（原标题：亨通光电2023年环境、社会及措置求教（英文版））

Hengtong Optic-Electric Co., Ltd. 2023 Environmental, Social and Governance Report

Table of Contents - Corporate Governance - ESG Governance - Stakeholder Communication - Risk Management - Adherence to Business Ethics - R&D and Innovation - Sustainable Supply Chain - Quality Control - Responsible Sales - Customer Communication and Service

Overview - This report is the second Environmental, Social, and Governance Report published by Jiangsu Hengtong Optic-Electric Co., Ltd. - The report covers the fiscal year from January 1, 2023, to December 31, 2023. - The preparation of this report primarily follows the standards of the Global Reporting Initiative (GRI) and also responds to issues raised in the Morgan Stanley Capital International (MSCI) ESG Ratings.

Key Achievements - Established an ESG Committee and released the first ESG report. - Built the world's first "Lighthouse Factory" in the global optical communication industry. - Achieved significant technological breakthroughs in multiple fields, including the release of the 800G QSFP-DD 2×FR4 optical transceiver and successful application of the 400G optical transceiver in domestic and international markets. - Won the "Outstanding Case Award" at the EY (Ernst & Young) Second Listed Companies Sustainable Development Officer Summit. - Received the EcoVadis Gold Award for sustainability by the Spanish subsidiary, Cablescom. - Achieved ISO 14064 greenhouse gas verification and ISO 14067 product carbon footprint verification.

ESG Sustainable Value Management Performance - Self-built Photovoltaic Capacity: 10.5 MW (2022: 0.4 MW) - Purchased Green Electricity: 227,100 MWh (2022: 250,435 MWh) - Total Greenhouse Gas Emissions: 385,822.96 tons of CO2 equivalent (2022: 339,189.14 tons of CO2 equivalent) - Greenhouse Gas Emission Intensity: 810.18 tons of CO2 equivalent/100 million RMB (2022: 730.00 tons of CO2 equivalent/100 million RMB) - R&D Investment: 2.101 billion RMB (2022: 1.967 billion RMB) - Total International and Domestic Standards: 426 (2022: 364) - Total Authorized Invention Patents: 1,198 (2022: 1,010) - Total PCT International Patents: 135 (2022: 197) - Operating Revenue: 47.622 billion RMB (2022: 46.464 billion RMB) - Operating Profit: 2.311 billion RMB (2022: 1.674 billion RMB)

ESG Score Industry Ranking: 8/127 (Communications Equipment III) - Number of ESG-Related Indices Included: 4 - Number of ESG-Related Fund Products Included: 3.58% - ESG-Related Index Weight (%): 2023: 76 (2022: 33) - Refinitiv ESG Rating: 2023: A- (2022: BB) - China Credit: 2023: A- (2022: BB) - Wind: 2023: A (2022: BB) - Huazheng: 2023: BBB (2022: BB) - Business Greening: 2023: A- (2022: B)

ESG Sustainable Value Management Achievements - Green Manufacturing: National Green Factories: 5 (2022: 4) - National Green Products: 7 (2022: 7) - National Green Supply Chain Enterprises: 3 (2022: 3) - Jiangsu Green Factories: 7 (2022: 6) - Industrial Product Green Design Demonstration Enterprises: 3 (2022: 2) - Lighthouse Factories: 1 (2022: 0) - Near-zero carbon factories: 1 (2022: 0) - ISO 150001 Energy Management Systems: 6 (2022: 4) - ISO 14064 Organizational Carbon Emission Systems: 7 (2022: 4) - ISO 14067 Product Carbon Footprints: 28 (2022: 12) - Membership in Science-Based Targets Initiative (SBTi): 2 (2022: 0)

R&D and Innovation - Released over 20 R&D management regulations in 2023. - Key regulations newly added or improved include the "Pre-research Management Regulations," "Guidelines for Hengtong Technology Management System Construction," "Management Measures for Hengtong Industry-Academia-Research Collaboration," and the "IPD 3.0 R&D Management System Manual."

Sustainable Supply Chain - Achieved 100% coverage of suppliers certified by the ISO 14001 environmental management system. - Conducted 106 new supplier audits on-site during the reporting period.

Quality Control - Implemented a "Four-Way, Two-Sided" quality management model, enhancing the reliability of products and services and optimizing the efficiency of the value chain. - Established a 5G+IPv6 fully digital smart factory, achieving digital twins of the production process and full lifecycle quality traceability.

Responsible Sales - Provided systematic training for all sales personnel, covering relevant laws, compliance policies, and industry best practices. - Established a compliance supervision mechanism to address any violations of product promotion and service information standards.

Customer Communication and Service - Established internal norms such as the "Customer After-Sales Service Management System," "Emergency Response Management System," "Customer Complaint Management Measures," and "Special Process for Customer Complaints and Returns." - Conducted annual customer satisfaction surveys, with a satisfaction score of 96.31 points in 2023.

Environmental Protection and Management - Committed to green development, circular development, and low-carbon development. - Established a complete environmental management framework, with the board of directors serving as the highest governing body. - Achieved 100% ISO 14001 environmental management system certification for core business operations. - Conducted regular external audits based on ISO 14001 standards.

Climate Change and Carbon Neutrality - Set net-zero targets: By 2045, achieve a 90% reduction in absolute greenhouse gas emissions from Scope 1 and Scope 2 compared to the 2022 baseline. - Short-term targets: By 2033, reduce absolute greenhouse gas emissions from Scope 1 and Scope 2 by 54.6% based on the 2022 baseline.

Energy Efficiency and Transformation - Promoted the research and application of green and low-carbon technologies, such as energy-efficient technologies, clean energy technologies, and recycling technologies. - Achieved a 66% improvement in efficiency, a 21% reduction in unit manufacturing costs, and a 33% reduction in unit energy consumption through digital transformation.

Water-saving Transformation and Optimization - Established a centralized water circulation system for the workshop and adopted a centralized cooling mode of cooling towers. - Equipped with water-saving facilities and established a rainwater collection and utilization system.

Emission Management and Recycling - Waste gas emissions are mainly sulfur oxides generated during the production process of extrusion, lead extrusion, asphalt coating, and other processes. - Conducted preventive analysis of potential safety hazards, timely discovered and eliminated safety hazards, and formulated emergency rescue plans.

Talent Attraction and Retention - Committed to creating an open, fair, and just working environment. - Improved the employee recruitment management system and adhered to the principle of combining talent introduction and talent training.

Employee Compensation and Incentives - Established a fair, scientific, and reasonable remuneration management mechanism based on the nature of employees' positions. - Incorporated relevant performance indicators such as environmental management performance, health, and safety into the remuneration assessment system of management.

Supporting Growth and Development - Established a mature and complete employee promotion mechanism, setting up a dual-channel career development path in the management direction and professional and technical direction. - Cooperated with universities to organize training and education improvement projects for front-line employees.

Promoting Communication and Care - Established a sound and effective employee communication and consultation mechanism. - Held employee representative meetings every year to actively listen to and review work reports, commend outstanding employees, and track, rectify, and publicize employee proposals.

Occupational Health and Safety - Conducted occupational health and safety risk assessments, including special safety inspections, hidden danger investigation and rectification, emergency plan review and revision. - Ensured that all staff are equipped with complete safety protection equipment and set up safety warning signs around places with potential safety hazards.

Global Cooperation - Actively practiced the concept of global sustainable development and committed to addressing the challenges of global climate change and energy transformation through cross-border cooperation and technology output. - Participated in the ASEAN WIND ENERGY 2023 and won the 2023 Power Cable Technology Award from the organizer. - Donated 8.3583 million yuan to external parties during the year to support the sustainable development of society and the environment.

Community Contribution and Impact - Actively participated in public welfare activities, enhancing social care, promoting rural revitalization, education support, and charitable projects. - Donated funds and items to local orphanages, partnered with the local Red Cross to organize blood drives, and provided dairy cows to the community government during local traditional festivals.