Kunlun Tech Co., Ltd.
Environmental, Social and Governance (ESG) Management System (Draft)
(Applicable After H Share Offering and Listing)
Chapter 1 General Provisions
Article 1 Purpose of Formulation
To standardize the environmental, social and governance (ESG) management, data collection, risk management, annual report preparation, information disclosure, and continuous improvement of the Group (including its subsidiaries and investee companies), strictly comply with the Hong Kong Stock Exchange Listing Rules Appendix C2 ESG Reporting Guide, ISSB International Sustainability Disclosure Standards, TCFD Climate Disclosure Framework, and other relevant new regulatory requirements, establish an ESG management system, ensure timely, truthful, complete, and comparable ESG reporting, and enhance corporate governance, sustainable development capabilities, and capital market image, this policy is hereby formulated.
Article 2 Scope of Application
This policy applies to the Company and all its wholly-owned subsidiaries and investee companies, both domestically and internationally.
Article 3 Basic Principles
(I) Mandatory Compliance: Strictly adhere to mandatory disclosure matters of the Hong Kong Stock Exchange; for non-mandatory disclosure matters, follow the "comply or explain" principle.
(II) Truthful and Fair: Data shall be traceable, consistent in scope, without misrepresentation or omission, and major matters shall be fully disclosed.
(III) Comprehensive Coverage: Cover the three dimensions of environment, social, and governance, as well as significant impacts along the value chain.
(IV) Quantifiable and Comparable: Key performance indicators shall be comparable year-on-year, with annual and long-term ESG goals set.
(V) Risk-Oriented: Incorporate climate risk, transition risk, compliance risk, and supply chain risk into the entire process management.
(VI) Timely Disclosure: Annual regular reports + major ESG event interim announcements shall be disclosed simultaneously.
Chapter 2 Governance Structure and Division of Responsibilities
Article 4 Board of Directors' Responsibilities
The Board of Directors is the ultimate responsible body for ESG, with primary responsibilities including:
(I) Approving the ESG reporting policy, annual ESG strategy, major goals, risk appetite, and annual ESG reports.
(II) Overseeing the ESG governance structure, resource allocation, policy implementation, and control of major ESG/climate risks.
(III) Integrating ESG and sustainable development into the company's strategy, operational decisions, investment and acquisition, and risk management systems.
(IV) Reviewing major ESG negative events, compliance penalties, and climate risk impacts, and supervising rectification.
Article 5 Audit Committee
The responsibilities of the Audit Committee include:
(I) Responsible for ESG strategy formulation, goal decomposition, performance tracking, major issue analysis, and stakeholder communication.
(II) Reviewing the truthfulness, data completeness, internal control effectiveness, and disclosure compliance of ESG reports.