China Industrial Securities International Financial : ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2021

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China Industrial Securities International Financial Group Limited

(Incorporated in the Cayman Islands with limited liability)

Stock code : 6058

2021

Environmental, Social and Governance Report

ENVIRONMENTAL, SOCIAL AND

GOVERNANCE REPORT

CONTENTS

1. STATEMENT OF THE BOARD OF DIRECTORS 2

2. BUSINESS OF CISI 3

2.1 Group Overview 3

2.2 Principal Business 4

2.3 Group Structure and Development History 5

2.4 Awards and Accolades 6

3. ESG GOVERNANCE 8

4. RESPONSE TO STAKEHOLDERS 9

4.1 Communication with Stakeholders 9

4.2 Identification and Analysis of Material Topics 10

5. ECONOMIC AND OPERATIONAL RESPONSIBILITIES 12

5.1 Compliance with Business Ethics 12

5.2 Supplier Management 15

5.3 Implementation of Sustainable Finance 15

6. PRODUCT AND SERVICE RESPONSIBILITIES 20

6.1 Responsible Marketing 20

6.2 Customer Communication and Complaint Management 20

6.3 Protection of Customer Privacy 21

6.4 Investor Education 22

7. RESPONSIBILITIES FOR EMPLOYEES 23

7.1 Safeguarding Employees' Rights and Interests 23

7.2 Supporting Employees to Grow 26

7.3 Promoting Work-life Balance 28

8. COMMUNITY INVESTMENT 29

8.1 Keen on Charity Undertakings 29

8.2 Putting Environmental Undertakings into Practice 31

8.3 Caring for Disadvantaged Groups 32

9. ENVIRONMENTAL PROTECTION 32

9.1 Addressing Climate Change 32

9.2 Green and Low-carbon Operation 37

9.3 Strengthening Waste Management 39

Description of Report Preparation 49

KEY QUANTITATIVE PERFORMANCE TABLES 40

Report Index 43

China Industrial Securities International Financial Group Limited

Environmental, Social and Governance Report 2021

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ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

1. STATEMENT OF THE BOARD OF DIRECTORS

Year 2021 marked the start of the "14th Five-Year" Plan, and coincided with our 10th anniversary since the start of our operations in Hong Kong. The past decade witnessed our evolvement from a Chinese-funded securities house incepted in Hong Kong, an international finance hub, as a go-global bridgehead of Industrial Securities Co. Ltd. ("Industrial Securities") to an integrated player among leading securities firms in the territory, thanks to our efforts in seizing first-mover opportunities in the offshore market to grow our expertise and quality services. Along this journey, we attached great importance to Environmental, Social and Governance ("ESG") management, integrating ESG concepts into our corporate culture, strategic initiatives and daily operations to align our economic value creation with ESG management enhancements for a sustainable financial ecosystem.

Sound operations laying a ground for effective governance. We placed great emphasis on ESG management on the basis of a well-established governance system featuring robust risk compliance management. We set up a top-down ESG governance structure, where the Board of Directors oversees ESG practices and assumes the overall responsibility. Under the Environmental, Social and Governance Committee ("ESG Committee") at the Board level, the Environmental, Social and Governance Committee Work Team ("ESG Work Team") was set up to execute our ESG assignments and ensure continuity and effectiveness of ESG delivery.

Focusing on low-carbon operation to support green finance. Staying mindful of the environmental impact of our operations, we took initiatives to identify, assess and conduct analysis on climate risks and opportunities, seeking to manage climate risks across business development and operations by incorporating ESG factors including the environmental factor into our investment and financing considerations and assessing energy conservation and emission reduction during operations. Targets were developed across greenhouse gas emission, energy management, water resource management and waste management, with reference to our business practices. We will annually review our performance against targets and our environmental commitments to internal and external stakeholders to expedite the process of achieving national dual carbon goals.

Contributing to society by creating shared value. Adhering to the core values of advancing employee value and creating customer value, we are active in undertaking our responsibilities to employees, customers and society. We embraced the nature of finance to fuel technological innovation companies, going-global of Chinese enterprises and civilian infrastructure. To extend our care for employee growth, we provided them with a competitive compensation system, benefit packages, well-developed career ladders and training. Our active presence in giving back to society was also witnessed by our social and charity engagements and our care for disadvantaged groups, demonstrating our social responsibility as a Chinese-funded financial institution.

Looking ahead, amid China's faster opening-up pace and the lingering COVID-19 pandemic, we as a Hong Kong based Chinese-funded securities company will uphold our core philosophy to focus on value and create the future with wisdom, leveraging the city's clout as an international finance hub and our financial expertise to create maximum value for all stakeholders. To begin with, we will adhere to a quality-minded growth approach to serve the real economy with sustainable finance. In particular, a healthy and resilient business model upon our well-disciplined neutral and prudence-tilt risk appetite, together with rational internal controls, will enable us to reward shareholders and serve customers effectively. Meanwhile, we will continue to improve our human resource management system, upgrade climate change management and countermeasures, and take part in social and charity undertakings to promote common and sustainable growth of employees, the environment and the society.

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China Industrial Securities International Financial Group Limited

Environmental, Social and Governance Report 2021

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

2. BUSINESS OF CISI

2.1 Group Overview

China Industrial Securities International Financial Group Limited (stock code: 6058.HK) ("CISI") was listed on the GEM of the Hong Kong Stock Exchange and became the first overseas spun-off and listed subsidiary of a PRC securities Group in 2016. In 2019, it was successfully converted to be listed on the Main Board. The Group, located in Hong Kong, is an integrated financial group integrating global securities and futures brokerage, institutional sales and research, corporate financing, fixed income, asset management, private wealth management and other investment and financing business operations. It has obtained licences for Types 1, 2, 4, 5, 6 and 9 regulated activities issued by the Securities and Futures Commission of Hong Kong.

Industrial Securities Co. Ltd. is CISI's controlling shareholder. CISI is a bridgehead for Industrial Securities to put into practice the strategy of establishing international presence. The Group upholds the concept of "focus on value, create the future with wisdom", relying on Hong Kong, an international financial hub, to construct an international investment and financing platform. Through years of development, the Group has gradually built a solid foundation in Hong Kong and become one of the major integrated brokers in Hong Kong.

At the end of 2021, CISI had total assets of HK$16.8 billion and operating revenue of HK$636.37 million for the year.

China Industrial Securities International Financial Group Limited

Environmental, Social and Governance Report 2021

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2.2 Principal Business

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

• • Overseas investment consultancy services

Asset Management

• • Fund management services

• • Special account investment services

• • Carrying out bond derivatives andother self-owned investment business

• • Overseas debt financing

• • Structured products design, trading and risk hedging

Institutional Sales

• • Provision of investment research, trading, margin financing services

• • Professional research services

• • Tailored services for listed corporate clients and institutions and investors with high net value

  Wealth Management

• • Securities business

• • Futures business

• • Insurance brokerage business

• • Private customer business

  Investment Banking

• • Listing sponsorship and financial consultancy services

• • Hong Kong stock capital market business, provision of secondary market equity-linked financing solutions and share underwriting

• • Provision of services for enterprises including private financing, listing sponsorship, introduction of strategic investors, financial consultancy, compliance consultancy and merger and acquisition financial consultancy

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China Industrial Securities International Financial Group Limited Environmental, Social and Governance Report 2021