亨通光电:亨通光电2022年环境、社会及治理报告（英文版）

2022
Environmental Social and
Governance Report
Hengtong Optic-ElectricContents 01 02
Enhancing govern- Creating market-
About the Report 02 ance while putting leading quality
Message from the Chairman 04 responsibility first products
About Hengtong Optic-Electric 06
Corporate governance 18 R&D and innovation 26
Value Creation 10 ESG governance 19 Sustainable supply chain 29
Communication with stakeholders 20 Quality control 33
Risk control 22 Responsible marketing 35
Business ethics and anti-corruption 23 Customer services 36
Appendix 70
0304
Creating a green Cultivating high- 05
low-carbon future quality talents
on the principle Contributing to
of equality and community co-
diversity creation
Environmental management 40 Recruitment and retention 54 Highlighting responsibility 66
sense through participation in
Tackling climate change 41 Development and training 57
philanthropy
Energy management 44 Remuneration and benefits 60
Supporting sustainable 67
Water management 46 Communication and care 62 development according to
local conditions
Emission management 47 Health and safety 63
Advocating a green low- 68
Circular economy 50 carbon lifestyleHengtong Optic-Electric 2022 Environmental Social and Governance Report About the Report
About the Report
Overview Reporting Basis
This is the first Environmental Social and Gov- The Report is prepared mainly in accordance with Global Reporting Initiative (GRI) standards and
ernance Report (hereinafter referred to as the also the major concerns of ESG ratings released by Morgan Stanley Capital International (MSCI)."ESG Report") released by Jiangsu Hengtong
Optic-Electric Co. Ltd. (hereinafter collectively The contents of the Report are determined according to established procedures. The Report is
referred to as "Hengtong Optic-Electric" "our drafted on the basis of identifying and sorting important stakeholders and major ESG-related issues
company" "the Company" or "we"). Hengtong determining the boundaries of the Report collecting relevant materials and data preparing the
Optic-Electric is a listed subsidiary of Heng- Report according to relevant information and reviewing the information in the Report.tong Group Co. Ltd. (hereinafter referred to
as "Hengtong Group" or "the Group"). In the Reporting Scope and Boundaries
Report the Company's performance of duty The policies and data disclosed in the Report cover the Company and relevant subsidiaries with the
for major stakeholders such as shareholders same reporting scope as the Annual Financial Statement. Unless otherwise specified RMB is the
customers partners employees environments designated currency in the Report.and communities as well as environmental
social and governance results (hereinafter re-
ferred to as "ESG") are truthfully disclosed. Source of Information and Reliability Assurance
The data and cases disclosed in the Report are mainly sourced from the Company's statistical reports
Reporting Period and relevant documents which have been reviewed by relevant departments. The Board of Directors
affirms that the contents of this Report do not contain any false records or misleading statements and
The Report covers the work for the financial takes full responsibility for the authenticity accuracy and integrity of the contents thereof.year from January 1 2022 to December
31 2022 (the "reporting period" for short) We have followed an internal review process to give our stakeholders full confidence in the accuracy
but some contents thereof are extended as of the information reported. We will give serious consideration to adopting independent audit in the
appropriate to previous or subsequent years. future in accordance with the needs of Company's development and the overall environment.Confirmation and Approval
Reporting Cycle
The Report was approved by the Board of Directors on April 24 2023 following confirmation by the
The Report is an annual report. management.Language and Form of Release
About The Report is provided in both Chinese and English and an electronic version is made available for reference. In case of any inconsistency between the Chinese and English versions the Chinese version shall prevail. For details please browse the official website of Hengtong Optic-Electric: http://www.htgd.com.cn/.We value the opinions of stakeholders and welcome readers to contact us through the following
Report channels. Your feedback will help us further improve the Report and our sustainability performance. Email: htgd@htgd.com.cnTel.: +86 512 63430958
Address: 2288 Zhongshan North Road Wujiang District Suzhou City Jiangsu Province China
02 03Hengtong Optic-Electric 2022 Environmental Social and Governance Report Message from the Chairman
Message from the Chairman
2022 was a year of both opportunities and challenges for Hengtong initiatives such as process optimization and management and up-
Optic-Electric to further promote its policies of sustainable develop- grading of equipment and facilities among other measures.ment.In addition Hengtong Optic-Electric actively safeguards the rights
The key to Hengtong Optic-Electric's stable and sustainable develop- and interests of employees including their right to progress and de-
ment lies in a sound governance structure. Hengtong Optic-Electric velop.while continuously optimizing its governance structure on the prin-
ciples of independence transparency diversity professionalism and In accordance with its official pledge Hengtong Optic-Electric guar-
integrity has established the ESG Committee improved risk control antees the absence of discrimination and harassment in all areas of
capabilities and organized business ethics training programs in or- employee recruitment and management.der to create a clean and honest business environment. The Company prohibits the use of forced labor and child labor
In the midst of the global challenge of tackling climate change provides vulnerable groups with employment opportunities and
China is making every effort to achieve its carbon peak and carbon safeguards the rights and interests of all employees. All of these
neutrality goals. This drive is bringing unprecedented opportunities measures have been taken in order to create an equal diverse and
to enterprises offering them the possibility to create corporate value inclusive working environment. Meanwhile Hengtong Optic-Electric
and social value while pursuing growth. In the past year the offshore provides employees with smooth promotion channels and communi-
wind power (OWP) industry underwent a process of sustainable de- cation platforms with the aim of promoting the diversified develop-
velopment providing many opportunities for Hengtong Optic-Electric ment of talents.to develop new markets products and services. A journey of a thousand miles starts with a single step. The path to
Hengtong Optic-Electric adheres to the core strategy of making a sustainable development is long. In the future Hengtong Optic-Elec-
significant contribution to global energy transformation and digital tric will stay true to its original intentions and actively perform its
transformation with the ultimate purpose of accumulating the poten- duties showing a responsible attitude to shareholders the market in
tial of development. At present Hengtong Optic-Electric has formed general and other relevant stakeholders. At the same time Heng-
a full chain industrial development pattern spanning from product tong Optic-Electric will continue to engage in philanthropic charita-
development to delivery of solutions to operation and maintenance ble and community undertakings as the Company constantly seeks
services. By continuously increasing investment in innovative re- to forge ahead on the principles of openness cooperation co-con-
search and development and seeking out clean technology oppor- struction and sharing in order to advance sustainable development
tunities Hengtong Optic-Electric is capable of providing innovative both within industry and in society.and high-quality products and services in multiple fields such as Finally on behalf of the Board of Directors I hereby extend sincere
ultra-high voltage submarine cable transmission and wind power gratitude to all employees of Hengtong for their hard work and I
generation. This allows us to make ever more positive contributions would also like to express sincere thanks to our clients investors
to global sustainable development. partners regulators and general public for their trust help and sup-
Seizing on the opportunity of clean technology development Heng- port.tong Optic-Electric is focusing on energy conservation consumption
reduction and environmental management in all production and
operation processes. On behalf of the Board of Directors the ESG
Committee supervises and coordinates Hengtong Optic-Electric's
work in tackling climate change and conducting environmental and
energy management and has made every effort to improve Heng-
tong Optic-Electric's environmental performance through a series of
Cui Wei
Chairman
Hengtong Optic-Electric
04 05Hengtong Optic-Electric 2022 Environmental Social and Governance Report About Hengtong Optic-Electric
About Hengtong Optic-Electric Global business layout of Hengtong Optic-Electric
Hengtong Optic-Electric is committed to becoming a world-class provider of information and
energy interconnection solutions. With our National Enterprise Technology Center National Man-
ufacturing Innovation Center and other innovation platforms Hengtong Optic-Electric is commit-
ted to becoming the benchmark for industrial excellence in our field. Backboned by our strong
technical innovation capabilities and our best-in-class research and development in the fields of
communication electricity and new energy and with our intelligent manufacturing and green Germany
manufacturing projects our determination to achieve excellence in all areas is clear to see. All in
all Hengtong Optic-Electric is fully expecting to make a significant contribution to driving national
energy transformation and overall green development.In the context of global climate change with the continuous optimization of the optical communi- Spain
cation industry layout the steady grid construction in China and the rapid development of OWP
and other marine and new energy services Hengtong Optic-Electric in response to national
calls for "carbon peak and carbon neutrality" has further increased its strategic investment in the
core industries of communications and energy. Now Hengtong Optic-Electric has the capacity to
provide industry-leading products and solutions related to OWP marine communication optical
communication and smart grid and smart city solutions. Adhering to the business philosophy
of openness inclusiveness cooperation and win-win outcomes the Company is accelerating its
pace of constructing a truly international company. Portugal
With a total of 11 overseas industrial bases Hengtong Optic-Electric has continuously improved its Egypt China
global business layout market competitiveness and brand value and delivered products and ser-
vices to more than 100 countries and regions. Specifically Hengtong ranks among the top three
in the lists of "2022 World Top 10 Cable Manufacturers" "2022 World Top 10 Submarine Cable
Manufacturers" and "2022 World Top 10 Optical Fiber and Cable Manufacturers".India
Indonesia
Brazil
South Africa
Overseas industrial bases Countries and regions where our products and services are available
11100+
06 07Hengtong Optic-Electric 2022 Environmental Social and Governance Report About Hengtong Optic-Electric
Key achievements and honors
Environmental
performance
ESG Awards Awarded ISO 14001 Environmental Total water consumption of
Management System certification 250.435million kWh
covering all principal operations of green electricity purchased 2851777.00 cubic meters
Listed among China's First Industrial Total greenhouse gas emissions Total energy consumption Water consumption intensity
Carbon Peak "Leader" Enterprises (Hengtong Group) 339189.14 tonnes of CO2 equivalent 130269.75 tonnes of standard coal 6137.61 cubic meters/RMB 100 million
GHG emissions intensity Energy consumption intensity Helium recovery rate-reaching up to
Demonstration enterprises in 730.00 tonnes of CO2 equivalent/RMB 100 million 280.37tonnes of standard coal/RMB 100 million 70%
green design of industrial prod- National green supply chain
ucts (including two newly added National green management enterprises (including Social
in 2022) factories one newly added in 2022) performance
2 4 3 Employee turnover rate Per capita training hours Published 5 international standards and 359 domestic
National green products (including Provincial-level green factories 18.50 % 38.88 hours standards and approved for 1010 invention patents
one newly added in 2022) (including one newly added in 2022) 1994 utility model patents 51 appearance patents
7 4 Total training duration Number of work-related fatalities 197 PCT patents and 179 trademarks582539.04 hours 0
Collective contract Rate of screening new suppliers in Donated a total of 10.1448 million yuan
signing rate environmental and social performance
Global Human Settlements Green Energy Saving Technology (including a donation of 714900 yuan in kind and cash
Awards for Green Technology Innovation Award for the Chinese 100% 100% donations of 9.4299 million yuan)
(Product) Examples Communications Industry
Governance
performance
Established an Environmental Social and Governance (ESG) Committee
First Prize in the Science and Technology Highest SCI 3 (Supplier Composite Index)
Innovation Awards of the Chinese Society rating (Hengtong Optic-Electric) Trainees received business ethics and Coverage of business ethics and
for Optical Engineering awarded to anti-corruption training anti-corruption training
Jiangsu Hengtong Power Cable Co. Ltd.affiliated to Hengtong Optic-Electric 10776 71.96%
In May 2022 Hengtong won six major
China Telecom awards including the 2021
Supply Guarantee Contribution Award the
Emergency Relief Contribution Award the
Rural Revitalization Partner Award and the
A-level Product Supplier Award
08 09Hengtong Optic-Electric 2022 Environmental Social and Governance Report Value Creation
Value Creation Value created by Hengtong Optic-Electric through the
development of products and technologies
Always adhering to the concept of creating value for stakeholders Hengtong Optic-Electric is committed to maximizing value Constantly creating value for customers in the fields of communication
for all stakeholders while pursuing the highest quality development under the guidance of a win-win business philosophy. and energy Hengtong Optic-Electric provides industry-leading products
and solutions and fully leverages its advantages in terms of integrated
capacity of design R&D manufacturing assembly engineering sales
and services. Through our global industrial and marketing layout we
are committed to becoming a world-leading provider of information and
Value created by Hengtong Optic-Electric for different stakeholders energy interconnection solutions.In order to successfully achieve sustainable innovative development we need the support of investors partners employees Communication network service
communities and other stakeholders. At the same time we need to create value for them. Only in this way can we gain the
necessary dynamic momentum to keep moving forward. As a communication network company we are committed to enhancing
information interconnection. In terms of R&D of core technologies for next
generation communication industry applications we are focusing on cutting-
edge technologies and applications in the 5G communication and digital
communication fields but also continuously seeking to enhance the R&D and
integration of system solutions to meet the diverse needs of customers.In addition to the development of optical fiber technology we are constantly
enriching our products and services including transceivers and ODNs
supporting the construction of data centers and gigabit networks. Our ultra-
low-loss fiber laser fiber multimode fiber and other products strongly
Investors Partners Employees Communities support the construction of efficient 5G infrastructures. In addition we are
actively expanding the layout of smart water smart security IDC and smart
city solutions providing professional services to a wide range of diverse
clients.Hengtong Optic-Electric Hengtong Optic-Electric is Hengtong Optic-Electric Growth of Hengtong Op- We adopt a full-industry chain model that integrates "product-service-
remains steadfast in up- committed to becoming a has spared no effort to tic-Electric has driven the
holding integrity truthfully trustworthy global service create a community of development of surround- operation" in order to provide customers with more valuable products and
disclosing its operating provider of information shared future for both the ing communi t ies . Our services. We aim to jointly create a new era of the Internet of Things and
conditions and major in- and energy interconnec- Company and its employ- benevolent footprints of make greater contributions to enhancing information interconnection.cidents and steadfastly tion solutions. To this end ees where employees engagement are evident
safeguarding the rights we have always adhered enjoy a high-quality work- in a large number of phil-
and interests of share- to the following business ing environment and are anthropic undertakings all
holders and investors. The philosophies: an overriding provided with favorable around the world where
Company has further con- emphasis on quality a opportunities for maximiz- our charitable activities
solidated its industry lead- determination to provide ing their personal value are defined by a commit-
ing position and achieved customers with integrated while contributing to the ment to care for humanity
sus ta i ned and s t ab le advanced solutions based Company's development. to drive forward rural area Commercialization of new high-capacity optical fiber SDM transmission technology
growth by continuously on customized design and development and to pro-
improving the competitive- R&D-driven manufacturing vide educational support.ness of its products and a commitment to continu- Hengtong's commitment
services. At the same time ous quality improvement to the public good is driv- Network traffic will continue to increase rapidly following the meteoric rise of cloud computing and large-scale data centers.we have maintained our and to developing the en by a passion to com- As the main carrier of optical communication networks single mode fiber (SMF) is restricted by nonlinearities and bandwidth
focus on green develop- ent ire industr ia l chain prehensively push forward
ment to reduce the impact limitations of amplifiers which has already caused the communication capacity to approach the limit (100Tb/s). Multiplying according to the highest the harmonious develop-
of our business operations standards and require- ment of communities from the optical fiber transmission capacity multi-core fiber (MCF) can greatly improve the utilization rate of a single optical fiber
on the environment and ments. All the while we multiple perspectives. by increasing optical fiber cores and supporting C+L-band transmission which is a development trend for the next generation
to create optimized long- empower our partners in high-capacity optical fiber communication.term economic value for high-end manufacturing
investors. supply chains to further Hengtong Optic-Electric in conjunction with several universities and institutes is undertaking a key innovation project in the
promote industry develop-
ment. field of Space Division Multiplexing (SDM). Specifically through technical research on numerical modeling and simulation
few-mode multicore fiber fabrication technology fan-in and fan-out device fabrication technology and high-capacity optical
interconnection transmission systems we will make major technical achievements in high-capacity optical fiber transmission
software systems few-mode multicore fiber products and space-division/mode-division optical fiber devices thereby boosting
the commercialization of the new high-capacity optical fiber SDM transmission technology.
10 11Hengtong Optic-Electric 2022 Environmental Social and Governance Report Value Creation
Energy interconnection
As an energy interconnection company that relies on continuous research and innovation we have the capability to provide Dynamic submarine cable system for floating wind power (FWP)
solutions for the construction of smart grids OWP onshore wind power and photovoltaic power generation facilities across
the industrial chain as well as products and services related to high-voltage/ultra-high-voltage (UHV) power transmission and
special cable application. Meanwhile we will continue to focus on R&D in the field of new energy technologies including
floating OWP photovoltaic power generation systems and comprehensive energy application. FWP is an important part of deep-sea wind resources. As a
key part of FWP transmission the dynamic submarine cable
We aim to facilitate global clean energy development create greater value for sustainable development and provide a system is mainly used to connect static submarine cables
more friendly living environment. In addition to the investment and construction in energy interconnection we have applied between wind mills and those between wind mills and
our technological know-how to the fields of engineering construction rail transit and electrical equipment among others power collection outputs. To date Hengtong has successfully
demonstrating an ability to provide intelligent and efficient energy solutions for various industries. undertaken many projects in this domain around the world.Regarding this field which is full of opportunities and challenges we will continue to leverage our strengths to explore new China's first deep-sea FWP equipment "Fuyao" is also a
models of innovation and business together with our global partners as we seek to jointly boost the sustainable development demonstration project of deep-sea wind power. Equipped with
of the energy industry. a wind generator set it is currently the largest FWP equipment
in China which has a total weight (including the floating body
and the generator set) of more than 5000 tonnes and a
displacement of more than 15000 tonnes. Fuyao has filled
China's gap in the application of deep-sea FWP equipment in
Offshore oil field electricity substitution project waters with an average depth of over 65 meters becoming
another achievement for China in the field of deep-sea energy
development. As the only submarine cable supplier and
Hengtong Optic-Electric has undertaken a number of shore power projects through which onshore high-voltage electricity cable laying contractor for Fuyao Hengtong provided the first
is transformed and transmitted to offshore facilities through a shore power platform. We provide green power for various oil domestic high-voltage dynamic submarine cable used for sea
production and extraction platforms within the oilfield complex thereby greatly reducing electricity costs energy consumption depths of over 65 meters.and carbon dioxide emissions by changing the original electricity consumption mode. China’s deep-sea wind power demonstration project “Fuyao”
Cases of overseas application of dynamic cables
Wave energy driven dynamic cables for the CorPower project FWP dynamic cables for the X1 Wind project in Spain (an
in Portugal (an applied water depth of 75 meters) applied water depth of 90 meters)
12 13Hengtong Optic-Electric 2022 Environmental Social and Governance Report Value Creation
Empowerment for the Beijing 2022 Winter Olympics
OWP ultra-high voltage submarine cables and laying services The Beijing 2022 Winter Olympics showcased a wide range of wonderful sporting events to people all over the world. As one of
the main suppliers of the Games the Company took responsibility for the vital mission of ensuring stable electricity supply for
eight key venues of the Winter Olympics through delivery of relevant products and solutions to augment carefully planned core
The wind turbine generator with the world's largest unit capacity of 11MW for commercial purpose of the Jieyang systems. We are proud to say we contributed a significant amount of green and strong "momentum" for the Winter Olympics.Shenquan offshore wind power project II of State Power Investment Corporation Limited (SPIC) has been connected
to the grid for power generation.● Capital Indoor Stadium was built in 1968 and is China's first artificial indoor ice stadium. It played host to many major Chinese
UHV submarine cables sports events including the famous Sino-US "Ping-pong diplomacy" matches in the 70s and the Beijing 2022 Winter Olympics.Behind this continuous use of the Capital Indoor Stadium lie the wisdom and quality of Chinese products and solutions. Within
All submarine cables for this project are provided by Hengtong. only 40 days of being invited to submit a tender the Company successfully became the main supplier of electricity equipment and thanks to its sound designs and service solutions the Company successfully achieved all goals including supply of special
Specifically the supporting 220kV onshore cables provided by equipment. The electric transmission lines provided by the Company can be moved and dragged and can work normally at low
Hengtong are equipped with symmetrical temperature-sensing temperatures below 40 degrees Celsius while also meeting performance requirements for high flame retardancy.optical fibers and dedicated temperature-sensing safety warn-
ing devices. In addition the 66kV submarine cable provided by
Hengtong is equipped with a fireproof sealing module thereby
offering strong fire resistance. Also thanks to high levels of
water tightness air tightness explosion resistance and IP the
cable meets the strictest submarine environment requirements ● Genting Snow Park was specially built for freestyle skiing and snowboarding events Supplied clean electricity for
and has a service life of 30 years under all marine conditions. before the opening of the Beijing 2022 Winter Olympics and the Beijing 2022 Paralympic the first time in the Winter
Winter Games. Perfectly embodying the concept of "streamlining green and environmental" Olympics
the temporary buildings of the Park were all made of recyclable and renewable materials.All the products provided were green and safe. The Company successfully developed a
Submarine cable laying series of low-temperature and highly flame-retardant flexible products with prefabricated 100%
couplers which can be used for fast outdoor connection and can be freely combined
Hengtong Offshore Engineering Team was responsible for the for temporary energy supply regardless of length. The Company provided more than
laying of submarine cables for the Jieyang Shenquan offshore ten customized connection solutions for different venues and high-quality services for electricity supply for the Winter Olympics. In response to the call for holding a "Green
wind power project II. In spite of multiple difficulties such as Winter Olympics" we supplied 100% clean electricity for the first time.deep-water surges challenging construction timelines and fre-
quent typhoons the dedicated team successfully completed
the task thanks to careful planning and compliant construction.● The Zhangbei Renewable Energy Flexible DC Grid Test and Demonstration Project: Achieved green electricity
Making full use of the considerable wind power resources in the Zhangbei region with supply for the first time in
an annual average duration of 2400 hours we delivered green and clean energy to the the Winter Olympics
competition areas in Beijing Yanqing and Zhangjiakou achieving 100% green electricity
500kV UHV onshore cables supply for the first time in the history of the Olympics. To ensure efficient operation of
equipment units and transmission systems at Zhangbei Wind Farm the Company provided 100%
the necessary products and services including intelligent connectors for wind turbines
UHV products and supporting components. Relying on its digital and intelligent means
Located approximately 150 kilometers south of Tashkent (the capital of Uzbekistan) the 1500MW Gas-Fired Combined-Cycle Power the Company smoothly delivered the green electricity of Zhangbei Wind Farm to Beijing in
Plant project is an important livelihood project sponsored by the Uzbek government. Also it is a world-leading green environmental an energy-saving safe reliable and efficient manner.project for efficient energy conservation which is achieved by use of a gas turbine with the highest possible combustion tempera-
ture unit power and efficiency as well as the "zero discharge of wastewater" in its design. After being put into operation this project
can deliver over 36 million kWh electricity to the local power grid every day and will benefit millions of residents in Uzbekistan.●
In view of the high technical requirements for high-voltage Beijing-Zhangjiakou High-speed Railway: Traveling at speeds of 350 kilometers per hour the world's first intelligent high-speed railway the Beijing-Zhangjiakou High-speed Railway saw the operation of 40 pairs of trains and was used to transport
transmission and the considerable construction difficulties the athletes officials and ticket holders from around the world to the competition areas in Beijing Yanqing and Zhangjiakou every
Company provided high-quality 500kV UHV onshore cables day which was a vital element in ensuring the smooth staging of the Beijing 2022 Winter Olympics. The Company used smart
accessories professional technical services and comprehen- connection products and solutions for rail transit in the Hebei section and Beijing Changping section of the Beijing-Zhangjiakou
sive business and logistics services. The 500kV high-voltage High-speed Railway and provided services for energy transmission and intelligent warnings smart connection between signal
equipment and control devices and 5G signal coverage. In addition to meeting the original railway signal requirements our core
AC onshore cables are the most advanced in the world cur- communication and transmission products have been greatly improved in terms of impedance attenuation crosstalk and other
rently winning unanimous praise from customers. aspects through technological innovation. In various environments where strong electric field interference humidity and severe
cold were common they fully met the requirements for the very latest signal system equipment and with their strong anti-
interference capacity and fast transmission speed effectively improved overall system safety.
14 15Cultivating high-quality
Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
0Enha1ncing governance while
putting responsibility first
Corporate governance 18
ESG governance 19
Communication with stakeholders 20
Risk control 22
Business ethics and anti-corruption 23
16 17Cultivating high-quality
Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Corporate governance ESG governance
Hengtong Optic-Electric places great value on corporate governance and is committed to safeguarding the interests of all share- In order to strengthen the management of ESG matters and to better promote sus-
holders by maintaining and strengthening corporate governance conducting effective risk control and internal control and improving tainable development the Board of Directors is responsible for ESG risk control and
the transparency of the Board of Directors. On the basis of strictly complying with local laws and regulations and the management information disclosure and has made clear the overall policy of governance and
regulations of listed companies we are continuously seeking to improve our corporate governance structure in order to safeguard supervision underlying sustainable development at Hengtong Optic-Electric. During
the Company's development and shareholder rights and to actively respond to the concerns of stakeholders. the reporting period Hengtong Optic-Electric established the ESG Committee under
the Board of Directors. The ESG Committee is responsible to the Board of Directors
The shareholders' meeting the Board of Directors the Board of Supervisors and the Management of the Company all have their and reports directly to the Board of Directors. They shoulder the responsibility to
own respective powers and responsibilities but they maintain exemplary levels of professionalism and independence in business guide the Company's ESG strategy development and oversee the handling of ESG
personnel assets institutions finance and other areas. The Board of Directors consists of 12 directors including 4 independent affairs. In addition the ESG Working Group under the ESG Committee was estab-
directors each of whom has rich expertise and experience. In addition the Board of Directors consists of the Strategy and Devel- lished to coordinate the handling of daily ESG affairs. The ESG Working Group is
opment Committee the Audit Committee the Nomination Committee the Compensation and Assessment Committee and the ESG responsible to the ESG Committee and reports directly to it.Committee. Each committee has at least one independent director who has extensive experience and skills in areas like finance law
investment and risk control which ensures the independent transparent and effective operation of the Board of Directors. The duties of the ESG Committee include but are not limited to: identifying risks
opportunities and trends of sustainable development; setting and reviewing re-
sponsibilities vision goals strategies and policies of sustainable development;
ensuring the effective implementation of ESG policies approved by the Board of
Type Name Age Committees Industry Financial Risk Directors supervising the implementation of sustainable development strategies experts experts experts and integrating internal and external resources to carry out relevant work; mon-
itoring reviewing and evaluating ESG progress and performance according to
The Strategy and Development Committee internationally recognized industry indicators evaluating the performance of senior
Chairman Cui Wei 37 the Audit Committee the Nomination Committee the Compen- management according to related ESG indicators linking the Company's sustaina-
sation and Assessment Committee and the ESG Committee ble development with KPIs expected of senior management and gradually dealing
with and optimizing all aspects of ESG business. Through its design of multi-level
Director Qian Jianlin 50 The Nomination Committee the Strategy and Development incentives for employees the Company hopes to build a community of shared Committee futures where employees pursue a better life while contributing to the Company's
sustainable development.Director Bao Jicong 55 The Compensation and Assessment Committee the ESG Committee In the future the Company will further promote green development and establish
an ESG management system for sustainable development and a shared value
Director Yin Jicheng 50 The ESG Committee concept focusing on the major areas of low-carbon transformation sustainable
ecosystems technological research and innovation cultural and vision building
Director Li Ziwei 50 and risk control. We are committed to becoming an international group with
green sustainable and high-quality development and achieving harmonious de-
Director Sun Yixing 47 velopment and common progress between customers shareholders employees
society and nature.Director Tan Huiliang 41 The ESG Committee (Director)
Director Zhang Jianfeng 41 Audit Committee
Independent The Board of Directors
Director Chu Junhao 78 The Strategy and Development Committee
The Nomination Committee (Director)
Independent Cai Shaokuan 68 The Audit Committee the Compensation and Assessment Director Committee the Strategy and Development Committee and
the ESG Committee The ESG Committee
Independent The Audit Committee (Director)
Director Qiao Jiuhua 59 The Nomination Committee the Compensation and Assess-ment Committee the Strategy and Development Committee
The ESG Working Group
Independent Yang Junhui 51 The Compensation and Assessment Committee (Director)Director The Audit Committee the Nomination Committee
18 19Cultivating high-quality
Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Communication with stakeholders
Hengtong Optic-Electric places great value on the creation of social value. We are committed to establishing a harmonious Through effective and detailed communication with various stakeholders and comprehensive surveys Hengtong
and win-win development model based on the principles of transparency independence and responsibility. To this end we Optic-Electric has identified 16 important issues including three highly important issues: product quality and safety
have established and constantly sought to improve a mechanism for normalized communication and information exchange employee health and safety and data security and privacy protection. Based on this analysis Hengtong has drawn
with stakeholders actively responding to the concerns of stakeholders on major issues. The major stakeholders identified by up a matrix of major issues. The following issues will be disclosed herein to respond to the concerns of stakeholders.Hengtong Optic-Electric their main concerns and corresponding communication methods are as follows:
Stakeholders Main concerns Communication channels
v
●
● Employee health and safety Corporate Governance ● Business ethics Internal meeting Questionnaire survey● ●
● Product quality and safety ●
●
Employee care and benefits C areer development and
● Internal publications Collection of employees'
●
●
Data security and privacy pro- training of employees Employee interviews
opinions through internal
●
D iversity equity and inclu- and activities email platform call and ●
Employees tection siveness other methods Employee health and safety
Product quality and safety
● Product quality and safety
●
● Employee health and safety Supplier development and audit Data security and
●
Business ethics Conference of communication with suppliers ●
● Employee care and benefits privacy protection
● Data security and privacy protection Regular follow-up visits and evaluation of suppliers
●
Corporate Governance Questionnaire surveySuppliers ●
Corporate governance
Business ethics
● Product quality and safety ● Business ethics Career development and training of employees
●
● Employee health and safety ● D iversity equity and inclu- Client satisfaction survey
●
Career development and train- siveness Customer relation management platform●
●
ing of employees Supply chain management Customer hotline
Supply chain management Diversity equity and inclusiveness
●
Customers/consumers ● ● Employee care and benefits ● Corporate governance Media promotion
Exhaust gas management and emissions
Circular economy Energy management
● Energy management ● Product quality and safety Media interviews Water management●
● E xhaust gas management and ● D ata security and privacy
●
emissions protection Press release and announcement Waste management
●
Media ● Employee health and safety Supply chain management
Media promotion
●
Greenhouse gas emissions
● Product quality and safety ● Diversity equity and inclu- ● General meeting of shareholders
● Corporate governance siveness ● Activities of communication with investors
● Business ethics ● Employee health and safety ● Performance release and announcement
Investment institutions/
shareholders Community contribution and impact
●
● Energy management Product quality and safety
●
Waste management Data security and privacy ● ● Industry exchange and meeting
● Water management protection ● Supply chain management Industry exhibition and scientific research coop-●
● Employee care and benefits eration
●
Industry associations ● Employee health and safety
Business ethics
● Corporate governance
Importance to Hengtong Optic-Electric
● E xhaust gas management and
●
emissions Product quality and safety ● Field interviews and surveys
● Social issues Environmental issues Governance issues
● Greenhouse gas emissions Business ethics ●
●
Employee health and safety Corporate governance
Regular meetings
●
Governments/regulators
2021
Importance to external stakeholdersCultivating high-quality
Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Risk control Business ethics and anti-corruption
Hengtong Optic-Electric has formulated its Risk Control Policy in strict accordance with relevant laws and regulations such Hengtong Optic-Electric regards its mission to maintain a Electric regularly organizes special internal audits to learn
as the Supervision Law of the People's Republic of China and the Enterprise Internal Control Policy to enhance risk control clean and honest workplace and business environment with more about and guard against various unethical business
and internal control. Under the supervision of Hengtong Group Hengtong Optic-Electric has established a sound risk control the utmost seriousness. In accordance with relevant laws and conducts such as corruption bribery and fraud in order to
framework based on the COSO enterprise risk management framework. The Board of Directors and its Audit Committee are regulations the Company has formulated relevant rules and ensure the effective implementation of our business ethics
responsible for leading and arranging the overall work of risk management of the Company. regulations such as the Internal Audit Policy and the Work policies. Also we promptly investigate all problems discovered
Rules of the Audit Committee and clarified the requirements through audits and supervise the work of rectification and
for all directors in terms of business ethics. Specifically improvement to maintain the optimum environment for ethical
The Board of Directors the Board of Directors and the Audit Committee guide and business practice.supervise the work of business ethics and anti-corruption
Develop related risk management policies and guidelines while the Risk Management Committee and the Internal Audit In addition Hengtong Optic-Electric encourages its employees
Department are responsible for coordinating between various external stakeholders and the public to report any suspected
departments to eliminate bribery corruption fraud monopoly violations of business ethics and suspected corruption. In
money laundering and unfair competition among others. accordance with the Administrative Measures of Hengtong
Group for Disciplinary Supervision everyone is free to report
The Audit Committee Hengtong Optic-Electric regularly organizes lectures and any instances of code violations dereliction of duty or
training and also related examinations and it urges all unethical behavior on the part of any member of management
Review the policies developed by the Board of Directors listen to
reports from the Internal Audit Department and control overall risks employees (including part-time employees and contractors) or staff at Hengtong Optic-Electric without any prejudice
to learn and understand the Code of Business Conduct for to them personally and the reporting rules methods and
Employees of Hengtong Group. In addition Hengtong Optic- channels shall be made public to all employees.The Company firmly safeguards the safety and rights of whis- The Reporting channels of the
The Risk Management Committee The Internal Audit Department tleblowers by keeping confidential their personal information Internal Audit Department of
Identify assess and deal with risks according to Regularly audit risk management processes and procedures and providing corresponding rewards. We strictly investigate Hengtong Optic-Electric:
relevant policies approved by the Board of Directors and regularly report to the Audit Committee and deal with any violations of discipline derelictions of duty
and unethical behaviors and work together with employees to Email: htjubao@htgd.com.cn
create an environment that is clean and free from corruption.Framework of risk management During the reporting period no cases of corruption or bribery
occurred at Hengtong Optic-Electric. The anti-corruption train-
Taking this framework as its baseline Hengtong Optic-Electric has established a three-level risk prevention and control ing of the Board of Directors and employees is as follows: A lecture on integrity and self-discipline
mechanism to identify evaluate and deal with internal and external risks in many areas including but not limited to strategy given by a senior executive of Hengtong
market operations finance law and sustainable development. Number of Training Optic-Electric
trainees in Training
person times proportion
duration in
hours
In a lecture on integrity and self-discipline General Manager
Level-1 risk prevention Level-2 risk prevention Level-3 risk prevention The Board of Zhang Jianfeng of Hengtong Optic-Electric emphasized the im-
and control and control and control Directors 48 100% 48 portance of reinforcing awareness of integrity and honesty and
creating a good business environment. The need to establish the
concepts of integrity and diligence was stressed as integral to
Senior man-
Under the leadership of the Risk Under the leadership of the Audit The Board of Directors and 251 100% 502 improving the integrity of the risk prevention and control mecha-agement
Management Committee each Committee the Internal Audit shareholders' meeting regularly nism and to strengthening institutional control and assessment.functional department identifies Department regularly audits the evaluates the effectiveness of
and addresses daily operation risk management and control risk control measures to improve Hengtong Optic-Electric has consolidated its self-discipline fire-
risks in accordance with the situation of each department the Company's procedures of Mid-level
employees 567 100% 1134 walls and formulated the Ten Musts and Ten Prohibitions. To Company's risk management pol- assists and supervises the risk risk management internal control build a healthy ecosystem of work and entrepreneurship we
icies and relevant guidelines. Any management by each depart- and governance
risks that cannot be addressed ment and promptly reports risk have taken many measures including requiring key staff mem-
will be reported to senior man- loopholes (if any) to the Audit Ordinary bers to sign integrity and self-discipline agreements every year. In 9916 70% 19832
agement and the Board of Direc- Committee employees addition we require the signing of agreements stipulating good
tors for appropriate action. faith cooperation and honest co-building across the industrial and
supply chains in order to optimize the business environment for
private enterprises and create a clean business community.
22 23Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green
Cultivating high-quality Contributing to
putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
0Crea2ting market-leading
quality products
R&D and innovation 26
Sustainable supply chain 29
Quality control 33
Responsible marketing 35
Customer services 36
Hengtong Optic-Electric is committed to providing
customers with thoughtful services and market-leading
products. To this end Hengtong Optic-Electric continuously
improves product safety and quality ensures sustainable
supply creates a green supply chain and steps up R&D
and innovation. As a result we have established a stable
competitive advantage and made significant contributions
to national energy transformation and green development.
24 25Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green
Cultivating high-quality Contributing to
putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
R&D and innovation R&D achievements
Hengtong Optic-Electric regards R&D and innovation as the source and driving force of its sustainable development. Therefore As of the end of the reporting period Hengtong Optic-Electric had published 5 international standards and 359 domestic
the Company attaches great importance to the improvement of its R&D management system. Alongside our continuous standards and was granted 1010 invention patents 1994 utility model patents 51 appearance patents 197 PCT patents and
R&D and commitment to innovation we are actively promoting the transformation and upgrading of our global information 179 trademarks making it one of China's industry leaders in this respect.and energy interconnection systems in order to provide better solutions. Putting sustainable development and clean energy
development at the core of our strategy and business we firmly follow the path of innovative development and are making
positive contributions to global clean energy development.Optimizing R&D environment R&D breakthrough - Coilable optical fiber ribbons and cables
Based on our product lifecycle management (PLM) regulations such as the Policy for Ensuring Implementation During the reporting period the coilable optical fiber ribbons
the subsidiaries of Hengtong Optic-Electric at all levels of IPD 2.0 Program Administrative Measures for Technical and cables were developed by Hengtong Optic-Electric.have established a R&D management system with the Innovation and R&D Incentives and Management Rules Featuring proprietary special materials tooling and process
Integrated Product Development1 (IPD) system as the for Industry-University-Research Cooperation . We will molding the innovative products represented a technical
core. To comprehensively manage product development continuously seek to optimize our operations in three major breakthrough in the broadband business by addressing
and innovation we have formulated relevant rules and aspects: R&D processes organization and capacity building. the pain point of strained underground facilities. As such
Hengtong Optic-Electric became the only manufacturer in
China capable of manufacturing ROR-coilable optical fiber
ribbons in scale which in turn made us better positioned to
R&D processes further enhance our product quality and competitive edge
and expand growth potential.Hengtong Optic-Electric has established a management process of demand project approval and product
development according to actual conditions and further optimized the mechanism of R&D project approval and
review. Fixing eyes on R&D performance we promptly identify R&D deficiencies and continuously optimize them.R&D organization
Amid the R&D organization construction Hengtong Optic-Electric focuses on enhancing organizational synergy R&D breakthrough - Key Technology and
Expert recognition - Hengtong Optic-
Application of Heat-Resistant Aluminum Electric New Product Appraisal Meeting
between cross-departmental teams cultivating core R&D talents and building R&D culture. We are committed to Alloy Wires with New Aluminum-Coated
building a learning organization creating a strong R&D innovation atmosphere and improving R&D efficiency. Nickel-Molybdenum Alloy Steel Cores
At the Hengtong Optic-Electric New Product Appraisal Meet-
ing held by the China Electricity Council new technologies and
R&D capacity building products for UHV submarine cable transmission wind power The project of "Key Technology and Application of Heat-Resist- generation and intelligent warning developed during the re-
ant Aluminum Alloy Wires with New Aluminum-Coated Nick- porting period were unveiled and were unanimously praised
Hengtong Optic-Electric has set up an internal intellectual property database platform to facilitate the collection and el-Molybdenum Alloy Steel Cores" which Jiangsu Hengtong by over a hundred well-known experts in the power and en-
analysis of patent information during product development and to timely track and master the latest technological Power Special Conductor Co. Ltd. participated in has won ergy sectors from China Electric Power Research Institute and
innovation achievements and the intellectual property ownership of competitors so as to dynamically adjust the the Second Prize of Science and Technology Progress Awards Shanghai Electrical Cable Research Institute.direction and measures of product development. in 2021 at the New Technology Evaluation Conference of the
State Grid Smart Grid Research Institute. According to the Hengtong New Products Appraisal Opinions
Actively creating innovation platforms Hengtong Optic-Electric currently has 1 national enterprise technology center a total of 8 new products and technologies were launched
1 national postdoctoral research workstation 3 provincial postdoctoral innovation bases 3 academician workstations As reported this technology is oriented towards building green including 2 international market leading 4 internationally ad-
7 national and provincial key laboratories recognized by CNAS 40 provincial engineering technology research smart grids by developing new products and supporting tech- vanced and 2 domestic market leading innovations.
centers/enterprise technology centers/industrial design centers and 25 high-tech enterprises thereby providing rich nology which save energy and expand capacity. In this way it
academic resources and talents for technological research and breakthrough. can effectively boost grid transmission capacity and energy utili-
zation save transmission line corridors and reduce carbon emis-
sions from thermal power generation thus delivering substantial
1 Integrated Product Development. economic value and significant social benefits.
26 27Cultivating high-quality
Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Sustainable supply chain
Hengtong Optic-Electric plays a leading quality assurance role by maintaining a stable and green supply chain. On the one
hand we strictly manage suppliers in an effective manner through hierarchical management classified management flexible
tender and dynamic auditing processes thereby ensuring product quality. On the other hand we are constantly seeking
improvement in our sustainable supply chain by identifying and evaluating supply chain risks taking response measures
ensuring procurement compliance diversifying procurement channels and promoting stable procurement cooperation.Supplier management
Hengtong Optic-Electric has formulated a series of rules and regulations including the Supplier Access Regulations the
Supplier Management Regulations the Material Supplier Performance Assessment Standards the Procurement Tender
Management Regulations and the Procurement Execution Management Regulations in order to standardize and strictly control
all supplier access supplier assessment and logistics linkages.Supplier access
◆ C larifying access criteria: According to our clear criteria for suppliers' credit product quality production and delivery
capabilities environmental protection occupational health and safety and social responsibility fulfillment any suppliers
shall meet all such requirements and pass on-site audits before becoming our qualified suppliers.◆ S igning a framework agreement: Before cooperation we will enter into a procurement framework agreement with any
supplier in which a series of requirements for integrity assurance product quality intellectual property and supplier
assessment are specified.In order to protect our innovation and development
achievements Hengtong Optic-Electric has taken
the necessary measures to control the entire
lifecycle of intellectual property including creation Supplier management
application protection ownership and incentives
and management. We have established a sound ◆ H ierarchical management: By importance and procurement amount suppliers are divided
intellectual property management system and into four categories for which different but reasonable assessment frequencies will be
formulated a series of management rules including specified.the Intellectual Property Document Control
Procedure the Standard Work Management Policy ◆ C lassified management: By the type and nature of materials different audit frequencies
and the Technical Paper Management Policy. and management mechanisms are applied. Specifically we organize annual semi-
annual quarterly and monthly procurement of conventional materials through tender
In addition in order to further enhance intellectual and conduct flexible and normalized management. For key materials or strong suppliers
property protection and management awareness we organize negotiations and sign strategic agreements with them on an annual basis
among all levels of employees Hengtong Optic- to enhance cooperation viscosity and supply stability.Electric has invited external senior experts and
lecturers to organize special training in the area of
patent quality improvement and patent information
analysis and is taking steps to popularize intellectual Supplier elimination
property management knowledge every year.◆ E valuation and assessment: We organize monthly or quarterly assessments and on-site
audits of suppliers and divide them into four levels according to audit results and ratings: A
B C and D. We will continue cooperation with supplies with the ratings of A and B review
the qualification of C-level suppliers after urging them to make rectification and directly
terminate cooperation with D-level suppliers due to their unqualification.
28 29Cultivating high-quality
Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Supply chain risk Sustainable procurement
During the reporting period Hengtong Optic-Electric identified and evaluated our existing supply chain risks and found that Incorporating sustainable development into our supply chain management strategy and process we are committed to creating
the procurement of some materials and equipment was limited by deficiencies of certain suppliers. These included unstable a green sustainable supply chain and cultivating ecological partners. For effective supplier access we regularly review and
supply and lack of independent intellectual property rights in some technologies. To solve such problems Hengtong Optic- evaluate the suppliers' sustainability performance during detailed and comprehensive investigations into environmental and
Electric has taken some positive measures including diversifying supply sources developing independent supply technologies social conditions.and establishing more strategic supply relations.Diverse supply sources Environmental
During the reporting period the Company actively developed alternative suppliers in different regions looked for new suppliers ◆ H engtong Optic-Electric reviews and evaluates the suppliers' performance in many aspects including ISO14000
and cultivated existing suppliers to enhance their supply capabilities. environmental management system certification effective on-site environmental protection and waste management
development of environmental emergency plans and establishment of major environmental monitoring systems to
Independent supply technologies strength access and daily management of suppliers according to evaluation results.The Company has further improved its R&D and innovation capabilities accelerated its PCN (Porous Coordination Network) and
material localization processes and broken through some technological limitations in material development in cooperation with
existing suppliers. Social
Strategic supply relations ◆ H engtong Optic-Electric reviews and evaluates the suppliers' performance in ISO45001 occupational health and safety
management system certification recording of occupational safety training for employees identification of occupational
health hazards etc.In addition to material development in conjunction with existing suppliers we maintain in-depth communication and exchange
with key material suppliers and strong suppliers and keep strategic cooperation with them by signing strategic agreements on ◆ H engtong Optic-Electric has entered into the Agreement of Social Responsibility Fulfillment According to Ethical Standards
an annual basis. which requires all suppliers to respect employees and safeguard their health safety salary and welfare and the suppliers
as promised shall not hire child labor allow forced labor or have any conduct of coercion harassment or discrimination
against employees. During on-site audits we will review the suppliers' performance in such aspects.In addition Hengtong Optic-Electric has established a sound compliance system to prevent supply chain risks by regularly
analyzing and reviewing the actual conditions and specific demands of suppliers. Therefore during the reporting period the ◆ I n addition Hengtong Optic-Electric will sign the Integrity Co-constructing Agreement with the suppliers to jointly create a
Company organized targeted procurement personnel training and supplier visits. clean honest business environment.Procurement personnel training Supplier visits In the future the Company will further create a sustainable supply chain through the following four steps and work with our
suppliers to promote sustainable development:
During the reporting period in order to enhance the During the reporting period the Company identified
awareness and ability of procurement personnel to existing problems in the supply chain system and
deal with supply chain compliance risks the Company solicited suggestions for improvement. Visits to We will continue education and training of existing We will screen appropriate suppliers more rigorously
organized procurement system training customs AEO more than 40 suppliers took place and regular open suppliers enrich and improve the requirements and and select and evaluate them more according to their
(Authorized Economic Operator) training security communication lines were strengthened with the connotations of sustainable development in the performance in sustainability.
training procurement negotiation and skills training aim of gaining a clearer understanding of personnel Supplier Code of Conduct .for procurement personnel which deepened their venues products finance and other aspects. In
understanding of relevant rules and skills. addition through supplier visits we have found more
potential cooperation opportunities and enhanced our
suppliers' enthusiasm and loyalty thus further reducing
supply chain risks.We will organize special performance evaluation of We will give targeted assistance to our suppliers
suppliers in sustainability. after a thorough analysis of evaluation results to
ensure their continuous improvement in sustainability
together with us.
30 31Cultivating high-quality
Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Total suppliers Quality control
1267
Number of suppliers Excellent product quality is the cornerstone of our value creation and also a prerequisite for meeting customer needs.Hengtong Optic-Electric has passed the ISO 9001 quality management system certification comprehensively. In addition we
strictly control product quality through standard quality management in the production and development stage emergency
1182 1267 management of major quality accidents and training on product quality and safety.
◆ I n the production preparation stage Hengtong Optic-Electric will design quality indicators for each category of
customized products according to the internal Product Quality Indicator System. In addition following the principle
of equipment process similarity we will standardize product management according to quantitative indicators such
as key manufacturing process and raw material pass rates process and procedure (including characteristic indexes)
pass rates finished product and ex-factory pass rates external market complaints and quality accidents OEM pass
rate quality loss indicators and so on which lays a solid foundation for standard quality management.
51115
2
0340
Asian sup- American African European Oceanian Total suppliers having passed New suppliers subject
pliers suppliers suppliers suppliers suppliers the ISO 14001 certification to on-site audits ◆ T hrough effective prevention and control Hengtong Optic-Electric minimizes the occurrence of potential major
quality incidents. In addition we have developed optimal quality incident response plan and process to minimize
the negative impact of major quality incidents. During the reporting period there were no major quality incidents at
Percentage of new suppliers screened according to Percentage of new suppliers screened according to Hengtong Optic-Electric.environmental criteria social criteria
100% 100% Establishment of an Appointment for Incident reporting investigation team for Incident handling and accountability rectification and investigation punishment education
2 The response process of major quality incidents New suppliers mentioned herein only refer to suppliers of Class I and Class II materials introduced in 2022. Class I materials (leverage materi-
als) refer to the materials with a low procurement risk but with an annual procurement amount accounting for a large proportion of the total
procurement amount of the Company while Class II materials (key materials) refer to the materials with a relatively high procurement risk and a
relatively large procurement amount.◆ D uring the reporting period the central department
of Hengtong Optic-Electric organized a total of 38
quality related training sessions (about 150 hours)
in which nearly a thousand employees participated
which effectively enhanced their awareness of
safeguarding product quality.◆ D uring the reporting period Hengtong Optic-Electric
hosted the final Vocational Skills Competition and
the "Quality Month" event to encourage employees
to further improve their skills and workmanship
thus further consolidating the talent foundation for
Hengtong Optic-Electric to keep leading in quality.Quality related training sessions about
150hours
32 33Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green
Cultivating high-quality Contributing to
putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
In addition during the reporting period the Company
obtained a Level-4 intelligent manufacturing capability Responsible marketing
maturity certificate and showed compliance with national
standards of GB/T 39116-2020 and GB/T 39117-2020. This
indicates that Hengtong Optic-Electric has achieved a
certain level of automation digitization networking and Responsible marketing is vital for gaining customer trust seal authorization thus further enhancing the legal awareness
intelligence in manufacturing thus further ensuring process improving customer satisfaction creating a good business of all levels of our marketing personnel and avoiding any
standardization and effective product safety and quality environment and increasing brand influence. Therefore the legal risks. In addition the Company has opened up reporting
control. Company places great value on the regulation of marketing channels such as a complaint mailbox and an information
behavior and the training of sales personnel. We are reporting hotline at the General Manager's office in a move
committed to our pledge to adhere to compliant promotion to encourage internal and external stakeholders to report any
and sales and our responsibility to our customers is our suspected marketing activities while of course safeguarding
number 1 priority. The Company rejects utterly the practice the rights and interests of whoever makes the report.of making misleading descriptions or inappropriate and non-
objective evaluations of competitors. In view of existing or potential trade risks we have developed Level-4 intelligent manufacturing capability maturity certificate
relevant guidelines on the basis of establishing and improving
Alongside effective sales management we have organized our trade compliance management system and clarified the
special job briefings for marketing personnel to improve their sales management and operation requirements to prevent
overall quality. In addition we regularly issue promotional and reduce legal risks in trade and ensure compliant sales
Intelligent factory construction lean manufacturing and digital management warnings to ensure compliant marketing and to standardize and business activities.As a global service-oriented optical communication manufacturer Hengtong Optic-Electric a decade ago took the lead in
initiating intelligent factory construction lean manufacturing and digital management. We are sparing no effort to create an A reliable global partner
advanced intelligent manufacturing mode and an industrial innovation cluster featuring personalized customization networked
collaboration flexible production and visual manufacturing supervision. Through continuous integration and innovation of
cutting-edge technologies such as 5G communication artificial intelligence digital twins and blockchain among others
Hengtong has become a national Industrial Internet logo analysis demonstration enterprise and established cooperative Hengtong Optic-Electric has passed the authoritative certifi-
relations with more than 1500 upstream and downstream enterprises. In particular we have helped more enterprises to cation by Dun & Bradstreet a global data and analysis driven
achieve upgrade and transformation towards industrial digitalization and industrial networking. decision-making empowerment organization and obtained
the unique Dun & Bradstreet code of 545310872 as well as
Among the 2022 intelligent manufacturing demonstration factory projects of Jiangsu province the industry-leading and complete credit files and detailed credit reports. Hengtong
demonstrable "one network two platforms" intelligent factory of Jiangsu Hengtong Power Cable Co. Ltd. affiliated to Hengtong Optic-Electric was awarded a rating of 5A1 (the highest level)
Optic-Electric was awarded a place. by Dun & Bradstreet.The Company will continue to advance the intelligent construction of "one network two platforms". In other words relying Over the years Hengtong has passed multiple qualification
on the industrial Internet smart Internet of Things of State Grid and industrial Internet for enterprises we will speed up the certifications including Dun & Bradstreet certification which
smart and digital transformation of enterprises and set a benchmark for the digital and smart transformation and upgrade of provides guarantees to our global partners of our commitment
domestic industries. to integrity and our assurance of quality. In the future we will
continue to focus on creating value for our customers and es-
tablishing stable long-term and healthy business relationships
with our upstream and downstream supply chain partners so
as to promote the further development of our industry.Hengtong Optic-Electric was
awarded a rating of
5A1（the highest level）
by Dun & Bradstreet
34 35Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green
Cultivating high-quality
talents on the principle of Contributing to putting responsibility first quality products low-carbon future equality and diversity community co-creation
Customer services
In order to ensure the quality of customer service the Com- solve such problems quickly and effectively in order to improve The Company has established a strict confidentiality system in accordance with the Information Security and Confidentiality
pany has formulated a set of sound internal rules including customer satisfaction. During the reporting period the Com- Management Rules of Hengtong Group and set up a Confidentiality Committee to supervise and manage confidentiality related
the Aftersales Service Management Rules and the Emergency pany's customer satisfaction survey results showed that the work so as to strictly safeguard information security. In addition the Company is committed to reinforcing data security. To
Handling Management Rules. On the one hand Hengtong customer satisfaction score reached 96.02 (max score = 100).3 this end we have formulated the Technical Data Confidentiality Regulations. We have achieved encryption of customer privacy
Optic-Electric has developed a rapid response and emergen- layer by layer through the highest quality digital management in our ordering contract signing and other processes. We have
cy handling mechanism for customer complaints and major High customer satisfaction is a direct result of the Company's established specialized accounts for effective management and allocated different account permissions by level.market emergencies and drawn up the Special Process for service philosophy of "All-staff service to win the heart of
Customer Complaints Returns and Exchanges to reduce the customers with forever sincerity" allied to our sound service
impact and losses caused by emergencies and to improve support system. Services offered by Hengtong mainly include The Confidentiality Committee of Hengtong Optic-Electric mainly performs the following duties
the quality of customer service. On the other hand Hengtong after-sales and engineering services. In addition Hengtong
Optic-Electric has accurately identified existing problems and Optic-Electric has further improved its service efficiency and
difficulties commonly experienced by customers through our quality through full after-sales and engineering support servic- ◆ To implement national and industry-related policies laws and ◆ To review and supervise major matters related to the
annual customer satisfaction surveys and has taken steps to es for equipment and hardware. regulations concerning confidentiality. Company's confidentiality work.◆ To review the Company's deployments and annual work ◆ T o supervise the confidentiality work of each center/
An all-region after-sales service network has been formed and Through our specialized Engineering Service Department arrangements related to confidentiality. business department and sector.each service agency has a regional manager and an account equipped with professional engineers we provide strong
manager and a 24-hour free service hotline (8008282953) technical service support to customers in various regions so ◆ To provide confidentiality resources support and propel the
through which customers can inquire about product information that engineering issues can be resolved as quickly as possible. implementation of confidentiality work at the company level.and provide feedback on product use. In addition we provide Given that the products or services are still under guarantee
return visits training and other services to customers. We carry the Company will resolve quality problems caused by defects
out surveys and analysis of the services offered to customers in materials and improper manufacturing for free. Our technical
and their consumption needs on a quarterly basis. Through personnel will deliver timely field maintenance services and we Furthermore Hengtong Optic-Electric has formulated the Administrative Measures for Confidentiality and Non-competition
a targeted training system for customers we invite technical will recompense any economic losses incurred therefrom. After Agreement requiring employees in key confidential positions to enter into confidentiality agreements with the Company to
experts with theoretical and practical experience to provide free the guarentee has expired we guarantee a response within half
on-site installation guidance and technical training services for an hour upon receiving any notification of an issue and will ensure the security of data. In the event of any violation of the said agreement the Company shall be entitled to hold relevant
the technical personnel of our clients. immediately send technical personnel to the site to help with personnel accountable for breach of contract after verifying and providing relevant evidence through the allocation of internal
issue resolution to ensure that the optical cables we supplied and external resources.can return to normal usage in the shortest possible time period.During the reporting period the Company neither infringed upon any customer privacy nor lost any customer information.
3 Only the parent company of Hengtong Optic-Electric received the customer satisfaction survey.
36 37Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green
Cultivating high-quality Contributing to
putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
0Crea3ting a green
low-carbon future
Environmental management 40
Tackling climate change 41
Energy management 44
Water management 46
Emission management 47
Circular economy 50
The Company has always demonstrated a commitment to
advocating and following the path of green development.We have actively promoted sustainable commercialization
green transformation and green low-carbon energy
development and are devoted to making outstanding
contributions to the green and high-quality development
through the delivery of advanced products and technologies.We are committed to creating a green low-carbon and
sustainable future.
38 39Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green
Cultivating high-quality Contributing to
putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Environmental management Tackling climate change
The Company is dedicated to reducing the environmental have defined environmental protection as our long-term devel- Climate change is one of the most severe challenges transformation and reducing the impact of their operations
impact throughout the lifecycle of product design and manu- opment strategy. facing humanity in the 21st century. To protect our natural on the Earth against the background of increasing climate
facturing and to integrating the ethos of sustainable develop- ecosystem and ensure the sustainable development of change impacts. Actively advocating and practicing green
ment into each link. At present the Company has passed the ISO 14001 environ- our economy and society it is urgent to achieve carbon and low-carbon development the Company is actively
mental management system certification covering all principal neutrality by tackling climate change. Enterprises need to engaged in addressing climate change.We strictly abide by the Environmental Protection Law of the operations (100%) including the design of communication sys- play a supporting role in promoting low-carbon economic
People's Republic of China the Environmental Impact Assess- tem optical cables and submarine cables as well as environ-
ment Law of the People's Republic of China the Environmen- mental management activities and venues related to produc-
tal Protection Tax Law of the People's Republic of China and tion. Every year we regularly organize external audits to assess
other relevant laws and regulations as well as environmental our compliance with environmental laws our implementation Governance structure
regulations and rules related to overseas operations such as of environmental management policies and our risk control
the International Environmental Law the Environmental Liabil- measures in accordance with the ISO 14001 standard. In addi-
ity Directive (ELD) and the Industrial Emissions Directive. We tion we organize certificate renewal audits every three years. The Company has established a sound climate change risk governance framework. Specifically the ESG Committee coordinates
and reviews the work of dealing with climate change risk and is responsible for setting overall strategies and goals. In contrast
the ESG Working Group under the ESG Committee performs the duty of identifying and managing the Company's climate
Risk management change risks.To prevent and control potential environmental risk events
we have developed optimized reporting processes and Climate change risks
handling methods including a process for emergency
handling of environmental risks in which the control group
rescue group fire protection group evacuation group By analyzing the impact of climate change on the Company's operational strategy related business and finance we
vigilance group and monitoring group cooperate. have identified and evaluated climate change risks that may have an impact on the Company's operations according to
industry characteristics and business scope and have developed response strategies mainly in the area of physical risk
To effectively investigate and address environmental and transformation risk due to climate change in order to comprehensively promote green transformation and sustainable
pollution risks the Company has developed a response development.plan for environmental pollution emergencies and formed
a closed loop of tracking environmental problems and
hazards discovered through daily inspection. In addition Risk type Risk parameter Risk description Countermeasures
we regularly organize relevant emergency drills to find
deficiencies so as to continuously optimize the plan. During
the reporting period we did not violate any environmental Acute Extreme weather 1. Frequent occurrence of extreme
laws and regulations. risks events such as weather events will cause commuting
typhoons floods ex- inconvenience to employees trans-
treme high temper- portation obstacles and equipment
ature weather and failures thus resulting in discontinuity of
cold climates production and operation and ultimately
leading to a decrease in revenue 1. To implement the management per-
2. Typhoon and extreme cold might sonnel duty shift mechanism increase
cause damage to laid cables and other the frequency of weather forecast and
communication equipment detection and undermine the damage
caused by typhoons rainstorms etc.
2. To develop an emergency response
Physical plan for extreme weather events (such
risks Chronic The impact of 1. Slow changes in temperature and as typhoons rainstorms floods freez-
risks changes in temper- rainfall might lead to the relocation of ing rain snow and so on) and prepare
ature rainfall and some potentially affected sites of oper- emergency facilities in advance
sea level rise ating thus increasing operating costs
2. Slow rise in sea level might cause
malfunction of submarine optical ca-
bles due to pressure changes
40 41Cultivating high-quality
Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Risk type Risk parameter Risk description Countermeasures Carbon emission goals
Regula- Stricter emission In response to increasingly strict national 1. To learn and comply with relevant Hengtong Optic-Electric is committed to minimizing the Based on HioT an industrial Internet platform Hengtong
tions and disclosure manage- and international requirements for car- laws and regulations released by rele- impact of climate changes on corporate development has established an integrated energy management system
policies ment and compli- bon emission reduction regulators and vant regulators at home and abroad in
ance requirements investors require Hengtong Optic-Electric a timely manner and regularly identify particularly the impact of carbon emissions on the production through which we have realized automatic acquisition of
to disclose more information on emission applicable carbon emission policies and operation of the Company. Presently Hengtong Group has energy consumption information of electricity water natural
reduction goals measures and results. set the goal of "carbon peaking by 2028 and carbon neutrality gas industrial gases and so on and effectively monitored
This may cause a range of potential risks 2. To strengthen internal carbon by 2045" striving for a 40% reduction in comprehensive energy consumption and carbon emission during production.including delay in the progress of project accounting management and carbon
emission accounting in the production energy consumption per RMB 10000 output value and a 50% In addition we have realized unified management of carbon potentially heavy penalties and increasing
compliance costs process reduction in carbon dioxide emissions per RMB 10000 output emissions through a digital management platform through
value by 2028 compared with 2020. In active response to such which we can identify the direct and indirect sources of GHG
goals Hengtong Optic-Electric is formulating corresponding emissions from the Company and its member entities and
Tech- Low-carbon In response to climate change To explore low-carbon materials and action plans to achieve the carbon emission goals by means define the emission boundaries.nologies technology low-carbon materials will gradually technical transformation paths and of effective control of carbon emissions.transformation be substituted for existing products introduce efficient and energy-saving
and low-energy equipment and more technical means or production equip-
advanced energy-saving technologies ment GHG emissions4 Unit 2022
will further attract more investors and
policy support which might result in
reduced liquidity of existing assets
cost increase for low-carbon materi- Total GHG emissions (Scope 1+Scope 2) Tonne of CO2 equivalent (tCO2e) 339189.14
als and technical transformation and
other risks
GHG emissions (Scope 1) Tonne of CO2 equivalent (tCO2e) 80297.40
Change of With customers' increasing attention 1. To closely track and investigate
customer to climate change and low-carbon life changes in customer demand for GHG emissions (Scope 2) Tonne of CO2 equivalent (tCO2e) 258891.74
preferences Hengtong Optic-Electric will speed up energy-saving and green products and
low-carbon transformation but will face services and adjust the industrial layout
Transforma- many potential challenges including in a timely manner
tion risks GHG emissions intensity Tonne of CO equivalent (tCO e)/RMB100 million 730.00budget increase pressure from compet- 2 2
itors providing low emission products 2. To increase the budget for providing
and a decrease in market share and transformational products and services
demand for goods and services to meet customer needs and actively
analyze price fluctuation trends
Market
Rise in raw mate- The cost of resources such as energy 1. To actively explore energy-saving and
rial costs water and equipment will rise as a consumption reduction measures for
result of climate change which will production and achieve recycling of
increase the costs of raw materials resources as much as possible
procurement and transportation
2. To reach a consensus with partners
on low-carbon transportation to reduce
procurement costs
Repu- Investors are Stakeholders are increasingly concerned 1. To further disclose the requirements
tation increasingly con- about climate change issues. If we fail to for sustainable development and climate
cerned about nega- meet investors' expectations Hengtong change response to ensure compliance
tive feedback Optic-Electric might face risks such as
divestment and downgrading of related 2. To closely track the feedback of
ESG ratings customers and other stakeholders on
the requirements for addressing climate 4 T he greenhouse gas emissions of the Company mainly include direct emissions (Scope 1) and indirect energy emissions (Scope 2).change The Company performs carbon footprint accounting in accordance with ISO14064-1:2018 Specification with guidance at the organization
level for quantification and reporting of GHG emissions and removals . The GHGs mainly include carbon dioxide methane and nitrous
oxide. Furthermore the accounting is based on the average emission factor of state grid for 2022 specified in the Notice on Reporting
and Management of Greenhouse Gas Emissions of Power Generation Enterprises from 2023 to 2025 issued by the Ministry of Ecology and
Environment and the emission factor defined in the 2019 Refinement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories
issued by the Intergovernmental Panel on Climate Change (IPCC).
42 43Cultivating high-quality
Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Energy management
The Company regards it a necessity to achieve low carbonization of energy mainly by means of energy saving and
consumption reduction in production and operation process. The Company has further improved capabilities of refined Energy consumption5 Unit 2022
energy management and expedited the improvement of energy utilization efficiency by establishing and improving the energy
management system as well as the energy-saving and consumption reduction management mechanism reinforcing target Direct energy
assessment and process management and taking measures including process technology innovation equipment technology
Gasoline Liter 157017.59
transformation digital management etc.Diesel Tonne 5742.74
Optimization of preform Energy-saving transformation of Natural gas 10000 cubic meters 2667.76
manufacturing technology optical fiber drawing equipment Hydrogen 10000 cubic meters 29.46
Featuring a series of advanced technologies with the efficient By means of innovations in key technologies such as ultra- Propane Tonne 75.19
deposition technology as a representative one the Company high-speed drawing and full-process automatic control the Biomass particles Tonne 2367.00
has been continuously optimizing the preform manufacturing promotion and application of LED curing technology as well
process. It is hoped to achieve efficient environment-friendly as the optimization and transformation of public and auxiliary Direct energy consumption Tonne of standard coal 42550.36
and green technology development from the source of the in- facilities the Company has realized further reduction of energy
dustrial chain so as to better achieve green manufacturing in consumption in the optical fiber drawing process. During the Indirect energy
the optical communication industry chain. During the reporting reporting period approximately 2200 tonnes of standard coal Purchased electricity Kilowatt-hour 701999126.00
period approximately 5800 tonnes of standard coal consump- consumption and approximately 4300 tonnes of CO2 emis-
tion and approximately 9900 tonnes of CO2 emissions were sions were reduced due to such energy-saving transformation. Purchased green electricity Kilowatt-hour 250435000.00
reduced thanks to the process optimization.Purchased steam Tonne 15358.55
Indirect energy consumption Tonne of standard coal 87719.39
Energy-saving transformation of a produc- Total energy
tion line for continuous casting and rolling Green electricity purchase
Total energy consumption Tonne of standard coal 130269.75
The Company has significantly cut down the use of natural The Company has been optimizing the energy structure in an Energy consumption intensity Tonne of standard coal/RMB100 million 280.37
gas via furnace structure optimization and regenerative orderly manner and progressively increasing the proportion of
transformation of the continuous casting and rolling production renewable energy. During the reporting period the Company 5 T he comprehensive energy consumption is calculated based on the consumption
line. During the reporting period approximately 700 tonnes of purchased 250.435 million kWh of green electricity and of gasoline diesel natural gas hydrogen electricity and steam as well as the
standard coal consumption and approximately 1300 tonnes reduced CO2 emissions by approximately 142800 tonnes. conversion coefficient in the national standard General Rules for Calculation of
of CO2 emissions were reduced due to such optimization and Comprehensive Energy Consumption (GB/T 2589-2020).transformation.
44 45Cultivating high-quality
Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Water management Emission management
Water resources are vital for the survival of any lives on the Earth and are of great impor- Save of water annually The Company has actively promoted effective control improving technologies and management processes and
tance to build a community with a shared future for mankind. Regarding effective use of of emissions in strict accordance with related laws and optimizing the emission recycling system the Company is
water resources as the only approach to green transformation Hengtong Optic-Electric 42000 tonnes regulations such as the Environmental Protection Law of the capable of ensuring the reduction of exhaust gas wastewater
strictly abides by the Water Law of the People's Republic of China as well as other related People's Republic of China the Law of the People's Republic and waste emissions during production and operation. To
laws and regulations and internal water management rules. The Company aims to achieve of China on the Prevention and Control of Atmospheric satisfy the compliance requirements at various business sites
sustainable water management in the business operation and supply chain links and fun- Pollution the Law of the People's Republic of China on the the Company has set a goal of reducing the consumption
damentally reduce the impact of water scarcity on the environment by means of regularly Prevention and Control of Water Pollution the Law of the of waste emulsion per unit of production by 10% in 2022
monitoring and controlling risks related to water use standardizing the use consumption People's Republic of China on the Prevention and Control compared with 2020 for the purpose of consolidating the
and discharge of water resources and improving production water efficiency. of Environmental Pollution by Solid Waste. By continuously foundation for the Company's sustainable development.During the reporting period we actively carried out water-saving activities and conveyed
the water-saving concept to our employees through daily awareness promotion. The Com- Exhaust gas management
pany has installed sufficient water-saving facilities in our production plants and established
a rainwater collection and utilization system. The rainwater so collected is applied for
washing on-site equipment and vehicles and flushing roads so as to maximize rainwater While strictly complying with domestic and foreign exhaust gas emission standards the Company has set clear various
utilization and achieve efficient utilization of water resources. requirements for standardized production. In addition the Company makes efforts to control emissions from the source while
strictly monitoring the exhaust gas emission in the operation process.Furthermore we can save 42000 tonnes of water annually through internal recycling of
industrial water and centralized water treatment through the continuously improved water
circulation system.Process for treating dust and exhaust gas
Utilization of water resources Unit 2022
Total water consumption thousands of m3 2851.777 With a continuous investment the Company has made some remarkable achievements in environmental technology
transformation. For example the Company has substituted the former wet electrostatic dust removal process with the dry bag
Water consumption intensity m3/(RMB100Mn) 6137.61 dust removal process for treatment of tail gas from production of preform thereby reducing the use of precipitants PAC and
PAM for water treatment every year reducing the industrial wastewater discharged into the municipal sewage pipeline and
further converting wet sludge as general solid waste into the dust by-product SiO2 with economic value.Furthermore the Company has installed monitoring equipment at key emission sites for 24-hour video surveillance so as
to prevent risks such as damages to emission treatment equipment and performance degradation arising from any external
factors.
46 47Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green
Cultivating high-quality Contributing to
putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Wastewater management Waste management
The Company has formulated internal wastewater treatment rules strictly in accordance The number of non-com- In strict accordance with laws and regulations at home and abroad such as the Law of the The consumption of waste
with domestic and foreign sewage discharge standards and other related laws and regula- pliant emissions by the People's Republic of China on the Prevention and Control of Environmental Pollution by emulsion per unit of
tions international wastewater treatment and compliance discharge requirements as well Company was Solid Waste the Company has formulated the Procedures for Waste Control to coordinate production reduced by in
as industry conventions and regulations. and manage the links of waste collection storage transportation and treatment so as to 2022 compared with 2020
The wastewater of the Company mainly includes domestic sewage and industrial waste- 0 guarantee the compliant treatment and recycling of generated waste. The consumption of
water and the pollutants mainly include COD SS total phosphorus ammonia nitrogen waste emulsion per unit of production reduced by 10% in 2022 compared with 2020. 10%
etc. With strict control measures taken our quality of wastewater discharge is superior to
that required by regulators. In 2022 our wastewater detection values conformed to the Non-hazardous waste
requirements of GB8978-1996 and were included in the scope of pipeline requirements.Non-hazardous wastes of the Company mainly include scrap metal waste plastics waste paper packaging materials and other
We strictly control the generation and discharge of wastewater from source. For example wastes generated in the production process as well as office and kitchen wastes. By means of specialized waste collection
industrial wastewater is recycled by means of sedimentation degradation and separation stations at production and office sites the Company is capable of timely classifying wastes first and then transferring them to
in treatment facilities such as sumps sedimentation tanks drainage ditches septic tanks relevant town-level units for treatment.and oil separators in the production site while domestic sewage is discharged into the
municipal sewage pipeline for centralized treatment. Hazardous waste
During the reporting period the number of non-compliant emissions by the Company was 0.The hazardous wastes of the Company mainly include waste emulsions activated carbon and other toxic and harmful
substances generated in plants and administrative office areas which may have an adverse impact on the surrounding
environment. The Company strictly follows the hazardous waste treatment requirements and rules. Following uniform reporting
and collection the Company transfers the hazardous waste (via the full-life-cycle hazardous waste treatment system of Jiangsu
province) to qualified third parties for centralized disposal. The Company has achieved "zero emissions" of hazardous waste
and prevented secondary pollution to the environment.Discharge of waste liquid gas and solid Unit 2022
Wastewater discharge
Discharge of domestic sewage Tonne 36180.72
Hazardous waste
Waste emulsion Tonne 251.09
Activated carbon Tonne 1.40
Total discharge of hazardous waste Tonne 586.60
Non-hazardous waste
Discharge of general solid waste (recyclable) Tonne 117586.80
Total amount of recycled packaging materials Tonne 70894.86
Total amount of other wastes recycled Tonne 46691.94
Total amount of general solid waste (non-recyclable) Tonne 49939.22
Total amount of general solid waste generated Tonne 167526.02
48 49Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green
Cultivating high-quality Contributing to
putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Circular economy
The Company treats sustainability from a long-term and
open perspective. Advocating and promoting the concept
and model of low-carbon circular development and resource
recycling the Company has increased the use of recoverable The helium gas recycling rate
and recyclable materials to reduce dependence on raw has reached
materials. While reducing costs and increasing benefits the
Company proactively promotes green long-term development
to fundamentally mitigate the environmental impact arising 70%
from shortage of resources.In terms of tail gas treatment Hengtong Optic-Electric
through environmental technology transformation has reduced
the consumption of water resources in traditional processes In terms of recycling of raw materials the
and achieved the conversion from solid waste to industrial by- Company collects and purifies helium gas
products. through helium gas treatment devices for the
purpose of centralized recycling. Through reuse
In addition the Company promotes the recycling of transport of helium gas up to standard for equipment
pallets to reduce the generation of waste. operation the Company has improved the
helium gas recycling rate to 70%.Tail gas treatment
Hengtong has replaced the former wet
electrostatic dust removal process with the dry
bag dust removal process for treatment of tail
gas from production of preform. In addition we
have changed wet sludge as general solid waste
into the dust by-product SiO2 with economic
value.Transport pallets
The Company inspects classifies and disposes
of transport pallets in good conditions and
recycles them based on transport scenarios and
performance requirements so as to reduce the
generation of waste.
50 51Cultivating high-quality
Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green putting responsibility first quality products low-carbon future talents on the principle of
Contributing to
equality and diversity community co-creation
0Culti4vating high-quality talents
on the principle of equality and
diversity
Recruitment and retention 54
Development and training 57
Remuneration and benefits 60
Communication and care 62
Health and safety 63
Talent strategy serves as the most important strategy for
the development of a company and plays an important role
in improving its overall strength. Hengtong Optic-Electric
adheres to the people-oriented management philosophy and
safeguards the basic rights and interests of every employee.Through years of development we have established a sound
employment system. By providing abundant training resources
for employees and actively organizing various care activities
the Company has further upgraded talent competitiveness
and cohesion created a healthy and upward culture and
promoted the common development of the Company and our
employees.
52 53Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green
Cultivating high-quality
putting responsibility first quality products low-carbon future talents on the principle of
Contributing to
equality and diversity community co-creation
Recruitment and retention Fair recruitment
The Company adheres to the employment principles The Company is committed to eliminating discrimination in gender age region ethnic group family status marital status
of fairness impartiality diversity and inclusiveness religion disability sexual orientation social background etc. In recruitment and employment the Company strictly prohibits any
and abides by laws and regulations. Hengtong Optic- Number of employees by gender discriminatory descriptions or any discrimination behaviors acquire only necessary information and keep confidential personal
Electric has formulated the Recruitment Management privacy. Furthermore the Company actively provides job opportunities to vulnerable groups and safeguards the rights and
Measures according to the actual situation to strictly 11151 interests of female employees. The Company devotes to creating an equal diverse and inclusive employment environment and
regulate and control the recruitment and employment Male employees promoting the diversified development of the talent team.practices. During the reporting period the Company 3832 The Company actively provides job opportunities for vulnerable groups. Specifically we recruit disabled persons according to recruited talents from all sectors of society through recommendations from the district-level Disabled Persons' Federations and town-level Civil Affairs Departments by publishing
a series of channels including campus recruitment Female employees recruitment information on the website and participating in special job fairs for disabled persons. Furthermore the Company
social recruitment and internal promotion. With such follows the principle of equal pay for equal work and arranges suitable work for disabled employees according to their actual
efforts the Company has reserved many talents. Number of employees by age situation to better safeguard their rights and interests.We regularly analyze the gaps in existing human 4075
resources to develop an appropriate annual 30 and below
recruitment plan so as to ensure that the Company's Prohibiting child labor and forced labor
human resources can satisfy the demands for current 924930-50 years old
and future development.
1659 In strict accordance with related laws and regulations of China and other host countries the Company has formulated the
Above 50 Control Procedure for Prohibiting Forced Labor. The Company prohibits child labor forced labor and other illegal employment
behaviors including employment of anyone aged below 18 and strictly verifies each new employee's age and background to
Total employees ensure employment compliance. Once any employment violation is verified we will deal with it seriously in accordance with
14983 Number of employees by level the Company's internal rules. During the reporting period there were no incidents of child labor or forced labor. Person
251
Senior management
New employees 567
Mid-level employees
3474 Person 14165
Ordinary employees
Number of employees by region
Full-time employees
14456 12648 Person Employees of China Mainland
2335
Employees from abroad Hong Kong Macao and Taiwan China
Temporary or part-time employees
Number of employees by academic background
527 Person
9490
College degree or below
4820
Bachelor's degree
Disabled employees
633
366 Master's degree Person
40
Doctor's degree and above
54 55Cultivating high-quality
Hengtong Optic-Electric 2022 Environmental Social and Governance Report Enhancing governance while Creating market-leading Creating a green Contributing to putting responsibility first quality products low-carbon future talents on the principle of equality and diversity community co-creation
Labor union and collective labor agreements Development and training
To satisfy related requirements of employees for democratic management
and communication Hengtong Optic-Electric has drawn up internal Labor union Rate of signing collective Excellent talents are vital for the development of a company. Hengtong Optic-Electric always pursues the growth together with
management rules such as the Control Procedure for Freedom of coverage rate agreements with employees employees. We put forth effort to establish a systematic diversified and full-coverage talent development system to create
Association and Collective Bargaining Right in accordance with the
100 100 opportunities for sustainable growth of employees. Meanwhile we continuously expand channels for career development and requirements of the International Labor Organization. The Company % % promotion so as to facilitate employee ability improvement and talent team building.
fully respects employees' rights in association and collective bargaining
committing to creating a free open work platform for employees.Employee retention Talent cultivation
The Company spares no efforts to attract and retain talents and the performance in this regard is deemed as a key evaluation
indicator. Furthermore the Company strives to maintain industry competitiveness by improving the career development plan
Highly valuing talent cultivation the Company has
for employees adjusting and optimizing the compensation structure and intensifying communication with employees. Internal offline training
established related management rules and training
procedures such as the Training Management
Measures . Our online and offline training services
Employee turnover rate by gender Employee turnover are readily accessible to all employees. Specifically
rate by age Em-we intend to arrange over 36 hours of training per ployee External online training
13.65% employee every year on average. training
Employee turnover rate The employee training modes of the Company 8.75% include internal offline training external online
6.85% Specialized seminars skill and 18.50% training other specialized seminars sharing 4.88% knowledge sharing sessions case sessions regulation interpretation case study as study regulation interpretation etc.
2.93% well as other special training.
Male Female Age