Guangxi LiuGong Machinery Co. Ltd.ESG Strategic Plan 203001 02 03

LiuGong ESG Evolution LiuGong ESG Strategic LiuGong ESG Strategic

Formulation Guiding Philosophy Framework and Strategic

02 Guiding Philosophy Model

02 Basic Principles 03 Vision and Mission

02 Advancement Approach 03 CREST Strategic Model

04 2030 ESG Strategic Development Goals

05 Strategic Implementation Support

CONTENTS01

195819661987199319952000

Factory Construction: Embarking on Industry Pioneer: Launching Improvement and Innovations: Starting Listing on the Shenzhen Stock Win-Win Cooperation: Starting the Marching Eastward: Pioneering Mergers

a Journey of Glory and Dreams China’s First Wheeled Loader a Wave of Technological Innovation Exchange: Becoming the “First Stock” Layout of Independent and Controllable and Acquisitions in China’s Construction

of Guangxi and China’s Construction Systems of Core Components Machinery Industry

527 workers from Shanghai and other LiuGong successfully developed LiuGong introduced Caterpillar technology and

regions came to Liuzhou to build the factory China’s first wheel loader “Z435” carried out large-scale technological transfor- Machinery Industry LiuGong in cooperation with ZF Friedrichshafen LiuGong acquired the Jiangyin Road Machinery

from scratch. They established Liuzhou under the “Dongfeng” brand (East mations laying the foundation for the explora- LiuGong was listed on the Shenzhen Stock AG jointly invested in establishing Liuzhou ZF Plant and successively set up plants in

Construction Machinery Manufacturing Wind) which marked the beginning tion of new technologies and products. Exchange becoming the first listed company Machinery Co. Ltd. marking the beginning of Shanghai Anhui Jiangsu and Shandong

Plant the predecessor of LiuGong which of China's independent research and in Guangxi and in China’s construction LiuGong’s development of controllable systems becoming a pioneer in exploring diversified

marked the official founding of LiuGong. development of wheel loaders. machinery industry. for core components. development within China’s construction

machinery industry.

202020192015201120072002

Breakthrough Reform: Revitaliz- AI Leadership: Leading the New Scientific Research: Promoting the Settlement Cooperation Alliance: Providing Overseas Layout: Establishing Entry into the Global Market:ing Corporate Development Era of 5G Remote Control and of “National Earthwork Machinery Engineer- Driving Engines for Equipment LiuGong’s First Overseas Factory Starting LiuGong’s Journey toElectrification ing Technology Research Center” at LiuGong Products Global Expansion

LiuGong’s mixed-ownership reform LiuGong invested in building a factoryproject focusing on promoting LiuGong launched the world’s first LiuGong Global R&D Center also the National LiuGong and Cummins established the and a subsidiary in India taking the first The strategic goal of “Building an“Reform through Mixed Ownership” commercial 5G remote control loader Earthwork Machinery Engineering Technology world’s first joint venture specified in step in building overseas manufacturing Open and Internationalized LiuGong”

successfully attracted investment and three purely electric loaders Research Center has been completed laying a solid construction machinery providing facilities. Since 2007 the Company has was put forward which opened the

injecting new momentum into the marking a solid step forward in the foundation for LiuGong to accelerate the achievement exclusive power for the global publicly issued a social responsibility prelude to LiuGong’s exploration of

Company’s high-quality development. industry’s digital and intelligent of its goals for electrification digitalization intercon- construction machinery market. report on an annual basis. international businesses.transformation. nection automation and sharing.

20212022202320242025

Ongoing Efforts: Striving for Intelligent Manufacturing: Acceler- Leap cross 10 Billion: Embarking Leadership in New Quality Productivity: Building on Heritage and Innovation:

Self-improvement and Excellence ating the Pace of High-quality on Robust International Expansion Facing Challenges and Striving for Victory! Forging Ahead to Promote Green

Development TransformationOn April 26 2021 General Secretary LiuGong’s overseas business revenue Due to the global leap driven by the strategy of “TotalXi Jinping visited LiuGong and The completion of Phase 1 of LiuGong reached a new high over RMB 10 Solution Total Intelligence Total Internationalization” The latest achievements of LiuGong’s smart

delivered an important speech highly Loader Intelligent Factory and the billion further enhancing the the main product sales growth leads the industry and manufacturing ecosystem — the Intelligent

praising the innovative development groundbreaking of LiuGong Intelligent international influence of LiuGong. the Company’s total revenue and net profit both hit Excavator Factory and Intelligent Loader Factory —

achievements of LiuGong. International Industrial Park represented historic highs. LiuGong issued its first environmental drew extensive attention from state-level media.an important step for LiuGong in social and governance (ESG) report and established The Company’s Wind ESG rating was upgraded to A

improving intelligent manufacturing levels. an ESG management framework. and Huazheng ESG rating to AA and it received

multiple ESG awards and honors.LiuGong ESG Evolution02

LiuGong ESG

Strategic

Formulation

Guiding

Philosophy

Guiding Philosophy

Stage Core Task StrategyLiuGong holds the mission of “Empower People with Intelligent Green Machin-ery” and the vision of “To be the World Leading Equipment and Technology Improve the ESG governance framework estab-Solutions Provider”. Guided by its strategic vision for the next decade and Establish an ESG lish ESG system regulations and form an effective Phase 1: Founda-

inspired by new brand and culture the Company is committed to creating governance framework ESG management system;tion and Empow-

greater value for customers developing together with partners and building a and unify the standard erment (1 Year) Formulate an ESG strategy define priority

distinctive ESG strategic system that embodies the unique characteristics of Global system. improvement areas and set corresponding goals

LiuGong. Leadership and measures.Execute the ESG strategy and fully incorporate

Basic Principles Systematic ESG indicators into management performance

Deepening Promote ESG evaluations;

integration across the

Strategic Alignment Principle Coordinated Advancement Principle Continuous Phase 2: Systemat- entire operational Integrate ESG management for overseas subsid-

Improvement Principle. ic Deepening (2 chain and build iaries improve ESG indicator system and working

Years)

digital governance mechanisms and enhance the ESG professional

Foundation and capabilities. capabilities of all employees;

Advancement Approach Empowerment Launch an ESG digital management platform to

achieve automatic data collection and analysis.LiuGong has innovatively established an ESG planning “Pyramid” focusing on

Join the United Nations Global Compact (UNGC);three levels: “Foundation and Empowerment Systematic Deepening GlobalLeadership”. Through layered implementation and coordinated advancement LiuGong’s three-phase ESG strategy is centered on the three levels of Achieve global ESG Continuously execute the ESG strategy and Phase 3: Global

the Company aims to achieve efficient execution and continuous refinement of the ESG planning “Pyramid” forming a “Step-by-Step” development leadership and drive integrate ESG management as standard practice Leadership (3

the ESG strategy. pathway to ensure the goals at each stage are progressive and the formulation of in overseas subsidiaries;Years)

organically connected. industry standards. Lead the formulation of ESG disclosure guidelines

for the construction machinery industry.03

LiuGong ESG Strategic

Framework and Strategic Model

Vision and Mission

Vision Interpretation: “Safeguarding Our Green Home” transforms environmental protection from an abstract concept into a

tangible act of “Home Protection” reflecting the Company’s awareness transformation of elevating environmental“Safeguarding Ourprotection from a compliance obligation to an intrinsic mission. “Building a Better Future for Humanity” goes beyond a

Green Home and

single environmental goal emphasizing the synergy between environmental governance and social well-being. The

Building a Better

entire statement revolves around environmental protection and sustainable human development demonstratingFuture for Humanity”

LiuGong’s deep appreciation for the Earth's ecology and its sense of responsibility toward the shared future of humanity.Mission Interpretation: As a leading enterprise in China’s construction machinery industry LiuGong has identified “Intelli-“Empowering People gence” and “Green” as its two major development directions for the future. By integrating technology environmental

with Intelligent Green protection and productivity the Company demonstrates its vision of achieving sustainable development throughMachinery” technological innovation and helping to create a better future for mankind.CREST Strategic Model

The CREST strategic model is derived from the initials of LiuGong’s five ESG strategic directions symbolizing the meaning of “Peak” or “Summit” which aligns

with the Company’s values of being proactive and striving for excellence. By setting high standards and continuously challenging itself the Company strives

to achieve improvement and development across multiple key areas such as product quality R&D innovation service levels environmental protection social

responsibility and corporate governance aiming to reach industry-leading positions and thereby achieve long-term success and sustainable development.04

2030 ESG Strategic Development GoalsTo build a synergistic “Five-Pronged Technolo-gy” system to become a trusted global provid-

er of equipment and technical solutions

Key Measures:

Build multiple types of scientific research platforms To build a value network for win-win

Improve the quality management system cooperation and create a sustainable

Optimize the customer service system industry ecosystemCustomer First Key Measures:

Collaborating to Establish a sustainable supply chain manage-

ment system

Create Value Achieve 100% talent development coverage for

the Company’s global workforce

Deeply participate in the formulation of indus-

try standards

Striving as the

To establish a healthy compliance

governance system and promote the Core Innovation

steady development of the Company Excellence in

Key Measures: Drives the FutureGovernance

Conduct ESG due diligence for all stakeholders

Build a comprehensive compliance management system Solidifying the

Conduct in-depth risk assessment on integrity and Foundation for ESG Strategic

anti-corruption

Health Direction Build a scientific and standardized

environmental management system to

support the Company’s dual carbon goals

Key Measures:

Dual carbon goals: achieve carbon peaking by

2030 and carbon neutrality by 2055

To build a responsible ecosystem featuring mutual Conduct carbon inventory and carbon verification

prosperity and become a benchmark in supporting the

construction of a harmonious society Towards Green

Create factories that feature low emissions and

low energy consumption externally and are

Key Measures: Transformation employee-friendly internally

Build and improve a digital safety management platform Responsibility in Co-creating the Build a sustainable circular ecosystem for raw material regeneration and recycling

Continuously optimize the employee grievance handling system Motion Building a Continuously optimize the energy management

Establish medium and long-term plans for domestic and interna- Earth’s Blueprint

system

tional social welfare initiatives Harmonious Society

Together05

Strategic Implementation Support

Organizational LiuGong has established a sustainable development framework featuring a complete structure clear hierarchy

well-defined roles and responsibilities and efficient operations. To ensure the smooth and effective implementa-

System Support tion of LiuGong’s ESG strategy the Company further clarifies day-to-day responsibilities within its ESG manage-

ment system while strengthening human resource support. Through the creation of specialized positions devel-

opment of a localized talent pool establishment of a tiered training system and enhancement of incentive mech-

anisms the Company provides critical human capital support for the continuous optimization of its sustainable

development systems and mechanisms.Internal

Mechanism To effectively fulfill its ESG responsibilities LiuGong has established internal ESG safeguard mechanisms includ-

Support ing information management mechanisms internal reporting mechanisms ESG risk monitoring mechanisms ESG

budget management mechanisms and ESG performance appraisal mechanisms among others.Corporate

Culture Through multi-dimensional measures such as policy revision culture cultivation employee engagement and

Support incentives and recognition the Company systematically integrates ESG principles into daily operations and core

values thereby fostering a sustainable corporate culture that is embraced and practiced by all employees.Digital & Smart

Innovation Leverage information and digital technologies to drive ESG data transparency refined management and

Support intelligent decision-making. Digitally empower green manufacturing by promoting remote intelligent operation

and maintenance platforms reducing on-site equipment service frequency and lowering customers' carbon

footprint during the use phase.Communication

By building a multi-level internal and external collaborative network including deepening sustainable supply

with Stakeholders chain cooperation improving systematic communication mechanisms and expanding industry and international

partnerships the Company deeply integrates stakeholders into the ESG governance process. This helps build

consensus manage risks and enhance overall ESG performance ultimately achieving systematic ESG gover-

nance industry synergy and international alignment.Financial

Actively expand cooperation with financial institutions integrate ESG factors into corporate financing and invest-

Empowerment ment decision-making processes and promote the application of green financial instruments to provide stable

Support financial support and innovative impetus for the implementation of the company's ESG strategy. By leveraging

green credit sustainability-linked bonds ESG-specific funds and other channels we will optimize the financing

structure lower financing costs and enhance capital utilization efficiency.Tel.:0772-3886509

Email:stock@liugong.com

Address:No.1 Liutai Road Liuzhou Guangxi