and business capabilities. Furthermore we endeavor to link sales personnel. Hengtong Optic-Electric spares no efforts job gradesand designing determine an annual gross and determine the salary and performance through

remuneration scales based income of a sales person levels based on local market job grade management and

the salaries of managerial staff with their ESG performance in to achieve fair and standardized performance evaluation and on their abilities and perfor- in accordance with his/ conditions. qualification evaluation.a timely manner and strive to achieve sustainability in opera- bonus distribution to inspire employees to improve their own mance. her completion of business

tions. abilities and performance so as to contribute to the improve- objectives (such as sales

ment in benefits of the Company. revenue market expansion

situation and so forth)fo-

cus on rewarding the sales

personnel who outperform

significantly and ensure a

synchronous increase of

benefits and incomes.To stimulate the enthusiasm of employees the Company has developed the employee stock ownership plan for 2022 covering di-

1 ：0.96 1 ：0.97 1 ：0.97 rectors senior management core technicians and technical backbone. We have also set up performance evaluation goals that are binding to employees established a multi-batch phased release mechanism and proposed performance evaluation requirements

and long-term service requirements at both the Company and individual levels to stimulate the enthusiasm of core members and

urge all employees to work concertedly for the same goals.Salary ratio of female senior Salary ratio of female Salary ratio of female ordinary Employee benefits

executives to male senior managerial staff to male employees and male ordinary

executives managerial staff employees

In addition to the allowances and ben-

efits stipulated in related laws and reg-

ulations we have provided employees

with five major social insurances and

housing provident fund. Furthermore

1.75 1.75 we have provided additional living allowances and benefits including

holiday and birthday gifts free health

examinations parental leave high-tem-

perature subsidies apartment accom-

modation subsidies meal subsidies

reimbursement of expenses of trans-

portation during festivals and holidays

Ratio of standard entry level wage Ratio of standard entry level wage of

of female employees to local male employees to local minimum wage such as the Spring Festival. All these

minimum wage aim to alleviate the living pressure of

the employees and establish a harmo-

nious labor relationship.

60 61Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green

Cultivating high-quality Contributing to

putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

Communication and care Health and safety

The Company values communication and exchange with employees. To enable employees to freely express their wishes and The Company is committed to creating a healthy and comfort- At the beginning of each year we develop an annual safety

demands in different circumstances we have established various communication channels and feedback mechanisms so that able working environment and safeguarding the occupational training plan and set KPI targets for annual safety manage-

employees can offer recommendations for the sustainable development. safety and physical and mental health for all employees. The ment. We organize occupational health and safety risk assess-

management of the Company is responsible for safeguarding ments on a quarterly or semi-annual basis engage third-party

the health and safety of employees. The Company links safety organizations to inspect indicators such as noise tempera-

management with the performance of the management and tures lighting and indicators on a yearly basis and submit an

Interview mechanism pushes all departments to strengthen safety protection and occupational safety assessment report every three years.advance the implementation of safety rules and measures.We spare no efforts to safeguard the safety of employees in

The Company strictly complies with the occupational health the production process. In this regard we provide production

The Company maintains an interview mechanism in which the leader of each department interviews with their subordinates laws and regulations of China and host countries adheres to employees with safety protection equipment such as earplugs

on a monthly basis to understand their thoughts work and living situations in a timely manner. In this way any employees in the concept of life first and safety first and always gives top masks protective goggles and high-temperature protective

difficulty can be helped in time so that a humanistic care environment has been created. Furthermore the Human Resources priority to safet production. All major production-based compa- clothing. Furthermore we have put up warning signs on

Department organizes seminars for new employees hired through campus recruitment on a quarterly basis so as to get to nies have passed OHSAS 18001 occupational health and safety high-temperature production devices and installed protective

know their daily work and living conditions. Effective problems and suggestions from such employees will be timely disclosed certification. Furthermore the Company actively shoulders the nets. All high-speed operation devices have been equipped

to corresponding departments for the purpose of rectification. entity responsibility of occupational health and endeavors to with infrared alarm systems thereby being able to immediately

minimize adverse impacts from occupational disease hazards suspend production in case of any emergencies.in the work process thereby fully safeguarding the occupa-

We continuously enhance the safety operation awareness

Express mechanism tional health of employees. of all employees by organizing safety trainings and launch-

During the reporting period we promoted the safety culture ing initiatives such as "Safety Production Month" and "Safety

development and improved the level of safet production Consultation Day" so as to avoid potential work risks. In 2022

To better solicit opinions of employees the Company has established a reasonable through risk assessments regular special safety inspections Hengtong Optic-Electric has organized safety drills and train-

communication mechanism where all employees are entitled to submit hazard rectification emergency drills as well as safety training ing for all employees in the online and/or offline manner with

recommendations. If any suggestions involve the internal process of the Company of all employees. contents covering production safety fire safety emergency

the Administrative Department first performs a preliminary review and then forwards knowledge safety operations etc.them to related departments for handling tracking and implementing according to the

types of suggestions. If any suggestions involve the external process the Performance

Department performs a preliminary review and then forwards them to related

departments for handling and implementation based on the types of suggestions. Safety Production Month 2022

Number of work-related Times of emergency

Workers' Congress In June 2022 Hengtong Optic-Electric launched a Safety fatalities drills in safety productionProduction Month event and comprehensively enhanced

safety awareness and emergency response capabilities 0 Person 392 Times

On a yearly basis the Company holds the workers' of employees by means of publicity drills knowledge

Congress to review work reports commend model competitions micro videos etc.employees track improve and disclose employees'

proposals. At the workers' Congress the up-to- Total hours of

date rules of the Company as well as the matters Times of safety trainings safety trainings

that are of vital interests and of common concerns

of employees will be disclosed and explained. 182 Times 364 Hours

Furthermore results of timely rectification in

accordance with reasonable recommendations

proposed by employees will also be disclosed.Taking a responsive work attitude the Company

through timely and effective rectification

has progressively improved employee

satisfaction and enhanced employees'

sense of belonging and recognition of

the Company.

62 63Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation

0Cont5ributing to

community co-creation

Highlighting responsibility sense through participation in philanthropy 66

Supporting sustainable development according to local conditions 67

Advocating a green low-carbon life 68

The recognition and support from society are imperative for

the development of Hengtong Optic-Electric. We actively

explore the modes of social connectivity and advocate the

environmental protection concept. Meanwhile we actively

participate in social welfare activities including emergency

response and disaster relief boost rural area development

and support development of education undertakings to pay

back to society and promote sustainable development.

2022

Total donation amount

1014.48 RMB 10000

Cash donation

942.99 RMB 10000

Donation in kind

71.49 RMB 10000

64 65Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green talents on the principle of Contributing to putting responsibility first quality products low-carbon future equality and diversity community co-creation

Highlighting CSR sense through participation Supporting sustainable development

in philanthropy according to local conditions

Emergency rescue and disaster relief relieving difficulties Joining Global Compact and pursuing 17 Sustainable Development Goals (SDGs)

In September 2022 a 6.8-magnitude earthquake stroke Luding County Ganzi Tibetan Autonomous Prefecture Sichuan Cablescom employees have made nests for various species of birds and placed them in factory gardens to better monitor and

Province. The earthquake repeatedly and severely damaged communication networks and power facilities significantly affecting protect their living environment which has not only raised employees' attention to environmental protection but also created

the rescue and relief process. In this context Chengdu Hengtong Optic Communication Co. Ltd. actively took epidemic biodiversity.prevention and control measures urgently produced a batch of optical cables and delivered them to the disaster-stricken

areas which ensured timely repair of communication facilities and opened a channel of emergency communication with the

outside world for such areas.Philanthropic action of "Assisting the Disabled to Realize Dreams"

Up to now Hengtong Optic-Electric has

hosted the philanthropic action of "Assisting

the Disabled to Realize Dreams" for 12

consecutive years. Hengtong Optic-Electric

never stops the pace of assist ing the

children of local disadvantaged families

with disabilities in receiving education.Furthermore we have provided subsidies

and books to the children of disadvantaged Cables de Comunicaciones Zaragoza S.L. Spain

families with disabilities.

66 67Cultivating high-quality

Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green talents on the principle of Contributing to putting responsibility first quality products low-carbon future equality and diversity community co-creation

Advocating a green low-carbon lifestyle

Green development For the charitable purpose 12000 trees have been planted for four consecutive years in Hengtong's Global Forest Action Initiative

In the face of severe challenges brought by environmental On the morning of March 11 2022 the 5th Hengtong Global Forest Action and Planting Ceremony a large-scale charitable and

changes to human survival and development the global environmental project jointly sponsored by Hengtong Optic-Electric and Qidu Township was held in Gelin Country Garden

communities have demonstrated an increasing attention to Wujiang District in response to the call for low-carbon and green development.green development which has become a common sense.In response to green development Hengtong Optic-Electric

calls on its employees worldwide to plant trees. In the

process of high-quality development we also pursue green

development working together with all parties to establish

a closer green development partnership.Aberdare Technologies Private Limited India

Alcobre in Portugal has reduced production emissions

by using reusable materials and low-energy equipment

among other measures. After planting some Metrosideros

polymorpha (most popular in the Pacific region) in their

factory area they expressed "We are proud to take part in

the green initiative of Hengtong."

Alcobre Condutores Electricos S.A. Portugal

Located at the southernmost point of the African continent

Aberdare in South Africa is also actively engaging in the

"Green Initiative". "Through green actions we pay back to

the nature and make the nature be eternal so as to bring

more well-being to all humans."

To enhance the awareness of planting and protecting

trees among local people Aberdare has engaged in a

series of tree planting actions in cooperation with related

departments of agriculture and forestry. By protecting

water soil and wildlife they have made due contributions

to improving the ecological environment.Aberdare Cables (PTY) Ltd. South Africa

68 69Hengtong Optic-Electric 2022 Environmental Social and Governance Report Appendix

Appendix

Disclosure items Disclosure issues Corresponding chapters/sections

Disclosure items Disclosure issues Corresponding chapters/sections GRI 202: Market performance 2016

GRI 2: General disclosure 2021

3-3 Management of substantive issues Cultivating high-quality talents on the principle of equality and diversity - remuneration and welfare

Organization and reporting practices

202-1 Ratios of standard entry level wage by gender com- Cultivating high-quality talents on the principle of equality 2-1 Organization details About the Report pared to local minimum wage and diversity - remuneration and welfare

2-2 Entities included in the sustainability report About the Report GRI 203: Indirect Economic Impact 2016

2-3 Reporting period reporting frequency and contact About the Report 3-3 Management of substantive issues Contributing to community co-creation - highlighting re-person sponsibility sense through participation in philanthropy

Activities and workers

203-1 Infrastructure investments and supporting services Contributing to community co-creation - highlighting re-

2-6 Activities value chain and other business relations About Hengtong Optic-Electric sponsibility sense through participation in philanthropy

2-7 Employees Cultivating high-quality talents on the principle of equality

GRI 204: Procurement Practice 2016

and diversity - recruitment and retention

3-3 Management of substantive issues Creating market-leading quality products - sustainable

Governance supply chain

2-9 Governance structure and composition Enhancing governance while putting responsibility first -

GRI 205: Anti-corruption 2016

corporate governance

3-3 Management of substantive issues Enhancing governance while putting responsibility first -

Nomination and selection by the supreme governing Enhancing governance while putting responsibility first - business ethics and anti-corruption2-10 body corporate governance

205-1 Operations assessed for risks related to corruption Enhancing governance while putting responsibility first -

2-12 Supervisory role of the supreme governing body in man- Enhancing governance while putting responsibility first -

business ethics and anti-corruption

agement impact corporate governance

205-2 Communication and training regarding anti-corrup- Enhancing governance while putting responsibility first -

Enhancing governance while putting responsibility first - tion policies and procedures business ethics and anti-corruption2-13 Delegating responsibility for managing impacts corporate governance GRI 206: Anti-competitive Behavior 2016

2-14 The role of the supreme governing body in sustaina- Enhancing governance while putting responsibility first - bility reporting ESG governance 3-3 Management of substantive issues

Enhancing governance while putting responsibility first - busi-

ness ethics and anti-corruption

2-16 Communication about important concerns Enhancing governance while putting responsibility first - GRI 302: Energy 2016corporate governance

3-3 Management of substantive issues Creating a green low-carbon future - energy management

2-17 Common knowledge of the supreme governing body Enhancing governance while putting responsibility first - ESG governance 302-1 Energy consumption within the organization Creating a green low-carbon future - energy management

Cultivating high-quality talents on the principle of equality 302-3 Energy intensity Creating a green low-carbon future - energy management2-19 Remuneration policy and diversity - remuneration and welfare 302-4 Reducing energy consumption Creating a green low-carbon future - energy management

Strategy policy and practice

302-5 Reductions in energy requirements of products and services Creating a green low-carbon future - energy management

2-22 Strategic statement on sustainability Enhancing governance while putting responsibility first - ESG governance GRI 303: Water and Effluents 2018

Enhancing governance while putting responsibility first - 3-3 Management of substantive issues Creating a green low-carbon future - water management

2-23 Policy commitment communication with stakeholders ESG governance busi-

ness ethics and anti-corruption 303-2 Management of water discharge-related impacts Creating a green low-carbon future - water management

Enhancing governance while putting responsibility first - 303-3 Water withdrawal Creating a green low-carbon future - water management

2-24 Integration policy commitment communication with stakeholders ESG governance busi- 303-4 Water discharge Creating a green low-carbon future - water management

ness ethics and anti-corruption

303-5 Water consumption Creating a green low-carbon future - water management

2-26 Mechanism for seeking advice and raising concerns Enhancing governance while putting responsibility first - business ethics and anti-corruption GRI 305: Emissions 2016

Stakeholder engagement 3-3 Management of substantive issues Creating a green low-carbon future - tackling climate change

Enhancing governance while putting responsibility first - 305-1 Direct (Scope 1) GHG emissions Creating a green low-carbon future - tackling climate change2-29 Approach to stakeholder engagement communication with stakeholders 305-2 Energy indirect (Scope 2) GHG emissions Creating a green low-carbon future - tackling climate change

2-30 Collective bargaining agreement Cultivating high-quality talents on the principle of equality 305-4 Greenhouse gas emissions intensity Creating a green low-carbon future - tackling climate changeand diversity - recruitment and retention

305-5 Reduction of GHG emissions Creating a green low-carbon future - tackling climate change

GRI 3: Substantive issues 2021

305-7 Nitrogen oxides (NOx) sulfur oxides (SOx) and other

3-1 The process of determining substantive issues Enhancing governance while putting responsibility first - major gas emissions

Creating a green low-carbon future - tackling climate change

communication with stakeholders

GRI 306: Waste 2020

3-2 List of substantive issues Enhancing governance while putting responsibility first - communication with stakeholders 3-3 Management of substantive issues Creating a green low-carbon future - emission management

3-3 Management of substantive issues Enhancing governance while putting responsibility first -

306-2 Management of significant impacts related to waste Creating a green low-carbon future - emission management

communication with stakeholders 306-3 Waste generated Creating a green low-carbon future - emission management

GRI 201: Economic performance 2016 306-4 Waste transferred from disposal Creating a green low-carbon future - emission management

3-3 Management of substantive issues Creating a green low-carbon future - tackling climate GRI 308: Supplier Environmental Assessment 2016change

Creating market-leading quality products - sustainable

201-2 Financial implications and other risks and opportuni- Creating a green low-carbon future - tackling climate

3-3 Management of substantive issues supply chain

ties due to climate change change

70 71Hengtong Optic-Electric 2022 Environmental Social and Governance Report Appendix

Disclosure items Disclosure issues Corresponding chapters/sections Disclosure items Disclosure issues Corresponding chapters/sections

308-1 New suppliers screened according to environmental Creating market-leading quality products - sustainable GRI 408: Child Labor 2016criteria supply chain Cultivating high-quality talents on the principle of equality

GRI 401: Employment 2016 3-3 Management of substantive issues and diversity - recruitment and retention

3-3 Management of substantive issues Cultivating high-quality talents on the principle of equality Operations and suppliers at significant risk for inci- Cultivating high-quality talents on the principle of equality and diversity - recruitment and retention 408-1 dents of child labor and diversity - recruitment and retention

401-1 Employment rate and turnover rate of new employ- Cultivating high-quality talents on the principle of equality GRI 409: Forced or Compulsory Labor 2016ees and diversity - recruitment and retention Cultivating high-quality talents on the principle of equality

401-2 Benefits for full-time employees (excluding tempo- Cultivating high-quality talents on the principle of equality

3-3 Management of substantive issues and diversity - recruitment and retention

rary or part-time employees) and diversity - remuneration and welfare Operations and suppliers at significant risk for inci- Cultivating high-quality talents on the principle of equality

403-3 Parental leave Cultivating high-quality talents on the principle of equality

409-1 dents of forced or compulsory labor and diversity - recruitment and retention

and diversity - remuneration and welfare GRI 413: Local Communities 2016

GRI 402: Labor/Management Relations 2016 Contributing to community co-creation - highlighting re-

3-3 Management of substantive issues Cultivating high-quality talents on the principle of equality sponsibility sense through participation in philanthropyand diversity - recruitment and retention

Contributing to community co-creation - supporting sus-

GRI 403: Occupational Health and Safety 2018 3-3 Management of substantive issues tainable development according to local conditions

3-3 Management of substantive issues Cultivating high-quality talents on the principle of equality Contributing to community co-creation - advocating a and diversity - health and safety green low-carbon life

403-1 Occupational health and safety management system Cultivating high-quality talents on the principle of equality Contributing to community co-creation - highlighting re-and diversity - health and safety sponsibility sense through participation in philanthropy

403-2 Hazard identification risk assessment and incident Cultivating high-quality talents on the principle of equality investigation and diversity - health and safety 413-1 Operations with local community engagement im- Contributing to community co-creation - supporting sus-pact assessments and development programs tainable development according to local conditions

403-3 Occupational health services Cultivating high-quality talents on the principle of equality and diversity - health and safety Contributing to community co-creation - advocating a

green low-carbon life

403-5 Training on occupational health and safety of work- Cultivating high-quality talents on the principle of equality ers and diversity - health and safety GRI 414: Supplier Social Assessment 2016

Cultivating high-quality talents on the principle of equality 3-3 Management of substantive issues Creating market-leading quality products - sustainable 403-6 Safeguarding workers' health and diversity - health and safety supply chain

403-7 Preventing and mitigating occupational health and Cultivating high-quality talents on the principle of equality 414-1

New suppliers screened according to social eval- Creating market-leading quality products - sustainable

safety impacts directly related to business relations and diversity - health and safety uation criteria supply chain

GRI 416: Customer Health and Safety 2016

403-9 Work-related injuries Cultivating high-quality talents on the principle of equality and diversity - health and safety Creating market-leading quality products - responsible

GRI 404: Training and Education 2016 marketing

3-3 Management of substantive issues

3-3 Management of substantive issues Cultivating high-quality talents on the principle of equality

Creating market-leading quality products - customer ser-

and diversity - development and training vice

GRI 417: Marketing and Labeling 2016

404-1 Average hours of training per year per employee Cultivating high-quality talents on the principle of equality and diversity - development and training

3-3 Management of substantive issues Creating market-leading quality products - responsible

404-2 Programs for upgrading employee skills and transi- Cultivating high-quality talents on the principle of equality

marketing

tion assistance programs and diversity - development and training GRI 418: Customer Privacy 2016

404-3 Percentage of employees receiving regular performance Cultivating high-quality talents on the principle of equality Creating market-leading quality products - customer ser-and career development reviews and diversity - development and training 3-3 Management of substantive issues vice

GRI 405: Diversity and Equal Opportunity 2016

Enhancing governance while putting responsibility first -

corporate governance

3-3 Management of substantive issues

Cultivating high-quality talents on the principle of equality

and diversity - recruitment and retention

Enhancing governance while putting responsibility first -

corporate governance

405-1 Diversity of governing bodies and employees

Cultivating high-quality talents on the principle of equality

and diversity - recruitment and retention

405-2 Ratio of basic salary and remuneration of women to Cultivating high-quality talents on the principle of equality men and diversity - remuneration and welfare

GRI 406: Non-Discrimination 2016

3-3 Management of substantive issues Enhancing governance while putting responsibility first - business ethics and anti-corruption

GRI 407: Freedom of Association and Collective Bargaining 2016

3-3 Management of substantive issues Cultivating high-quality talents on the principle of equality and diversity - recruitment and retention

407-1 Operations and suppliers in which the right to freedom Cultivating high-quality talents on the principle of equality of association and collective bargaining may be at risk and diversity - recruitment and retention

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