SUPPORT THE UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS

We have incorporated the United Nations Sustainable Development Goals (SDGs) into our business development strategy and are committed to aligning the responses of our stakeholders with the relevant sustainable development goals (SDGs) to actively promote the integration of operational development and sustainable development value.

HIERARCHICAL GOVERNANCE STRUCTURE FOR ESG INITIATIVES

STAKEHOLDER ENGAGEMENT

Long-term and effective communication with stakeholders is the top priority for improving sustainable development. During the Reporting Period, the Group evaluated material topics to important stakeholders including employees, investors, customers, suppliers and contractors through online questionnaires. By analyzing the survey results of the Group’s management and other stakeholders, the topics identified by the Group’s management and other stakeholders as having a significant impact on the Group’s economy, society and environment are summarised. The Group fully understands their demands and expectations and incorporates them into the Group’s sustainable development management policy.

Stakeholder Groups Communication Channels Issues of Concern
Management
  • Regular meetings
  • Internal communication
  • Economic benefits
  • Smart port
  • Innovation and intellectual property rights
  • Anti-corruption
  • Compliant operation
  • Business ethics
  • Management of contraband and anti-smuggling of marine cargo
  • Port area greening
  • Climate action
Employees
  • Internal communication
  • Seminars and questionnaires
  • Labor union
  • Employee activities
  • Talent management
  • Occupational health and safety
  • Employee training and development
  • Diversity and equal opportunity
  • Employee communication
  • Labor Standards
Customers
  • Satisfaction surveys
  • Complaint handling mechanism
  • Product health and safety
  • Customer satisfaction
  • Customer privacy and cybersecurity
  • Dangerous goods management
Shareholders/investors
  • Annual report
  • Shareholder meetings
  • Investor meetings
  • Corporate governance
  • Compliant operation
  • Business ethics
  • Environmental compliance
  • Anti-corruption
  • Economic benefits
Suppliers/contractors
  • Supplier assessment
  • Procurement platform
  • Materials trading platform
  • Supplier meetings
  • Supplier management
  • Contractor management
  • Green procurement
Community
  • Volunteering activities
  • Donation
  • Community engagement
  • Community Opinion

TACKLING CLIMATE CHANGE

The Group is well aware of the significant impact of climate change on the global and the Group’s business operations. In the face of the increasingly severe climate change threats, the Group has carried out climate-related risks and opportunities assessment in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) since 2020. In 2022, the Group launched a new round of climate change questionnaire assessment added a matrix analysis based on the assessment result to further improve the integrity and transparency of climate-related information disclosure, and more intuitively demonstrate the short, medium and long-term climate-related risks and opportunities identified.

Governance

The Board of Directors of the Group is fully responsible for the work related to climate change. The ESG Working Committee ensures that the relevant requirements are met and makes recommendations, and reports to the Board at least once a year. The Board reviews and determines the risk management matters related to climate change through the Audit Committee.

Responsibilities of the Board and the ESG Committee
Duties of the Board: Supervise and make final decisions on climate change-related matters, including annual review of climate change management, identify climate change risks and opportunities, countermeausres, and relevant disclosures and announcements.
Duties of the ESG Working Committee: Regular meetings are held to identify risks and opportunities of climate change; formulate climate change management strategies, policies and systems, measures and goals for the Board to make decisions; ensure distribution and completion of specific items of work, and supervise performance of subsidiaries and affiliates in implementation of relevant measures.

Strategies

The Group agreed that scenario analysis can help to explore and understand the impact of various climate-related risks, including transition and physical risks, on business, strategy and financial performance with the lapse of time. Following TCFD’s recommendations, the Group selected RCP 8.5 – the baseline scenario of the highest greenhouse gas emissions as a conservative forecast for the physical risk assessment, and assessed the transition risks related to climate with IEA 2DS – the International Energy Agency Sustainable Development Scenario.

RCP 8.5 scenario: Under this scenario, there is no new climate change policy in the world to predict and limit emissions. It is estimated that by 2050, the global average temperature will increase by 2.3 degrees Celsius compared to the early stage of industrialization, and by 2100, the sea level will increase by approximately 0.43 meters.

IEA 2DS scenario: The scenario assumes a high level of global sustainable development by 2050. Through various new policy requirements and measures, the global warming is controlled within 2.0 degrees Celsius and the climate change and air pollution issues are effectively addressed.

For a detailed description of the risks and opportunities, please refer to the “Climate-related Risks and Opportunities Management” section.

Climate-related Risks and Opportunities Management

The Group actively responded to global climate change and continued to pay attention to climate-related risks and opportunities. Based on the results of the 2022 questionnaire assessment, the identified risks and opportunities were ranked in accordance with the two dimensions of “potential risks (degree of impact)” and “impact time period”, and the following matrix was determined.

Key performance

Impact analysis

Risk description Potential financial impact Impact boundary Actions undertaken
Physical risks
Acute physical risks
Risks driven by extreme weather events, such as typhoons, hurricanes or floods, flooding the port or swamping the port, making the port not able to operate normally, damage to terminals, operating facilities, equipment, storage areas and cargoes, lead to siltation of port waterways.
  • Decrease in revenue: Business operation affected
  • Decrease in assets: impairment of assets
  • Increase in expenditure: Maintenance of damaged port infrastructure and equipment, maintenance of dredging work, construction of port breakwater to resist wind and wave
 Short-medium term
  • Conduct flood control and storm prevention drills every year
  • Establish corresponding emergency plans for extreme weather such as heavy rains, cold tide and sea ice
  • Equipped with flood prevention emergency management team for the vessels gates in low-lying areas, and set up moisture-proof baffles to seal up when water level rises, which has achieved good results
  • Strengthen the management of rain effects and damage prevention and tidal loss in key areas, evaluate the key points of damage prevention and the high-level changes in low-lying areas of each unit, form a statistical template for cargo conditions in key areas, and timely arrange cargo transportation and relevant records to further consolidate basic management
Chronic physical risks
The long-term change in climate patterns and the incremental changes in climate (rising in sea level, changing in rainfall and continuous high temperatures) have led to more frequent and severe extreme events, leading to more frequent transportation delays and affecting the reliability of marine transportation.
  • Decrease in revenue: Decrease in market demand for services
 Medium
  • The Group optimizes the operation level and improves service quality through the development of smart ports
Transition risks
Policy and legal risks
Directly or indirectly affected by policies and laws designed to limit the impact of climate change and/or enhance the adaptability to climate change, including the implementation of carbon pricing mechanisms, increase in environmental disclosure requirements and stricter environmental and climate policies, and increased corporate compliance
  • Increase in cost: Increase in emission cost
  • Increase in cost: Increase in renovation costs
 Medium
  • Regularly collect and update regulations through various channels such as government agencies and the Internet to ensure operational compliance
Technology risks
Directly or indirectly affected by technological changes, including the industry’s support for global low-carbon transformation to increase research and development and investment in renewable energy technologies, the wide application of new energy-saving facilities to procure new facilities and replace old equipment (Increased investment in the development of smart green ports in the industry)
  • Increase in costs: increase investment in research and development of green technologies and purchase of new equipment
  • Decrease in assets: Decommissioning of original equipment
 Medium
  • Promote the construction of smart ports and fully automate large equipment as planned
Reputational risks
Stricter environmental regulations may expose enterprises to higher risks of claims and litigation
  • Increase in costs: Legal cases of non-compliance claims
 Medium-long term
  • Conduct environmental assessment on subsidiaries and affiliates with reference to the environmental protection assessment measures
Market risks
Climate change affects the supply and demand of certain goods, products and services in the market, including the increase in resource prices (such as energy, sales of fuel,etc.)
  • Increase in costs: increase in raw material prices
 Medium
  • Implementing flexible supply chain management and promoting low-carbon transformation
Opportunities description Potential financial impact Impact boundary Actions undertaken
Resources efficiency opportunities
In the medium-long term, improving energy efficiency can directly save operating costs and contribute to limiting global carbon emissions, including the development of green ports, the use of clean energy and the promotion of shore-based power use.
  • Cost reduction: reducing operating costs
 Medium
  • Promote the application of energy-saving technologies in production and operation, such as energy-saving lamps, clean energy equipment
  • Promote the construction of energy management system and improve energy conservation management ability for the whole process of the system
  • Strengthen the optimization of port energy structure
Product and service opportunities
The innovation and development of low-carbon emission products and services can enhance the market competitiveness, such as customers’ preference for more environmentally friendly service providers or products (such as low-carbon marine fuel), and investors’ preference towards focusing on investing in green port operators.
  • Cost reduction: Lower financing cost
  • Increase in revenue: Increase in sales volume of low-carbon fuel
 Medium
  • Promote the construction of smart green ports, and subsidiaries and affiliates should implement green port projects in accordance with the green port construction plan of Tianjin Port
  • Accelerate the transformation into a low carbon business and actively participate in low-carbon construction

Metrics and Targets

The Group measures and discloses indicators related to greenhouse gases and energy to monitor climate change management performance, including gas emissions (Scope 1 and 2), greenhouse gas emission intensity (in terms of turnover), energy consumption (electricity, diesel, LNG, natural gas and heat), energy consumption intensity (in terms of turnover).

LABOR MANAGEMENT POLICIES ON EMPLOYEE DIVERSITY AND INCLUSION, WOMEN’S PROTECTION

The Group considers talent management as the cornerstone of corporate development and sustainable management, and is committed to creating an equal and healthy workplace environment. We are determined to eliminate any form of discrimination on gender, race, religion, age and physical condition. The Group supports the employment of disabled persons and protects the rights and interests of female employees in accordance with relevant and regulations such as the Measures for the Administration of Employment Security Fund for the Disabled in Tianjin and the Law of the People’s Republic of China on the Protection of Women’s Rights and Interests.

TALENT TEAM BUILDING

Environmental, Social, and Governance Report