Chu Kong Shipping Enterprises : 2024 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

Contents

1.	About this Report	02	6.	Green Development	48
	1.1.	Reporting Scope	02		6.1.	Green Operation	51
	1.2. Basis of Report Preparation	03		6.2.	Climate Change	60
	1.3.	Report Disclaimer	05	7.	Community Engagement	62
	1.4.	Contact Us	05	8.	Our Performance	66
2.	About the Group	06	Appendix 1 Applicable Laws and Regulations	72
3.	Approach to Sustainability	10	Appendix 2 Environmental, Social and Governance Reporting Guide Content Index	74
	3.1.	Governance and Compliance	11
	3.2. Stakeholder Engagement and Materiality Assessment	20
4.	Providing Excellent Service	24
	4.1.	Service Optimisation	24
	4.2.	Customer Satisfaction	27
	4.3. Data and Privacy Protection and Intellectual Property Rights Protection	29
	4.4.	Procurement Practices	30
5.	Adhering to People-oriented	32
	5.1.	Employment Profile	32
	5.2.	Employee Development	33
	5.3.	Safety and Health	40

About

this Report

1. ABOUT THIS REPORT

This environmental, social and governance ("ESG") report (this "Report") details the sustainability strategy, progress, and achievement of Chu Kong Shipping Enterprises (Group) Company Limited and its subsidiaries (collectively referred to as the "Group" or "we") in 2023.

1.1 Reporting Scope

This Report supplements the 2023 Annual Report of the Group and discloses the Group's management approaches, measures and performances in ESG from 1 January 2023 to 31 December 2023 (the "Reporting Period") (with some contents dating back to the prior years or looking forward to the date of release of this Report).

The reporting scope of this Report includes the Group's terminal logistics business, passenger

About this Report

1.2 Basis of Report Preparation

This Report was prepared in accordance with the Environmental, Social and Governance Reporting Guide ("ESG Guide") set out in Appendix C2 of the Main Board Listing Rules of The Stock Exchange of Hong Kong Limited ("SEHK"). For detailed information about the provisions of the ESG Guide , please refer to Appendix 2 of this Report.

This Report has complied with the "comply or explain" provisions as well as mandatory disclosure requirements of the ESG Guide and was prepared in adherence to the four reporting principles: Materiality, Quantitative, Balance and Consistency.

Materiality

Quantitative

transportation business, fuel supply business, and corporate and other businesses, which covers our operation in offices, cargo terminals, and ferry terminals in Mainland China, the Hong Kong Special Administrative Region of the People's Republic of China ("Hong Kong"), and the Macao Special Administrative Region of the People's Republic of China ("Macao").

• Chu Kong Shipping Enterprises (Group) Company ‧ Zhongshan City Huangpu Port Cargo and

Limited ("CKSG" or the "Company")	Container Terminal Co., Ltd. ("Huangpu Port")
‧ Chu Kong Agency Company Limited	‧ Zhaoqing New Port Co., Ltd. ("Zhaoqing New
‧ Chu Kong Container Transportation Company	Port")

A materiality assessment was conducted to inform the structure and focus areas of our ESG reporting. For the process to identify and the criteria for the selection of material ESG issues, please refer to the section "3.2 Stakeholder Engagement and Materiality Assessment" of this Report.

We reported our quantitative performance for stakeholders to evaluate the effectiveness of our ESG policies and management systems. Moreover, we disclosed the standards, methodologies, assumptions, and source of conversion factors used for the reporting of key performance indicators where applicable.

Limited	‧ Zhaoqing Chu Kong Logistics (Sihui) Co., Ltd.
‧ Chu Kong (Guangdong) International Freight	‧ Chu Kong International Airfreight Company Limited
Forwarding Co., Ltd. ("CKIFF")	‧ Ever Sky Transportation Limited
‧ Chu Kong Godown Wharf & Transportation	‧ Chu Kong Cargo Terminals (Qingyuan) Co., Ltd.
Company Limited	("Qingyuan Port")
‧ Chu Kong Transhipment & Logistics Company	‧ Chu Kong Cargo Terminals (Gaoming) Co., Ltd.
Limited	("Gaoming Port")
‧ Chu Kong Transportation (H.K.) Limited	‧ Chu Kong Cargo Terminals (Kangzhou) Co., Ltd.
‧ Chu Kong Passenger Transport Company Limited	("Zhaoqing Kangzhou Port")
("CKPT")	‧ Shenzhen Zhu Chuan International Freight
‧ Sun Kong Petroleum Company Limited ("Sun	Forwarding Co., Ltd. ("Shenzhen Zhu Chuan")
Kong Petroleum")	‧ Chu Kong (Guangdong) International Shipping
‧ Oriental Pearl Cruise Company Limited (formerly	Agency Co., Ltd.
known as Cotai Chu Kong Shipping Management	‧ Civet (Zhuhai Bonded Area) Logistics Company
Services Company Limited)	Limited ("Civet Port")

• Chu Ou Engineering And Technologies Company ‧ Guangdong Digital Port & Shipping Technology

Limited

Co., Ltd. ("Digital Port and Shipping")

• Sun Ferry Services Company Limited ("Sun Ferry")
• CKS Container Terminal (Zhuhai Doumen) Co., Ltd. ("Doumen Port")
• Chu Kong Shipping (Guangdong) Logistics Co., Ltd.
• Zhaoqing Chu Kong Logistics (Gaoyao) Co., Ltd. ("Gaoyao Port")

Balance	Consistency
This Report is prepared in a transparent manner	We adopted consistent methodologies and
of which the information disclosed covers both	reported the changes to the scope and
sustainability achievements and challenges of	methods to allow for meaningful comparisons
the Group.	of ESG data over time.

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About this Report

About this Report

1.3 Report Disclaimer

All information disclosed in this Report was sourced from the Group's documents and statistics. The board of directors of the Company (the "Board") has overall responsibility for the Group's ESG strategy and reporting. This Report was reviewed and approved by the Board on 26 April 2024.

This Report was published in Traditional Chinese and English versions. Should there be any discrepancy between the two versions, the English version shall prevail.

1.4 Contact Us

We welcome your feedback on our ESG performance and this Report. Please contact us with the information below:

Chu Kong Shipping Enterprises (Group) Co., Ltd.

Address: 24/F., Chu Kong Shipping Tower, 143 Connaught Road Central, Hong Kong.

E-mail:[e-mail]

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About

the Group

About the Group

2. ABOUT THE GROUP

CKSG (Stock Code: 00560) is a listed company incorporated in Hong Kong held by Chu Kong Shipping Enterprises (Holdings) Company Limited and is affiliated to Guangdong Provincial Port & Shipping Group Company Limited.

The Group is principally engaged in investment holding, focusing mainly on terminal navigation logistics, waterway passenger transportation, and fuel supply business.

Terminal	Passenger		Corporate
Navigation	Fuel Supply
Transportation	and Other
Logistics	Business
Business	Businesses
Business

The Group has established shipping business network that "Travels in the Pearl River Delta, Covers the Greater Bay Area and Reaches Southeast Asia", and its business radiates to Guangdong, Hong Kong, Macao and countries and regions along the "Belt and Road". The "CKS" corporate brand is well known in Guangdong, Hong Kong, Macao, and Southeast Asia.

The Group has a well-developed, vertical, and horizontal terminal logistics business system, and its business network extends to Singapore, Malaysia, Thailand, and other Southeast Asian countries. It holds and invests in more than 10 river terminal companies in the Pearl River Delta, wholly owns the private warehouse terminal in Tuen Mun, Hong Kong, and operates a number of berths in public cargo working areas in Yau Ma Tei, Butterfly Beach, and Gin Drinkers Bay, etc. We have a number of modernised warehousing bases, and those are well developed in cross-bordere-commerce logistics, cold chain warehousing logistics, and high-end integrated logistics, and have established an integrated logistics service system in the Greater Bay Area based on port, shipping, and warehousing.

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About the Group

About the Group

The Group's core business also includes the water passenger transportation business. The cross-border high- speed waterway passenger transportation based in Guangdong, Hong Kong, and Macao, has developed into the largest operation agent of waterway passenger transportation in the region. The Group also operates five inner harbour and outlying island ferry routes in Hong Kong. The fuel supply business of the Group focuses on the provision of diesel and lubricants for passenger ferries and cargo vessels, and other businesses of the Group cover the operation and management of facilities maintenance services for properties in Macao.

Moving forward, the Group will firmly grasp the strategic opportunities brought by the National "14th Five- Year Plan", the Guangdong-HongKong-Macao Greater Bay Area development, as well as the "Belt and Road" initiative. We are committed to leveraging these initiatives to enhance the well-being of the people in Hong Kong, harness the resources within the Bay Area, strategically plan for ASEAN integration, and drive the high- quality development of the Group.

By aligning our goals with these national and regional strategies, we aim to maximise synergies in the Greater Bay Area, explore "Belt and Road" opportunities, and foster strategic partnerships to optimise operations and expand our market reach. With a commitment to quality, innovation and collaboration, we confidently navigate the evolving landscape, advancing enterprise development for long-term success.

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Approach

to Sustainability

Approach to Sustainability

3. APPROACH TO SUSTAINABILITY

The Group is dedicated to integrating sustainable business practices into its daily operations. We strive to uphold the highest ethical standards, minimise our environmental footprint, respect the rights of our employees and make meaningful contributions to the community. We actively interact with stakeholders through diverse communication channels and foster transparency and accountability by openly sharing our ESG performance. Our overarching goal is to create value for all stakeholders and demonstrate unwavering dedication to sustainability.

3.1.Governance and Compliance

The Group has established a robust governance structure to ensure comprehensive governance and seamless execution of our ESG commitments, covering three levels, including decision-making level, management level, and execution level. As the highest decision-making body, the Board oversees the Group's ESG issues across all business segments. The Governance Group for the ESG Report, as the management level, assists the Board in fulfilling its ESG oversight responsibilities and is accountable to the Board. At the execution level, the Working Group for the ESG Report supports the Governance Group for the ESG Report in implementing all ESG-related initiatives.

The Board

Governance Group for the ESG Report

Working Group for the ESG Report

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Approach to Sustainability

The Board

The Board is responsible for the overall ESG management of the Group. It provides oversight of the Group's ESG management and gives final approval for the Group's ESG strategies, policies, targets, and approaches.

Governance Group for the ESG Report

Spearheaded by one of the executive directors of the Company, the Governance Group for the ESG Report is comprised of general managers from different business segments. Under the full authority of the Board, it is responsible for assisting the Board in conducting its ESG supervisory duties and reporting to the Board regularly. Its main responsibilities are as follows:

• to assist the Board in providing strategic guidance, formulating sustainability policies and objectives, identifying key ESG factors and monitoring progress, and support the Board in incorporating sustainability considerations into the Group's business strategy and managing the ESG risks arising from its business arrangements;
• to assist the Board in establishing processes for identifying, assessing and managing significant ESG-related issues and risks;
• to establish good relationships with key stakeholders and achieve natural growth and sustainable development of the Group, and create value for key stakeholders by understanding their needs and concerns and improving business strategies to meet their expectations;
• to integrate corporate social responsibility into the Group's operations and implement various sustainable business practices on the basis of strict internal compliance in order to promote the Group's environmental and social sustainability gradually;

Approach to Sustainability

• to drive the Group to continuously optimise its operational practices to reduce social risks and bring more benefits to the community;
• to monitor the Group's strict compliance with laws and regulations relating to environmental protection that have a material impact on the Group, and whether the Group's subsidiaries have formulated relevant policies, management systems, practices and methods to manage their environmental impact in accordance with the nature and actual conditions of their business;
• to drive the Group to continue to meet its environmental responsibilities and reduce the environmental impact of its operations, and assist the Group in taking environmental considerations into account in its corporate decision-making process, as well as to conduct operations in accordance with reasonable environmental practices;
• to develop prevention and emergency response mechanisms to ensure that the Group can respond effectively and orderly in the event of major environmental pollution incidents and minimise damage to the environment; and
• to exercise its powers, authorisations and discretion in respect of ESG reporting as appointed by the Board to the Governance Group for the ESG Report from time to time by complying with the Hong Kong Companies Ordinance, the Listing Rules and the Articles of Association of the Company.

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Approach to Sustainability

Working Group for the ESG Report

The Working Group for the ESG Report is comprised of ESG representatives from all subsidiaries in the Group. It is responsible for implementing the Group's ESG policies, collecting and compiling the data needed for ESG reporting, and reporting to the Governance Group for the ESG Report. Its main responsibilities are as follows:

Approach to Sustainability

• Adhering to Our ESG Policy
  To strengthen our ESG governance and guide the development and implementation of ESG initiatives, the Group has implemented the Environment, Social and Governance Policy ("ESG Policy "). This policy reflects our commitment to conducting business with environmental awareness and creating value for the communities in which we operate. It also outlines our sustainability vision, mission, commitment, and responsibility.

• to assist the Governance Group for the ESG Report in the implementation of all ESG issues;
• to facilitate the exchange of best practices among the Company's departments and subsidiaries and report relevant recommendations to the Governance Group for the ESG Report for integration into operations and procedures;
• to maintain continuous communication with key stakeholders and regularly collect their views through various channels such as meetings, workshops, surveys and feedback programmes;
• ESG representatives receive the ESG data collection form and distribute it to the relevant departments according to the contents;
• ESG representatives are responsible for the comprehensiveness and accuracy of the ESG data collection form submitted by their units;
• to urge all departments to fill in the ESG data collection form on time and accurately, and return the ESG data collection form to the Capital Operation Department of the Company on time;
• responsible for organising relevant personnel to answer questions from the Governance Group for the ESG Report and the consulting firm on the relevant contents of the ESG data collection form; and
• to complete an ESG report under the Listing Rules and submit it to the Governance Group for the ESG Report.

Vision

Mission

Commitment

Responsibility

We are devoted to becoming the most competitive navigation company and leading service provider in Guangdong, Hong Kong, and Macao through adopting innovation and sustaining our commitment to environmental protection.

We strive for excellence in providing safe and reliable services to our customers with dedication, professionalism, and efficiency.

We are committed to adopting sustainable practices and operating our business in a transparent and ethical manner. We embed accountability in the workplace and take responsibility for our decisions and actions.

We recognise that our employees make a significant contribution to the Group's success. We therefore place great emphasis on providing a safe and healthy workplace and improving employee engagement.

During the Reporting Period, the Group has established the ESG Working Manual, which outlines the ESG governance structure, ESG policies, the management of ESG metrics and targets and the annual ESG workflows to enhance internal communication and ensure a comprehensive understanding of the Group's ESG management policies and workflows among all employees.

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Approach to Sustainability

Approach to Sustainability

• ESG Risk Management
  The Risk Management and Internal Control Committee of the Group assumes a proactive leadership role in preventing and controlling risks, monitoring, and managing major risk events, as well as following up on the overall risk management performance report. The Board is accountable for conducting a comprehensive evaluation and identification of the Group's main ESG risks and ensuring the establishment and maintenance of suitable and efficient risk management measures.
  During the Reporting Period, the Group has identified major ESG risks through comprehensive scoring, based on the two dimensions of "risk occurrence probability" and "risk impact degree", and the corresponding measures are as follows:

Significant ESG Risks

Competition Risk

Potential Impacts

During operations, the Group is likely to face disordered competition from competitors, and the low-price strategy exacerbates the competitive environment. Furthermore, there is homogeneous competition among adjacent terminals within the Group and among ports in the same hinterland. To avoid related risks and prevent a decrease in revenue,

Response Approaches

- Increase service content, pay

attention to service details, improve

service quality, reach a level that

other competitors cannot do,

improve operational efficiency,

strengthen cost control, reduce

unnecessary operations, and solve

common problems of container

handling and inspection. Avoid

deliberately lowering prices to

Significant ESG Risks

Demand Fluctuation Risk

Potential Impacts

Due to the influence of the pandemic and global trends, the market demand fluctuates greatly, which has posed a risk to the Group in terms of wrong decision-making that could lead to financial losses, as well as greater financing pressure, affecting the Group's reputation and brand image

Response Approaches

To adapt to the changes of the market environment, we should strengthen market development and potential exploration. In terms of marketing strategy, it is necessary to pay more attention to the high-return businesses such as air freight, bulk cargo, and comprehensive logistics, especially to strengthen the development of engineering logistics projects

• Actively respond to shipping market risks by integrating resources from all aspects
• Closely cooperate with transshipment and logistics terminals
• Adjust the development model and seek new business growth points

the Group needs to take appropriate measures to ensure the realisation of its strategic goals

attract customers, and adhere to the

bottom line of prices

- Expand comprehensive logistics and

multimodal transport, expand the

scope of business development, and

establish cooperative relations with

the Pearl River Delta major terminals

to enhance the competitiveness of

comprehensive logistics

- Grasp the Group's positioning in the

market, improve our products and

services quality, make the products

and services more value-added,

or reflect more value or value-for-

money, close to customers, close to

the market, deeply grasp the needs

and pain points of customers, make

characteristic services, and carry out

differentiated marketing

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