China Industrial Securities International Financial : ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2022

ጳᗇ਷ყږፄණྠϞࠢʮ̡

China Industrial Securities International Financial Group Limited

(Incorporated in the Cayman Islands with limited liability)

Stock code : 6058

Environmental, Social and Governance Report

2022

ENVIRONMENTAL, SOCIAL AND

GOVERNANCE REPORT

CONTENTS

STATEMENT OF THE BOARD ON ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) 2

1. ENTERING INTO CISI 3

1.1 Corporate Profile 3

1.2 Principal Business 4

1.3 Group Structure and Development History 5

1.4 Awards and Accolades 5

2. ESG MANAGEMENT 6

2.1 ESG Management Structure 6

2.2 Stakeholder Communications 7

2.3 Identification and Analysis of Material Issues 8

3. ECONOMIC AND OPERATIONAL RESPONSIBILITIES 10

3.1 Risk Management 10

3.2 Compliance and Business Ethics 12

3.3 Responsible Finance 18

4. PRODUCT AND SERVICE RESPONSIBILITIES 22

4.1 Responsible Marketing 22

4.2 Customer Communication and Complaint Management 22

4.3 Investor Education 26

5. EMPLOYEE RESPONSIBILITIES 27

5.1 Equal and Diverse Workplace 27

5.2 Common Development Workplace 30

5.3 Healthy and Energetic Workplace 32

6. COMMUNITY RESPONSIBILITIES 33

6.1 Public Welfare and Charity 33

6.2 Joining Hands to Fight the Pandemic 33

6.3 Practicing Environmental Protection and Public Welfare 34

7. ENVIRONMENT RESPONSIBILITIES 35

7.1 Responding to Climate Change 35

7.2 Promoting Green Operation 40

7.3 Strengthening Waste Management 43

KEY QUANTITATIVE PERFORMANCE INDICATORS 45

REPORT INDEX 49

DESCRIPTION OF REPORT PREPARATION 55

China Industrial Securities International Financial Group Limited

Environmental, Social and Governance Report 2022

1

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

STATEMENT OF THE BOARD ON ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)

China Industrial Securities International Financial Group Limited ("CISI", together with its subsidiaries collectively referred to as the "Group", stock code: 6058.HK) has made full use of Hong Kong's status as an international economic hub, continuously improved its professional level and business capabilities, and become an international business platform under the "Industrial Securities" brand. At the same time, the Company deeply recognizes the importance of ESG management to its sustainable operation, and has always been committed to deeply implementing ESG concepts in all aspects of its operation and business execution, so as to contribute to the continuous construction of a sustainable financial ecosystem.

In 2022, the Group interpreted and analyzed external policies and industry trends, combined with the practice benchmarking of peer institutions, clarified its own responsibility direction and ESG material issues, and assessed, analyzed and ranked the importance and priority of identified ESG material issues through stakeholder research, and finally supervised, deliberated and made decisions by the Board of Directors (the "Board") to strengthen the pertinence of ESG management.

Steady governance to lay a solid development foundation. A sound governance structure is fundamental to the protection of shareholders' rights and interests and the efficient operation of enterprises. In order to further enhance its corporate governance capabilities, the Group has established and continuously improved its ESG management system, with the Board participating in the deliberation and decision-making of major ESG matters, supervising and assuming overall responsibility for the Company's ESG work, and clarifying a hierarchical governance structure for the "Board, ESG Committee, ESG Working Team, relevant departments and subsidiaries" to perform their respective duties to ensure the continuous and effective advancement of ESG. At the same time, the Group has also actively incorporated ESG risk management into the comprehensive risk management system to achieve comprehensive risk control.

Green operation to practice responsible finance. Responsible finance and responsible operation are important objectives pursued by the Group. In its business, the Group fully considers ESG factors such as climate and environmental risks of the target enterprises, incorporates them into risk management and business decision-making, and gives full play to its own resources and professional advantages to provide customers with high-quality green investment and financing services to create more environmental benefits. In its operations, the Group attaches great importance to the impact of its operations on the environment, conducts statistics, collection and analysis of carbon emissions, energy, waste and other performance indicators every year, and sets relevant targets, regularly tracks the changes of performance indicators and reviews the achievement of targets, so as to promote the improvement of ESG performance.

Contributing to society and creating shared value. The Group has always adhered to the core values of "enhancing employee value and creating customer value", and actively fulfilled its responsibilities to employees, customers and society. In terms of creating customer value, the Group adheres to the origin of serving the real economy, and has made in-depth efforts in supporting the development of technological innovation industries, serving Chinese enterprises to "go global", and helping the construction of infrastructure for people's livelihood. In terms of enhancing employee value, the Group provides employees with a good development platform, competitive remuneration and benefits, and a healthy and equal working environment. In terms of creating social value, the Group actively participates in Hong Kong social charity activities, provides long-term support and assistance to Hong Kong youth and vulnerable groups, and contributes to the common prosperity and development of Hong Kong society.

Looking forward to the future, in the journey of China's second centennial goal, the Group will continue to strengthen the implementation of sustainable finance strategies on the basis of a sound and standardized risk and compliance management and control system, help more real industries develop steadily, promote the green transformation of the real economy, and earnestly fulfill its financial responsibilities in the process of high-quality development of the country. At the same time, the Group will continue to improve the employee welfare system and employee development system, strengthen the management of climate risks and opportunities, actively participate in social welfare undertakings, and comprehensively promote the sustainable development of employees, environment and society.

2

China Industrial Securities International Financial Group Limited

Environmental, Social and Governance Report 2022

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

1. ENTERING INTO CISI

1.1 Corporate Profile

CISI was successfully listed on the GEM of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange") in 2016, becoming the first subsidiary of a Chinese securities group to be spin-off and listed overseas, and successfully listed on the Main Board of the Hong Kong Stock Exchange in 2019. Located in Hong Kong, the Group is a comprehensive financial group integrating investment and financing businesses such as global securities and futures brokerage, institutional sales and research, corporate finance, fixed income, asset management and private wealth management, and holds licenses of Types 1, 2, 4, 5, 6 and 9 regulated activities issued by the Securities and Futures Commission of Hong Kong.

The controlling shareholder of CISI is Industrial Securities Co., Ltd. ("Industrial Securities"). As a bridgehead for Industrial Securities to practice its internationalization strategy, the Group adheres to the concept of "focus on value, create the future with wisdom", relies on Hong Kong as an international financial center, has built an international investment and financing platform. After years of development, the Group has gradually established a solid foundation in Hong Kong and become one of the major comprehensive securities trader in Hong Kong.

At the end of 2022, CISI had total assets of HK$12,472 million and recorded an annual operating revenue of HK$258 million.

China Industrial Securities International Financial Group Limited

Environmental, Social and Governance Report 2022

3

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

1.2 Principal Business

Asset Management

• • Fund management services

• • Special account investment services

  • • Overseas investment consultancy services

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

• • Overseas debt financing

• • Structured product design, trading andrisk 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

  Corporate Finance

• • 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

4

China Industrial Securities International Financial Group Limited Environmental, Social and Governance Report 2022