中复神鹰:中复神鹰碳纤维股份有限公司2023环境、社会及治理报告（英文版)

Introduction 01 ｜
Chairman’s Statement 03 ｜ 01 02 03
About us 05 ｜
Management Fostering Technology Promoting Innovation Driving
Brief introduction 05 ｜ Sustainable Operations Green Production Circular Economy
Corporate culture 06 ｜
Enhancing governance efficiency 23 ｜ Implementing green and low-carbon 39 ｜ Promoting the circular utilization of 51 ｜
transformation natural resources
Continuing to deepen integrity 27 ｜
Sustainable Development 07 ｜ Responding to concerns on climate 41 ｜ Empowering green and lightweight 53 ｜
Column Smoothing stakeholders’ 30 ｜ change development communication channels
Sustainable Development 09 ｜ Safeguarding the harmony of natural 44 ｜ Constructing the product recycling 54 ｜Enhancing corporate responsibility 32 ｜
Strategy ecology system operations
Sustainability Management 11 ｜ Promoting regional collaborative 34 ｜
Framework development
Major Events on Sustainability in 13 ｜
2023 05 Sustainable
Sustainability Performance 15 ｜ 04 Quality Penetrating development KPIs 87 ｜Review in 2023
High-End Markets Perspective 93 ｜
Honors and Awards in 17 ｜
Sustainability Talents Building
Excellent Teams Strengthening quality capacity 75 ｜ Appendix 95 ｜
Analysis and Evaluation of 19 ｜ construction
Sustainable Development All-out efforts to building a talented 57 ｜ Keeping pursuing technology 77 ｜
Materiality Issues team innovation Index table of indicators 95 ｜
Accelerating the enhancement of 60 ｜ Facilitating smart development 80 ｜ Feedback 103 ｜
intrinsic safety
Strengthening responsible 81 ｜
Effectively safeguarding employee 68 ｜ marketing
rights and interests
Facilitating joint construction of the 82 ｜
Wholeheartedly implementing 71 ｜ industry
employee care2023 Environmental Social and Governance Report
Introduction
The report describes the performance of Zhongfu Shenying Carbon Fiber Co.Ltd. (hereinafter “Zhongfu Shenying”
“the Company” or “We”) in environmental social and governance (ESG) and social responsibility fulfilment
in 2023 to facilitate communication with stakeholders and respond to their demands. The Board of Directors of
Zhongfu Shenying is fully responsible for the Company’s sustainable development and the report has been
reviewed and approved by the Board of Directors.Reporting period Terms and definitionsUnless otherwise specified this report covers the period from 1 January 2023 to 31 December 2023 (hereinafter“the During the Reporting Period the following terms shall have the definitions stated below unless otherwise indicated:Reporting Period” or “this year”).“China” The People’s Republic of China.Reporting scope “CNMB” China National Building Material Group Company Limited.The entity of this report is of Zhongfu Shenying Carbon Fiber Co.Ltd.. The report mainly covers ESG performance “Shenying Dapu orrelated to the Company’s core business as well as related policies and management during the Reporting Period. Zhongfu Shenying Carbon Fiber Dapi Company Limited.Lianyungang Headquarter”
“Shenying Xi’ning” Zhongfu Shenying Carbon Fiber Xining Company Limited.Reporting cycle
“Shenying Shanghai” Zhongfu Shenying (Shanghai) Technology Company Limited.The Environmental Social and Governance (ESG) Report of Zhongfu Shenying Carbon Fiber Co.Ltd.. is published on
an annual basis. “Shenying Lianyungang” Zhongfu Shenying Carbon Fiber Lianyungang Company Limited.Report access
Preparation basis
The download links for the electronic version are listed below：
This report is prepared in accordance with the Shanghai Stock Exchange Guidelines No. 1 for Self-discipline Shanghai Stock Exchange：www.sse.com.cn
Regulation of Listed Companies -Standardised Operation of the Companies Listed on the Main Board (2023) and the Zhongfu Shenying Carbon Fiber Co.Ltd. Official Website：https://www.zfsycf.com.cn/#/
SASAC’s Study on ESG Special Report Compilation for Listed Companies Controlled by Central Enterprises. It also
refers to the Sustainability Reporting Standards (2022) released by the Global Reporting Initiative (GRI) the Guidance
on Social Responsibility by the International Organisation for Standardisation (ISO 26000: 2010) the National Feedback
Standard GB/T36000 Guidance on Social Responsibility and the United Nations’ Sustainable Development Goals The Company attaches great importance to the suggestions or opinions put forward by various stakeholders if you
(SDGs). The results of the materiality assessment conducted in accordance with the reporting principles in the above have any suggestions or comments on the Company's ESG related work please contact the Company through the
guidance and standards are also considered as the basis for information disclosure. This report is published in both following:
Chinese and English. In case of any inconsistency between the two versions the Chinese version shall prevail. Zhongfu Shenying Carbon Fiber Co.Ltd
Address: No.1-6 Jinqiao Road Dapu Industrial Zone Economic Development Zone Lianyungang City Jiangsu
Information description Province
Email address：stock@zfsycf.com.cn
The historical information quoted in this report is final statistics. In case of any inconsistency between the financial Official Website：www.zfsycf.com.cn
information and the annual report the annual report shall prevail. Unless otherwise specified the financial figures in The questionnaire for feed back is attached in this report on page XX we welcome you to fill in the questionnaire and
this report are denominated in RMB. send it to our email address.
1 22023 Environmental Social and Governance Report
A strong enterprise drives national prosperity promoting the leading in technology. Zhongfu Shenying
leads a breakthrough for dry-spray wet spinning technology domestically and successfully localized the
core equipment of the technology independently realizing a significant leap in carbon fiber production
scale from thousands of tons to tens of thousands of tons. Through matrix-style cooperation the
Company has stimulated scientific research momentum achieved full coverage of product application
Zhongfu Shenying Carbon Fiber Co. Ltd. areas and moved towards the international market with a posture of high-quality development.Chairman
Zhang Guoliang Leading the “dual carbon” target promoting low-carbon transformation and green development.Guided by the "dual carbon" target Zhongfu Shenying has formulated strategic plans for carbon
neutrality and carbon peaking developed action plans and emphasized the green transformation and
efficient utilization of energy. At the same time we vigorously promote circular economy accelerate
the deployment of clean energy empower the construction of green and low-carbon industries and
comprehensively transform towards green and low-carbon development across all aspects and systems
to create green products.Fulfilling our responsibilities we leapfrog in growth and gather care to work together. We adhere to
the principle of "putting the strivers first" and strive to cultivate comprehensive technical talents. We
have established a "four-heart system" for talent development creating a diverse and equal working
Chairman’s Statement environment for employees and effectively safeguarding their rights and interests. Emphasizing "people-oriented" values we deeply root the concept of safe development and adhere to enhancing intrinsic
safety through technological advancements. With our mind connected to society we remain committed
to public welfare undertakings providing assistance to students and the underprivileged and supporting
rural revitalization.Obtain the past we steadfastly adhere to our original aspirations. Embarking on a new journey our
path shines brightly. Zhongfu Shenying has always adhered to the guidance of Xi Jinping Thought All that has passed is merely a prologue. As the century-long changes accelerate we are more
on Socialism with Chinese Characteristics for a New Era. Leveraging our advantages in technology determined to uphold the concept of green and high-quality development. Bearing in mind our corporate
production scale and cost competitiveness we uphold the development strategy of "high-end large- mission of " Let the world feel the power of carbon fiber". We are committed to accelerating technological
scale and green-based". We integrate ESG principles into our company's management and operations innovation and striving to become a world-class carbon fiber enterprise with global competitiveness. We
treating sustainable development as an important part of the Company’s strategy. With a concept of aim to achieve sustainable development and continue climbing towards the "glorious summit" of China's
green operation we promote production and jointly build a low-carbon and beautiful blueprint. carbon fiber industrialization journey.
3 42023 Environmental Social and Governance Report
About Us
Brief introduction Corporate culture
Zhongfu Shenying Carbon Fiber Co. Ltd. (hereinafter referred to as Zhongfu Shenying or the Company) was
established in 2006 and is affiliated with China National Building Material Group Corporation a Fortune Global
500 company under the management of the State-owned Assets Supervision and Administration Commission
of the State Council. The company is a national high-tech enterprise integrating the R&D production and sales Enterprise Enterprise Core value
of carbon fiber and composites. With two production bases located at Lianyungang and Xi’ning and one R&D mission vision
base in Shanghai the production capacity of Zhongfu Shenying is global leading. The company was successfully
listed at the Shanghai Stock Exchange on April 6th 2022 (Stock Short Name: Zhongfu Shenying Stock Code: Let the world feel the We are committed to building Innovation Integration
688295). power of carbon fiber a world-class carbon fiber with Strive and Responsibility
global competitiveness.Zhongfu Shenying obtains mature manufacturing technology for ten-thousand-ton-level carbon fiber
production. The company leads a breakthrough for dry-spray wet spinning technology domestically and
successfully localized the core equipment of the technology independently. It has also systematically mastered
T700 T800 M30 M35 thousand tons production technology and T1000 thousands tons production technology
with M40 hundred tons carbon fibric fully in production. As the first completion unit on January 2018 Zhongfu Strategic Operating
Shenying won the first prize of 2017 national science and technology progress award. At the end of 2021 the positioning Mission
Xining 10000-ton Carbon Fiber Project was selected as one of Top Ten Super Projects of China's State-owned
enterprises. In 2023 the Company awarded the Nomination Award of the 5th China Quality Award. High-end Large-scale Uphold our original aspirations and
Green-based craftsmanship to pursue excellence in
As for now the carbon fibers made by Zhongfu Shenying include high-strength standard modulus high-strength quality. Lead advancements in science and
medium modulus and high-strength high modulus. These products are widely used in high-end and green- technology and courageously undertake
based applications of aerospace pressure vessel carbon/carbon composite wind turbine blade and clean national responsibilities.energy vehicles as well as in daily operating scope including transportation construction sports & leisure etc..It greatly promotes the development of the carbon fiber composite industry in China.The Company has always adhered to the corporate mission of "let the world feel the power of carbon fiber"
and the core values of " Innovation Integration Strive and Responsibility". The Company will concentrate its
technological forces on the research and development of a new generation of high-strength high-modulus
and high-performance carbon fiber accelerate the construction of aviation-grade prepreg projects to extend
the application of carbon fiber industrial chain take "new quality productive forces" as the core driver become
the "pillars of the Nation" empower the new era and become a world-class carbon fiber enterprise with
competitiveness globally!
5 62023 Environmental Social and Governance Report
Sustainable
Development Column
Sustainable Development Strategy
Sustainability Management Framework
Major Events on Sustainability in 2023
Sustainability Performance Review in 2023
Honors and Awards in Sustainability
Analysis and Evaluation of Sustainable
Development Materiality Issues
2023 is a crucial year that bridges the past and
future for the implementation of the 14th Five-Year
Plan as well as a key year for Zhongfushenyingto embrace its overall “high-end large-scaleand green-beased” strategic positioning. The
Company continuously promotes the localization
of carbon fiber by standardizing the management
system and implementing substantive
technological innovation to accelerate the building
of an innovation-driven green low-carbon and
significantly effective carbon fiber industrial
system.
7 82023 Environmental Social and Governance Report
Sustainable Development Strategy One Core
To promote the green and high-quality development of the Company and speed up the realization of its strategic With technological innovation as the core market demand as the guide and quality upgrade as the goal we will
positioning the Company has formulated the sustainable development strategy and officially launched it this year. strengthen the presence of green attributes in products along the development of the value chain and strive to
Centering on the overall "high-end large-scale and green-based" strategic positioning the strategy specifies three promote high-quality and low-carbon development in society.principles: upgrading products and markets towards high-end with philosophy innovation scaling up production
capacity and talent teams with management innovation and advancing green production and operation with
technology innovation. Based on these principles a strategic system with "one core and five pillars" has been Five Pillars
formed.
1.Management Fostering Sustainable Operations：
The Company will continuously fortify our responsible corporate image by enhancing the capacity and awareness of
our partners in sustainable development and promoting coordinated development in its operational areas laying a
solid foundation for the Company's sustainable development.
2.Technology Promoting Green Production：
The Company will improve resource utilization efficiency and reduce pollutant emission levels through technological
upgrades. Besides the Company will adjust its energy structure utilizing clean energy technologies to implement
clean production and reduce the carbon footprint of our products demonstrating corporate responsibility in
supporting the national "Carbon Peaking and Carbon Neutrality" strategy and responding to global climate change.
3.Innovation Driving Circular Economy：
Fully integrating the idea of circular economy the Company will accelerate the improvement of resource recycling
efficiency and cascade utilization of energy aiming to build "zero-emission" factories to boost the development of
circular economy in the industry thereby enabling green and high-quality development.
4.Talents Building Excellent Teams：
The Company will safeguard employees' rights and interests ensure their health and safety and provide them with a
reassuring work environment to enhance their sense of happiness and belonging. The Company has designed career
paths that meet employees' needs and promote employee care to attract and cultivate high-quality employees.
5.Quality Penetrating High-End Markets
Combining market development needs the Company has been building a solid research and development
foundation to pursue high-quality products and services. Additionally the Company actively respond to concerns
about the company's sustainable development performance in domestic and overseas markets to explore new high-
end markets.
9 102023 Environmental Social and Governance Report
Sustainability Management Framework
The Company actively fulfills its corporate social responsibilities and attaches great importance to the coordinated
development of economic and social benefits. To effectively implemente the Company's sustainable development
strategy and apply the strategic deployment of the national green and high-quality development the Company has
upgraded its strategic committee to the Strategic and ESG Management Committee this year. Meanwhile an ESG
work group led by the senior management has been established to see ESG-related work through. Additionally the
Company actively fosters the participation of board members in ESG and sustainability training that covers multiple
aspects such as corporate governance ESG trends and information disclosure analysis injecting new momentum
into the company's sustainable development management.serves as the highest governing
authority responsible for ESG
affairs and assumes responsibilities
is tasked with formulating The Board of
ESG objectives and Directors
of leadership and supervision
covering the Coupany's overall
strategies assessing and ESG objectivesstrategiesrisks and
identifying ESG risks and policies.driving the establishment The Strateagic and ESG
of appropriate and committee
effective ESG risk
management and
internal control systems.The ESG Work Group
is responsible for the implementation and advancement of specific ESG matters within
the Company. This includes compiling annual ESG reports executing ESG strategies and
orgenizing ESG-related communication and training activities.
11 122023 Environmental Social and Governance Report
Major Events on Sustainability in 2023
01020304
Technical breakthrough in the production of Zhongfushenying making a strong presence
T1100 carbon fiber products Low-carbon "smart" manufacturing: Commencing with new product releases at JEC WORLD Industry-leading: The 25000-ton annual construction of the 30000-ton annual high-
2023 to demonstrate strength high-performance carbon fiber project of
February 2023 performance carbon fiber manufacturing base in Zhongfushenying Xi’ning has been fully
Shenying Lianyungang
After three years of scientific research and April 2023 operational
development the Company made breakthroughs in Zhongfushenying made a debut at the JEC World April 2023 May 2023
the new molecular structure design for carbon fiber 2023 unveiling its new products SYT55S-24K and
and established all technological routes launching SYT45S-48K which manifests the capabilities of
The manufacturing base for high-performance carbon The Zhongfushenying high-performance carbon fiber
the T1100 carbon fiber with mechanical strength "Made in China". During the three-day exhibition
fiber with an annual output of 30000 tons has officially project with an annual output of 25000 tons has been
reaching 7000MPa. the Company attended to approximately a thousand
commenced in Lianyungang Jiangsu. The project is fully operational in Xi’ning marking the completion
customers from France Italy the United Kingdom the first to adopt the leading 4.0 version of carbon fiber of the world's largest single-unit high-performance
Germany etc. securing multiple intent orders on industrialization technology for its design and will make carbon fiber production base at the highest altitude.site opening up a new chapter in the Company's full use of clean energy sources such as nuclear steam and This has provided solid material support for the quality
international cooperation and development. photovoltaic power to establish a benchmark for high-end improvement and upgrading of the industrial chain
and green development in the carbon fiber industry. setting a new benchmark for the construction of carbon
fiber facilities with a capacity of 10000 tons.
070605
Innovating and transforming: Zhongfu Shenying evolves towards a conglomerate Heading towards the international stage to steadily Accelerating the high-end application in the
carry out international business exchanges aerospace market
August 2023 August 2023 June 2023
The Company has completed its transformation into a headquarters-managed enterprise to improve its operational We have conducted cooperation with international clients The prepreg production line at Zhongfushenying
efficiency in a comprehensive and systematic approach accelerating its high-quality development. The Company on hydrogen energy and obtained product certification from Shanghai has officially commenced operation. A contract
intends to share information talent and technology among its subsidiaries thereby enhancing the company's internationally renowned suppliers further accelerating the has been signed with a third party on the test article for
industrial and social value. Company's internationalization. the evaluation of the processing property of domestically
produced materials. This will expedite the company's
market layout in the aerospace field.
13 142023 Environmental Social and Governance Report
Sustainability Performance Review in 2023
Sustainability
strategy segments Core measures Sustainability key performance indicators and successes
The UN's sustainable
development goals (UN SDGs)
The Company comprehensively deepens enterprise reform and promote the The proportion of female directors accounts for approximately 25% and the proportion
modernization of corporate governance. Besides the Company consolidates efficient of female supervisors exceeds 60%.Management Fostering governance and stresses gender diversity in the board of directors and board of The Company has conducted 17 integrity training sessions at all levels with a total of 785
Sustainable Operations supervisors. Meanwhile the Company continuously strengthens the improvement of participants.Party conduct and upholds integrity by cultivating a culture of honesty to ensure the The proportion of suppliers signing anti-corruption cooperation agreements has reached
stable operation of the Company. 100%.The Company accelerates the transformation of low-carbon production technology carrying
out technical applications and transformations such as recycled water cooling technology and Environmental protection investments amounted to RMB 37707200.steam energy-saving technology in spinning processes and reduce energy consumption. It The Company's annual consumption of wind and solar power as well as hydropower
also quickly increases the proportion of clean energy usage including wind and solar power accounted for 70% of its total electricity.Technology Promoting and hydro-power and comprehensively promotes the application of intelligent energy service The comprehensive energy consumption per unit of product (per ton) decreased to 8.67
Green Production systems. The Company formulated the company's dual-carbon strategic action plan based on tons of standard coal a year-on-year decrease of 26%.the group strategy clarify the company's carbon reduction targets and adheres to protecting The greenhouse gas emission intensity per unit of product decreased by 27% year-on-
the natural ecology by strictly carrying out environmental management strategies taking year.technological transformation as the starting point implementing clean production technologies The Company was awarded the National "Green Factory" .and enhancing the level of environmental protection in production and operation.The Company cooperated with qualified third-party companies to recycle waste with
nearly 20% of the waste used for power generation from biomass.The Company strives to build a double development dynamic of flows within industrial chains The Company achieved energy cascade utilization by implementing independently
and resources to promote the cascade utilization of energy and water resources enhancing the upgrading equipment achieving the utilization rate of recovered waste heat as 85%
Innovation Driving efficiency of waste recycling. The Company also enables products to be lightweight and carry which reducing greenhouse gas emissions by approximately 3200 tons of carbon dioxide
a prolonged lifespan accelerating the application of carbon fiber in the new energy industry. equivalent annually.Circular Economy
Furthermore the Company has been seeking to tackle the difficulties in the research on a high- The Company independently designed developed and applied a highly efficient recovery
quality and efficient recycling system for products. device for dimethyl sulfoxide achieving a year-on-year decrease of 13.5% in the material consumption of dimethyl sulfoxide per unit of product.Cumulatively the Company provided more than 8000 tons of carbon fiber to the new
energy industry.The Company adheres to the people-centered principle building a comprehensive system for The total investment in safety production throughout the year reached RMB 19.8151
fostering scientific and technological talents. The Company enhances the inherent safety through million.Talents Building the application of science and technology continuously investing in safety production management The total number of participants to safety eduction and training session reached 54379.Excellent Teams and building up the safety production management system. The Company has established a sound The average training hours per person reached 128.61 hours an increase of 11.5% year-
management system to safeguard employees' rights and interests by effectively protecting their on-year.welfare enriching their lives and thriving with them together. The total investment in employee care throughout the year reached RMB 1.39 million.The Company conducted 150 quality-related training sessions throughout the year with a
The Company has comprehensively enhanced its quality management capabilities and total of 5005 attendances.improved the quality literacy of all employees. The Company continues to increase The Company invested RMB 218 million in research and development which accounted
Quality Penetrating investment in scientific research to build a high-quality research team and deepen the
for a year-on-year increase of 41.16%. The number of technical personnel increased by 20%
systematic development of innovation. The Company keeps strengthening industrial compared to 2022.High-End Markets cooperation to establish a marketing model that covers all sales processes and regions. The The Company filed 3 international patent applications through the Patent Cooperation
Company continues to participate in industry exchanges and strengthen school-enterprise Treaty (PCT). Additionally 230 patents have been newly accepted and 95 patents have been
cooperation promoting high-quality development of the industry. authorized throughout the year.The Company achieved the management objective of maintaining a customer satisfaction
score of no less than 95 points.
15 162023 Environmental Social and Governance Report
Honors and Awards in Sustainability
"Innovation leads to development and quality casts glory" Highlights from Honors and Awards in Sustainability
Zhongfu Shenying has been awarded the Nomination Award of the 5th
China Quality Award.Zhongfu Shenying adheres to independent research and development continuously breaking through the technological
milestones in carbon fiber production. Through collaborative research and development and matched management
of technology equipment and processes the company has achieved independent controllability of complete sets of
equipment for high-performance carbon fiber production. The company insists on strengthening its industrial foundation
through lean management leading the transformation of carbon fiber production from "informatization" to "intelligent"
manufacturing through the "Thousand-ton High-performance Carbon Fiber Smart Factory" project and forming a
systematic integration of products equipment processes production energy usage and management. In the process of
continuously optimizing its quality management level the company has gradually formed a full-lifecycle intelligent quality
management model that fits its corporate culture adapts to production practices and reflects its quality characteristics
namely "One Carbon One World Quality as the Foundation". This model embodies the company's comprehensive quality
management control innovative processes and comprehensive element mobilization representing the crystallization of its The Company was awarded the Winning the "ESG Benniu Attaining the Bronze meadal in
diligent efforts and the foundation of its confident forward progress. As the highest honor in China's quality field the China National "Green Factory" Award - ESG Public Welfare Pioneer" EcoVadis sustainability rating
Quality Award recognizes the company's quality management philosophy methods and models and serves as a driving
force and motivation to encourage the company to promote quality management innovation and disseminate advanced
quality concepts. The company will courageously undertake the responsibility of a central enterprise forge ahead on the
path of promoting quality improvement throughout society fully promote the construction of a quality-oriented country
and unwaveringly cultivate new productive forces with a new posture.Gaining the 2022 Environmental Earning First Prize for the 29th National Receiving the Title of "Model Enterprise
Protection Quality Award for Enterprise Management Modernization for Harmonious Labor Relations" in
Enterprises Innovation Achievements Lianyungang City for 2021
Ranking among the Environmentally Making the List of the 29th Batch of Featured in the List of Jiangsu
Exemplary Enterprises and Institutions Newly Recognized National Enterprise Province's AAA-rated Quality Credit
Technology Centers as a sub-center Enterprises for 2023
17 182023 Environmental Social and Governance Report
Analysis and Evaluation of Sustainable
Development Materiality Issues
High
To fully understand the concerns of various stakeholders regarding the sustainable development of Zhongfushenying 06
this year the Company conducted the first systematic identification and analysis of the material issues related to 14
sustainable development. Based on its operational status the Company referred to the key focuses on sustainable
development in the industry and evaluated their supporting roles in the company's sustainable development 11 13
strategy. Eventually the Company identified a total of 17 material issues related to sustainable development 05 17
including 6 environmental issues 8 social issues and 3 governance and compliance issues.
10
0412
010916
Eventually the Company identified a total of17material issues related to sustainable development 15
including6 02environmental issues9social issues and 2governance and compliance issues.
0703
08
For these 17 issues the Company adopted the following process for materiality assessment
01 The Company conducted a stakeholder survey in the form of a questionnaire. Low Significance to the Company High
02 The Company engaged in the discussion on the material issues with experts from relevant fields. Environmental issues Social issues Governance and Compliance issues
01 Waste management 07 Community contribution 16 Corporate governance
03 According to the feedback results the Company conducted the analysis of the priority of the material
02 Responding to climate change 08 Sustainable supply chain 17 Business ethics and compliance
issues in an objective and balanced manner. 03 Water resources management 09 Employee care
04 Promoting circular economy 10 Providing quality services
The Company exported the materiality matrix based on the "Significance to stakeholders" and the 05 Reducing pollutant emissions 11 Innovative research and development
04 "Significance to the Comp any". 06 Efficient energy utilization 12 Safeguarding employee rights and interests
13 Pursuing product quality
14 Employee health and safety
The Company's Board of directors and management team have reviewed and approved the results of the materiality
assessment providing ESG management recommendations based on the company's operational status. 15 Support for Employee Development
1920
Significance to stakeholders2023 Environmental Social and Governance Report
01 Management Fostering Sustainable Operations
Enhancing governance efficiency
Continuing to deepen integrity
Smoothing stakeholders’ communication channels
Enhancing corporate responsibility operations
Promoting regional collaborative development
Zhongfu Shenying consistently upholds the
core values of "innovation integration strive
and responsibility" seamlessly integrating Party
leadership into every facet of corporate governance.Through ongoing comprehensive reforms the
Company continually fortifies its operational
management systems thereby ensuring steady
progress towards achieving its objective of high-
quality development.Responding to material issues
Corporate governance Business ethnics
and compliance Sustainable supply chain
Community contribution
21 222023 Environmental Social and Governance Report
Enhancing governance efficiency Party building as a leading force in cultural construction
The Company comprehensively implements the spirit of the 20th CPC National Congress enhancing education and
Upholding leadership by Party building training for Party members. The Company establishes diverse learning platforms and organizes activities such as
walking events calligraphy and photography exhibitions and themed group events commemorating the May Fourth
Movement. The Company promotes exemplary models and utilizes a variety of channels including websites official
Zhongfu Shenying has remained committed in its adherence to Xi Jinping Thought on Socialism with Chinese
social media accounts intelligent Party building platforms and internal publications for dissemination fostering
Characteristics for a New Era conscientiously studying propagating and implementing the spirit of the 20th
a cohesive atmosphere of resonance both online and offline. Throughout the year Party branches at all levels
CPC National Congress maintaining dedicated to its original mission engaged in solid work and demonstrated
alongside Communist Youth League branches have collectively organized nearly 100 specialized learning sessions
a proactive attitude shouldering national responsibilities courageously to build the "Pillar of the Country". The
training programs exchange forums and themed Party events.Company strategically coordinates the advancement of Party theoretical studies and actively explores methods
and pathways for the deep integration of Party building and corporate management embedding Party leadership
throughout the entire process of corporate governance achieving high-quality Party building to drive high-tier
enterprise growth. This year the cartoon mascot "Five-Colored Shenying" has earned the Company the prestigious
title as "Outstanding Party Building Brand of National Enterprises in 2023".Tech Shenying
Brand Name Brand Logo Excellence Shenying
Five-Colored Smart Shenying
Shenying
Striving Shenying Party building as a leading force in smart development
Integrity Shenying
In alignment with the evolving landscape the Company keep using the "Smart Party Building Platform" this year
"Five-Colored Shenying" Party Building Brand of Zhongfu Shenying
to digitally invigorate Party building activities creating a timeliness convenience innovation and interactivity
atmosphere of Party building elevating the standard of Party building work and empowering the Company's
development with new vigor.Party building as a leading force in scientific governance
The Company integrates Party building efforts into its core operations
and production development deeply. In 2023 the Company initiatives
such as "contributing to one's role" "providing constructive suggestions"
and "learning from exemplary figures" have been conducted 21 times
with 32 exemplary Party member positions established. It transforms
the achievements of thematic education into a powerful driving force for
promoting the Company's high-quality development. Regarding aspects
such as energy conservation quality improvement technological
breakthroughs and addressing the urgent needs of the masses the
Company has gathered more than 70 opinions and suggestions from
Party members and the masses. It has also recognized 24 exemplary
individuals achieving record-breaking highs in product quality metrics Smart party building platform of Zhongfu Shenying
while minimizing production costs.
23 242023 Environmental Social and Governance Report
Strengthening of governance systems
Zhongfu Shenying strictly adheres to the requirements of laws regulations and normative documents such as
the Company Law of the People's Republic of China the Securities Law of the People's Republic of China and the
Code of Corporate Governance for Listed Companies. The Company has established a comprehensive governance
framework which encompasses the General Shareholder Meeting the Board of Directors the Board of Supervisors
and the Management Team collectively referred to the "three meetings and one layer" governance structure.1
Through meticulous delineation of responsibilities and standardization of governance systems and operational
mechanisms within this framework the Company effectively enhances governance efficiency thereby laying a
solid foundation for its high-quality and sustainable development. Moreover the Company's Board of Directors
comprises four specialized committees: the Strategic and ESG Committee the Audit Committee the Nomination
Committee and the Remuneration and Assessment Committee. These committees play vital roles in assisting the The Company convened its fourth interim shareholder meeting of 2023 to deliberate on the matters
Board of Directors in areas such as strategic planning audit oversight director nomination and remuneration and of the Board of Directors and Board of Supervisors' re-election
performance assessment thereby contributing to the efficient operation of the Company across all business sectors.Reinforcing risk management
The Company has held 5 general shareholder meetings at which a total of Zhongfu Shenying adheres comprehensively to national policies and takes the Articles of Association as its
foundation. By continuously enhancing its risk and compliance management system in line with the Compliance
General Shareholder 20 proposals were deliberated. Management System Internal Control Manual and other relevant management framework the Company establishes
Meeting a management mechanism that features a clear division of powers and responsibilities coordinated operation and
effective checks and balances. Furthermore to reinforce its risk management capabilities Zhongfu Shenying has
instituted a three-tier management structure encompassing the Party Committee the Board of Directors and the
Company Office.
9directors 2 of whom are female held 9 board meetings and deliberated Party Committee
The Party Committee plays a pivotal role in guiding the Company's directionoverseeing the overall situation
Board of Directors 61 and ensuring the implementation of strategies. Itpromotes the strict adherence and implementation of on proposals. compliance requirements.while continuously enhancing the level of operation and management imaccordance
with legal regulations.Board of Directors
3 supervisors 2 of whom are female held a total of 9 supervisory board The Board ofDirectors fulfills the crucial roles of strategy settig decision makingand risk prevention. Its
primary responsibilities include approving the fudamentalsystem of compliance management reviewing the
annual report appointing andremoving the person in charge of compliance management and addressing
Board of Supervisors meetings and deliberated on the proposal a total of 26 proposals. othersignificant matters pertaining to compliance.General Office
The Company Offce fulflls the roles ofoperational planning implementationoversight and management
enhancement. It is responsible for formulating thecompliance management system construction
9 2 plan organizing responses to majorcompliance risk events as well as guiding and supervismg the members of the senior management of whom are women.
Senior Management compliancemanagement work carried out by various departments and subordinate companies.
1For the detailed governance structure of Zhongfu Shenying please refer to the company's official website: https://www.
zfsycf.com.cn/#/manager The compliance management structure of Zhongfu Shenying
25 262023 Environmental Social and Governance Report
Enhancing the risk compliance awareness Strengthening supervision and operations
In order to comprehensively enhance its risk management capability the Company organizes orderly participation of The Company is committed to fostering a clean and honest operational atmosphere. It continuously enhances its
employees at all levels in multi-category multi-dimensional and multi-faceted risk compliance awareness training. ability in risk identification monitoring and prevention. The Company strictly adheres to the bottom line of lawful
In 2023 the Company actively engaged in risk compliance trainings organized by the SASAC the China National and compliant operations. It consolidates the supervision and inspection modes through the " Checklist-based"
Building Materials Group and other tripartite institutions while also actively organizing internal legal compliance supervision and inspection the integration of "Normalization" into operations and "Standardization" of joint
capacity building attracting a total of 856 participants throughout the year. supervision into operations.Refining the risk management mechanism Checklist-based Integrating supervision into Joint "Standardization"
supervision and inspection "Normalization" operations supervision
The company places a strong emphasis on the identification and control of risk sources. It regularly audits the
systems and internal controls of each department and subsidiary company to assess their effectiveness. Once risks The Company develops a The Company conducted The Company operates the "Great
2
are identified the company promptly adheres to the principles of timely detection timely suspension and timely detailed checklist for supervision 8 special supervision and Supervision" system which
reporting. Concurrently with a robust compliance system as its core the company regularly guides supervises and and inspection focusing inspections on key links enhances supervision synergy
inspects the compliance management work across all departments and subsidiary companies. This ensures that on normalized supervision in critical areas such as and promotes management
compliance management is carried out in a structured and orderly manner promoting continuous improvement and and inspection in key areas procurement bidding project improvement. Throughout the
characterized by concentrated construction and external year the Company conducted 5
adherence to regulatory standards. power dense funds and coordination management. joint supervision inspections with
abundant resources. The During these inspections various departments leading to
Continuing to deepen integrity Company utilize supervision the Company issued 7 enhancements in 4 management and inspection as a driving supervision and inspection systems across different aspects.force to enhance the Company's proposals. Furthermore the Additionally the Company
To further enhance the integrity culture in the new era Zhongfu Shenying relentlessly fortifies its clean culture management production and Company conducted a special collaborated with suppliers
framework by firmly grasping the fundamental principle of "don't dare to are unable to and have no desire to operations. investigation into integrity risks and business partners on anti-
commit acts of corruption" ensuring that it is ingrained in the corporate ethos and cultivating this clean culture in in affiliated enterprises once. corruption efforts ensuring
alignment with the actual development trajectory of our enterprise thereby comprehensively elevating the anti- Through routine supervision that all newly added business
corruption and anti-bribery awareness of employees across all levels. In 2023 the Company was devoid of any practices the Company partners signed anti-corruption
corruption incidents related to embezzlement or bribery successfully maintaining a clean and honest operational proactively identified potential pledges.hazards urged prompt
environment. The Company is committed to preserving this pristine business conduct and fostering a culture of rectification and aimed to
transparency and accountability. enhance work quality and
efficiency.Deepening institutional construction
The Company strictly enforces institutional norms and strengthens the application of supervision and inspection Strengthening the integrity defense line
results. It keeps refine systems and regulations such as the Employee Discipline and Violation Handling Measures
Integrity Risk Prevention and Control Handbook and Cadre Marriage and Funeral Matters Reporting Requirements The Company places a strong emphasis on comprehensive integrity risk management conducting identification and
to push forward the standardization of all work operations. Simultaneously the Company is deepening the reform of prevention efforts that span across all departments and business processes. It reinforces the accountability of the
the discipline inspection and supervision systems. It has set up a discipline inspection and audit department in the main body and guides employees to understand the rules and laws encouraging respect vigilance and adherence
affiliated enterprises to open up the process of the anti-corruption supervision systems. This initiative aims to reduce to ethical standards.hidden risks of integrity and build a solid disciplinary guarantee for the Company's sound development.
2 "Great Supervision" refers to the comprehensive integration of Party supervision and enterprise management supervision
leveraging the strengths of both to address weaknesses in the company's development. This approach focuses on
identifying and rectifying issues forming a vertical supervision chain based on business divisions and horizontal
cooperation among supervisory departments. The goal is to establish an interactive and comprehensive three-dimensional
supervision system.
27 282023 Environmental Social and Governance Report
Performance of key integrity risk management Smoothing stakeholders'communication
channels
Strengthening accountability
Signed 24 "Party Conduct and Integrity Building Responsibility Agreements" with affiliated enterprises Zhongfu Shenying actively establishes diversified
c o m m u n i c a t i o n c h a n n e l s b u i l d s m u l t i p l e
primary Party organizations and key departments. communication channels with investors through In 2023 the Company received
platforms such as SSE SSE e-interview investment mail
Enhancing supervision of cadres one of the first disclosure "A" investment hotline etc. maintains open and transparent (Excellent) ratings on the STAR
Strengthened supervision of oversight on leading bodies and their heads conducting 22 heart-to-heart information fully responds to the expectations and Market.requirements of stakeholders and works with partners
talks; signed 205 "Integrity and Self-discipline Commitment Agreements" with mid-level cadres and key to achieve sustainable development.position personnel; conducted 32 pre-appointment integrity talks with cadres.Stakeholder Main communication methods and channels
Long-term rectification of "Four Attitudes"
Conducted internal self-inspections and daily supervision 4 times to implement the spirit of the Eight General Meetings press releases/announcements
Rules on improving Party and government conduct. Main shareholders Annual/Interim Results Conferences Analyst
Conferences roadshows company introduction days
Conducting integrity education
Held 12 sessions of the "Monthly Discussion on Party Conduct and Integrity" during office meetings; Potential investors Investor conferences press releases/announcements
and Annual/Interim Results Conferences roadshows
conducted integrity training for all new employees at all levels in 11 sessions totaling 565 participants; financial institutions company introduction days
developed 4 editions of disciplinary and legal micro-courses.Telephone/ e-mail government and regulatory meetings
Government and and trainings local government and corporate project
regulatory bodies cooperation regular corporate reporting
Smoothing reporting channels Corporate platforms suggestion boxes and labor union
Employees channels team building activities employee satisfaction
surveys workers' congress
The Company has established a sound supervision and protection network ensuring smooth reporting channels
such as emails and phone calls clarifying the scope of receiving reports and complaints and strictly protecting the
legitimate rights and privacy of whistleblowers. Public announcements are made in work procedures such as public Meetings and conferences customer service hotline
bidding related-party transactions cadre selection performance benefits for corporate leaders and inspections Customs customer satisfaction surveys official account social
willingly accepting public supervision. Enhancing the application of the "First Modality" 3and resolutely preventing media
the occurrence of corrupt practices.Work inspections and monitoring supplier/contractor
Partners conferences telephone/e-mail meetings and
conferences supplier evaluations
3"First Modality" refers to "making whispering in ears pulling sleeves blushing and sweating become the norm."
29 302023 Environmental Social and Governance Report
Case ｜ Diverse activities to facilitate seamless communication channels with investors Enhancing corporate responsibility
Throughout 2023 the Company hosted several noteworthy events encompassing the official operations
commencement ceremony for the 30000-ton high-performance carbon fiber project the grand opening
ceremony marking the full operational capacity of the second phase of the Xi’ning project and an Adhering to the principles of integrity fairness and transparency Zhongfu Shenying respects and safeguards the
exclusive "Day Tour" at the China Composites Expo. These occasions served as valuable platforms for legitimate rights and interests of its partners strives to establish a mutually trustful and beneficial cooperation
deep-dive discussions with numerous investment institutions covering topics ranging from carbon relationship and moves forward hand in hand with its partners to jointly create a sustainable operational environment.fiber technology research to downstream application development. Through these engagements
Zhongfu Shenying expressed its unwavering commitment to consistently delivering favorable returns
to shareholders and investors. Leveraging its preeminent advantages in technology scale and cost the Building a sustainable supply chain
Company underscored its dedication to maximizing corporate value and enhancing shareholder interests. Zhongfu Shenying has been consistently promoting the development of a sustainable supply chain effectively
integrating the ESG philosophy into all aspects of supplier management. This year the Company has introduced the
Safety Management Measures for Outsourcing to standardize supplier health safety and environmental (HSE) risk
management and to enhance suppliers' understanding of responsible cooperation.Supplier ESG audit process
A cross-functional supplier evaluation team is established to conduct document reviews and
on-site audits of suppliers' ESG-related management practices encompassing environmental
Admission
Phase and occupational health and safety management. The team compiles relevant records such
as the "Supplier Survey Form" and "Supplier Risk Assessment Form" and only approves
suppliers that meet the required criteria.Suppliers undergo annual audits routine spot checks and in-use inspections ensuring
Routine
Audit continuous monitoring of their ESG performance through document reviews and on-site
inspections.All suppliers undergo at least one annual performance evaluation including ESG-related
Performance metrics. Suppliers failing to meet the evaluation criteria risk losing their cooperation
Evaluation qualifications leading to revisions in the list of approved suppliers for dynamic and effective
supplier management.Supplier ESG awareness enhancement
Establishing compliance agreements including sunshine
Promoting green procurement giving preference to suppliers
agreements and confidentiality agreements with our long-term
with low-carbon and environmentally friendly production
suppliers. These agreements necessitate both parties to jointly
processes under equal conditions. This effectively advances the
abide by national laws regulations and internal management
low-carbon development of our supply chain.The Company organized visits for securities analysts and representatives from fund companies to attend the China Composites Expo protocols ensuring honest and transparent cooperation.
31 322023 Environmental Social and Governance Report
Focusing on information security Promoting regional collaborative
The Company places a strong emphasis on enhancing information security protection capabilities by establishing a
comprehensive and multi-tiered information security guarantee system. This robust system is designed to prevent development
privacy breaches and ensure the smooth progress of our digital and intelligent transformation efforts. We are proud
to announce that our company has achieved national network information security level-3 certification further Zhongfu Shenying upholds its social responsibility by leveraging its business and resource advantages to actively
demonstrating our commitment to maintaining high standards of information security. engage in public welfare initiatives. The company consistently implements the "Do Practical Things for the People"
campaign aiming to foster regional coordinated development. Through these efforts the Company contribute to
social progress enhance people's livelihoods and fulfill the aspiration for a better life.Established and continuously improved management systems such as the "Network Security
Management System" and the "Information System Operation and Maintenance Management Embodiment of responsibility
System" to ensure standardized network information security management.Over the past three years the Company has conducted the "Shenying Helps the Needy" campaign. In 2023
through collaboration with the Haizhou District Charity Federation the Company assisted 34 families
in need and provided financial support to 25 students facing difficult circumstances totaling RMB
To comprehensively oversee and guide the Company's network security efforts a network
security work leading group headed by the general manager has been established. This group 100000.regularly conducts thorough reviews of network security to ensure the effective operation and
continuous improvement of the security system. Over the past three years the Company has implemented the "Shenying Education Assistance" program
successfully aiding over 60 senior high school students in realizing their university aspirations and
supplying daily necessities to more than 420 primary and secondary school students.Implemented a management model based on business needs and information security risk
assessment results. This model divides information security into five key areas: business needs
risk assessment supervision data backup and terminal management. Each area is supervised
and managed separately to ensure that information security in all business areas receives equal
attention and effective safeguarding.Enhancing intellectual property management
The Company prioritizes the protection of intellectual property as a vital element in safeguarding our innovation
outcomes and core competitiveness. The Company actively undertake measures to protect its IP assets while
avoiding infringement risks of the intellectual property rights of others. The Company fully embraces the Enterprise
Intellectual Property Management and has developed comprehensive management systems including the Patent
and Thesis Management Measures Intellectual Property Management System and Technology Secret Protection
Measures in alignment with legal guidance. This integrated approach establishes a robust management system that
spans the entire life-cycle of IP protection. To cultivate awareness of IP protection and risk prevention the Company
conducted specialized training sessions for key personnel responsible for core technical knowledge. These initiatives
contribute to fostering a supportive environment for the protection of intellectual property rights.The Company rigorously oversees the process of translating research and development outcomes into intellectual
property continually monitoring for potential product infringement risks.
3334
Institutional System Risk
Development Improvement Assessment2023 Environmental Social and Governance Report
Case ｜ Shenying makes dreams come true "Enterprise Open Day" Case ｜ Consolidating rural revitalization with the support of Shenying
Our headquarters and Shenying Xi’ning held "Enterprise Open Day" activities in August. In particular the In 2023 the Youth League Committee of the Xi’ning facility visited Houyao Village in Handong Hui
Charity Federation of Haizhou District and the students and family members benefiting from the "Shenying Autonomous Township located in Huangzhong District. They carried out the initiative "Working on the
Education Assistance" program were invited to visit Zhongfu Shenying during which the assisted students Frontlines to Address People's Needs Directly" where they provided student subsidies and essential
were provided with firsthand knowledge of carbon fiber production and operations through observation supplies to 6 underprivileged primary and secondary school students as well as 10 families in need in
hands-on experiences symposiums and various other activities aiming to support their comprehensive Houyao Village. This effort aimed to reinforce the accomplishments of rural revitalization.development.
35 362023 Environmental Social and Governance Report
02 Technology Promoting Green Production
Implementing green and low-carbon transformation
Responding to concerns on climate change
Safeguarding the harmony of natural ecology
Zhongfushenying is committed to building a high-
quality environmental management system that
features efficient resource utilization accurate
carbon emission tracking and real-time pollution
monitoring by which the Company seeks to
achieve harmonious win-win results that benefit
ecological and environmental protection as well as
business development thereby consolidating the
company's “green-based” strategic positioning.The company deeply understands and firmly
responds to the national "Carbon Peaking and
Carbon Neutrality" strategy by contributing
corporate strength that includes practicing low-
carbon production and operation and seizing green
market opportunities.Responding to material issues
Efficient energy utilization Reducing pollutant
emissions Responding to climate change
37 382023 Environmental Social and Governance Report
Zhongfushenying adheres to green development and has formulated the "Action Plan for Carbon Peaking and
Carbon Neutrality (Double Carbon)" in line with the company's strategic planning. It has established 19 tasks under Implementing green and low-carbon transformation
11 major categories setting relevant goals and specific implementation plans on optimizing the layout of industrial
structure promoting green and low-carbon energy transformation conserving resources and efficient utilization and Zhongfushenying adheres to driving low-carbon production through technology. The Company continuously upgrades
other areas clarifying the Company's direction for carbon peaking and carbon neutrality. Additionally the Company the production process to improve efficiency adopting intelligent technologies for management. Besides the Company
has devised a performance evaluation mechanism for the energy management system by forming a special energy- optimizes its energy structure by accelerating the application of clean energy technologies. The company has taken 63
conserving team to push forward the implementation of energy conservation and carbon-reduction steadily. energy-conserving and consumption-reducing measures to promote overall low-carbon production and operation. In
2023 all manufacturing bases of the Company have obtained the ISO 50001 Energy Management System certification.
Carbon Reduction Targets for 2024
Promoting energy conservation through technology
Indicators: Targets（year-on-year）
Comprehensive energy consumption The Company promotes overall upgrades of energy-conserving processes to reduce energy consumption per unit of
per unit of main product product from the source.(ton/ton of carbon fiber)
3 Technological transformation for water electricity and gasComprehensive energy consumption %
per unit of carbon fiber
(ton/ton of carbon fiber) CO2 emission intensity per unit The Company carries The Company has
of main product out modifications in The Company uses The Company has 3% Carbon emissions per unit of carbon fiber (ton of CO2/ton of carbon fiber) recycled water cooling steam to assist electric completed the energy-
introduced more
efficient public auxiliary
(ton of CO2 equivalent/ton of carbon fiber) 3 and steam condensate
heating achieving conserving optimization
% reductions in the in steam for the equipment to replace insulation reducing
3% old ones which boosts power consumption in comprehensive energy spinning process to
the cycling process. consumption. reduce steam losses.secondary energy
conversion efficiency.For measures related to energy reutilization please refer to the section " Innovation Driving Circular Economy".Promoting intelligent management
The Company carries out a full-scale promotion of the "Intelligent Energy Service System"
Key performance in energy conservation and carbon reduction which leverages the connectivity of the Internet of Things as a medium to conduct real-
time monitoring analysis and presentation of production-related energy consumption
The Company carried out comprehensive energy-conserving renovations reducing energy consumption indicators. It also provides a robust data management model for dynamic oversight of
53 energy use indicators and real-time surveillance of energy consumption data.by thousands tons of standard coal annually through upgrades in energy-conserving technologies and Zhongfu Shenying "Intelligent Energy Service System"
energy reutilization. These measures could reduce greenhouse gas emissions by approximately 141.10
thousands tons of carbon dioxide equivalent. Deploying Clean Energy
The company seeks to expedite the increase in the proportion of clean energy usage. Based on the layout of
Compared to 2022 the power consumption per unit of product has decreased by 22%; the per unit steam clean energy resources in its operational areas the Company is actively collaborating with nearby hydroelectric
consumption has decreased by 18%; the comprehensive energy consumption per ton of product has and photovoltaic power stations. The Company gives priority to using clean energy as the main energy source for
production and operations. As a result the company-wide annual consumption of wind solar and hydroelectric
dropped to 8.67 tons of standard coal having been decreasing for two consecutive years. power accounts for 70% of the total energy usage. Additionally once the Company's 30000-ton high-performance
carbon fiber manufacturing base is operational it will actively utilize the waste heat from clean energy consumptions
Compared to 2022 the greenhouse gas emissions per unit of product have decreased by 27% year-on-year in surrounding areas and the offshore photovoltaic power as well as other clean energy sources. This will
which has been a decease for the second consecutive year. comprehensively enhance the Company’s usage coverage of clean energy and effectively reduce carbon emissions
from production and operations.
39 402023 Environmental Social and Governance Report
Responding to concerns on climate change Physical Risks
The frequency of climate-related extreme weather
Identifying climate risks events such as floods and typhoons has occurring
more frequently. These events are likely to disrupt the
Company’s essential operations through power outages
The Company has gained a clear perception of the risks posed by climate change to its sustainable development attaching Acute water supply interruptions and damage to logistical The Company will develop a supply chain
great importance to the urgency of the identification of these risks. This year the Company has initiated an assessment of routes. As a result these disruptions could impact the stabilization mechanism. Meanwhile the Company
the risks linked to climate change and their financial implications by leveraging insights from the Task Force on Climate- Company's operations and lead to economic losses. will conduct emergency drills that are tailored
related Financial Disclosures (TCFD) and considering market dynamics industry characteristics the sustainability strategy The continuous rise in global temperatures due to local climate characteristics in case of natural
disasters to ensure adequate supplies.of the Company etc. Subsequently we have outlined the main measures to mitigate these risks. to climate change may pose chronic risks including
rising sea levels changes in water resource distribution The Company will upgrade production and
patterns and an increase in heat waves. These factors operational equipment that are more resilient to the
could impact the Company’s operations in ways such impacts of climate change in an effort to enhance
Risk Descriptions and Potential Impacts Countermeasures Chronic as relocations of operational sites increased demands
the Company's ability against natural disasters.for cooling equipment higher frequency of equipment
Transition Risks maintenance ultimately increasing the operational costs for the Company.With the promotion of China’s "Carbon Peaking
and Carbon Neutrality" goals local governments are
introducing new carbon reduction policies imposing
stricter requirements on emission-intensive economic The Company will keep close updates on changes
activities. This could escalate compliance costs for the in low-carbon policies within its operating areas and
Company. the industry upholding its sustainable development
Continuous expansion of the Company's business has strategy by increasing the proportion of clean
enabled its overseas operations to grow steadily as well. energy usage such as photovoltaic and wind power
Policy and Under the guidance of the Paris Agreement countries initiating carbon footprint certifications for products
Legal and regions worldwide are enforcing stricter carbon and adhering to circular economy in an effort to
emission policies (such as the EU's Carbon Border accelerate the green and low-carbon transformation
Adjustment Mechanism) which could mean escalated of the Company’s operations and products.compliance risks and higher operational costs for the
Company. Seizing climate opportunities
Zhongfushenying has always been at the forefront of promoting social green development. The Company delivers
Given the ongoing national efforts to optimize The Company will improve the efficiency of clean
energy consumption structure the Company has technology research and application encouraging exceptional carbon fiber products to leading sectors in the new energy industry such as new energy vehicles wind turbine
to expedite the upgrades of low-carbon processing all manufacturing bases to adopt new energy- blades and energy storage effectively catering to the evolving low-carbon demands from our partners. The Company
technologies which could lead to the elevation in the conserving and carbon-reducing technologies and capitalizes on emerging low-carbon opportunities in the market and fosters new drivers for social green transformation
Technology expenditure of the Company’s R&D and technology methods to create a synergy between low-carbon to propel the comprehensive upgrade of green technology across our industrial and value chains fueling the green substitution. development and cost-effectiveness.transformation and sustainable development across the entire society. This year according to the TCFD recommendations
The Company proactively identifies low-carbon and considering the business characteristics the Company identified the following climate-related opportunities.requirements for carbon fiber products in domestic and
international markets. Additionally the Company will
Products and Services
Downstream customers and value chain partners gradually initiate efforts in reducing carbon footprint of
are placing growing importance on the low-carbon products.attributes of products and services setting higher The Company will engage in active cooperation
low-carbon standards for the Company's products. with partners by highlighting the benefits of low- The Company is fully committed to facilitating the value chain's green and low-carbon development by
Failure to promptly adapt to market shifts and meet carbon product development and pursuing low- effortlessly increasing the proportion of green and clean energy utilization while gradually upgrading carbon certifications for products to promote market
Market/ evolving expectations may create barriers for the recognition. production processes to create green and low-carbon products. The Company proactively responds to the
Reputation Company to penetrate new markets. The Company will adhere to its sustainability strategy demand for low-carbon development by providing downstream customers with greener and lighter solutions
and enhance information disclosures of its sustainable and supplying high-quality carbon fiber to sectors such as wind power photovoltaics and energy storage to
development to reinforce the Company's image in
sustainability. support the high-quality development of the new energy industry.
41 422023 Environmental Social and Governance Report
Markets Safeguarding the harmony of natural ecology
Zhongfu Shenying upholds the guiding principle that 'lucid waters and lush mountains are invaluable assets' viewing
In pursuit of the low-carbon development objectives countries and regions globally are actively facilitating ecological and environmental protection as the core mission of its enterprise development. The Company has consistently
the application of carbon fiber across industries as aerospace wind turbine blades and automotive enhanced its environmental management system using technological transformation as a pivotal approach to continually
stabilize its environmental performance and mitigate the impact of production and operations on the environment
manufacturing. The Company has established its “high-end” strategic positioning to respond to market through practical measures. This year Zhongfu Shenying achieved the national "Green Factory" title for the first time
demands for carbon fiber materials which are perceived as green and environmentally friendly seizing and was honored with the 2022 Environmental Protection Quality Award for Enterprises and one of the first batch of the
emerging market opportunities to foster new growth drivers for its business. Environmentally Exemplary Enterprises and Institutions.Enhancing environmental management
The Company strictly adheres to the relevant laws and regulations in its operational areas prioritizing the 'institution-
Energy source first' approach to environmental management. It has refined internal management systems such as the Ecological
Environmental Protection Responsibility System of Zhongfu Shenying Carbon Fiber Co. Ltd. and the Supervision and
Management Measures for Energy Conservation and Ecological Environmental Protection of Zhongfu Shenying Carbon
Fiber Co. Ltd. to standardize environmental management processes within the company. This year all production bases
Zhongfu Shenying continues to increase the proportion of clean energy usage and has achieved a usage ratio of the company have successfully obtained ISO 14001 environmental management system certification.of wind solar and hydroelectric power reaching 70%. The new base in Lianyungang will be equipped with
offshore photovoltaic power and steam generated by clean energy as energy sources in an effort to cope with Improving the environmental organizational system
the rise in compliance costs induced by the carbon reduction policies. This will enable the Company to seize
new commercial opportunities for participation in the carbon market. In order to fully implement environmental management the Company has established a vertical management structure with the company headquarters serving as the central authority and subordinate subsidiaries carrying out primary responsibilities.For more information on practices and achievements related to low-carbon development opportunities please refer Environmental protection leadership group
to the chapter " Innovation Driving Circular Economy".The environmental protection leadership group led by the general manager as director the deputy general
manager as deputy director and comprising the heads of various subsidiaries divisional heads and
middle-level management personnel from the headquarter is responsible for overseeing the Company's
environmental protection efforts.Corporate management department of the Company headquarter
Under the guidance of the environmental protection leadership group the corporate management
department is tasked with formulating environmental management policies and objectives.All Subsidiaries and Workshops
These entities are responsible for implementing ecological and environmental protection measures in the
production process in accordance with established policies.Conducting environmental performance appraisals
To effectively implement the achievement of environmental indicators and objectives the Company conducts annual
environmental performance appraisals for the management level in accordance with regulations. It requires responsible
persons at all levels of the enterprise to sign the Responsibility Letter for Ecological and Environmental Objectives thereby
clarifying their environmental protection responsibilities and the contents of performance appraisals. This approach
effectively promotes the implementation of environmental protection measures at all levels.
43 442023 Environmental Social and Governance Report
Strictly monitoring environmental performance Implementing multiple strategies to reduce exhaust gas emissions
In order to promote comprehensive identification and early prevention of environmental risks the Company
mandates each subsidiary to develop an environmental self-monitoring plan. Additionally they are required to Reducing source emissions
collaborate with professional external institutions to conduct regular environmental monitoring in strict accordance Implementing "closed cooling" and "electrostatic capture" technologies to treat exhaust gas leading to
with the established plan ensuring real-time supervision of emission data. This year all monitoring results have met a 10% reduction in the emission concentration of organic pollutants.the standards achieving the company's environmental protection goals.Ensuring emergency safety
Improving collection efficiency Enhancing end-of-pipe governance
The Company has established management systems such as the Management Measures for Sudden Environmental
Events of Zhongfu Shenying Carbon Fiber Co. Ltd. and the Management Measures for Emergency Response Plans for
Renovating exhaust gas collection ducts in spinning workshops employing hoods to collect unorganized
Sudden Environmental Events of Zhongfu Shenying Carbon Fiber Co. Ltd. Furthermore it has set up an emergency
exhaust gas and treating it with "normal temperature and high-efficiency catalytic oxidation" facilities.rescue command and emergency response teams forming a three-level emergency response mechanism involving
This reduces unorganized pollutant emissions and minimizes odors in the factory area.the company workshops and teams ensuring timely and appropriate handling of environmental emergencies.Installing hoods in carbonization workshops to collect unorganized exhaust gas and treating it with
Implementing clean production "dual-tower four-stage hydrogen peroxide absorption" facilities resulting in a 5% reduction in exhaust
gas emissions.Zhongfu Shenying steadily promotes diversified emission reduction measures continuously strengthens the
treatment of pollutants throughout the process adheres to source control reduces production emissions enhances Utilizing "cyclone dust removal" and "RTO incineration" to oxidize exhaust gas decreasing emissions of
the efficiency of end-of-pipe treatment and actively adopts intelligent pollutant monitoring and management pollutants like hydrogen cyanide by approximately 5%.systems to achieve comprehensive control of pollutant emissions.Exhaust gas management
Case ｜ Adopting multiple measures to reduce exhaust gas emissions from production processes
The Company adheres to a high-standard and strict management approach for exhaust gas emissions continuously
upgrading exhaust gas treatment facilities enhancing the efficiency of exhaust gas collection strengthening the Throughout the year Shenying Xining has proactively
efforts of exhaust gas disposal and effectively implementing the full-process management of exhaust gas. implemented technological improvements in exhaust gas
treatment across various production stages to minimize
emissions generated during production processes. In the
precursor fiber production stage the company introduced
normal temperature electrostatic oil removal technology to
capture exhaust gas ensuring waste gases were discharged
in compliance with emission standards. Within the
polymerization workshop and solvent recovery workshop
a comprehensive five-step process is employed originating
from residue in the drying machines within the workshops.Furthermore Shenying Xining has intensified end-of-pipe
exhaust gas treatment optimized treatment processes and
integrated RTO + absorption technology to manage exhaust
gas from various solvent recovery stages. These initiatives
have notably enhanced exhaust gas treatment efficiency by
approximately 30%.
45 462023 Environmental Social and Governance Report
Waste management Implementing water Reducing packaging Advocating green office
conservation measures materials practices
The Company adheres to waste reduction and harmlessness principles in waste disposal strictly following relevant
The Company is committed to The Company consistently The Company encourages green
regulations and policies to ensure 100% standardized waste management. To manage hazardous waste the
enhancing water use efficiency decreases the usage of office practices and implements
company has established dedicated hazardous waste storage sites and containers at each production base. Utilizing
and reducing consumption packaging materials to prevent the resource conservation
electronic and information-based methods the Company effectively collects and manages information regarding the
through management over-packaging. This year philosophy of "saving every
type and quantity of hazardous waste enabling precise hazardous waste management. Furthermore the Company
optimization and equipment the company successfully drop of water saving every
collaborates with certified third-party service providers to ensure compliant waste disposal practices ultimately
upgrades. This year Shenying minimized packaging box usage unit of electricity saving every
achieving "zero external discharge" of hazardous waste.Xining successfully optimized by increasing box volume to penny." This year the Company
chilled water and circulating enhance cargo capacity saving comprehensively implemented
Improving Resource Efficiency water pipelines resulting in approximately 10000 packaging paperless office practices
a 6.3% reduction in water cartons throughout the year. using email to circulate and
Zhongfu Shenying advocates for the efficient use of resources continually optimizing production processes and consumption due to improved distribute daily systems meeting
promoting conservation concepts to enhance resource utilization efficiency in production operations. transmission efficiency. summaries learning materials
and other documents and
leveraging digital technology
to manage archives effectively
promoting the process of
paperless documentation.For more information on measures for recycling of resources and waste materials please refer to the chapter
"Innovation Driving Circular Economy".
47 482023 Environmental Social and Governance Report
03 Innovation Driving Circular Economy
Promoting the circular utilization of natural resources
Empowering green and lightweight development
Constructing the product recycling system
With innovative concepts at its core and guided
by the principles of "efficient resource utilization
low-carbon energy clean processes and waste
recycling" Zhongfu Shenying is dedicated to
constructing a recyclable carbon fiber industrial
chain. The Company has established a "double-
recycling" development model that integrates
"industrial chain circularity + resource circularity"
aiming to lead the industry in green and circular
development.Responding to material issues
Waste management
Water resource management
Promotion circular economy
49 502023 Environmental Social and Governance Report
The graded utilization of energy
Zhongfu Shenying “double recycling” development model The Company is committed to promoting the comprehensive utilization of energy through technological
optimization. This year the Company has conducted a comprehensive upgrade of the processing equipment for
carbonization exhaust gas and has implemented the construction of waste heat recovery systems in various process
links to achieve graded energy utilization.The carbonization workshop of Shenying Xi’ning has introduced a technology for recycling and
Shenying Xi'ning utilizes waste utilizing flash steam from raw yarn focusing on recovering waste
Promoting the circular utilization of natural resources gas to assist in generating steam heat from self-generated steam during the carbonization process.Developing comprehensive utilization of production resources for carbon fiber through MSTO equipment and This technology can recover approximately 1.5 tons of flash steam
distributes it to other processes
according to demand enabling per hour saving more than1000 tons of standard coal
a recovery and utilization rate annually and reducing greenhouse gas emissions by approximately
of waste heat to reach 85%. 3200 tons of carbon dioxide equivalent per year.The water resources recycling
Comprehensive Graded
utilization of utilization of The Company is dedicated to advancing the construction of wastewater recycling systems aiming to achieve "zero
waste resources external discharge" and "full recycling" of industrial wastewater. This year various production bases of the Company
have significantly enhanced their wastewater treatment capabilities and successfully achieved water resource reuse
Constructing the product Contributing to green and by implementing measures such as installing wastewater treatment stations wastewater recovery facilities high
recycling system lightweight development ammonia nitrogen wastewater treatment facilities and rainwater and sewage diversion equipment.Facilitating high-quality Empowering low-carbon
recycling of carbon fiber solutions for carbon fiber
products applications Shenying Xi’ning has implemented a variety of technologies The adoption of a multi-stage recycling
to increase the reuse of wastewater resulting in a reuse rate of water treatment process enables treated
industrial wastewater to be used for fire
Zhongfu Shenying's "double-recycling" development pattern wastewater over 50% and a year-on-year decrease in water protection dust suppression irrigation
43 humidification and other applications consumption per unit of product by approximately %. facilitating the graded utilization of
Promoting the circular utilization of water resources.natural resources
Zhongfu Shenying has been actively promoting the recycling and reuse of production resources and focusing efforts
on four aspects namely the graded utilization of energy the recycling of water resources the resource utilization
of waste and the recycling of resources. The Company vigorously implement various measures such as energy-
saving retrofits of recycling systems recovery and utilization of flash steam and reuse of condensate wastewater
to effectively promote the integration of circular economy and production operations thereby reducing the
consumption of natural resources.
51 522023 Environmental Social and Governance Report
Utilization of waste
The Company places great emphasis on enhancing the treatment of waste resources and actively collaborates with
qualified third-party waste disposal providers. It focuses on recycling and reusing waste suitable for biomass power
generation contributing to the advancement of a circular economy in society. The Company's high-strength and medium-modulus carbon
fiber products have been extensively adopted in the automotive
sector leading to a weight reduction of certain components by
Automotive approximately 30%-60%. This has resulted in an enhancement
In 2023 the Company recycled nearly 20% of solid waste for power generation through partnerships industry of fuel efficiency by around 20%-50% and a reduction in fuel
consumption per 100 kilometers by 1.8-7.2 liters.effectively implementing the waste resource treatment concept.The Company's high-strength and medium-modulus carbon
fiber products have proven successful in the rail transit industry
contributing to a 10%-25% reduction in train weight. This
Resource recycling and utilization reduction has led to a 15% decrease in energy consumption Rail transit
when operating the same mileage. industry
The Company is dedicated to improving the recycling of production resources and prioritizes technological
transformations to enhance recovery efficiency. Through in-house research and design efforts the Company has
developed a multi-level high-capacity dimethyl sulfoxide (DMSO) efficient recovery unit enabling the complete The Company's high-strength and medium-modulus carbon
recovery of high-concentration DMSO non-condensable gas. Furthermore the Company has conducted extensive fiber products have been implemented in cable-stayed bridges.technological research and development applications utilizing high-temperature steam extraction processes to fully Compared to conventional steel materials carbon fiber's
recover DMSO from waste slurry. lightweight nature high stiffness low creep and corrosion
Architectural resistance can extend the lifespan of bridge construction projects
applications by up to 30 years.These units facilitate the purification and reuse of DMSO resulting in a 13.5% year-on-year reduction in
DMSO material consumption per unit of product. This year the Company had supplied more than 8000 tons of
carbon fiber materials to the new energy sector significantly
facilitating the rapid development of this industry. New energy
industry
Empowering green and lightweight
development Constructing the product recycling system
Committed to empowering low-carbon development throughout the value chain Zhongfu Shenying consistently Zhongfu Shenying fully leverages its role as the "leader" in the carbon fiber industry committed to fostering
supplies downstream industries with high-performance carbon fiber materials. The Company’s products known collaborative development within the sector. The Company actively collaborates with domestic and international
for their excellent characteristics including high temperature resistance low density and high strength find partners to establish a carbon fiber product recycling system. This year Zhongfu Shenying has conducted extensive
extensive applications in sectors such as aerospace automotive rail transit and architectural bridges. This leads to a research on the separation and recycling technology of carbon fiber composites delving into the core aspects of
significant reduction in the weight of downstream products effectively decreasing energy consumption during their product recycling surmounting technical hurdles and prioritizing the establishment of a high-quality and efficient
usage prolonging product lifespan and enhancing the circular economy attributes of these products. Furthermore carbon fiber recycling system. Concurrently the Company engages in productive partnerships with universities
the Company remains dedicated to supplying high-performance top-quality carbon fiber products to emerging effectively utilizing its research academic and industrial transformation capabilities to drive research initiatives on
energy sectors like wind power photovoltaics and hydrogen energy storage serving as a key raw material provider circular economy technologies throughout the entire industrial chain. These efforts aim to accelerate the industry's
to customers in the green industry and actively supporting their robust growth. adoption of circular economy practices and facilitate its sustainable development.
53 542023 Environmental Social and Governance Report
04 Talents Building Excellent Teams
All-out efforts to building a talented team
Accelerating the enhancement of intrinsic safety
Effectively safeguarding employee rights and
interestsWholeheartedly implementing employee care
Zhongfu Shenying is committed to a people-
centric approach with a profound understanding
that talent is the foundation of team excellence.The Company earnestly safeguards employee
rights and interests solidly promotes the health
and safety of its workforce continuously refines
its talent cultivation system and wholeheartedly
creates a harmonious positive and collaborative
corporate ecosystem. This approach enhances the
cohesion and centripetal force of talent achieving
mutual growth between talented individuals and
the Company.Responding to material issues
Employee health and safety
Safeguarding employee rights and interests
Support for employee development
Employee care
55 562023 Environmental Social and Governance Report
All-out efforts to building a talented team Refine talent training mechanism
The Company adopts the "Annual Training Planning Form" mechanism which clarifies the annual training objectives
Zhongfu Shenying values and cherishes talent using the construction of a diverse and comprehensive talent team as and clearly plans the management of training resources thereby enhancing the effectiveness of training and the
a driving force. The Company has established a comprehensive talent training structure and development channels conversion rate of learning outcomes. This year the Company revised the "Training Management System" to deepen
to create a well-rounded talent team. This year the Company focuses on building a scientific research talent training the reform of the Company's talent development mechanism using the principle of classified and stratified training
system improving the training system mechanism and promoting a diverse talent reserve fully implementing the to continuously improve the employee training mechanism."talent strengthens the enterprise" strategy.Establishing a talent cultivation system This year the Company completed a total of 867 training sessions to 68405 trainees on
safety production job skills management systems and quality management. Compared to
After years of refinement and in-depth integration with the needs of technological development the Company
has established a "four-core" talent cultivation system. With the basic principles of prioritizing scientific and 2022 there was a 30% month-over-month increase in the number of training sessions and
technological R&D and decision-making based on effectiveness the Company actively carries out medium and long- 288% year-on-year increase in the number of trainees.term incentive programs. It has set up an enterprise annuity plan covering all levels of the Company stimulating
employees' work enthusiasm and initiative."Four New Systems" for talent cultivation Cultivating internal trainers Nurturing new talents Strengthening effectiveness
The new "Internal Trainer A new management trainee evaluation
Strengthening the construction of a scientific and innovative culture ensuring talents "feel belonged" Management Rules" training mechanism has The establishment of the
regulate the assessment been introduced and the "Employee Training Record
A series of talent cultivation plans have been formulated actively deploying the construction of innovative and management of internal "Production Management Book" enhances statistical
culture systems and talent teams. Additionally a system of science and technology award ceremonies has trainers encouraging Trainee Recruitment and capacity of managing employee
been established to encourage employees at all levels to innovate and set examples. employees at all levels to Training Program" has been training files effectively
participate in the Company's formulated and published. It manages and evaluates the
training work. This standardizes clearly implements a two-tiered progress and outcomes of
Reinforcing the basic guarantees of r&d ensuring talents "have faith" the teaching process of internal training and management employee training efficiently
trainers enhances the scientific mechanism supervised by identifies training needs and
Efforts are being made to actively build high-level high-performance talent and carbon fiber R&D platforms rational standardized and workshop heads and executed continuously optimizes the
such as national high-tech enterprises post-doctoral research workstations provincial carbon fiber effective management of by guidance heads which helps training plan.engineering technology research centers and provincial carbon fiber engineering centers. internal trainers and improves the Company achieve high-
the quality of their teaching. quality talent team construction
and lays the foundation for
Reforming talent cultivation mechanisms ensuring talents "have expectations" the reserve of production
management talent.Reforms are being implemented from four aspects: top-level architecture salary benefits achievement
rewards and living security to ensure the treatment of scientific researchers and establish project-based
personalized training programs.Creating a positive research environment ensuring talents "feel at ease"
A results-oriented evaluation mechanism and a fault-tolerant mechanism centered on innovation are being
established aiming to foster a research environment that encourages bold thinking and action.
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Core training
performance2023 Environmental Social and Governance Report
Case ｜ talent development organizing training to enhance management skills for cadres Accelerating the enhancement of
This year the Company invited external trainers to conduct a training program aimed at enhancing the
management skills of its cadres in the management team. During the training the trainers provided engaging intrinsic safety
lectures centered around three main modules: "The Three Key Role Positions of Middle and Senior-level
Managers" "The Three Mechanisms for the Role Transition of Middle and Senior-level Managers" and "The Zhongfu Shenying adheres to the safety production philosophy of embedding safety in the heart and upholds the
Three Methods for the Role Transition of Middle and Senior-level Managers." These sessions aimed to strengthen safety production policy of "safety first prevention foremost and comprehensive management". With the goal of
the management layer's understanding of management concepts self-positioning and management methods. "preventing any work-related safety accidents causing minor injuries or worse throughout the year" the company
has formed a pervasive safety culture that ensures "everyone talks about safety in every matter".The Company insists on leading with technology and using management improvement as a lever relying on
the application of digital and intelligent production facilities and management systems combined with the
continuous optimization of safety management systems to steadily enhance the construction of inherent
safety capabilities. In 2023 the Company invested RMB 19.8151 million in safety production.Implementing technology to enhance intrinsic safety
Zhongfu Shenying is committed to creating an intrinsically safe enterprise continuously enhancing employees' skills
and improving the company's production conditions to ensure safety. It comprehensively carries out the work of
Management Enhancement Training for Cadres enhancing intrinsic safety in terms of equipment facilities personnel status management processes and working
environments. The company has fully established and put into use the "five-in-one" and dual-system digital safety
management platform. Guided by "automation intelligence and informatization" the Company accelerates the
modernization of management processes standardizes operational procedures promotes the improvement of
Strengthening the reserve of diverse talents safety management quality and efficiency effectively enhancing the level of intrinsic safety.Enhancing the reserve of young talents Shenying Dapu has invested over RMB ten million to implement a
comprehensive automation reform of major hazard sources equipped
The Company values the future and continuously reinforces the development of young talent injecting new vitality with high-standard independent safety instrumentation systems
into the Company's growth. The Company has established a targeted reserve cadre system for young talents to achieve dual protection and enhance safety. The company has
standardizing the selection and appointment process for young reserve cadres. The Company has organized a total optimized the fire protection network to improve emergency response
of six batches of reserve cadre training programs. By the end of 2023 young cadres born in the 1980s and 1990s capabilities and introduced a professional management team to
accounted for nearly 90% of the total number of cadres selected and appointed at all levels. strengthen the lifecycle management of equipment and facilities.Shenying Xi'ning continues to implement the work of enhancing intrinsic
Promoting talent project applications safety adhering to the principle of "people-oriented". the company
aims to enhance the level of intrinsic safety through adding enclosed
samplers to improve the sampling environment increasing static pipe
The Company places great emphasis on the diversified cultivation of talent and actively carries out the application mixers to improve material mixing and replacing manual intervention
of talent projects. This year a total of 14 talent application projects were organized with 117 successful applications. installing waste gas recovery devices and complete sets of insulation
At the same time the Company actively promotes the professional skills assessment of its employees. This year and ventilation equipment to improve the working environment and
under the guidance of Lianyungang City's Vocational Skills Appraisal Center the Company successfully became a installing sewage pipelines in the production area to reduce the pressure Shenying Xi’ning Automated
vocational skills grade recognition institution in Lianyungang City helping employees to expand their professional on environmental protection emissions. Production Line
skills and assisting them in embarking on a path of high-quality career development.
59 602023 Environmental Social and Governance Report
Case ｜ prioritizing technology with the establishment of a visual safety management platform Zhongfu Shenying health and safety production targets
This year the Company has established an intelligent safety production management information platform The number of work- Occupational Diseases: Fire accidents of
advancing the intelligent control of safety risks and promoting the deep integration of the Company's dual
prevention mechanism with its daily management system. The safety production management information related safety accidents 0 general level or above
platform is equipped with functions such as dynamic monitoring of safety risk control tracking and resulting in minor injuries
supervision of hidden danger investigation and rectification and automatic early warning for abnormal 0
states. These features effectively enhance the efficiency of safety risk identification. Additionally the platform or worse is 0
includes a multifunctional information management system encompassing electronic work permits training
management contractor management and legal and regulatory identification solidly advancing the efficient
operation of safety management.Rectification Rate of Hazards Major hazards are Safety production
accident rate does not
no less than 95%。 100% rectifiedexceed 0.05%
Shenying Dapu Intelligent Safety Production Management Information Platform
Strengthening the safety production management system
The Company strictly adheres to laws and regulations such as the "Work Safety Law of the People's Republic of Consolidating safety production risk management
China" and the Law of the People's Republic of China on Prevention and Control of Occupational Diseases" and has
formulated management methods such as the "Safety Production Management Manual" and the "Special Operations The Company emphasizes the management of
Safety Management Measures." These documents clarify the health and safety management processes at all levels production safety from the source proactive
providing employees with a comprehensive occupational health and safety system. prevention and regularly conducts health and safety
risk management reviews. Adhering to the principle of
The Company emphasizes collaborative efforts and the top-down implementation of safety management "continuous improvement and excellent operation"
establishing a health and safety management mechanism with the Company headquarters as the main body and the Company establishes and implements a "three
subsidiary companies fulfilling their primary responsibilities. A Chief Safety Officer is appointed to oversee the lists and one linkage4" working mechanism. This year
Company's health and safety affairs emphasizing the safety management principles of "horizontal to the edge the Company has focused on strengthening the safety
vertical to the bottom" and "one post one responsibility" and focusing tightly on safety management tasks. By management of outsourced personnel enhancing
the end of 2023 all the Company's production bases had obtained the ISO 45001 Occupational Health and Safety the signing of safety management agreements with
Management System Certification. contracting units and comprehensively carrying out
safety education for personnel entering the factory.Safety Production Management Targets All long-term cooperative contractors are included
This year to effectively implement the safety production responsibility system the Company has established 100% within the scope of the Company's safety
a goal-oriented working mechanism completing the signing of safety production target responsibility letters management system.and commitment letters at all levels and positions. This ensures that "every individual has targets and there is
assessment at every level for implementation." In 2023 all operational units of the Company have achieved the set 4“Three Lists and One Linkage”: refers to the implementation of the risk list control list and responsibility list and with safety risk
safety production management objectives. management linked to employee performance assessment.
61 622023 Environmental Social and Governance Report
Conducting solid safety hazard identification Fully implementing accidents emergency drills
The Company continuously deepens the principle of safety risk management that involves "full personnel To effectively prevent safety emergency accidents and lay a solid foundation for handling such incidents the
participation full process control and full direction coverage" and has formulated the "Zhongfu Shenying Company has formulated the "Production Safety Accident Emergency Plan" and established a robust emergency
Digital Application Improvement Implementation Plan for the Dual Prevention Mechanism." It implements a dual mechanism characterized by "unified command tiered management clear responsibilities resource sharing and
prevention system that includes a "risk grading control system" and "hazard identification and rectification." rapid response." The Emergency Management Office is responsible for overall coordination and scheduling while
the emergency command organization manages the specific handling of sudden accidents.The Company adopts a multi-department collaboration mechanism to carry out safety hazard identification and
engages external experts to enhance its capability in this area. At the same time the Company requires personnel at
all positions to fully understand the risk points of their respective positions conduct routine inspections according to In 2023 the Company actively carried out various types of emergency drills at different levels
plans and ensure comprehensive coverage of professional content and points in hazard identification. In 2023 the
including:
Company organized nearly 60 special safety checks identified over 3000 hazards supplemented and improved the
identification of 5400 risk factors and completed more than 70 safety enhancement and transformation projects. * 2 comprehensive emergency drills at the factory level with105 participants.* 7 specialized emergency drills at the factory level with totalling 331 participants.* A total of 102 specialized emergency drills with 1323 participants.Safety Production Risk Hazards Inspection in Shenying Dapu
Case ｜ leading by example shenying Xi’ning conducts systematic safety hazard inspection
Shenying Xi’ning conducts a comprehensive risk inspection annually based on the state of safety production.Combining engineering technology training and education emergency response personal protection and
safety management the Company implements a graded control and management of risks. It formulates
hazard inspection and rectification plans at the corporate factory workshop and team levels and carries out
inspections and patrols as required. In addition Shenying Xi’ning signs a safety guidance agreement with the
China Chemical Safety Association inviting external experts and lecturers to conduct on-site inspection and
guidance work.
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Core safety drill performance2023 Environmental Social and Governance Report
Deepening safety awareness training and communication
The Company based on systems such as the "Training Management System" and the "Safety Production
Manual" relies on digital systems to orderly carry out various types and forms of safety awareness training. The
content covers multiple levels of safety training including new employee orientation factory-level training
workshop and team-level training as well as internal training for safety management personnel. In 2023 safety
training reached 54379 times.Shenying Dapu
Annual Comprehensive Emergency Rescue Drill
Conducted a total of 1087 safety education and training sessions throughout the year with
18210 participants achieving a 100% coverage rate. The content included multi-level
safety training such as new employee orientation factory-level training workshop and team-level
training and internal training for safety management personnel.Shenying Xi'ning
Organized 1 9 6 4 safety education and training throughout the year with a total of
31169 participants achieving a 100% coverage rate.. The Company also utilized "Pei
Xun Bao" (Company training application) to publish online training materials enriching the training
pathways.Comprehensive Emergency Response Drill
65 662023 Environmental Social and Governance Report
Case ｜ Diverse methods and intelligent platforms support efficient safety awareness communication Effectively safeguarding employee rights
This year the Company established a digital "Zhongfu Shenying Safety Production Training System" enriching
the training models and enhancing training efficiency. The platform upgraded the safety process training for and interests
various positions from text and images to a three-dimensional simulation format. Relying on the intelligent
platform an independent three-dimensional safety production training system was built utilizing virtual reality Zhongfu Shenying adheres to the people-oriented core development philosophy creating a fair just and diversified
technology. Based on safety production information the factory area was modeled rendered and interactively superior working environment for its employees. The Company has established a robust mechanism for protecting
produced in a 1:1 three-dimensional format to conduct safety training through human-machine interaction. employee rights and interests ensuring efficient and unobstructed communication channels with employees and
The use of this platform further enriched the modes of employee safety training encouraged employees to building a pragmatic team of talents laying a solid foundation of human resources for the Company's long-term
diligently learn the safety operation specifications and precautions of production raised employee awareness stable development.of safety in production and reinforced the production philosophy of "safety first."
Zhongfu Shenying strictly follows laws and regulations such as the "Labor Law of the People's Republic of China"
and the "Labor Contract Law of the People's Republic of China" and has established a comprehensive personnel
management system. This year the Company revised internal systems such as the "Employee Handbook of
Zhongfu Shenying Carbon Fiber Co. Ltd." (hereinafter referred to as the "Employee Handbook") detailing measures
for managing employee rights and interests. It emphasizes the elimination of all forms of discrimination based
on gender ethnicity religious beliefs age etc. during processes such as employee recruitment promotion
development welfare distribution and termination of labor contracts ensuring the protection of employees' legal
rights and interests.Strict regulation of employment
The Company strictly prohibits the recruitment of child labor and forced labor. In accordance with laws and
regulations such as the "Law of the People's Republic of China on the Protection of Minors" and the " Provisions on
Prohibition of Child Labour" the Company explicitly states in its Employee Handbook that child labor is not to be
employed. At the same time the Company requires new employees to submit valid documents including identity
information before starting work to prevent the occurrence of child labor from the source. The Company signs
labor contracts with workers based on the principles of equality and voluntariness ensuring that all employees are
employed voluntarily. Additionally the Company strictly supervises third-party employment and any found illegal
employment by third parties will be severely punished to eliminate all instances of child labor and forced labor. This
year the Company has not had any cases of using child labor or forced labor.Fair compensation and performance
The Company has established the "Zhongfu Shenying Carbon Fiber Co. Ltd. Compensation Plan" establishing a job
level system and emphasizing the application of a compensation system combined with performance assessment
results standardizing the management of compensation and performance assessment. This year the Company
formulated the "Executive Compensation Management Measures" "Middle-level Management Performance Appraisal
and Compensation Management Measures" and "Total Wage Management Measures" improving the incentive and
restraint system for management personnel detailing the wage management mechanism and effectively enhancing
the operational efficiency of all employees.Zhongfu Shenying safety production training system
67 682023 Environmental Social and Governance Report
Sustainable development management performance linked to management assessment Well communication and opinion exchange
The Company signed the "2023 Annual Operating Performance Responsibility Letter for the Management and The company fully respects the employees' right to know right to participate right to express and right to supervise
General Manager" with the General Manager incorporating sustainable development-related indicators such as and has established a democratic management system with the staff congress as the basic form. During the staff
technological innovation carbon reduction and emission reduction and safety and environmental protection into congress the company widely collects staff proposals learns about employees' reasonable suggestions promptly
the General Manager's performance assessment system promoting the Company's sustainable development from proposes improvement measures and oversees the effectiveness of these improvements. At the same time the
top to bottom. company regularly carries out satisfaction surveys covering all employees collects and understands their voices
through questionnaires interviews and other methods and strives to normalize employee communication.Transparent promotion channels Case ｜ listening with care the eighth session of the first workers' representative congress
successfully held
The Company has formulated and continuously optimized regulations such as the "Employee Skill Level Evaluation The company fully respects the employees' right to know right to participate right to express and right
Plan" "Technical and R&D Position Promotion and Transfer Standards" and "Reserve Cadre Selection and to supervise and has established a democratic management system with the staff congress as the basic
Appointment Methods" continuously improving the internal job level management system and clarifying the form. During the staff congress the company widely collects staff proposals learns about employees'
conditions for promotion demotion and exit for personnel at each level. To ensure the fairness justice and reasonable suggestions promptly proposes improvement measures and oversees the effectiveness of these
openness of employee promotions the Company adopts a competitive employment mechanism publicly releasing improvements. At the same time the company regularly carries out satisfaction surveys covering all employees
vacancy information and all eligible employees can apply. If any unfair incidents occur employees can report to the collects and understands their voices through questionnaires interviews and other methods and strives to
relevant Company departments to ensure that their rights and interests are legally and reasonably protected. normalize employee communication.Promoting diversity and equality
The Company continues to create a healthy workplace environment that is diverse and equal improving equal
employment policies and systems and ensuring fairness and justice in recruitment employment promotion and
compensation within the Company. The Company insists on empowering female talent and improving the policy
support system for female talent. This year female employees accounted for over 40% of the workforce and female
employees in management positions reached nearly 30%. In 2023 one of the Company's employees was invited to
attend the 13th National Women's Congress of China setting an exemplary standard for female employees.
2022 Annual Summary and Commendation Conference and the Eighth Session of the First
Workers' Representative Congress
69 702023 Environmental Social and Governance Report
Wholeheartedly implementing employee Focusing on the care if female employees
care The Company places emphasis on enhancing the welfare benefits for female employees continuously conducting
team-building activities for them holding female employee symposiums and fully listening to their opinions and
Zhongfu Shenying Upholds the employee-oriented value taking it as its responsibility to enhance the sense of suggestions. At the same time the Company purchases top-tier insurance and maternity insurance for female
belonging among employees and to build their cohesion achieving collaborative development between employees employees sets up nursing rooms and increases specialized health check-ups for female employees continuously
and the Company. paying attention to their physical and mental health.Case ｜ cultural promotion conducting "March 8th" Women's Day commemoration activities and
* The Company organizes annual welfare health check-ups for all employees helping them to fully
recognition meetings
understand their physical condition.* Provides critical illness insurance and employee mutual aid insurance with close to 70% of employees On March 8 2023 the Company's general manager extended sincere holiday greetings to all female employees
insured this year offering comprehensive and effective protection for employees. at the recognition symposium affirming their contributions to the high-quality development of the Company
* E stablished a special consolation mechanism for events such as marriage bereavement childbirth and presented awards to outstanding female employees in research management and production frontlines.hospitalization and retirement with 3355 consolations provided throughout the year totalling an In the afternoon nearly 200 female employees from Shenying Dapu took a bus to the Resistance against
investment of RMB 1.39 million. Japanese Aggression Mountain Martyrs' Cemetery in Ganyu District to participate in the "Pursuing Red
Memories and Showcasing the Grace of Women" thematic education activity; Shenying Xi’ning organized
nearly 100 female employees to visit a patriotic education base enriching their daily work and life.Case ｜ combining work and leisure the successful organization of the "striving for excellence
surpassing ourselves" second workers' sports meeting
The Company encourages employees to maintain physical and mental health and is fully committed to creating
a vibrant and positive working atmosphere for them. It actively provides employees with a rich platform for
cultural and sports activities. This year the Company organized the second Workers' Sports Meeting with over
1000 participants helping employees to relax and enhance their physical fitness amidst the pressures of work.
"March 8th" Women's Day activities
Other employee activities
"Striving for Excellence Surpassing Ourselves" Second Workers' Sports Meeting "Youth is Now Striving for the Future" May 4th Youth Day Assistance and condolences for workers in difficulty
walking event
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05 Quality Penetrating High-End Markets
Strengthening quality capacity construction
Keeping pursuing technology innovation
Facilitating smart development
Strengthening responsible marketing
Facilitating joint construction of the industry
Zhongfu Shenying forges ahead with determination
bravely shoulders the mission of the era of self-
reliance and strength in science and technology
strives to improve the quality of products
and services continues to strengthen quality
construction insists on independent research
and development optimization of the innovation
management system and creation of a core team to
tackle key problems upholds an open and win-win
attitude and drives the high-quality development
of the industry with actions thus giving the new
material industry wings for soaring to the skies.Responding to material issues
Pursuing product quality
Innovative research and development
Providing quality service
73 742023 Environmental Social and Governance Report
Strengthening quality capacity construction The Company has organized online knowledge competitions 3211 person-times for all employees of all
branches and subsidiaries aiming to create a working atmosphere of "everyone has quality awareness";
Testing real strength it has also organized the selection of quality craftsmen and commended 16 employees who had made Zhongfu Shenying regards product quality assurance and product quality improvement as an important core for through quality outstanding contributions in their positions with high professional level and strong innovation ability in
the Company's steady development. The Company always adheres to the quality concept of "zero defect" takes competition purpose of erecting benchmarks and carrying forward the spirit of craftsmanship."systematic quality management and quality system management" as the central idea and an excellent performance
management mode as the core to continuously explore and optimize the quality management system with the
characteristics of Zhongfu Shenying. During the current year all of the Company's production facilities have been The Company has established a total quality management platform carried out the activity of
certified to the ISO 9001 quality management system. Looking for "Solicitation for Rationalization Proposals" summarized and exchanged advanced experience
breakthroughs and successful practices in quality improvement of each department and promoted the in-depth
through quality implementation of the Company's overall quality management.Firming quality control capability improvement
The Company diagnoses the operation of the quality management system on a regular basis and constantly improves
the full-process quality audit mechanism. The Company conducts routine quality inspections every week publishes The Company has organized 143 special training sessions for quality management personnel process
weekly reports on quality inspections and timely communicates with relevant departments to develop solutions to these Promoting growth technicians and front-line workshop employees in forms of systematic knowledge case analysis job
problems and monitors the effectiveness of problem solving to achieve closed-loop quality managemen. During this through quality skills and so on which has further enhanced the quality awareness of all staff.year the Company set up 12 quality improvement (QC) groups adopted 31 rationalization suggestions built a new Quality training
Accountability and Incentive System and implemented the responsibility for quality management at all levels.Guided by management improvement the Company has organized internal audits cross audits and
supplier audits to systematically inspect the operation quality of each process of product realization and
Seeking improvement conducted systematic and separate inspections and evaluations of the quality system to consolidate the
through quality audit foundation of quality management and escort the product quality.The Company has carried out quality-centered essay competitions and micro-video solicitation activities
practiced the quality culture of "building dreams with original aspiration and pursuing excellence
Creating atmosphere with craftsmanship spirit" on the basis of all staff participation and conveyed the quality concept of
through quality culture "innovation leads the development and quality creates brilliance".Strengthening quality testing capability
During the current year the Company has continued to promote the construction of laboratory CNAS system added the
testing items of carbon fiber and carbon fiber composite materials and improved the existing testing capacity to better
meet the testing needs and provide solid support for product quality assurance. Meanwhile the Company has innovated
and developed diversified quality testing methods to fully enhance the quality testing efficiency and capacity.Enhancing quality leadership
Enhancing quality management capability Giving full play to its role of industry "leader" the Company has been sparing no effort to promote the high-quality
development in the industry and striving to be a designer and leader of quality in the carbon fiber industry.The Company has continued to enhance the quality awareness of all employees. The Company has thoroughly
implemented the quality improvement platform encouraged all employees to spontaneously conduct quality Quality Honor
improvement activities and laid focus on product quality improvement. During the current year the Company has
held the "Quality Month" activity themed on "Promoting Total-Staff Involvement in Quality Management and High- * Being approved as a standard innovation base of carbon fiber technology in Jiangsu Province;
Quality Development of Shenying" which centers on five modules namely testing real strength through quality * B eing included in the list of top 50 advanced quality management methods in the 2023 National "Quality Month"
competition looking for breakthroughs through quality improvement promoting growth through quality training in Jiangsu Zhejiang Anhui Jiangxi and Shanghai with the case study on the Whole-lifecycle Smart Quality
seeking improvement through quality audit and creating atmosphere through quality culture to enhance the quality Management Pattern Themed "Exploring the 'Carbon' World Consolidating the Foundation by Quality Control" and
management awareness and ability of all staff in an all-round way. the list of "Quality Benchmarks" in Jiangsu Province in 2023.
75 762023 Environmental Social and Governance Report
Quality Honor During the current year the Company has continuously enhanced its R&D strength invested RMB
* C ertificate of Honor for Top 50 Advanced Quality Management Methods in the 2023
National "Quality Month" in Jiangsu Zhejiang Anhui Jiangxi and Shanghai 218million in R&D with a year-on-year increase of 41.16% and the number of technicians is up
20% year-on-year from 2022.
Keeping pursuing technology innovation Zhongfu Shenying full-process R&D platformR&D platform
Zhongfu Shenying insists on promoting technological development through innovation promoting high-end Carbon Fiber Fundamental
application of products and pursuing parallel development of technological height and breadth. Based on the first- R&D
generation wet-spinning technology the company has successfully overcome the key technology of dry-jet wet-
spinning carbon fiber through technological breakthroughs and established the second-generation technology of Pilot test
dry-jet wet-spinning carbon fiber centered on thousands ton level of T700 and T800. With the gradual upgrading
of industrial technology the company has constructed "Four Core Technology Systems" and established the third-
generation industrialization technology of ten thousand ton level carbon fiber with independent intellectual Applied
aerospace
property rights. In addition the Company has continued to develop a structured management model for the research
product development process consolidate the strength of scientific and technological innovation and promote the
high-quality development of the industry with an open and equal scientific research culture. Industrialization Validation
high-capacity polymerization high-strength/medium-modulus
and homogenization raw liquid carbon fiber precursor dry-jet wet- In 2023 the Company successfully made the following progress:
preparation technology "Four Core" spinning key technology * T he world's first dry-jet wet spinning T700 class 48K tow was successfully developed
Technology realizing 48K tow strength of over 4900MPa;
Large-capacity homogeneous high- System 10000-ton full-process high- * T1100 class high-performance carbon fiber achieving strength of 7400MPa or more;
efficiency oxygen carbonization performance carbon fiber * Completed PCD pre-approval through COMAC T800 class prepreg.preparation technology independent production technology
Honor awards for technological innovation
Zhongfu Shenying core technology system By the end of 2023 the Company has made significant progress in a number of
scientific research fields:
* Being awarded the Branch Center of National Enterprise Technology Center
and other honors;
The Company has earnestly implemented innovation management systems including the Work Program on
* H aving won the first prize for scientific and technological progress in Qinghai
Further Improving the Company's Capability of Scientific and Technological Innovation and further improved the Certificate of the first
Province;
responsibilities of the key links of work such as the establishment implementation funding acceptance and result prize for scientific and
* B eing awarded the title of Technology-based Enterprise by China National
protection of Scientific Research Projects and vigorously promoted the construction of a full-process R&D platform. technological progress in
Textile and Apparel Council. Qinghai Province
77 782023 Environmental Social and Governance Report
Deepening systematic innovation management Facilitating smart development
The Company has continued to establish and improve its R&D and innovation management mechanism by relying on Zhongfu Shenying has thoroughly implemented the informatization concept of "driving business with data and
a matrix trans-department collaborative operation system and taking intelligent operation and integrated business improving efficiency with intelligence" focused on strengthening the strategic development and security assurance of
management as the core. The Company has issued the No.1 document of Zhongfu Shenying for two consecutive informatization and actively deployed the digitization and intelligence of all business processes. During the current year
years to fully deploy its R&D and innovation work and has formed a relatively perfect R&D management system. the Company has continued to strengthen the system of "one network" and "one cloud" to promote the strategic layout
of informatization and realize the full operation of the operation systems of Shenying Shanghai Shenying Lianyungang
and Shenying Dapu and effectively implement the full operation of the customer relationship management (CRM) system.Promoting industrial innovation
The Company has been committed to the improvement of intellectual property management system formulated “One network” “One cloud”
the Work Program on Constructing National Intellectual Property Advantageous Enterprises and led the industry Constructing "One Network" to support efficient Applying "One Cloud" to enable resource sharing
to develop together. In order to ensure the successful and efficient transformation of R&D the Company has set up decision making – The Company has built a unified – The Company has employed advanced private
an intellectual property management team to be responsible for developing the Company's intellectual property information management platform to integrate cloud computing technology to build a highly
strategic planning making decisions on major intellectual property matters and instructing intellectual property the data resources from various departments efficient data center which features powerful
work. This year the Company successfully completed the qualification assessment related to the title of "National strengthen inter-departmental communication and computing and storage capacity and convenient
Intellectual Property Advantageous Enterprise". collaboration and realize the standardization and cloud services and enables the production and
normalization of data management. By adopting R&D departments to quickly access the required
smart analysis tools the Company has achieved in- resources and ser vices thus continuously
depth mining of business data providing powerful improving work efficiency.During the year the Company has continued to enhance the overseas deployment of intellectual support for product decisions.property rights:
* A pplied for 3 PCT international patents;
* H aving won the Silver Award for Patents in Jiangsu Province issued by Jiangsu Provincial People's
Government for its patent "preparation method of high-viscosity spinning solution suitable for Case ｜Guided by smart technology: Visualized office system for improvement of decision-making efficiency
dry-jet wet spinning";
* H aving won the Patent Excellence Award of China National Textile and Apparel Council - Silver The Company has fully deployed OA ERP NCC and
Award for its patent "preparation method of low-ash polyacrylonitrile-based carbon fiber". other information systems at all levels as well as digital
signage to ensure efficient information integration
and data circulation between the headquarters and
various branches and subsidiaries. As an important
tool for data visualization intelligent signage can not
only provide rich data display modes but also conduct
212 47 in-depth data analysis through intelligent algorithms · By the end of 2023 the Company has obtained a total of patents including invention to obtain a picture of business insights thus providing
the management with suggested product decisions
patents and 164 utility model patents，1 appearance design and the number of newly with high reference value. Zhongfu Shenying Digital Business Signageaccepted patents for the year was 230 and 95 patents were authorized; 5: "One network" refers to the internal business network of the Company which aims to realize information sharing and collaborative work
among various business departments.
6
· In 2023 the Company has participated in the formulation of 6 national. : "One cloud" refers to the data center based on cloud computing technology which aims to improve data processing capacity and
storage security.
7980
Transformative performance of
key innovations2023 Environmental Social and Governance Report
Strengthening responsible marketing Facilitating joint construction of the industry
Zhongfu Shenying always regards customers as the core and takes the satisfaction of customer needs and the creation of As a leader in the carbon fiber industry Zhongfu Shenying has always aimed to lead the high-quality development
customer value as its highest pursuit to improve service quality. The Company focuses on building a systematic service of the carbon fiber industry and continued to promote the communication and exchange among scientific research
network with comprehensive coverage aiming to enhance the Company's brand marketing strength. During the current year institutions to effectively combine industry-university-research integration and accelerate the transformation of
the Company has continued to optimize the marketing mechanism and system establish a marketing center which consists scientific and technological achievements. We have actively cooperated with leading enterprises in the fields of
of several functional departments and is responsible for domestic and international sales after-sales services and market pressure vessels and carbon/carbon composite materials and signed strategic agreements with important customers
management and other marketing links to achieve full coverage of the scales process and scales areas of the sales model. to give full play to their respective advantages enhance the benefits of resources integration jointly promote the
rapid development of the carbon fiber industry and advance the practice of localization.Expanding the high-end market
During the year the Company continued to expand the use of carbon fiber high-end applications and clean energy
applications relying on high-quality products high-efficiency research and development and steadily expanding the
domestic and international markets to promote the realization of the Company's "high-end" strategic objectives.Setting up a carbon fiber photovoltaic application technology research group to further develop and verify
the feasibility of carbon fiber application at more levels.Accelerating the expansion of overseas pressure vessels wind power sports and other fields of application
continuing to visit important overseas customers and taking a solid step towards overseas.Actively responding to the latest needs in the field of electronics 3C clean energy vehicles etc.communicating in-depth with customers about the needs of the product and actively broadening the
carbon fiber application scenarios.Management of customer complaints
To fully standardize the customer complaint handling process the Company has formulated the Procedures for
Control of Delivery and Services which have clearly defined the responsibilities of each department upon receipt
of complaints The Company has set strict rules on the response time and processing time limit for each stage of
complaints. In case of any complaint concerning product quality service price and logistics a verbal or written
response should be given within 24 hours after receipt of such complaint. For other complaints a preliminary
response shall be given within 72 hours and a final response should be provided in the form of a report file within
one week to ensure a prompt response to customer feedback.Customer satisfaction survey
To effectively understand customers' feedback on the Company's products and services the Company has
formulated the Procedures for Control of Customer Satisfaction Measurement and conducted satisfaction survey for
all customers which covers product performance service quality delivery timeliness and other aspects. Based on
the results of the customer satisfaction survey the Company forms a satisfaction survey report formulates targeted
rectification programs and monitors the effectiveness of rectification to achieve closed-loop management of service
improvement. During the current year the Company has set and accomplished the management objective of having
an average score of no less than 95 in the satisfaction survey.
81 822023 Environmental Social and Governance Report
Promoting industry exchanges Case ｜School-enterprise cooperation to cultivate emerging technical talents for the industry
During the current year the Company carried out cooperation with Peking University organized a delegate of
The Company is committed to building a joint construction ecosystem for the industry strengthening communication with 6 postdoctoral and doctoral students from Peking University to visit the Company's production line and held
industry organizations and associations and actively participating in major industry exchange conferences and activities. symposium on the situation of the school and the Company talent training and talent demand. This activity
has not only promoted the connection between the Company and the institution of higher learning but also
enabled students to have a more intuitive and in-depth understanding of the industry realizing the sharing of
We have actively participated in industry seminars promoted industry exchange and been committed to high-quality school and enterprise resources and complementary advantages further laying a good foundation
common development and progress with industry partners. for win-win cooperation between the two sides.* G etting exhibited at the first China Composites Expo Shenzhen to vigorously promote the application of our
products in aerospace carbon/carbon composite materials sports and leisure and other fields;
* P articipating in the China Composites Expo with a whole series of products among which SYT45S-48K was
granted the "China Composites Expo - JEC Innovative Product" award.* P articipating in the JEC World Composites Show in France to provide "customized" product solutions for
global customers.Zhongfu Shenying at the JEC World Composites Certificate of the "China Composites Expo - JEC
Show in France Innovative Product" award
Strengthening university-enterprise cooperation
The Company focuses on cooperation with colleges and universities enhancement of industry-university-research
transformation promotion of joint development of schools and enterprises and cultivation of scientific research
talents in the industry aiming to realize the synergy of resource advantages. By the end of 2023 the Company has
signed cooperation agreements with Donghua University Wuhan University of Technology and other colleges and
universities to reserve a large number of production skill talents and technical talents for the Company.This year the Company has continued to invite teachers and students from Peking University Tsinghua University
Nanjing Tech University and other colleges and universities to visit the Company's exhibition halls and production
workshops facilitating them effectively understand the carbon fiber production process and have conducted in-
depth exchanges with teams aiming to attract more outstanding talents to join the carbon fiber industry and inject a
strong impetus for the long-term development of the industry.
83 842023 Environmental Social and Governance Report
Sustainable development
KPIs
Environmental KPIs
Social KPIs
85 862023 Environmental Social and Governance Report
ESG key performance indicators7
Environmental KPIs
Indicator Unit 2023 Indicator Unit 2023
Energy Waste disposal Industrialized ton 1010.30
treatment
Comprehensive energy consumption tce 180371.63
Landfill ton 1251.20
Comprehensive energy consumption per ton of carbon fiber tce/ton carbon 8.67
fiber Incineration power ton 492.36
generation
Total direct energy consumption8 tce 2589.08
Incineration without ton 1929.2
Total indirect energy consumption9 tce 177782.55 power generation
Include: Total purchased electricity consumption tce 61549.34 Resouce consumption
Consumption of non-renewable materials 10000 ton 4.35
Include: Total purchased heat consumption tce 116233.21
Materials consumption per ton of carbon fiber ton/ton carbon 2.09
Greenhouse Gas fiber
Total GHG emissions10 ton of CO e 650218 Total water discharge 10000 ton 173.642
11
GHG Emission per ton of carbon fiber ton of CO2e/ton 31.24
Total water withdrawal 10000 ton 313.71
carbon fiber Total water withdrawal per ton of carbon fiber ton/ton carbon 150.72
fiber
Include: Direct GHG emissions(Scope 1) ton of CO2e 4642
Recycled water consumption 10000 ton 10103.66
Include: Indirect GHG emissions(Scope 2) ton of CO2e 645576
Environmental protection investment
Waste Environmental protection expenditure12 10000 RMB 3770.72
Hazardous waste generated ton 1941.16
8 Direct energy consumption mainly covers natural gas. The result is calculated in accordance with the General Rules for Calculation of the
Hazardous waste generated per ton of carbon fiber ton/ton carbon 0.0933 Comprehensive Energy Consumption (GB/T2589-2020).fiber 9 I ndirect energy consumption covers purchased electricity and purchased heat. The result is calculated in accordance with the General
Rules for Calculation of the Comprehensive Energy Consumption (GB/T2589-2020).Non-hazardous waste generated ton 2741.90 10 The calculation of GHG-related emissions has referred to the Notice on the Key Work Related to the Management of Enterprise
Greenhouse Gas Emission Reporting in 2022 the General Guideline of the Greenhouse Gas Emissions Accounting and Reporting for
Non-hazardous waste generated per ton of carbon fiber ton/ton carbon 0.13 Industrial Enterprises (GB/T32150-2015) as well as other national and international standards.fiber 11 All water acquired by the company is from tap water that provided by the third-party company and there is no water acquired by high
water pressure regions.
12 Environmental protection expenditure includes the expenditures for environmental protection and ecological restoration.
7The coverage of the following KPIs is the same as that of the consolidated statements. In case of any discrepancies
between the total number and the sum of the data and ratios disclosed herein it is due to rounding.
87 882023 Environmental Social and Governance Report
Social KPIs Indicator Unit 2023
Employee training
Indicator Unit 2023
A verage training hours of employees hours 128.61
Employees
By gender Male hours 127.07
Total number of employees Person 3719
Female hours 130.73
By gender Male Person 2139
By position level Senior employees hours 38.89
Female Person 1580
Middle-level employees hours 128.62
By ethnicity Han employees Person 3414
General employees hours 128.85
Minority employees Person 305
By age Under 30 years old hours 128.08
By position level Senior employees Person 9
30-50 years old hours 130.63
Include：Female Person 2
Over 50 years old hours 88.82
Middle-level employees Person 70　
Number of environmental Number of environmental training Case 10
Include：Female Person 20 training sessions and sessions
participants
General employees Person 3640 Number of environmental training Person- 3078
participants time
Include：Female Person 1558
Employee's right
By age Under 30 years old Person 1455
Number of employees joining staff union Person 3719
30-50 years old Person 2169
Percentage of employees joining staff union % 100
Over 50 years old Person 95
Percentage of employees signing collective contracts % 100
Employees with STEM relative work13 Person 325
Percentage of employees represented through the staff and workers' % 100
Include：Female employees with STEM relative work Person 73 congress
Total number of newly recruited employees Person 1082 Safety and health
Include：Total number of internally recruited employees Person 143 Number of work-related fatalities Person 0
Total number of internally recruited employees % 13.22 Death rate per 1000 employees ‰ 0
Employee turnover rate14 % 14.52　 13 STEM stands for Science Technology Engineering and Mathematics.
14 Employee turnover rate = number of employees turned over throughout the year / number of employees at the end of the period.
89 902023 Environmental Social and Governance Report
Indicator Unit 2023 Indicator Unit 2023
Number of deaths of contractors due to work person 0 Supplier management
Number of lost workdays due to occupational injuries day 0 First tire supplier with training happened16 number 165
Lost time injury frequency rate (LTIFR) for employee day 0 Important first tier supplier with training happened17 number 17
Lost time injury frequency rate (LTIFR) for contractor day 0 Percentage of expenditure that trading with important first tier supplier % 27.59
to total expenditure with all suppliers
Expenditure for production safety 10000 1981.51
RMB Important supplier non-first tier supplier with training happened number 0
R&D Total number of important supplier in the year number 55
Number of intellectual Patents applied for during the year piece 230 Number of supplier that undertake desk and on-site assessment number 55　
property
where patents for inventions piece 123 Number of supplier that engaged the Company's capacity building number 8　
programs
Patents granted during the year piece 95
Ratio of important supplier to total suppliers that engaged the Company's % 30.9
where patents for inventions piece 17 capacity building programs
Cumulative valid patents piece 212 Public welfare
where patents for inventions piece 47 Investment to public welfare 10000 46.6
RMB
Cumulative software copyrights registered piece 3
Educational assistance Number of needy who accept the person- 17　
Responsible operation assistance time
Proportion of customers participating in satisfaction surveys % 100 Costs to needy who accept the assistance 10000 2
RMB
Average satisfied rate of customer15 % 95
Total number of assistance to University person 25
Number of cases of employees violating corporate Code of Conduct case 0 student
(Including corruption or bribery discrimination or harassment customer
privacy leaking conflicts of interest money laundering or insider trading) Total amount of scholarships distributed 10000 10
in the year RMB
Number of sign of integrity Signed Party Conduct and Integrity number 24
agreement Building Responsibility Agreements Welfare event Offering condolences to employees in person- 34
need time
Signed Integrity and Self-discipline number 205
Commitment Agreements Costs to offering condolences to 10000 4.67
employees in need RMB
15 Customer satisfaction refers to the score calculated through the results of the annual customer satisfaction survey.
16 一 First tier supplier is the supplier who take direct trading with the company.
17 Important supplier is the combination of category A and category B.
91 922023 Environmental Social and Governance Report
Perspective
Looking ahead Zhongfu Shenying will fully implement the concept of green and high-quality development
adhere to the strategic positioning of "high-end large-scale and green-based" combine the core idea of "taking
technological innovation as the core market demand as the guidance and quality upgrading as the goal" strengthen
the application of products in supporting the green development of the value chain strive to promote the process
of social green and low-carbon transformation continuously promote the high-quality development of the whole
society and build a world-class carbon fiber enterprise with global competitiveness. We will focus on achieving high-
level technological self-reliance in China's carbon fiber field contributing to the rapid development of the global
carbon fiber industry starting a new journey with concerted efforts and moving forward together to create a better
future.
93 942023 Environmental Social and Governance Report
Appendix Disclosure Chapter page number or other descriptions
Index table of indicators E2.3.1 Legal compliance for solid
waste disposal
E2.3.2 General industrial solid waste
Index of Reference of ESG Indicators System for ESG Reports of Listed Companies Controlled by management Safeguarding the harmony of natural
Prevention ecology；
Central Enterprises and control of Solid waste E2.3.3 General industrial solid waste
pollution disposal Sustainable development KPIs -
Environmental KPIs
E2.3.4 Hazardous waste management
E2.3.5 Hazardous waste disposal
Disclosure Chapter page number or other descriptions volume
Environmental
Primary Secondary Tertiary indicators
indicators indicators (to be filled) E3.1.1 Sources and types of
greenhouse gases
E1.1.1 Fresh water usage E3.1.2 Greenhouse gas emissions Technology Promoting Green Production management - Implementing green and low-carbon
E1.1.2 Circulating water consumption Innovation Driving Circular Economy - Promoting GHG emis- transformation；
the circular utilization of natural resources; sions E3.1.3 Scope I emissions
Water E1.1.3 Percentage of recycled water Sustainable development KPIs - Environmental
Sustainable development KPIs - Environmental E3.1.4 Scope II emissions KPIs
usage KPIs E3.1.6 Greenhouse gas emission
E1.1.4 Intensity of water consumption intensity
Climate
change
Resource con- E3.2.1 Greenhouse gas emission Technology Promoting Green Production -
sumption E1.3.1 Fossil energy consumption Emission intensity Responding to concerns on climate change；
E1.3.2 Non-fossil energy consumption reduction management E3.2.2 Greenhouse gas emission Sustainable development KPIs - Environmental
Energy Sustainable development KPIs - Environmental E1.3.3 Proportion of non-fossil energy KPIs reductions KPIs
use
E1.3.5 Energy intensity
Climate risk Technology Promoting Green Production
management E3.4.1 Climate risk management - Implementing green and low-carbon transformation
Packaging E1.4.2 Packaging material lightweight Technology Promoting Green Production -
materials reduction Safeguarding the harmony of natural ecology Low-carbon Sustainable Development Column - Sustainable
development Development Strategy；
goal setting E5.1.1 Low-carbon development goal-setting and strategic measures Technology Promoting Green Production E2.1.1 Wastewater discharge and strategic - Implementing green and low-carbon
compliance measures transformation
E2.1.2 Wastewater management and Safeguarding the harmony of natural ecology - Resource and
abatement measures Enhancing environmental management； environmental management
Wastewater E2.1.3 Wastewater discharge Sustainable development KPIs - Environmental systems and Safeguarding the harmony of natural ecology -
KPIs measures E5.2.1 Water use management Enhancing environmental management；
E2.1.4 Wastewater pollutant
Prevention emissions
Resource
management E5.2.2 Material Use Management
Technology Promoting Green Production
- Implementing green and low-carbon
and control of E2.1.5 Wastewater pollutant measures E5.2.3 Energy use and energy transformation；pollution discharge concentration conservation management Sustainable development KPIs - Environmental
KPIs
E2.2.1 Waste gas emission compliance
Safeguarding the harmony of natural ecology；
Waste gas E2.2.2 Emissions of waste gas pollutants Sustainable development KPIs - Environmental
KPIs
E2.2.3 Waste gas pollutant emission
95 962023 Environmental Social and Governance Report
Disclosure Chapter page number or other descriptions Disclosure Chapter page number or other descriptions
E5.4.1 Cleaner production S1.4.1 Employee incentive and
promotion policy
E5.4.2 Green technologies and
Green recycling Technology Promoting Green Production；
Talents Building Excellent Teams - Effectively
Employee S1.4.2 Employee education and safeguarding employee rights and interests；
actions and
E5.4.4 Green office and operations Management Fostering Sustainable Operations -
development training
measures Enhancing governance efficiency and training Talents Building Excellent Teams - All-out efforts S1.4.3 Employee career planning and to building a talented team
E5.4.5 Green procurement and green Employees’
supply chain management rights and job change supportResource and
environmental interestsE5.5.1 Environmental management Talents Building Excellent Teams - Effectively
management system certification safeguarding employee rights and interests；
systems and S1.5.1 Employee satisfaction survey
measures Green/low-carbon E5.5.2 Green low carbon enterprise Technology Promoting Green Production -
Employee
certification Safeguarding the harmony of natural ecology satisfaction
Talents Building Excellent Teams - All-out efforts
S1.5.3 Employee turnover
certifications to building a talented team；
E5.5.3 Certification of green and low Sustainable development KPIs - Social KPIs
carbon products and services
S2.1.1 Policies and measures
Green/
low-carbon E5.6.1 Emergency response plan for Safeguarding the harmony of natural ecology -
for standardised manufacturing Quality Penetrating High-End Markets -
environmental emergencies Enhancing environmental management Product management Strengthening quality capacity construction；certifications safety and
quality S2.1.2 Quality management Quality Penetrating High-End Markets -
Social S2.1.4 Negative events for products or Strengthening responsible marketing
services
Primary Secondary
Tertiary indicators (to be filled)
indicators indicators Customer S2.2.1 Customer satisfactionProduct
service and Quality Penetrating High-End Markets - and service S2.2.2 Customer complaints and
rights Strengthening responsible marketingS1.1.1 Corporate recruitment policy management responses
and implementation
Recruitment
and employ- S1.1.2 Employee structure Talents Building Excellent Teams - Effectively S2.3.1 R&D and innovation
ment safeguarding employee rights and interests management systems
S1.1.3 Avoidance of child or forced
labor Innovative S2.3.2 R&D investment Quality Penetrating High-End Markets - Keeping
development S2.3.3 Achievements in Innovation pursuing technology innovation
S1.2.1 Compensation philosophy and
S2.3.4 Protection of intellectual
policy property
S1.2.2 Working hours and rest and Talents Building Excellent Teams - Effectively
Employee re- vacation S3.1.1 Supplier selection and safeguarding employee rights and interests； management Enhancing corporate responsibility operations - muneration Supplier S1.2.3 Security of remuneration and Building a sustainable supply chain；and benefits Talents Building Excellent Teams - management S3.1.2 Number and distribution of
Employees’ benefits Wholeheartedly implementing employee care suppliers Sustainable development KPIs - Social KPIs
rights and
interests S1.2.4 Democratic management of Supply chain safety and S3.2.1 Policies and measures in
employees management supply chain management
Supply chain S3.2.2 Supply chain security Management Fostering Sustainable Operations -
S1.3.1 Employee occupational health management assurance and contingency plans Building a sustainable supply chain
and safety management S3.2.3 Significant risks and impacts
S1.3.2 Employee safety risk (supply chain)Talents Building Excellent Teams - Accelerating
prevention
Health and the enhancement of intrinsic safety；
safety and control Talents Building Excellent Teams -
S1.3.3 Responding to safety accidents Wholeheartedly implementing employee care
and workplace injuries
S1.3.4 Employee care and support
97 982023 Environmental Social and Governance Report
Disclosure Chapter page number or other descriptions Disclosure Chapter page number or other descriptions
S4.2.1 Policies and measures in local
Prosperity Investor
G3.1.1 Investor relations management Management Fostering Sustainable Operations
community building
with the Management Fostering Sustainable Operations - relation man-
strategy - Smoothing stakeholders’ communication
community S4.2.2 Contribution and impact on Promoting regional collaborative development Investor agement G3.1.2 Investor communication channels
local communities relation
management G3.2.1 Shareholders' Meeting
S4.3.1 Policies and measures to and (General Meeting)
Social wel- participate in social welfare activities Management Fostering Sustainable Operations - shareholders’ Contribution fare activities Promoting regional collaborative development equity
Sharehold- G3.2.2 Shareholder communication Management Fostering Sustainable Operations - ers’equity Promoting regional collaborative development
to society S4.3.2 Investment and performance
in social welfare activities G3.2.3 Shareholders' right to know
and participate in decisionmaking
Management Fostering Sustainable Operations -
Response S4.4.1 Industrial transformation Promoting regional collaborative development；
Information Management Fostering Sustainable Operations
disclosure G4.1.2 Non-Financial information - Smoothing stakeholders’ communication
to national S4.4.2 Rural revitalisationand regional Technology Promoting Green Production policy disclosure channels
strategies coordinated development - Implementing green and low-carbon Transparency
transformation in Information disclosure Quality of G4.2.1 Regular monitoring auditing
information and evaluation of all disclosed Management Fostering Sustainable Operations -
disclosure information compliance and risk Enhancing governance efficiencyGovernance management
Primary Secondary G5.1.1 Compliance operation system Management Fostering Sustainable Operations -
Tertiary indicators (to be filled)
indicators indicators Compliance G5.1.2 Status of compliance system
Promoting regional collaborative development
operation development
G5.1.3 Specific process of compliance Management Fostering Sustainable Operations -
G1.1.1 Governance strategy review Enhancing governance efficiency
formulation
Governance G1.1.2 Governance policy supervision
strategy and process Management Fostering Sustainable Operations -
process Enhancing governance efficiency
Compliance
G1.1.3 Approval and review process operation
Governance of governance policy and risk G5.2.1 Risk identification and early
strategy and managementG1.1.4 Party Building leads Risk warningorganisational management G5.2.2 Risk control and tracking Management Fostering Sustainable Operations - structure Promoting regional collaborative development
G5.2.3 Risk reporting and
management
Organi- G1.2.2 Organizational structure and
sational functions of the Board of Directors Management Fostering Sustainable Operations -
structure and the Board of Supervisors and the Promoting regional collaborative development
functions Management
Internal
G2.1.1 Internal audit Management Fostering Sustainable Operations -
control Promoting regional collaborative development
Standardised
governance G2.2.1 Regulations and norms of
Integrity integrity construction Management Fostering Sustainable Operations -
building G2.2.2 Effectiveness of integrity Promoting regional collaborative development
construction measures
99 1002023 Environmental Social and Governance Report
GRI index Table of contents GRI indicators system
3.1 Promoting the circular utilization of 301-103；302-4；303-103；303-
Table of contents GRI indicators system natural resources 1；303-2；305-103
Introduction 2-1；2-2；2-3；2-6 Ⅲ Innovation Driving 3.2 Empowering green and lightweight
Circular Economy development
Chairman statement 2-22
3.3 Constructing the product recycling
Brief introduction 2-6；203-103 system
About us
Corporate culture 4.1 All-out efforts to building a talented
team 404-103；404-2
Sustainable Development Strategy 2-22
4.2 Accelerating the enhancement of 2-25；402-104；403-1；403-2；
Sustainability Management Framework 2-14 intrinsic safety 403-3；403-4；403-5；403-6；403-7；403-8
Major Events on Sustainability in 2023 305-5；405-1 Ⅳ Talents Building
Excellent Teams 2-15；2-20；2-25；2-26；202-
Sustainable
Sustainability Performance Review in 4.3Effectively safeguarding employee 103；206-103；401-103；402-Development Column
2023 rights and interests 103；405-103；406-103；406-1；
407-103；408-103；409-103
Honors and Awards in Sustainability
4.4 Wholeheartedly implementing em-
Analysis and Evaluation of Sustainable ployee care
201-3；403-10
Development Materiality Issues 2-1；2-29
5.1 Strengthening quality capacity con-
2-9；2-10；2-11；2-12；2-13；2-18； struction
416-103；416-1；413-103
1.1 Enhancing governance efficiency 2-27
5.2 Keeping pursuing technology innova-
1.2 Continuing to deepen integrity 2-25；205-103；205-2；205-3； tion206-103 Ⅴ Quality Penetrating
High-End Markets 5.3 Facilitating smart development
Ⅰ Management Fostering 1.3 Smoothing stakeholders’ commu- 2-15；2-26；2-29
Sustainable Operations nication channels 5.4 Strengthening responsible marketing 417-103；417-1；417-2；417-3
1.4 Enhancing corporate responsibility 2-15；2-25；204-103；308-103；308-1；308-2；414-103；414-1； 5.5 Facilitating joint construction of the operations 414-2；418-103 industry
1.5 Promoting regional collaborative
development 2-15；203-2；203-3；413-103 6.1 Environmental KPIs
302-1；302-2；302-3；303-4；
303-5；305-1；305-2；305-4
Sustainable development
2.1 Implementing green and low-carbon KPIs
transformation 302-103；302-4；305-103；305-5 6.2 Social KPIs
2-7；2-8；401-1；401-2；403-9；
Ⅱ Technology Promoting 2.2 Responding to concerns on climate
Green Production change 201-2；302-4 Perspective
2.3 Safeguarding the harmony of natural 2-25；301-3；303-103；303-1；
ecology 303-2；305-7
101 1022023 Environmental Social and Governance Report
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