China Shenhua Energy : 2023 Environmental, Social and Governance Report

2023

Environmental, Social and Governance Report

Promote
Development,
Pursue	Green
Excellence

CONTENTS

About this Report	2
Board Statement	4
Statement of the Board	6
About China Shenhua	7
ESG Governance	10

01

Compliance with Regulations to
Deepen Corporate Governance	18
Governance System	20
Internal Control and Risk Management	22
Integrity and Compliance	24
Anti-corruption and Integrity Promotion	26
Business Ethics	29
Party Building	30

04

Adhering to People-oriented Principle to

Protect the Rights and Interests of Employees 76

Labour Rights and Cares	78
Employee Training and Development	81
Employee Care	83

02

Building a Solid Foundation to
Protect the Ecological Environment	32
Response to Climate Change	34
Ecological Environmental Management	46
Pollution Prevention and Control	48
Resource Utilisation Optimisation	54
Biodiversity	58

05

Sharing and Mutual Benet to
Build a Harmonious Society	84
Supply Chain Management	86
Industrial Cooperation and Development	88
Community Engagement	89
Community Development and Public
Welfare Investment	92

03

Agglomerating Efforts to Promote
High-quality Development	60
Product Responsibility	62
Driven by Technological Innovation	64
Safety and Health	68

Appendix	96
Table of ESG Performance	96
Indicators Index of HKEx ESG Reporting
Guide	104
GRI Index	107
Independent Limited Assurance Report	113
Denitions	118
Feedback from Readers	120

2023 Environmental, Social and Governance Report

About this Report

The report mainly introduces the core values and policies of China Shenhua in aspects of environmental, social and corporate governance ("ESG"), as well as the practice and performance in 2023. The report aims at enhancing communication with all stakeholders to jointly promote the sustainable development of the Company and society. The compilation of this report may not be entirely satisfactory due to various objective constraints. Readers are welcome to put forward their comments and suggestions by completing the Feedback from Readers attached to this report. The Company will improve and enhance the report on a best effort basis in the future.

Reporting Period

The report is an annual report. The reporting period is from 1 January 2023 to 31 December 2023. Certain contents have been retrospectively reviewed and extended in accordance with the principle of information consistency .

Scope of the Report

Unless otherwise indicated, the information and data in this report cover China Shenhua and its subsidiaries.

Basis for Preparation

The report is prepared in accordance with the requirements of the Environmental, Social and Governance Reporting Guide as set out in Appendix C2 of the Main Board Listing Rules on HKEx, and the Guidelines for the Self-Regulationof Listed Companies No. 1 - Standardised Operation on SSE, and with reference to the requirements of the GRI Standards of the Global Sustainability Standards Board (the "GSSB"). The section of Response to Climate Change was partially prepared with reference to the HKEx Guidelines on Information Disclosure of Climate.

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About the Report

Reporting Principles

Materiality principle: This report focuses on matters that may have material effects on stakeholders and the Company on the basis of the evaluation results of material ESG issues approved by the Board of the Company.

Quantitative principle: All data and information in this report come from the Company's official documents, statistical and financial reports and ESG information collected, compiled, and reviewed by the Company. Data contained herein were gathered and calculated in accordance with the regulations or industry standards of the PRC such as the General Principles for Calculation of Comprehensive Energy Consumption (GB/T2589-2020),the General Rules for Water Statistics in Water-useOrganisation (GB/T 26719-2022),the Calculation Method for Pollution Discharge Volume at the Discharge Outlet of State-controlledPollution Sources (H.B. [2011] No. 8), the Energy Statistical Reporting System (2021) (National Bureau of Statistics of the PRC), etc. Unless otherwise stated, the currency unit is CNY.

Balance principle: The contents of this report reflect objective facts, and disclose indicators involving positive and negative information.

Consistency principle: Unless otherwise stated, there are no significant adjustments to the scope of disclosure of the Company's ESG reports from previous years, and a consistent statistical methodology has been used to disclose 3-year comparisons for the key quantitative ESG indicators in order to reflect trends in performance levels.

Reporting Language

This report is published in Chinese and English. If there are any discrepancies between the two versions, the Chinese one shall prevail.

Assurance Information

This report has been assured independently by our independent auditor, KPMG Huazhen LLP. The proof, scope, methodology and conclusion of the assurance are included in Appendix IV.

Availability of the Report

This report is published in Simplified Chinese characters, Traditional Chinese characters and English. This report is available to stakeholders and the public in a PDF document, which can be downloaded from the websites of the SSE and HKEx and the official website of China Shenhua (www.csec.com or www.shenhuachina.com). Please email [e-mail] or dial 86-10-5813-1088 to request a printed copy of this report.

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2023 Environmental, Social and Governance Report

Board Statement

2023 was a remarkable year for ESG development. With the release of two programmatic disclosure guidelines by the International Sustainability Standards Board (ISSB), ESG-related policies, regulations and regulatory rules will also be issued. ESG factors will become an important benchmark for resource allocation in the global market. Over the past year, the Company has comprehensively implemented the new development concept by accelerating the construction of a new development pattern, actively responding to the "dual-carbon" target, striving to achieve new breakthroughs in building a modern industrial system, strengthening ecological environmental governance and promoting common prosperity, and continuing to improve the level of ESG governance and the performance of key indicators.

Focusing on "security" to ensure energy supply.

It has become a social consensus that, in the coming years or longer, coal resources are vital to safeguarding national energy security and ensuring a stable energy supply. In 2023, the Company fully leveraged the advantages of integration and synergy, accelerated the transformation and upgrading of traditional business, and made full efforts to safeguard the safe, smooth and stable operation of the industrial chain by focusing on optimising product structure, improving operating system and ensuring production and sales connectivity. The average monthly output of commercial coal during the year exceeded 27 million tonnes and the average monthly power generation exceeded 17.6 billion kWh. Four 1000-MW-level clean and efficient coal-fired units were put into operation. All these achievements highlighted the Company's role of the main force in energy supply.

Anchoring the "dual carbon" to empower green development.

Against the backdrop of the national construction of a clean, low-carbon, safe and efficient energy system, the Company strengthened strategic leadership and actively explored the development path of low-carbon transformation. In 2023, the Company set up a low-carbon development leading group to coordinate and promote green and low-carbon development work. In accordance with the 2023 Low-carbonWork Plan, the Company continued to propel the construction of green mines and implement the "three types of technical transformations linkage" of coal-fired power units, further reduced unit energy consumption by developing clean energy alternatives, effectively planned and developed new energy projects, explored low-carbon technology development, and optimised the carbon asset management mode.

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Board Statement

Upholding the "red line" to protect lucid waters and lush mountains.

We always insisted on planning our development from the perspective of harmonious coexistence of human and nature, and creating new driving forces and advantages for the Company's development through high-level ecological environmental protection. We persistently fought against pollution, built a green industrial chain integrating coal, electricity, chemicals and transportation, and built places for demonstration, leadership and benchmarking for environmental protection. We insisted on relying on green low-carbon technology, solidly promoted comprehensive utilisation of mine water, comprehensive treatment of waste, etc., and accelerated the formation of a production mode and industrial structure that saves resources and protects the environment. We strengthened the accountability of subsidiaries and branches for environmental protection, comprehensively and thoroughly carried out hazard investigation and rectification, and built a solid ecological safety foundation for high-quality development.

Contributing to "win-win" and common development.

We were committed to strengthening the implementation of safety responsibilities, improving working environment, enhancing the configuration of safety equipment, and effectively ensuring the physical and mental health and safety of employees. We implemented localised and diversified employment strategies, respected the legitimate rights and interests of employees and their growth with the Company. The Company worked together with local communities, actively participated in the local development in various fields such as science, education, culture and health, took the lead in disaster relief, and gave back to society with gratitude. We were dedicated to serving the national rural revitalisation strategy, driving the synergistic development of rural industries and increasing farmers' income. Throughout the year, the Company invested CNY438 million in social donation and CNY74.55 million in rural revitalisation.

Solidifying the "foundation" to enhance governance level.

We deeply integrated ESG governance with corporate operations to achieve a virtuous cycle of environmental, social and economic benefits enhancement. In 2023, the Company revised the rules of procedures for specialised committees under the Board to further improve the governance structure for climate change risks. We formulated management systems such as the Management Measures for Land Reclamation in the Coal Industry, to promote the establishment of a system covering the entire business and ESG system, ensuring the standardised operation of governance system and the efficient exercise of governance authority. We implemented ESG special actions, conducted international and domestic rating benchmarking and upgrading, proactively deployed measures to comply with international sustainability standards, maintained effective communication with stakeholders, thus maintaining the ESG brand status of China Shenhua.

Building synergy for a bright future of energy.

China Shenhua will, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, profoundly implement the new energy security strategy of "four revolutions and one cooperation", strengthen the mission and responsibility as a central state-owned energy enterprise, and cultivate new advantages and driving forces for development to contribute to the construction of the country's new energy system by adhering to the transformation and upgrading of traditional industries and the development of emerging industries, fully leveraging the role of coal and coal-fired power in securing basic needs, and implementing the carbon peak action in a planned and phased manner.

Board of Directors of China Shenhua Energy Company Limited

22 March 2024

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2023 Environmental, Social and Governance Report

Statement ofthe Board

The Board of the Company is the highest responsible and decision-making institution for ESG matters, which takes full responsibility for the Company's ESG strategies and report, and monitors ESG related matters that may affect the Company's business or operation, shareholders and other stakeholders. The Safety, Health, Environment and ESG Working Committee of the Board is responsible for supervising the commitment and performance of ESG key issues, and reporting to the Board to ensure the integration of ESG concept and the Company's strategy. The Audit and Risk Management Committee of the Board of Directors promotes the establishment of an effective internal control system for the Company and participates in the deliberation and decision-making on ESG matters such as climate change.

The Company attaches great importance to ESG governance and continuously improves the ESG governance system. The Company regularly conducts analysis and assessment of material ESG issues and identification of ESG risks based on the internal and external environment of development and the results of communication with stakeholders. The Board considers and determines material ESG issues and ESG risk list, takes them as the key work to manage and supervise, ensures that ESG concepts are integrated into the Company's development strategy and implemented in production, operation, and management activities in order to promote the Company's economic development, social equity, and environmental sustainability.

The Company has established an ESG target management mechanism covering major ESG performance indicators such as carbon emissions, pollutant emissions, energy consumption and water resources management, and the Board reviews the progress of those targets annually. The Company has incorporated ESG indicators into the annual performance appraisal system of the management and subsidiaries and branches of the Company to promote the achievement of the Company's ESG targets and improve the Company's ESG performance.

This report discloses the details of progress and effectiveness of ESG work of China Shenhua in 2023, and it was considered and approved at the Board meeting on 22 March 2024. The Board and all the Directors of the Company guarantee that the report does not contain any false representation, misleading statement, or major omission, and bear legal liabilities for the truthfulness, accuracy and completeness of the content hereof.

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About China Shenhua

About ChinaShenhua

Profile of the Company

China Shenhua was founded on 8 November 2004 and is a listed company of China Energy Investment Corporation Limited with A+H shares. Its H shares and A shares were listed on HKEx and SSE on 15 June 2005 and 9 October 2007, respectively. By the end of 2023, the Company had assets of CNY633.4 billion, with a total market capitalisation of USD84.5 billion and a total of 83,400 employees.

China Shenhua is the world's leading listed coal-based comprehensive energy company, mainly engaging in businesses such as coal, electricity, railway, port, shipping, coal-to-chemicals and new energy. Starting from the coal mining business, the Company leverages its own transportation infrastructure and sales network, as well as the downstream power plants and coal chemicals facilities to achieve a cross-sector and multi-industry vertical integration mode for its development and operation, thus forming the core competitive advantage of China Shenhua.

8 November 2004	9 October 2007
China Shenhua was founded	A shares were listed on SSE

15 June 2005

H shares were listed on HKEx

Total assets of	Total market capitalisation of	A total of
CNY633.4 billion	USD84.5 billion	83,400 employees

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