Kangda International Environmental : 【2022-05-30】Financial Statements/ESG Information - 2021 Environmental, Social and Governance Report

Environmental, Social and Governance Report

Kangda International Environmental Company Limited

Environmental, Social and Governance Report

Contents

ABOUT THIS	02	Sustainable
REPORT		Development
Management' s	03	Innovation
Statement
Board of		for a Better
05	Future
Directors' Statement	05	Talent
ESG Work Implementation
Responsibility of the Board	05
of Directors		Development
ESG Risk Management	06
About Kangda	07
International	07	Environmental
Company Profile
Key Performance	11	Protection
Business Overview	09

Corporate Governance

ESG Management

Materiality Assessment

Compliance Operation

Quality Assurance

Innovation and R&D

Supply Chain Management

Industry Leadership

Employee Employment

Employee Development

Employee Care

Employee Health

Pandemic Prevention and Control

Environmental Management

Environmental Goals

Resource Consumption

Emissions Compliance

Combat Climate Change

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Kangda International

Environmental Company

Limited

APPENDIX 77

Content Index of the

Environmental, Social

and Governance

Reporting Guide of

the Hong Kong Stock

Exchange

ABOUT THIS REPORT

Overview and Principles

This is the sixth Environmental, Social and Governance ("ESG") report of Kangda International Environmental Co., Ltd. ("Kangda International" "Company" or "We"), which is compiled in accordance with the rules in the Appendix 27 of the Guidelines for Environmental, Social and Governance Reporting (the "ESG Reporting Guidelines") of the rules governing the listing of securities (the "Listing Rules") on The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), covering the Company's performance and data in the areas of business development, employee caring, environmental protection, and community investment from January 1 to December 31, 2021.

Report Scope

The policies, statements, materials and data in this report cover the urban water projects, water environment comprehensive management and rural sewage treatment projects that the Company and its subsidiaries have major involvement. Unless otherwise stated, all currencies in this report refer to RMB.

The report follows the principles of "materiality", "quantification", "balance" and "consistency" of the ESG Reporting Guidelines of the Hong Kong Stock Exchange. The content of the report is derived mainly from the assessment and analysis of major topics and the opinions of the stakeholders. Please refer to the chapter"Sustainable Develop- ment"for detailed procedures.

Confirmation and Approval

THIS ABOUT Contents

REPORT

Kangda Aboutof Board s Management'

International tatement Directors' S Statement

Community vironment
Engagement	Contribute to a Grenner En-
Public Welfare

01

73

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The content of this report has been confirmed by the management and directors on May 27, 2022.

This report is available in simplified Chinese, traditional Chinese and English. The digital version of the report is available on the website of the Hong Kong Stock Exchange in the category of Kangda Interna- tional's"Financial Statements/ESG Information"and it can also be obtained from the Company's website. If you have any questions or comments on this report, please send them to us in the following ways:

Address： No.72, Avenue of Stars, Innovative & High-Tech Park, Northern New District, Chongqing, China

Phone： [phone]

Fax： [phone]

Email： [e-mail]

Official website： www.kangdaep.com

02

Environmental, Social and Governance Report

Management' s

Statement

As the Chinese saying goes, "only when all rivers flow into the sea can it grow broader, and only when all tricklets meet together can a magnificent vast ocean be formed." Kangda International closely watches policy developments, harnesses growth opportunities brought by environmental protection policies, and leverages its leading role in technology, market integration, and financing. The Company combines internal and external resources available, explores an innovative mindset for expansion, and implements more effective ways for comprehensive pollution management. By enhancing our technological innovation capabilities and optimizing the service industrial chain, we aim to create an environment with greener water, lusher mountains, bluer skies, and more livable cities, contributing our share to China's environmental cause.

03

Kangda International

Environmental Company

Limited

Since its inception over two decades ago, Kangda International has been at the forefront of China's environmental protection and water service sectors. We are now entering a new stage of development. In 2021, we again made the list of China Top 50 Environmental Enterprises and our position improved by nine places over the previous year. The Company is devoted to expanding its status and influence across the industry through its best-in-class management system, innovative environmental technology, and operational excellence.

Kangda International values honesty and trust in its business dealings with clients and customers. We continuously improve our management, optimize the quality management system governing project construction and operational service, make quality management more efficient and effective, and synergize the upstream and downstream activities. With a trustworthy brand reputation and efficient business operations, we have earned the respect and trust of the government and partners. The Company

has always placed a high value on scientific research and development. We hold the belief that scientific and technological innovation is the lifeline for corporate sustainability. As a result, we advance technological innovation through independent research and development, patent purchases, mergers and acquisitions, and joint ventures, engage in industry-university-research institute partnerships, and empower the innovative development of our industry.

Kangda International believes that talent holds the key to corporate sustainability. We adopt a people-centered approach to human resources management and try our best to grow and care for employees so that we can develop together. We safeguard our employees' basic rights and interests and improve the talent training and support system. By hosting sports competitions, football matches, and cultural festivals, we hope to deliver work-life balance to our employees, build stronger teams, and foster a diverse, inclusive, healthy, and happy working environment. The Company goes all out to protect the core elements that drive our growth.

Kangda International remains committed to the core values of "Sincere Commitment and Repaying the Society." Our business growth fuels a model of sustainable development that combines environmental conservation and economic growth. We want to improve inhabitants' living conditions and contribute to the development of beautiful rural and urban neighborhoods. In addition, as part of our corporate social responsibility, we organize public benefit initiatives.

Going forward, Kangda International will continue to follow the latest policy trends, seize market opportunities, make innovations, and undertake better projects. We will promote the sustainable development of our society while advancing corporate growth.

Contents

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International tatement Directors' S Statement

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Environmental, Social and Governance Report

Board of

Directors' Statement

Responsibility of the Board of Directors

Kangda International values ESG work and has made green operations and low-carbon development a part of its core business strategy. We're committed to providing win-win outcomes for our customers, employees, shareholders, and government. The Board of Directors assumes full responsibility for the Company's ESG strategy and performance. The Company has created a three-tier governance structure consisting of the Board of Directors, the Audit Committee, and the ESG Working Group to support sustainable development.

The Audit Committee is responsible for monitoring, reviewing, and researching the Company's ESG-related matters, suggesting ESG strategies and frameworks, identifying material ESG risks and opportunities, supervising and evaluating the ESG rules, strategies, policies, and objectives, deliberating the annual ESG report, and submitting the report for Board approval.

ESG Work Implementation

The ESG Working Group is in charge of carrying out the ESG concept and strategy, developing ESG objectives and action plans, and reporting to the Audit Committee on a regular basis. In addition, as part of its continued efforts to incorporate ESG requirements into everyday operations and management and improve ESG performance on an ongoing basis, the Company has assigned specialized staff to generate ESG reports.

The Audit Committee met twice during the reporting period to examine topics of concern to stakeholders and to summarize ESG work progress. We assessed the material ESG topics in terms of stakeholder expectations and demands, identified opportunities and response measures in climate risk mitigation, and established environmental goals for energy consump- tion, resource usage, and greenhouse gas (GHG) emissions. The ESG Working Groups would be assigned particular duties after the Board of Directors reviewed the opinions and proposals expressed by attendees at the meetings. The Audit Committee would be in charge of overseeing and examining progress toward the goals as well as the implementation of the ESG responsibilities. More information is laid out in Sections 1.3 Materiality Assessment, 4.2 Environmental Goals, and 4.5 Climate Change Responses of this report.

05

Kangda International

Environmental Company

Limited

ESG Risk Management

Kangda International greatly values ESG risk identifica- tion and management and has established a perfect risk management system to mitigate the impact of potential risks on corporate sustainability. The Board of Directors assumes full responsibility for the Company's risk management system and supervises and approves the ESG risk management strategies and policies, which are designed to assess the Company's risk exposure and tolerance. The Audit Committee is responsible for reviewing, evaluating, and reporting to the Board on the ESG-related risks and opportunities, developing corre-

sponding objectives, and regularly monitoring the progress toward the objectives. These include but are not limited to environmental risks such as climate change, water resources, and pollutant discharge, as well as social risks such as employment, supply chain, and corruption.

Contents

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Kangda Aboutof Board s Management'

International Statement Directors' Statement

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Environmental, Social and Governance Report

About Kangda

International

Company Profile

In 2011, Kangda International Environmental Co., Ltd. (HK06136) was established. Since then, it has become an industry leader in the field of pollution control. On July 4, 2014, the Company was listed on the main board of the Hong Kong Stock Exchange. The Company participates in pollution control, sewage treatment, and solid waste disposal as a comprehensive service provider of urban environmental governance. The Company attracts domestic and overseas capital through stock acquisition, TOT, BOT, PPP, and other models, and provides customers with integrated water project solutions and services.

Kangda International values research and development input and works to improve overall research and development capabilities. The Company has established a technological innovation team composed of renowned experts and scholars at home and abroad, as well as an Expert Committee that is tasked with tackling technological challenges. Moreover, the Company proactively seeks partnerships with famous universities and research institutions such as China Ship Scientific Research Center, Tianjin Municipal Engineering Design and Research Institute to jointly promote the Company's technological innovation.

Kangda International has won numerous honors for its leadership in the industry. The Company is one of China's top 50 environmental enterprises and one of the country's first AAA credit rating companies. It is also the Vice-Chairman Organization of the China Environmental Chamber of Commerce and the China Association of Environmental Protection Industry. The Company was certified by the ISO 9001 Quality Management System, the ISO 14001 Environmental Management System, and the ISO 45001 Occupational Health and Safety Management System, as well as obtained the CAEPI level-1 industrial wastewater and domestic sewage operation and service ability evaluation certification.

Kangda International stays true to its mission of "Creating a First-Class Environmental Protection and Creating a Century Enterprise" and carries forward its core values of "Sincere Commitment and Repaying the Society." We seize industry development possibilities, adopt a "water-centric" business philosophy, improve our management structure, strengthen technological innovation capabilities, optimize the service industrial chain, and create value for our stakeholders and society as a whole. Going forward, we will seize the opportunity presented by the improved water environment and China's "dual carbon" goals, establish a complete water service industry chain, and undertake good projects such as reclaimed water and industrial sewage reuse. We will contribute our wisdom to help enhance the environment and support sustainable social development.

07

Kangda International

Environmental Company

Limited

Nine-Word Principle

Following Rules, Pursuing Self-discipline and Fulfilling Duties

Corporate vision

Create a First-Class Environmental Protection, Creat a Century Enterprise

Corporate mission

Create an Environment with Greener Water, Lusher Mountains and Bluer Skies

Corporate core values

Sincere Commitment and Repaying the Society

Contents

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International tatement Directors' S Statement

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