Supervisory Level

The Board

The highest governing body of the Group’s ESG issues  and is ultimately responsible for overseeing matters concerning ESG  (including climate change issues) for the Group, covering matters (including  but not limited to) risks, governance, policies objectives and strategies  related to responsible investing.

ESG Committee

Chaired by independent non-executive director,  members include persons in charge of relevant departments, including  corporate governance, legal and compliance, risk management and human resources  functions as well as asset management and investment businesses.

Established by the Board as a functional committee. Responsible  for (including but not limited to) formulating visions and strategies related  to responsible investment, identifying relevant risks and opportunities,  providing recommendations to the Board.

Management Level

Relevant Management Committees

Relevant Management Committees  (including but not limited to Investment Committee) are established and authorized  by the Executive Committee and responsible for discharging corresponding  duties. The Investment Committee is authorized to oversee the Group's  investment portfolios adhering to the Group's risk tolerance. Investment portfolios may include but not limited  to assets in the primary and secondary markets.

Sustainable Finance Working  Group

Bearing the managing  responsibility for organizing, coordinating and facilitating the  implementation. Members include heads of all business units, including asset  management, investment, wealth management and corporate finance businesses. Responsible  for implementing strategic deployments and decision-making requirements, integrating  ESG factors into every aspect of the operations, and reporting to the ESG  Committee.

Execution Level

All Relevant Departments

Responsible  for implementing the decisions and goals set  by the supervisory and management levels, and performing daily sustainable  finance-related work.

Negative Exclusion

During  the investment process, investment targets that have a negative impact on  society and the environment, have major pollution or safety incidents, or  have defects in corporate governance are excluded.
  
 Companies and industries with negative environmental, social and corporate  governance impacts need to be carefully evaluated and investigated.

Ø  Listed  Equity

Ø  Private  Equity

Ø  Fixed  Income

Positive Screening

When  screening investment targets, focus on those that comply with ESG investment  concepts.
 
 

In  terms of the environment, we will consider clean energy, reducing carbon  emissions, and effectively managing water resources. For traditional  industries, we will consider targets that have less impact on the environment  and lower energy consumption.

 In terms of society, we focus on investment targets that focus on employee  welfare, support community development, and promote diversity.
 
 

In  terms of corporate governance, we focus on investment targets with high  transparency and reasonable executive compensation, and pay special attention  to the target companies' multi-village revitalization, green and inclusive  businesses, etc.

Ø  Listed  Equity

Ø  Private  Equity

Ø  Fixed  Income

ESG Integration

Take  ESG factors as one of the investment focus criteria, establish an ESG  evaluation system for listed companies and bond-issuing companies, build a  quantitative evaluation model, assign weights to each ESG factor, and derive  a comprehensive evaluation score as a reference for investment  recommendations.

Ø  Listed  Equity

Ø  Private  Equity

Ø  Fixed  Income

Thematic Investment

Focus  on sustainable development themes including but not limited to energy  conservation and environmental protection, new energy, new materials, and  green transformation of traditional industries, issue sustainable development  themed products, and participate in green bond investment.

Ø  Listed  Equity

Ø  Private  Equity

Ø  Market  Making for hedging

Ø  Fixed  Income

Impact Investment

Investing  in projects dedicated to solving social or environmental issues with focuses such  as urban revitalization, targeted poverty alleviation, and common prosperity;  objective is to aim for financial returns while creating positive social  impacts.

Ø  Fixed  Income

Ø  Private  Equity

Active Ownership

The  company actively exercises its shareholder rights, proactively communicates  with investee companies on ESG issues, and guides investee companies to  actively create positive ESG impacts through dialogue with senior management,  submission of shareholder meeting resolutions, and shareholder votings.

Ø  Listed  Equity

Ø  Private  Equity

Target Screening

In  the early stages of integrating the investment research framework, the investment  teams may adopt a negative exclusion strategy, excluding investment targets  that had significant negative impacts on society and the environment, or  those with major pollution incidents or major safety accidents, or had  defects in corporate governance, thereby preventing the transmission of ESG  risks to credit risks.

Investment  Decisions

The  investment team selects targets that are in line with the Company's ESG  investment strategy, and the credit research teams may incorporate ESG  factors into the credit analysis framework and sets corresponding investment  standards to assist in investment decisions.

Post-Investment Management

The  investment teams has established monitoring mechanisms to evaluate and track  the ESG scores of domestic bond issuers and closely monitor negative ESG  public opinion about bond issuers.

Project Initial Screening

Screen  the industries in which the investment targets are located, exclude heavily  polluting and high-carbon emission industries, and screen out investment  targets that do not meet the requirements through ESG negative lists and  other forms.

Evaluation  factors including but not limited to negative public opinion, environmental  lawsuits and regulatory penalties.

Due Diligence

Based  on the ESG evaluation system, a comprehensive ESG evaluation is conducted on  the investment targets during the due diligence process, including nine  evaluation factors in the three areas of environment, society, and corporate  governance. The results of the ESG due diligence will be reported to the  Investment Committee as an important basis for investment decisions.

Post-Investment Management

Continue  to carry out ESG investment evaluation, regularly track and evaluate the ESG  performance of investment targets, and strengthen archiving management of  materials related to the entire ESG investment cycle.