Guotai Junan International : 2023 ESG Report

保持領先

Environmental, Social and Governance Report

環境、社會及管治報告

2023

將環境、社會、管治（ESG）因素融入 公司經營管理各個環節，全方位提升 綠色金融服務能力，促進經濟社會高 質量發展。

Integrate Environmental, Social, and Governance (ESG) factors into all aspects of Company's operations and management, comprehensively upgrade green finance and service capabilities, promote high-quality economic and social development.

CONTENTS

1. About Guotai Junan International	004
2. Message from the Board	006
3. Aligning with UNSDGs	008
4. ESG Highlights and Milestone	010
4.1. Performance Highlights in 2023	010
4.2. ESG Milestone	012
4.3. Awards and Achievements	013
5. ESG Governance	015
5.1. ESG Vision, Objectives and Strategies	015
5.2. ESG Governance Structure	017
5.3. ESG Risk Management and Internal Controls	018
5.3.1. Risk Management Policies and Practice	018
5.3.2. Three Lines of Defense	023
5.4. Business Ethics	024
5.5. Stakeholder Engagement and Materiality Assessment	028
5.5.1.	Communication with Stakeholders	028
5.5.2.	Material ESG Issues	030
6. Social Responsibility	032
6.1. Client-oriented Products and Services	032
6.1.1. Digital Transformation to Safeguard Services and
	Products Responsibility	032
6.1.2. Services and Products Integrity	036
6.1.3.	Investor Education	038
6.1.4. Customer Relationship Management	039
6.2. Talent Attraction, Retention and Development	041
6.2.1. Diversity, Equity, and Inclusion	041
6.2.2. Employment Management	043
6.2.3. Employee Health and Wellbeing	045
6.2.4.	Training and Development	046
6.2.5.	Recognition	049
6.3. Sustainable Supply Chain	050
6.4. Community Investment and Engagement	052

7. Environmental Responsibility	056
7.1. Environmental Targets	057
7.2. Tackling Climate Change	059
7.3. Green Office and Operation	065
7.4. Environmental Performance Table	068
8. Green and Sustainable Finance	069
8.1. Responsible Investment Practice	069
8.2. ESG Integration into Financial Services	074
8.3. Green and Sustainable Finance Performance	076
8.4. Case Study	076
About the Report	078
Reporting Basis and Principles	078
Reporting Scope and Period	078
Feedback	078
Appendix 1: The Stock Exchange's ESG Reporting
Guide Content Index	079
Appendix 2: Ten Principles of the UN Global Compact	083
Glossary	084

004 Guotai Junan International | 2023 Environmental, Social and Governance Report

1. About Guotai Junan International

Established subsidiaries in Singapore in 2015

Became the first Chinese securities firm

entered into Vietnam in 2019

Guotai Junan International has been established in Hong Kong for 30 years		Established subsidiary in Macao in 2023

About Guotai Junan International

Guotai Junan International has been established in Hong Kong for 30 years. In 2010, it became the first Chinese securities company approved by the China Securities Regulatory Commission for listing its shares on the Main Board of the Stock Exchange through IPO.

As one of the world's premier international financial centers, Hong Kong is not only the preferred location for financial services but also home to many large financial institutions. Strategically located in the heart of Asia, Hong Kong is closely integrated with the Mainland China and well-connected to all parts of the world. Its sound legal system, straightforward and low tax regime, free flow of capital, comprehensive range of financial products and services, and abundant financial expertise contribute to long-term competitiveness of Hong Kong as a financial hub. Adhering to the vision of being "based in Hong Kong, supported by the Mainland China and serving the world", the Group expands its business development into the Greater Bay Area and Southeast Asia through subsidiaries in Singapore, Vietnam and Macao, thus serving as a conduit linking high-quality enterprises with capital market in China and the world. Leveraging the strong brand advantage, extensive customer base and robust capital support of GTJA, the parent company, the Company paves the way and plays a pivotal role in the parent company's international development strategy.

Guotai Junan International | 2023 Environmental, Social and Governance Report 005

1. About Guotai Junan International

Our Business

In recent years, the Company has fully implemented its diversified development strategy, successfully transforming from a "brokerage oriented" securities firm into a large "integrated financial services provider" with a broad range of business sectors. With solid business capabilities and a strong shareholder background, the Group has developed four core business segments: wealth management, institutional investor services, corporate finance services, and investment management.

Integrated Financial Services Provider

Wealth Management

Providing comprehensive financial services and solutions to individual investors, small to medium-sized businesses and family office including: brokerage, loans and financing (mainly margin business) and other wealth management services.

Corporate Finance Services

Providing advisory services, placing and underwriting

services of debts and equity securities.

Institutional Investor Services

Providing market making, investments, structured product solutions and other services to corporations, governments and financial institutions, and also include investments to support the above services.

Investment Management

Providing asset management and fund management

services to institutions and individuals, and also includes investment in funds, debts and equity securities.

006 Guotai Junan International | 2023 Environmental, Social and Governance Report

2. Message from the Board

2023 was a year full of challenges. Despite facing multiple obstacles, Guotai Junan International has bravely forged ahead, pioneering and advancing with determination. We have not only achieved excellent results at the business level, but, more importantly, have taken significant strides in fulfilling our ESG responsibilities. The Board is pleased to share with you the Company's achievements in sustainable development and its vision for the future.

The Company has thoroughly implemented the ESG development concept. With a robust ESG management structure in place (which includes an ESG committee under the Board, and three ESG thematic working groups have been established), the Company continuously enhanced the effectiveness of the Company's ESG management system. This commitment advances our overarching goal of sustainable development and exemplifies our responsibility as a financial institution to protect the environment, contribute to society, and enhance corporate governance.

In addressing the challenge of climate change, we have taken proactive measures to maximize energy conservation and emission reduction at the operational level, resulting in a decrease in total GHG emissions for four consecutive years. Building on this, we achieved carbon neutrality at operational level for the first time through the subscription of carbon credit assets in 2023. This is not only a practical action against climate change but also a an indication of our taking commitment and responsibility to shareholders and society.

At the business level, by leveraging our professional expertise, we have played the role of a financial institution in supporting the green transformation of the real economy. We adhere to the concept of responsible investment, vigorously develop green and sustainable products and services, and comprehensively promote the high-quality development of sustainable finance. All business lines of the Company have formulated and implemented ESG policies tailored to their operations, integrating ESG factors into the investment decision-making process. Notably, the coverage rate of asset management and investment business has reached 100%. In terms of financing services, we not only assist clients in completing financing projects related to green industries, but also help them to achieve sustainable development goals by providing ESG-related products. In 2023, we completed 41 sustainable finance business projects, the total issuance scale exceeded HK$80 billion. Additionally, we have obtained the authority to trade on the carbon market of the Stock Exchange, providing new impetus to support the green and low-carbon transformation of the economy.

Guotai Junan International | 2023 Environmental, Social and Governance Report 007

2. Message from the Board

The Company strives to practise corporate social responsibilities, actively participating in social welfare activities, focusing on many areas such as education, environmental protection, vulnerable groups, giving back to the society with genuine care and practical actions. Throughout the year, we have consistently engaged in public welfare activities, making active contributions to ecological and environmental protection, material donations, and the care of society.

We firmly believe that fostering an inclusive and diverse work environment is key to corporate success. Therefore, we integrate ESG concepts with corporate culture, striving to create a working environment where everyone can realize their potential regardless of gender, race, religion or cultural background. We encourage diversity and inclusivity, attracting exceptional talents, which we believe that it will make our team stronger, thereby driving the Company sustained rapid development and creating greater value for shareholders.

Looking to the future, we are full of confidence. Guotai Junan International will hold itself to high standards and further strengthen its awareness and execution capabilities of corporate governance, environmental protection and social services. At the same time, we remain steadfast in the philosophy of "finance for the good," persistently assist high-quality enterprises' green transformation with professional, efficient, and high-quality financial services, promoting the positive interaction between economic development and ecological civilization, and injecting greater financial vigor into green, low-carbon and sustainable development.

Thank you again for your trust and support in Guotai Junan International. We look forward to walking with you hand in hand to write a new chapter for Guotai Junan International on the road to sustainable development, and to embrace a greener and better tomorrow.

The Board

Guotai Junan International

008 Guotai Junan International | 2023 Environmental, Social and Governance Report

3. Aligning with UNSDGs

The Group has consistently embraced sustainable business practices. This year, the Group has further strengthened commitment by aligning its ESG-related action plan with UNSDGs. As a responsible corporate citizen, the Group is committed not only to generating financial returns for its shareholders but also to contributing to a sustainable future for all stakeholders in the value chain and the wider community.

UNSDGs	The Group's Actions/Commitments

• Offering medical insurance packages, life insurance, disability insurance, business travel insurance, annual medical check-ups, and dental benefits to provide quality healthcare services to employees

• Organizing health and psychological wellness workshops to support employees' mental and physical health

Target 3.8

		• Offering comprehensive professional training that covers ethics, market knowledge,
		ESG-related topics and more to ensure employees are up-to-date with the market
		• Launching an e-learning platform for all employees, covering topics relating to product
		knowledge, equity instrument, securities lending, IPO placement procedure, best
		execution policy, credit and market risk management, whistleblowing, as well as topics
		on corporate social responsibility and ESG investing including green bonds, social
	Target 4.4, 4.7	bonds, and sustainable investment instruments

• Promoting equal employment opportunities and eliminating gender discrimination at workplace

• Ensuring gender-equality-related awareness is integrated into daily working practices and corporate culture

Target 5.1, 5.5

		• Promoting energy savings around the office and initiating renovation programs to
		improve the energy efficiency of office appliances
		• Prioritizing sectors that aim to improve energy use, including electric vehicles and
		renewable energy in investment decisions
		• Assisting in financing green projects that use renewable or clean energy to support the
		global rate of improvement in energy efficiency and the significant increase in the use
	Target 7.2, 7.3	of renewable energy worldwide

• Supporting sustainable development of the wider economy by investing in high-quality, innovative, and sustainable companies, and assisting clients to finance ESG-related projects

• Launching a management trainee program to equip university graduates with the necessary skills and knowledge required for the financial services industry

Target 8.3, 8.4, 8.6

Guotai Junan International | 2023 Environmental, Social and Governance Report 009

3. Aligning with UNSDGs

UNSDGs	The Group's Actions/Commitments

• Assisting clients in raising capital to adopt clean and green technologies for sustainable growth. This year, the Company has supported the fund raising of an enterprise that uses innovative energy technologies to improve heating efficiency and provide an alternative to coal-fired heating systems

Target 9.4

• Implementing a series of water-saving and waste reduction measures within the Company

• Adopting and promoting green procurement and incorporating ESG factors into the tendering process to better manage environmental and social risks in the supply chain

Target 12.2, 12.5

• Identifying climate-related risks and opportunities and taking proactive actions to enhance the Company's climate resilience and reduce environmental impact

• Exploring green and sustainable finance opportunities to invest in and finance companies committed to making a positive impact on environmental sustainability

Target 13.1

• Establishing a comprehensive and effective risk management and internal control system

• Conducting business with the highest ethical standards and has zero tolerance towards any form of bribery, corruption, extortion and fraud

• Requiring all employees to participate in anti-bribery and anti-corruption trainings

Target 16.3, 16.5