Haitong International Securities : ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2022

Stock Code : 665.HK

Soaring towards Robustness

Environmental, Social and Governance Report 2022

Contents

About This Report	3
Management Statement	5
1.	Business of Haitong International	6
	1.1	Overview of Organisation	6
	1.2	Core Values and External Ratings	7
	1.3	Entities included in the Consolidated Financial Statement	8
	1.4	Organisation Coverage	9
	1.5	Business Overview	10
2.	Governance Structure	11
	2.1	Corporate Governance Practices	11
	2.2	Corporate Governance and Committee Structure	11
	2.3	Nomination and Election of the Highest Governance Body	13
	2.4	Internal Audit	13
	2.5	Conflict of Interest and Remuneration Policy	14
3.	ESG Governance Structure	16
	3.1	Main functions of the Board, ESG Committee and	17
		ESG Executive Office
	3.2	ESG Strategy	18
4.	Grow with Stakeholders	22
	4.1	Communication with Stakeholders	22
	4.2	Materiality Assessment	25
		4.2.1	Materiality Assessment Procedure	26
		4.2.2	Materiality Matrix	27
		4.2.3	Material Topics Selected by Stakeholders	29
5.	Economic and Operating Practices	30
	5.1	Sustainability and Green Finance	30
		5.1.1	ESG Investment Roadmap	30
		5.1.2	ESG Investment Practices	35
	5.2	Compliance Operation	37
		5.2.1	Anti-Corruption Policies	38
		5.2.2	Anti-Money Laundering Policies	38
		5.2.3	Training for Compliance Operation	39
	5.3	Supply Chain	40
		5.3.1	Green Procurement	40
		5.3.2	Supplier Assessments and Negative News Screening	40
		5.3.3	Anti-Corruption and Anti-Commercial Bribery	41
			of Supply Chain

Haitong International Securities Group Limited ｜ Environmental, Social and Governance Report 2022

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Contents

6.	Products and Services	42
	6.1	Product Responsibility	42
		6.1.1	Strict Guarantee on Product Safety	42
		6.1.2	Quality Assurance Process	43
		6.1.3	Data Protection and Customer Privacy	46
	6.2	Product and Service Development	50
		6.2.1	Innovation of Financial Services and Technology	50
		6.2.2	Exploration of Industry Opportunities	53
		6.2.3	Outstanding Achievements and Recognitions	55
	6.3	Shareholder and Investor Relations	56
	6.4	Customer Relations	56
		6.4.1 Good Customer Communication	56
		6.4.2	Investor Education	58
7.	Employee Care	60
	7.1	Employment and Interests	60
	7.2	Health and Safety	62
	7.3	Development and Training	64
8.	Community Investment	67
	8.1	Haitong International Charitable Foundation and Donations	68
	8.2	Charity and Volunteer Work Participated by Staff	70
9. Environment and Climate Change	74
	9.1	Climate Change	74
		9.1.1	Governance Structure	74
		9.1.2	Strategies and Goals	76
		9.1.3	Risk Management and Actions to	78
			Address Climate Change
		9.1.4	Climate Change Indicators	81
	9.2	Environmental-related Policies and Systems	82
		9.2.1	Emission Management	82
		9.2.2	Greenhouse Gas Emissions	82
	9.3	Green Office	83
		9.3.1	Waste	83
		9.3.2	Energy Use	84
	9.4	Actions for Environmental Protection and Promotion	86
Assurance Statement	87
Appendix 1: KPI Tables	91
Appendix 2: Reporting Basis - Data Verification for 2022	105
Appendix 3: Global Reporting Initiative Standards and	107
			the HKSE ESG Reporting Guide Content Index
Appendix 4: Feedback	118

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About This Report

The Environmental, Social and Governance Report 2022 (the "Report") discloses various tasks in environmental, social and governance ("ESG") aspects and accomplishments of Haitong International Securities Group Limited (the "Company"), together with its subsidiaries, (the "Group", "Haitong International" or "We") in 2022, in hopes of timely and effective communication with the stakeholders of the Group. This Report is the seventh environmental, social and governance report published on an annual basis to give a detailed picture of the our strategic philosophy, corporate governance and green finance practices in respect of ESG and how the Group identifies and manages various risks and opportunities.

Reporting Period

Unless stated otherwise, the contents, information and data in this Report cover the same period as the audited financial statements of the Group, which is from 1 January 2022 to 31 December 2022. Both this Report and the annual report of the Group are published on the same date.

The information and data in our ESG Report 2021 published on 27 April 2022 covers the period starting from 1 January 2021 to 31 December 2021. The setting process and calculation of data, scope and boundary for use in this Report are mostly the same as in the previous report. There is no material restatement for the previous report.

Scope of Report

Unless stated otherwise, this Report covers major locations where we operate in, including Hong Kong, Singapore, New York, London, Tokyo, Mumbai and Sydney. However, the quantitative environment performance indicators stated herein are applicable only to Hong Kong which is the Group's principal place of operation.

Guarantee of Obligations

The contents and data used in this Report are sourced from the Group's official information and statistical data, and have been reviewed and approved by the Board of Directors ("Board") of the Company before publishing on the websites of Hong Kong Exchange and Clearing Limited ("HKEx") and the Group.

We have obtained independent assurance from Ernst & Young for certain quantitative data for this Report. The details of scope and criteria of assurance are set out in the section "Assurance Statement" in this Report.

In convenience for analysis and research, the indexes are provided as follows:

• "Environmental, Social and Governance Reporting Guide (ESG)" (the "ESG Reporting Guide"), the Appendix 27 to the Rules Governing the Listing of Securities (the "Listing Rules") on the The Stock Exchange of Hong Kong Limited (the "HKSE")
• Global Reporting Initiative (GRI) (the "GRI Standards")

Haitong International Securities Group Limited ｜ Environmental, Social and Governance Report 2022

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About This Report

Reporting Guidelines

The Report is compiled on the "Mandatory Disclosure Requirements" and "Comply-or-Explain" Provisions in accordance with the ESG Reporting Guide.

When compiling this Report, the Group based on the 4 ESG core principles following the ESG Reporting Guide, namely, Materiality, Quantitative, Balance and Consistency.

• Materiality: Our sustainability consultant had assessed the major ESG issues and their priorities identified through the online surveys and engagement with stakeholders. The major issues were approved and confirmed by the ESG Committee and ESG Executive Office and the Board were also well informed. For details, please see Chapter 4: Grow with Stakeholders.
• Quantitative: We have set targets to mitigate the environmental impact of our operations and
  disclosed various quantitative ESG KPIs. For details, please refer to the Appendix I: KPI Tables.
• Balance: This Report objectively reflects the facts of the Group with positive and negative indicators included.
• Consistency: The disclosure and statistical methods used in this Report are consistent with previous reports as much as possible allowing for meaningful comparisons of the ESG data in the future. Reasons and additional explanation will be given once there are changes in the calculation of indicators.

Meanwhile, this Report is complied with reference to the followings:

• GRI Standards 2021 - the latest version of GRI Standards
• The recommendation on disclosure of climate-related financial information by the Task Force on Climate-related Financial disclosures (TCFD) (TCFD Disclosure Recommendation)

Reporting Languages and Access to the Report

This Report is compiled in Chinese and English versions on the websites of The Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the Group (www.htisec.com). In case of any discrepancies between the Chinese and the English versions, the Chinese version shall prevail.

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