Hengyi Petrochemical Co.,Ltd.
2022 Social Responsibility Report
受社会尊敬的
世
界
级 绿色石化企业
WORLDCLASS, RESPECTED BY SOCIETYGREEN PETROCHEMICAL ENTERPRISES
About this report
Purpose
This report aims to respond to the expectations and concerns of stakeholders regarding thesustainable development concept and policies of Hengyi Petrochemical Co., Ltd. and itsefforts in environmental protection, social responsibility, and corporate governance in 2022.OrgnizationalCoverageReportingPeriod
PublicationThis is the forth social responsibility report issued by the company.
References
Abbreviations
For ease of presentation and readability, Hengyi Petrochemical Co.,Ltd. is also referred toas "Hengyi", the "Company" and "We" in this report.
Data Sources
The information and data cited in this report come from official company documents,statistical and financial reports, provided by Hengyi employees and partners. It's only fordisclosing Hengyi's sustainable development progress, not for commercial use. Thefinancial data in this report is subject to the annual report data. Other data is from internalstatistics. The currency used in this report is RMB unless otherwise noted.LanguageVersions
This report has been reviewed and approved by the board of directors of the company onApril 19, 2023.This report is available in simplified Chinese and English. In case ofinconsistency, please refer to the simplified Chinese version as it shall prevail.
RequestWebsite：www.hengyishihua.com / CNInfo：www.cninfo.com.cn
Social Responsibility
HENGYI
The report covers Hengyi Petrochemical Co.,Ltd. and its branches, subsidiaries, and affiliates.
This report covers the period from 1 January 2022 to 31 December 2022. Some contentsand data are from previous years.
This report has been prepared in accordance with the requirements of Chapter 8 "SocialResponsibility" of the "Regulations of Shenzhen Stock Exchange for Self-Discipline ofListed Companies on the Main Board" and with reference to the "Global Reporting Initiative(GRI) Standards," as well as the "Guidelines for Social Responsibility ReportingCompilation" (GB/T 36000-2015) and the "Guidelines for Chinese Enterprise SocialResponsibility Reporting Compilation (CASS-CSR4.0)" issued by the Chinese Academy ofSocial Sciences.
Content
0506081022
38465262
Chairman’sStatement
About HengyiESG HighlightsGovernanceCommon Prosperity-Responsibility
Employee Well-beingRural RevitalizationCharityGovernanceBusiness EthicsComplianceInvestor RelationshipStakeholder CommunicationMateriality Analysis
Green Production-Carbon Net-zeroClimate ChangeWater Resource ManagementPollutant ManagementClean Energy
Ecosystem-AccountabilityResponsible ProcurementSafety ManagementProduct Quality&Service
Innovation-SustainabilityGreen InnovationCircular economyDigitalization
Appendix
In 2022, which was an extraordinary and challenging year, Hengyi upheld its strategic resolve and adjusted itsbusiness strategies to effectively combine its operations and sustainable development. Under the relentless effortsof all employees, Hengyi overcame the downward pressure in the industry and gained valuable entry into the nextround of competition.
Facing the complex and changing international situation and macro environment, Hengyi adheres to a strategicoutlook, enhances its sense of urgency and mission, and always maintains a humble and grateful heart. With thegoal of "reducing costs, increasing efficiency and improving quality," Hengyi works hard and improves its operationsand management efficiency, in order to achieve Hengyi's long-term development goals.
In the past year, Hengyi actively implemented its sustainable development philosophy and strengthenedenvironmental protection, committed to energy conservation and emissions reduction. During production, Hengyiadhered to a bottom-line mentality and focused on its core business, resulting in a continuously improvingproduction safety situation and significantly improved risk resistance capability. Hengyi's Brunei Refining andChemical project won the national-level "Luban Award" engineering prize and was praised as a model for building aAsia-Pacific community of shared destiny by People's Daily. In product R&D, Hengyi persistently drove innovationand increased R&D investment, and was the first in the industry to break through the bottleneck of environmental-friendly phthalate-free polyester industrialization, opening a new era of green development. Through technologicalinnovation and management transformation, Hengyi continuously advanced the company's green, low-carbon andenvironmental protection processes, comprehensively enhancing its sustainable development level.
In 2023, Hengyi will continue to be guided by the spirit of the CPC's 20th National Congress, enhance its sense ofurgency, responsibility, and mission, and continuously improve its own quality. With a high sense of socialresponsibility and mission, Hengyi will make persistent efforts to achieve the grand vision of "Green Hengyi, Buildinga Harmonious society."In the future, Hengyi will adhere to the development strategy continuously improve greenmanagement, continuously promote green production, actively promote resource conservation, and continuouslyexplore the circular economy. Hengyi will also strengthen its R&D efforts on recyclable and biodegradable products,and jointly build a green ecological circle of circular development with upstream and downstream industries in theindustrial chain. At the same time, Hengyi will also continue to fulfill its corporate social responsibility, committed tocommunity development, employee welfare, public welfare and charity projects, contributing to the realization of thegoal of common prosperity and rural revitalization.I believe that with the joint efforts of all Hengyi employees, the future Hengyi will usher in a better tomorrow.
Chairman’s Statment
HENGYI
0504
Social Responsibility
Hengyi Culture
Hengyi has developed a unique "54354" corporate culture mechanismover 40 years, focusing on five sub-cultures: shared creation,dedication to excellence, pioneering, stability and security, and mutualcooperation. It adheres to four principles, aiming for harmony betweenculture and strategy, growth and employee development, and culturaladvantage and competitiveness. By building five driving systems,Hengyi aspires to be a century-old enterprise deeply respected,welcomed, trusted, and loved by society, customers, shareholders, andemployees. Core values include pragmatism, responsibility,surpassing, and sharing.
Hengyi is committed to becoming a leading and first-classpetrochemical company in China and the world,continuously improving its competitiveness throughresource sharing and industry collaboration. The companyexpands its industrial supporting functions and enriches itspetrochemical products through multi-level, three-dimensional industrial layout and integration of productionand finance strategies. Its main products include purifiedterephthalic acid (PTA), caprolactam (CPL), polyethyleneterephthalate (PET) chips, bottles, pre-oriented yarn (POY),draw-textured yarn (DTY), and short fibers. Polyesterproducts are widely used and closely related to nationaland people's livelihood needs, mainly for textile clothing,home textiles, and industrial applications. Hengyi hassuccessfully launched differentiated products such as"YiTaiKang" environmental-friendly polyester chips andfibers, cationic polyester chips and fibers, ultra-high elasticfibers, imitated rabbit hair fibers, special shape fibers,colored fibers, mother fibers, bamboo fibers, dragon fibers,and colored fibers, leading the field in differentiation andhigh-value-added products
About Hengyi
Since its inception, the company has focused on the strategic policy of"strengthening and enhancing its core business competitiveness." Incollaboration with strategic partners, it continuously expands upstreamin the petrochemical industry chain. The company will advance byleveraging the Brunei PMB Petrochemical Project, a joint venture withthe Brunei government. It is a key "Belt and Road" initiative, holdingstrategic significance and marking a crucial step toward internationalcapacity cooperation and integrated industrial chain goals. The projectwill exemplify China-Brunei friendly cooperation.The revenue amounted in 2022: 152.05 billion
Philosophy Persistence rewards diligence, noble aspirations reach farMission
Build a century-old, evergreen foundation and stand amongthe world's renowned enterprisesVision
Become one of the world's top-tier petrochemical industrygroupsSpiritNever stop moving forward, create brilliance
0706
Through resource sharing and industrial synergy, thecompany enhances its overall competitiveness, creating adual "polyester + nylon" driving mode and forming a multi-level and three-dimensional industrial layout with thepetrochemical industry chain as the core business, supplychain service business as the growth business, anddifferentiated fiber products, industrial intelligenttechnology applications as emerging businesses.
Social Responsibility
HENGYI
6 shareholder meetings major fraudulent event0 management and special audits25
15,637 employees
Female employees ratio of 26.37% hours of training time per person98 of physical examination coverage100%Issued skill certification to people1,500Primary school donation ofmillion 27RMB
Governance
Common Prosperity-Responsibility
Solar power generation of m44.2illion kWhEmission index compliance rate 100%Water saving of million tonnes423Environmental protection cost of RMB 80.10million
Green Production-Carbon Net-zero
1,661suppliers
safety training sessions919 major casualties0
safety training pass rate100%Safety cost of million 31.13RMB
Ecosystem-Accountability
1,065 R&D personnelR&D investment of RMB million690
projects under research23
Innovation-Sustainability
Awards and HonorsHengyi was awarded the “2022 ESG Gold Medal”The "2022 China Manufacturing Listed Companies Social Responsibility Five Star Gold Award List" is an annualsocial responsibility and ESG award published by the Times Responsibility 40 Forum think tank as an independentthird-party evaluation. Winning this award recognizes Hengyi's commitment as a model of shared prosperitydevelopment.
0809
ESG HIGHLIGHTS
HENGYI
Social Responsibility
Hengyi upholds fairness, transparency, and compliance, aiming toestablish a robust corporate governance system. The companyemphasizes optimized management, reinforced internal controls, and riskmanagement to ensure steady growth and protect investors' interests.
SDGs we focusedin this section：
GovernanceBusiness EthicsComplianceInvestor RelationshipStakeholder CommunicationMateriality Analysis
Corporate Governance
Hengyi is dedicated to high-level corporate governance, focusing on diligent boards and robust internal supervision.Complaining with the 'Company Law,' 'Securities Law,' 'Corporate Governance Guidelines for Listed Companies,''Shenzhen Stock Exchange Listing Rules,' 'Shenzhen Stock Exchange Main Board Listing Companies Self-regulatory Guidelines No. 1 – Main Board Listed Companies' Standard Operation,' and other relevant laws andregulations., the company refines its governance standards based on its situation, enhancing the performance ofthe 'shareholders meeting, board of directors, board of supervisors and senior management,' and promoting themodernization of governance systems and capabilities.
Governance
Governance
HENGYI
Social Responsibility
Audit&Legal
Production Management
Investment
Human Resource
Information&Data
Office
Finance
Capital ManagementSafety&Environment
Strategy&Investment Committee
Compensation CommitteeRisk Control Committee
Audit Committee
HengyiPetrochemicalCo.,Ltd
Shareholders MeetingBoard of DirectorsSenior Management
Board of SupervisorsBoD Office
1312
Governance Framework
The Hengyi Board of Directors has 9 directors, including 6 non-independent and 3 independent directors. TheBoard formulates company strategy and policies, sets performance and management goals, evaluates businessperformance and oversees management.In 2022, the Board held 10 meetings.
Shareholders Meeting
Board of Directors
The Board has four committees: Strategy & Investment, Compensation, Risk Control and Audit. These committeesare accountable to the Board, have clear responsibilities and powers, and provide advice and recommendations.Each committee operates within its own field to ensure the company's smooth operation.
As of the reporting period end, the company's Board of Supervisors consisted of 3 members, 2 of whom are female.The Board oversees the company's major matters, finances, and the legality of the directors and seniormanagement. It protects shareholder rights and company interests, and improves the company's standardoperating level.In 2022, the Board held 8 meetings。
As of the reporting period end, the company's management consisted of 8 senior personnel. The managementteam consists of experts in petrochemical, materials science, finance, law, marketing, etc., and has professionaljudgment and rich management experience, allowing the company to quickly identify market opportunities andpotential risks, and maintain its industry advantage.
Professional Committee
Board of Supervisors
Senior Management
Hengyi's shareholders meetingstrictly follow "Company Law of thePeople's Republic of China","Securities Law of the PRC", "Rulesfor Shareholders' Meetings of ListedCompanies", "Company Articles ofAssociation", "Shareholders'Meeting Rules", and other relevantlaws, regulations, and rules. Allshareholders are treated fairly.In 2022,the company held 6 shareholdermeetings
HENGYI
Social Responsibility
Governance
Compliance
To effectively strengthen the internal control system, the company focuses on system development, top-leveldesign, and system review.In 2022, collaborating with all BUs, the company audited new unit systems from a risk control perspective,suggesting modifications and optimizing processes. This reinforced internal control management and ensured theachievement of business goals.
Internal Control Construction
Conduct an assessment andoptimization of the key controlpoints (KCP) of the engineeringcompany, integrate internalcontrol into the process, andpromote closed-loopmanagement.
Improve OA process for newcreation and change reviewnodes, assess the risk of theprocess, balance efficiencyimprovement.
KCP assessmentProcess optimization
Internal Control Process
Hengyi consistently adheres to the principle of "legally and compliantly pursuing high-quality", sticks totransparent and compliant operation guidelines, and establishes a comprehensive compliancemanagement system that meets the needs of the company's business development and the bestpractices in the petrochemical industry. In 2022, the company further integrated and optimized itsinternal control, risk and compliance management systems, realizing a full alignment of the internalcontrol system and standards, and improving the company's risk management ability, immunity andresilience, providing a solid guarantee for the realization of the company's development strategy andsustainable development.
Business EthicsThe company strictly adheres to laws and regulations such as the "Civil Code of the PRC", "Criminal Law of thePRC", "Supervision Law of the PRC", "Company Law of the PRC", "Anti-Monopoly Law of the PRC", "Anti-MoneyLaundering Law of the PRC", "Anti-Unfair Competition Law of the PRC", "Labor Contract Law of the PRC", and"Environmental Protection Law of the PRC".With a "zero-tolerance" attitude towards fraud and corruption, it has established an anti-fraud working group led bythe chairman. The company's audit and legal departments oversee internal audits, supervision, and disciplinaryaction, continuously improving integrity-related systems and regulations. This strengthens long-term warningmechanisms against fraud and bribery, safeguarding the rights and interests of the company and its shareholders.
Promoting all employees toabide by integrity andprofessional ethics,ensuring compliance withlegal and ethical standards.
Strengthening internalcontrols, preventing fraudrisks, establishing anti-fraudmechanisms, and ensuringthe company's health andsustainable development.
Promoting all employees toabide by the law, maintainintegrity and self-discipline,and adhere to professionalethics, preventing corruptionfrom occurring.
PolicyGoal
Code of BusinessConduct and Ethics
Anti-FraudGuidelines
Employee Integrity andEthical Conduct Regulations
Hengyi encourages real-name reporting and strictly protects whistleblowers' information and identities. Whenaccepting or verifying reports, personal safety and identity are safeguarded. Obstruction or suppression ofreporting is not tolerated, and retaliation against whistleblowers is dealt with accordingly, involving judicialauthorities if necessary.
The company establishes a robust complaint and reporting management mechanism, standardizing channels andprocesses for timely and effective handling. Diversified reporting channels are publicized through various means.Report and Complaint
Phone：0571-83581890（ext：1890Fax：0571-82797666Email：fwb@hengyi.comAnti-Fraud Office reporting channels
）
1415
Anti-FraudGuidelines
HENGYI
Social Responsibility
Governance
Focusing on the company's core, the audit work aims to "prevent risks, control costs, strengthen management, andpromote standardization.routine + special + continuous " Targeting key business areas, a diversified audit model of "supervision + spot checks" is implemented for audit oversight, fulfilling internal audit responsibilities and ensuringthe effective improvement of the company's risk management level.
The company values project auditing, standardizes the auditing process, focuses on the foundation of projectauditing, and continuously improves audit quality. In 2022, with 'full-process project tracking' as the core method, thecompany regularly tracks project bidding dynamics and conducts monthly routine inspections of engineeringprojects, ensuring all activities are within the scope permitted by laws and regulations.
Key Business Audit
Project Audit
Key AuditAreas
FinanceProcurement
Sales
Raw materialsupply and tradeProduction
Logistics
Perform monthly routine inspections ofengineering projects in subsidiaries,combining with ongoing reviews.Provide timely feedback on findings andtrack progress of rectification, requireprompt recording by departments forfuture settlement basis, and optimizemanagement.
Regularly track the dynamics ofproject bidding, monitoring eachstage from bid prequalification,evaluation, to final awarding.Full-processProject Tracking
1617
Investor Relationship
The company strictly follows laws and regulations to ensure high-quality informationdisclosure. It continually improves governance and uses designated media to comply withregulations and strengthen communication with investors.
Hengyi values information disclosure, following laws and regulations, establishing a rigorousprocess, striving for timely and accurate disclosure. The company engages in various investorrelations activities, proactively communicating with investors, showcasing development highlights,conveying investment value, and safeguarding their rights.。
Communication Channels
Investor Hotline
Official website'sinvestor relationssection
WeChat officialaccount
P5W performancebriefing
SZSE interactive
platform
In 2022, the company disclosed 241 announcements, including 4 regular reports.
HENGYI
Social Responsibility
Governance
Materiality Analysis
Hengyi involves stakeholders in topicsidentification to understand their sustainabledevelopment expectations and concerns, andto focus on ESG practices and disclosures.The company has a process for analyzingsustainability topics, including identification,assessment, and selection.
Conduct research on the importance oftopics for stakeholders such as investors,customers, suppliers, and communities,while assessing the relevance to globalsustainable development goals,stakeholders' concerns, and their importanceto Hengyi.
Based on the assessment results, prioritizetopics, have them reviewed by thecompany's governance level and experts,and select the substantial topics for keydisclosure.
Considering national policies, industrytrends, peer sustainability benchmarking,and the company's development strategyand social responsibility standards, thecompany established a sustainabledevelopment topic repository.
Identification
Assessment
Priorization
Stakeholder CommunicationHengyi's main stakeholders include government agencies, shareholders, customers, employees, and communities.The company engages with them through various channels to understand their concerns and expectations.Stakeholders Topics coveredCommunication Channel
Government and
regulators
Shareholdersand investors
Clients
Employees
Suppliers
Community
Climate changePollutant managementClean energyResource recyclingWater resource
Business ethicsCompliant operationsClean energyClimate changeWater resourcePollutant managementInnovationInnovationClimate changeClean energyDigitalizationRisk controlPerformanceAnti-corruptionProduct quality and serviceGreen innovationCircular economySafety managementTraining and developmentDiversityWell-being
Resposible procurement
Environment performancedata collection and disclosureExternal surveyMedia communication
Symposium and seminarProject approvalGovernment regulation
Corporate annual reportsand announcementsRoadshowSpecial meetingsHotlineIR websiteMarket conferenceServicesClient meetingQuestionnaireWebsite and WeChatStaff and workers' congressManager's mailboxTrainingCulture acvtivitiesWebsite and WeChatSupplier assistanceSupplier training
1819
HENGYI
Social Responsibility
Governance
Importance to stakeholders
Importance to Hengyi
Medium importance
Low importance
LevelNoTopics
Climate changeWater resource managementPollutant managementClean energySafety managementProduct quality and serviceGreen innovationComplianceBusiness ethics and anti-corruptionInnovationResource recyclingEmployee well-beingEmployee trainingResponsible procurementCircular economyDigitalizationDiversity and equality
Core Issues
Important Issues
General Issues
ESG Importance Matrix in 2022
High importance
Hengyi supports national policies of common prosperity and ruralrevitalization. We focus on employee development and welfare, and fulfillsocial responsibilities to contribute to achieving national goals.
Employee well-beingRural RevitalizationCharity
Common Prosperity-Responsibility
Hengyi has always valued the rights and welfare of employees and strictly abides byrelevant domestic and international laws and regulations, while establishing andcontinuously improving internal employment regulations. We strive to build a diverseand inclusive team, provide a positive, equal and harmonious working environment foremployees. To protect employee rights, we have established a scientific salary andbenefits system, as well as an employee care system, to care for employees in allaspects and improve their sense of happiness, belonging, and job motivation. Webelieve that only when employees are satisfied, can the company develop andinnovate better.
Employeewell-being
Common Prosperity
SDGs we focusedin this section：
HENGYI
Social Responsibility
Hengyi has a comprehensive salary and benefits system with external competitiveness and internal fairness. Theyimplement a salary control policy to improve internal management and provide salary incentives to promotepersonnel efficiency. Salary standards are determined based on job responsibilities and employee competency.Different salary incentive policies are provided for different types of employees, and performance rewards are givenbased on performance appraisals.
Incentives
Brunei ProjectWe place great emphasis onemployee salary and benefitsworldwide. For example, in ourBrunei project, the salarystandards are higher than thelocal industry average. Hengyivalues the stability andrecognition of the local employeeteam and offers competitivecompensation to attract andretain outstanding local talents.This also contributes positively topromoting local employment andimproving the community'sstandard of living.
Epmployee Shareholding Plans
Hengyi is committed to the "people-oriented" concept,fully mobilizing employee enthusiasm, andcontinuously attracting and retaining outstandingmanagement talents and business backbones, whilebalancing the interests of the company, shareholders,and employees. The company has implemented fouremployee shareholding plans, three equity incentiveplans, and three repurchase plans since 2015. InOctober 2022, Hengyi launched the third sharerepurchase plan, using its own funds to repurchaseshares for implementing employee shareholding plansor equity incentives at a price not exceeding RMB 11.5per share.In April 2021, the company announced the fourthemployee shareholding plan, benefiting nearly 5,000employees with a total amount of RMB 1.6 billion. Thelock-up period for the fourth plan's shares expired onSeptember 23, 2022. Cash dividends of RMB22,750,920 have been distributed to the employeeshareholding plan.
Well-being
Employee Benefits
HighlightsContractSigning Rate 100%
Social SecurityCoverage 100%
Health&SafetyTraining Coverage 100%PhysicalExaminationCoverage 100%
Labor UnionParticipation 100%
TrainingCoverage
100%
Hengyi prioritizes employee benefit whilestrictly following national policies andlaws. The company providescomprehensive employee benefits,including social insurance, housing andtransportation allowances, statutoryholidays, and employee training andeducation. In 2022, these benefitscovered all employees, ensuring theirwelfare and rights.
Vacation
Healthcare
Life support
Commute
Canteen
Accommodation
The company offers housing support, including various room types, and rental subsidies for eligibleemployees.
The company offers free shuttle buses and subsidies for employees usingtheir own vehicles, and provides vehicle subsidies for eligiblemanagement personnel.The company has an internal canteen and ensures quality meals bystrengthening food safety supervision, controlling prices, and offering signaturedishes for employees to enjoy
The company enforces policies to ensure employee vacation
The company provides a health room with medicines, health monitoring instruments,health examinations, lectures, and insurance coverage including employer liability,group accident, medical mutual aid, and supplementary medical insurance.
The company assists employees with household registration and children'seducation, and sends Hengyi Family Letters to outstanding employees'families during Chinese New Year to convey gratitude and blessings.Benefits
HENGYI
Social Responsibility
Common Prosperity
Family Care
The company cares not only for its employees but also their families by organizing activities such as visiting familiesduring holidays, distributing gifts, and organizing summer camps for employees' children in 2022.
Summer CampTo address the challenge of childcare for dual-working familiesduring summer vacation, thecompany partners withuniversities to organize the LittleBird Summer Camp, a few-weeksummer art camp for employees'children. The camp providestutoring and fun activities,enhancing employees' sense ofbelonging and happiness.
Overseas employee protection
The company providesoverseas personal accidentinsurance for employees inBrunei and offers two paidhome leave trips per year withtravel expenses fully coveredby the company to ensureemployees can reunite withtheir families regularly andenhance their sense ofbelonging.
2627
Diversity & Equality
The company follows all internationally recognized human rights policies outlined in the United Nations UniversalDeclaration of Human Rights, International Covenant on Civil and Political Rights, and core conventions of theInternational Labor Organization. It strives to create a diverse, inclusive, and fair employee team, and prohibitschild labor and forced labor while respecting the legitimate rights and interests of all employees."
Gender EqualityThe company values diversity andgender equality, with female employeescomprising 26.37% of the workforce,including four executives and 162middle-level managers. Women haveplayed a crucial role in the company'sdevelopment and contributed to theformation of an international,professional, and career-orientedmanagement team.
Employees number:15,637Female employees:26.37%Female executive number:4Female in middle management:162College degree or above:33%Ethnic minorities:7.15%Outsourcing staff:1,450Local staff in Brunei projects:32%
The company values the physical and mental health offemale employees and has established a laborprotection and safety production system for them. Itorganizes various activities to raise awareness of healthcare, and celebrates International Women's Day bycarrying out activities to show care for femaleemployees and enhance their sense of happiness inwork and life.
HENGYI
Social Responsibility
Common Prosperity
Hengyi upholds equal and non-discriminatory employment, and values theemployment and social integration of vulnerable groups, including over 600disabled employees who contribute to the company's development. May isdesignated as Disability Service Month, during which the company organizesactivities to support disabled employees' work and life, and also regularly holdshealth and cultural events to enrich their spiritual life.
Culture ActivitiesTo enrich employees' spiritual and cultural life, andto let them truly feel the care and warmth of thecompany while improving their happiness, Hengyiactively organizes various cultural and sportsactivities, entertainment events, and club activities.In addition to enhancing employees' physicalfitness, these activities also further enhance thecompany's cohesion.Spring Festival Policy and BenefitTo ensure stable workforce and normal production,Hengyi has launched the Spring Festival job stabilitypolicy for its employees, providing on-duty subsidiesand implementing staggered leave policies foremployees from other regions. The companyencourages its subsidiaries to carry out variousemployee care activities before and after theChinese New Year according to productionconditions, showing appreciation for those whochoose to stay on duty during the holiday andcreating a good atmosphere of care and support foremployees from other regions, fostering employeeloyalty.
Human Right-Brunei Project
As of the end of 2022, there were a total of 665local employees in Brunei, accounting for 32% ofthe total employees in the Brunei project.
As a key project of China's "Belt and Road"initiative, the Hengyi Brunei petrochemical projectstrictly adheres to Brunei's labor laws andregulations, prohibits child labor and forced labor,and provides employees with a standard workingand living environment. To ensure the legitimaterights and interests of each employee, thecompany provides 100% labor protectionequipment and medical facilities to ensure thatemployees receive timely treatment in the event ofan accident.
Care for Disabilities
2829
HENGYI
Social Responsibility
Common Prosperity
Hengyi's talent reserveproject is a core program fordeveloping future talentthrough systematic training ofnew college graduates. TheNew Blue Program in 2022trained nearly 180 collegestudents through variouscourses.
Front-line Manager ProgramThe company launched trainingprograms for industrial managers,focusing on team building andimproving personnel efficiency,covering 14 companies and nearly800 individuals. Improvement actionswere taken to enhance themanagement skills of front-linemanagers, creating a positivemanagement atmosphere forindustrial workers.
Hengyi UniversityHengyi University's onlineplatform has been operating for 5years with over 5,000 learnersand 200+ courses coveringvarious dimensions. It plays acrucial role in motivatingemployee learning, improvingtheir overall level, and creatingenterprise knowledge assets,while enhancing the efficiency oftraining management.
Continuing Education for Front-line EmployeesHengyi has partnered with various schools, supported by labor unions, to offer continuing education opportunitiesfor front-line employees. Over the past decade, this has enabled numerous employees to further their educationwhile working, resulting in an effective internal talent supply chain and the development of a group of enterprising"Hengyi craftsmen." Almost 1,200 industrial workers with a high school diploma or below have obtained diplomas ofassociate degree or higher while working in frontline positions, with an improvement rate of nearly 98%.
Skill Certification
During the two-year pilot period, over 1,500 employees participated in the company's skillcertification program, with close to 1,300 employees obtaining certificates and a pass rate of 83%.The job stability rate among certified employees was as high as 95%, improving the stability offront-line employees.
As a pilot unit for occupational skill level certification in Xiaoshan District, Hengyi has activelyimproved its employee skill development system through the mechanism of "training throughassessment." Employees are encouraged to innovate and provide rational suggestions, creating apositive competition atmosphere and cultivating skilled talents guided by the principles of "strongskills, dedication, and innovation."
New-blue Program
3031
Hengyi prioritizes diverse talent development and offers customized training programs to employees basedon their job requirements and interests. We believe this promotes their long-term career growth byenhancing their professional skills and knowledge.We cultivate employees' business development capabilities through activities such as product knowledgeand sales case development, sales case competitions, and sales-related courses. We also cultivate salesexperts into internal trainers to enhance our sales talent development system and business capabilities.
Talent Development
By ageBy gender
and belowand above
MaleFemale
Percentage of Employee Turnover
HENGYI
Social Responsibility
Common Prosperity
DonationsHengyi established two named funds with a total of RMB 100 million to support charitable publicwelfare activities, with the amount of the "Hengyi Charity Fund" in Xiaoshan District increased toRMB 125 million in 2022. The donated funds will be used for initiatives such as "Spring BreezeAction" and "Assistance for Education."
Hengyi responded to the national call for ruralrevitalization by participating in targeted povertyalleviation activities and supporting education in thewestern region. The company donated RMB 27million to support the construction of the HongdeHope Primary School project in Hongshibao district,Wuzhong City, Ningxia.The company fulfilled its corporate socialresponsibility by supporting education and improvinglocal living standards, aiding the poverty alleviationefforts and rural revitalization.
Education Support
RuralRevitalization
3233
HENGYI
Social Responsibility
Common Prosperity
Hengyi collaborates with major universities in industry-academia-researchcooperation to promote STEM education and support its own product researchand technological innovation. The company has formed strategic partnerships withwell-known universities and research institutions based on the "integration ofindustry, academia, research, and application," and provides technical andfinancial support for the transformation of university scientific researchachievements.
University Cooperation
CharityHengyi collaborates with Politeknik Brunei to offer seven majors and participates in all aspects of the cooperativeeducation program, including setting up courses, recruiting faculty, and organizing teaching. Students spend theirthird year at the Hengyi Brunei Refinery and Petrochemical Project for production internships.
Hengyi-ZJU-UBD
Hengyi collaborates with Zhejiang University and Universiti Brunei Darussalam to offer the "HengyiPetrochemical Talent Class" at UBD in Brunei, training eight batches of outstanding UBD students who haveall joined Hengyi after graduation. The Hengyi-UBD-Zhejiang University Scholarship Program has trained 167Brunei students, and 91 of them have been employed by Hengyi in the Brunei PMB project, promoting thelong-term development of cooperation between the two countries.
Hengyi-LZPCC-IBTE
Hengyi, in cooperation with LanzhouPetrochemical University of VocationalTechnology and the Institute of BruneiTechnical Education, has launched aprogram to offer automation controlmajor, aiming to cultivate 600 skilledpetrochemical talents in Bruneithrough a three-year internationaleducation module.
Brunei——Support Local Youth
As the largest overseas direct investment project in Brunei in recentyears, the Hengyi Brunei Refinery and Petrochemical Project has long-term benefits for the local community, promoting local employment andeconomic development. The company's localization strategy involvespartnering with local universities to cultivate local young talents inBrunei, promoting local employment and improving the quality of theyouth. This helps to achieve Brunei's vision for 2035.
Hengyi-Politeknik Brunei
3435
Joint Talent Cultivation
State RecognizedTechnology Center
ZJU-Hengyi Gloval Innvation Research Center
Donghua University-Hengyi Joint Laboratory
HENGYI
Social Responsibility
Common Prosperity
Educational Donation
Hengyi donated RMB 10 million to establishthe "Zhejiang University Hengyi Fund" in 2007.Over the past 16 years, Hengyi has donated atotal of RMB 200 million in five installments tosupport the Hengyi Scholarship, HengyiInternational Exchange Scholarship, ResearchFund, and Social Practice Assistance. In 2022,Hengyi donated RMB 50 million to support theconstruction of the "Double First-Class"university.
Hengyi donated 50,000 Brunei dollars toYSHHB charity foundation in 2022 to supportthe establishment of the first special needsschool in Brunei.
Voluntary Blood DonationIn 2022, the company organized its 21st collective unpaid blood donation activity for employees. 302 employeessuccessfully donated 97,080 ml of blood, setting a new record. The Brunei company's employees also responded tothe local government's call and donated blood.
ZJU Hengyi Scholarship
Special Needs School in Brunei
Hengyi aims to be a respected global green petrochemical company andis actively working towards national carbon reduction goals. Throughtechnological upgrades, clean energy usage, and energy management,Hengyi is improving its green production level and fulfilling its carboncontrol responsibilities.
Climate ChangeWater Resource ManagementPollutant ManagementClean Energy
Green Production-Carbon Net-zero
Climate Change
Hengyi is actively responding to the national strategic goals of "carbon peak" and "carbonneutrality" , and in 2022, the company continuously improved its green production levelthrough measures such as technological upgrades and energy management, fulfilling itssocial responsibility of carbon control and emission reduction.
In 2022, the company upgraded, built, renovated, and eliminated about 39 boilers, resulting in a 4%-6%reduction in overall energy consumption and significant energy conservation and emission reduction.
The company responds to the national call to eliminate outdated production capacity and upgrade theindustry. It optimizes and upgrades equipment and processes, and takes measures such as boilerupgrades, waste heat recovery, and denitrification systems to reduce energy consumption, meetenvironmental standards, and lower carbon emissions.
Energy Conservation and Emission Reduction
Green Production
SDGs we focusedin this section：
HENGYI
Social Responsibility
The company uses its practical experience in long-term polyester equipment operation to improve the utilization ofpolyester exhaust heat and promote energy conservation and emission reduction.Measures：
Saves fuel by heating fresh ethylene glycol with exhaust heat through a heat exchanger；Utilizes waste heat to improve the temperature in the DTY workshop and maintain a reasonable temperature in case of lowambient temperatures or reduced machine operation, thus reducing electricity consumption in the hot box；Evaporates liquid working medium with esterification exhaust heat to generate electricity through continuous operation of thescrew expander, achieving energy-saving goals..
Hengyi utilizes the low corrosiveness of natural gas boiler flue gas, which is achieved through the conversion of natural gas boilers, to replace steam for heating the stripping tower.
High-temperature flue gas from sulfur combustion in the sulfuric acid plant is utilized to heat the nylonpolymerization heat transfer oil.
The company uses advanced catalytic fuel purification technology to improve the utilization rate of oxidationexhaust gas from the cyclohexanone plant, which is then used for power generation through expansion and therecovered energy is discharged into the atmosphere.
Utilization of Polyester Exhaust Heat
In 2022, the company saved about 8,200 tonnes of coal and 18,000 tonnes of steam by recoveringand utilizing polyester exhaust heat.
Conversion of Natural Gas Boiler
In 2022, the company saved approximately 7,200 tonnes of steam through the transformation of hotweather boilers.
Utilization of Heat from Sulfuric Acid Plant
In 2022, the company saved approximately 4,000 tonnes of coal.
Integrated Utilization Exhaust Gas from Cyclohexanone Plant
In 2022, the company saved approximately 1,696.8 million kWh of electricity through this technology.
Water Resource Management
Hengyi focuses on water resource management and reduces water usage and pollution through water-savingmeasures, sewage and wastewater treatment, and reducing pressure on local water resources caused byproduction operations.
Water Footprint
The company implements high-efficiency water production and reuse water, as well as water-savingmeasures in cooling towers.In 2022, the company saved a total of about 5.1 million tonnes of fresh water.
Water Saving
Cooling waterrecyclingReuseWater
Fresh water
100%
93.75%
6.25%
Pre-treatment
Desalination
RefrigerationBoilerEquipment Cooling
Product coolingOil blending
RestaurantGreensToilet
HENGYI
Social Responsibility
Green Production
The company used the EFDT process to transform theoriginal desalination process, replacing inefficienttechnologies and solving problems such as high inletwater requirements, low product water yield, and highenergy consumption.
In 2022, through the above process transformation, thecompany reduced its water consumption per ton byabout 30%, and each water production equipment setsaved about 810,000 tonnes of water per year.
The company achieves water reuse by treatingwastewater with various methods, resulting in anoverall water reuse rate of 87-93%.In 2022, through water reuse technology, thepolyester factory under Hengyi saved about 4.23million tonnes of fresh water.
By retrofitting the existing cooling tower, the waterloss caused by evaporation, wind, discharge, andleakage is reduced.It helped the company save about 20,000 tonnesof water annually.
High-Efficiency Water Production
Reuse Water
Cooling Towers
4243
Pollutant Management
The specific work done by the company in environmental pollution prevention and control in 2022 includes:
In 2022, the company prioritized environmental protection and extended its environmental management to ensurecompliance with standards for wastewater and exhaust gas.
Review the currentsituation
Track and organize each subsidiary company's three-waste emissionsand monitoring, emergency environmental contingency plans, as wellas discharge permits and pollutant emission indicators
Participate inenvironmentalassessment beforeacceptance
Participate in environmental assessment before acceptance for newproduction lines, factories, and renovations of each subsidiary company
Carry outenvironmentalimprovement andenhancement
Actively respond to the "zero discharge of sewage”
Improve themonitoring systemand enhance thedata assessmentplatform
The compliance rate of wastewater, rainwater (pH, COD, NH3-N), andboiler flue gas (particulate matter, SO2, NO2) for each subsidiarycompany is 100%
Communicate andcoordinate withRegulators
Coordinate with government environmental protection departments tohandle abnormal on-site monitoring data for subsidiary companies andavoid penalties
HENGYI
Social Responsibility
Green Production
Clean Energy
The company supports the "green production" strategy and promotes it by implementing projects such as 100%coverage of photovoltaic power generation and peak-valley electricity storage to reduce electricity consumption andcarbon emissions.Since 2020, the company has been increasing its investment in photovoltaic power generation.End of 2022: 51 MW photovoltaic capacity, annual output 44.2 million kWh.
Photovoltaic Power
Plan for 2023: 86 MW installed capacity and84 million kWh annual output.
The company follows the "separate by pollution type, rainwater and sewage, andindustrial/domestic wastewater" principle. They have a good wastewater collectionsystem and use "pretreatment + anaerobic + aerobic" treatment process. Sometreated water is reused, and the rest meets GB31752-2015 standards beforeentering the sewer network.The company uses source control and treatment measures to reduce waste gasemissions. The organized emissions of dust, non-methane total hydrocarbons, andformaldehyde comply with the relevant standards in the "Emission Standards forPollutants from Synthetic Resin Industry" (GB31752-2015). For the emissions fromcoal-water slurry boilers in Hangzhou, the "Emission Standards for AtmosphericPollutants from Boilers in Hangzhou" are followed, and for other areas, the"Emission Standards for Atmospheric Pollutants from Boilers" (GB13271-2014) arefollowed. The emissions of odorous pollutants comply with the relevant standards inthe "Emission Standards for Odorous Pollutants" (GB14554-93).
Solid waste
The company manages waste according to the principles of resource utilization,reduction, and harmlessness. The temporary storage of hazardous waste strictlyfollows the relevant regulations in the "Pollution Control Standard for the Storage ofHazardous Waste" (GB18597-2001), while general solid waste follows the"Pollution Control Standard for the Storage and Landfill of General Industrial SolidWaste" (GB18599-2020).
Pollution Prevention and Control
Sewage
Waste gas
4445
HENGYI
Social Responsibility
Green Production
Hengyi builds mutually beneficial and win-win relationships with suppliers,customers, and other partners, jointly fulfilling social and environmentalresponsibilities, and committed to promoting sustainable development inthe entire industry ecosystem, achieving a harmonious and positive cycleof the value chain.
Responsible ProcurementSafety ManagementProduct Quality & Service
Ecosystem-Accountability
Hengyi improves its supplier management system and practices responsible procurement. We extend oursustainable development concept to upstream and downstream enterprises and advocate for suppliers tofulfill social responsibilities.As of Dec 31, 2022, the company has 1,661 suppliers, including 278 active engineering suppliers with a totalprocurement amount of RMB 1.76179 billion, and 1,383 active material suppliers with a total procurementamount of RMB 4.3318 billion. We admitted 697 new suppliers in 2022, completed admission materialsreview, including legal and bidder qualification confirmation, and supplier performance evaluation.Supplier Qualification
The company has established a strict supplier admission management mechanism, which includes reviewingthe supplier's agent qualifications, ISO9001, ISO14001, ISO18001 system certification status, environmentalimpact assessment status, and wastewater discharge permit acquisition status. The company also conductson-site inspections of suppliers and issues inspection reports. In 2022, a total of 161 suppliers wereinspected on-site, and 49 inspection reports were issued, providing objective evaluations and independentsuggestions for the collection of supplier information, introduction of new suppliers, resolution of qualityproblems, calibration, fly check of raw material addition, fly check of product production, fly check ofproduction site, equipment inspection, production capacity investigation, and maintenance of relationships
Supplier ESG Promotion
Hengyi requires cooperation suppliers to follow their ethical and environmental standards. They promoteESG concepts with suppliers to reduce negative environmental impacts and enhance social responsibility.The company continuously monitors the supply chain's compliance with its values and standards.
Responsible Procurement
Ecosystem
SDGs we focusedin this section：
HENGYI
Social Responsibility
Production Safety Management System
In 2022, the company achieved good safety results by focusing on safety production standardization anddual prevention mechanisms, with no fires, personal injury accidents, or environmental pollution incidents.The "three wastes" met emission standards.
Safety Management
Key measures for safety management
In 2022, Hengyicarried out 96inspections
Identified351hidden hazards
Rectificationcompletionrate98.6%
Annual investmentin safety RMB
31.13 million
Issued 24problemnotices
Closed
hazards
The company has implemented "three management and three must" requirements.Sign responsibilitylettersIncreaseinvestment insafety
Review HSEregulatoryStandards&Conduct HSEhazardinvestigation
Enhance safetytrainingStrengthenenvironmentalprotection processmanagement
Establish environmental risk management accounts for subsidiaries, continuously track and rectify
potential hazards, and strive to reduce environmental compliance risks.
Manage environmental facilities for normal operation, conduct surprise inspections to enforce
environmental protection measures, ensure compliance of waste gas and wastewater discharge
standards, and properly dispose of solid waste.
Conduct safety education and training according to different needs.
Carry out various safety activities to strengthen employees' safety awareness and skills.
4849
Safety Training
The company prioritizes employee safety education and training for all levels of staff,covering major responsible persons, safety production management personnel, specialoperations and equipment operators, and other practitioners. In 2022, occupationalhealth training was provided through various opportunities such as pre-shift and post-shift meetings and team safety activities.
The company conducted a total of 919 training sessions, training a total of 47,725 people.Training achieved a 100% completion and qualification rate, with emphasis on key points and full staff coverage.
Identification ofoccupational diseasehazard factors
The influence ofoccupational hazardfactors on healthHow to preventoccupational diseases
The employer's legalduties in the preventionand treatment ofoccupational diseases
0102
0304
HENGYI
Social Responsibility
Ecosystem
During the reporting period, the company invested RMB 31.1276 million in safety and RMB 80.1008
million in environmental protection, enhancing facilities to improve safety.
Investing in safety and environmental protection and improving production conditions:
Promote safety production standardization system: 1.Certify non-compliant subsidiaries; 2.
Encourage qualified ones to reach second-level standardization; 3.Improve the system of certified
subsidiaries.11 subsidiaries meet the safety production standardization requirements: x at first level,
x at second level, 1 striving for second-level, and 9 at third level.
HSE legal compliance assessment: Updated the "HSE Law and Regulation List" by adding 99 new
standards and updating 16, resulting in a comprehensive list of 362 applicable HSE regulatory
standards. The assessment ensures compliance with relevant laws and regulations.
On-site HSE inspections are conducted using multiple methods to increase frequency and intensity,
and detect and eliminate potential hazards. Inspection methods include leader-led inspections and
strict control of key project nodes. Analogical investigations and safety transformations are
conducted on accident-prone areas, including the short fiber post-spinning process and elevators.
The company has established a diversified channel customer satisfaction surveymechanism to help improve Hengyi's product quality.The company uses diverse channels such as a "WeChat mini-program mall," on-site visits by salespeople, andphone calls to collect customer satisfaction-related information, particularly on product quality. This aims to improveproduct and service quality and increase customer satisfaction.
The company improves after-sales service efficiency and effectiveness by providing technical support andaddressing customer feedback through quality improvement, returns, and exchanges, resulting in improvedcustomer satisfaction.
In 2022, customer satisfaction with after-sales events reached 97%.
After Sales
The company has an after-sales service department with a complete managementsystem and process to handle product quality issues and customer service.
customer satisfaction
97%
95%93%
202020212022
The company also implements a monitoring and control system for quality management, such as the"Product Center Value Management Measures," to stabilize product quality and control fluctuations inrelated quality indicators during the production process. The company continuously improves and revises itsoperating procedures to ensure that employee operations are standardized. Additionally, the companystrengthens its equipment management and abnormal inspection management to ensure stable productquality.Furthermore, the company integrates production digitization to strengthen its overall quality management. Ittracks the quality of raw materials, machinery, and accessories, manages production process anomalies,and manages end-product quality, using big data to plan, implement, monitor, correct, and improve theentire quality management process. In 2022, the company's product quality inspection qualification ratereached 100%, and the product recall probability remained stable between 0.02% to 0.04%.
To produce high-quality products, Hengyi has established the "Hengyi Chemical Fiber Product EnterpriseInternal Control Standard" system to manage all of its products, including PET, POY, FDY, DTY, PSF, andPa6. The system covers product grading and production process control, and categorizes products intothree levels of quality: excellent (AA), first-class (A), and qualified (B). Products below the qualified level areconsidered substandard (C). This ensures that the quality of the products meets customer requirements.
QualityProduct Quality & Service
Key performance
In 2022, the company had a100% product quality inspection qualification rate and a stableproduct recall probability of 2-4%00.5051
HENGYI
Social Responsibility
Ecosystem
Hengyi is committed to enhancing its independent innovation capabilitiesand developing high-end and environmentally-friendly polyester fiberproducts. Through academic collaborations, the company has achievedleading technology and unique product diversification, serialization, andquality improvement.
Green InnovationCircular EconomyDigitalization
Innovation-Sustainability
本章所影响的SDGs：
Amidst the global trend of green development, titanium catalysts have become the best alternative toantimony catalysts. Hengyi's self-developed "Yitai Kang" uses a full titanium composite catalyst system toreplace heavy metal antimony catalysts, providing healthier and more environmentally friendly productsfor end customers.
Hengyi Research Institute conducted related research on the bottleneck problems in the synthesisof antimony-free environmentally friendly polyester catalysts, including catalyst compounding,addition methods, polyester polymerization, melt stable transportation, and polyester spinnability.After multiple experiments and optimizations, they successfully developed a full titanium-basedcomposite catalyst system for the production of antimony-free environmentally friendly polyester.Using a full titanium-based composite catalyst system, "YiTaiKang" not only ensures product quality butalso reduces pollution emissions during production, effectively alleviating the pressure of wastewatertreatment for downstream processing enterprises and improving the ecological environment of theindustry chain. The product achieves green circulation throughout the textile product lifecycle, fromproduction to use to recycling, making a positive contribution to environmental protection"YiTaikang" project has achieved large-scale production of high-capacity titanium polyester meltdirect-spun polyester filament, with stable production operations and product quality indicators. Theproject has applied for 16 invention patents, of which 4 have been authorized, and established 4enterprise standards, led the drafting of 4 industry standards, and participated in the developmentof 1 industry standard. In the future, Hengyi will continue to strengthen its technological researchand development and innovation to make greater contributions to the development of green andenvironmentally friendly industries and social progress.
Hengyi prioritizes market demand and green environmental protection inits R&D efforts, committed to offering eco-friendly and healthy products todownstream customers and end consumers in the industry chain.GreenInnovation
YiTaiKang
Innovation
HENGYI
Social Responsibility
AntibacterialPolyester
Flame RetardantPolyesterOur HFRPET is a halogen-free, phosphorus-based flame-retardant polyester with aphosphorus content over 6500 ppm and a fabriclimiting oxygen index over 30%. It meets nationaland American standards and covers productssuch as POY, FDY, DTY, and slices.
HFRPET is stable, durable, water-resistant, andenvironmentally friendly with no toxicity. Itovercomes problems such as poor waterresistance, poor hand feel, and fading found inother flame-retardant fabrics. The brightness ofthe slices and yarns is superior to marketalternatives and can be used for all types offlame-retardant fabrics
Green consumption and a focus on healthy living are driving growth potential in the anti-bacterial textilemarket. Silver ions are harmful to health and restricted, copper ions lower product quality, while zincions provide a durable anti-bacterial effect without any health or quality issues.
We made anti-bacterial polyester slices and fibers by mixing nano-zinc oxide, PTA, and EG, thenpulping, esterifying, condensing, and spinning. The slices showed good filtration performance and evendistribution of nano-zinc oxide. The project has a pending invention patent and was approved for keyresearch in Zhejiang Province in 2022.The anti-bacterial polyester slices have slightly higher crystallization temperature and viscosity but areotherwise similar to conventional ones and are stable during spinning. The resulting fabrics have a 99%inhibition rate against three types of bacteria and are widely used in medical materials, high-performance home textiles, and sports clothing, offering a promising market and economic benefits.
5455
Recycling ofWaste Polyester
CircularEconomy
Hengyi is dedicated to green low-carbon transformation, building a circulareconomy, and promoting the development of green industrial chains such asthe recycling of waste polyester and bio-based polyester, in order to achieveproduct circularity. Through technical expertise, Hengyi transfers waste ordiscarded products from landfill sites and converts or reuses waste intohigher value products. The future product portfolio will include manytechnologies specifically developed for reusable materials, seeking morewaste and carbon reduction solutions for the industrial ecosystem.
Hengyi's polyester production has exceeded 10 million tonnes, but waste such aswaste fibers are produced, causing waste and increased costs. Clothing waste isalso increasing due to improving living standards. Traditional methods of handlingwaste polyester, such as landfill or incineration, have a significant impact on theenvironment, economy, and society. Therefore, recycling waste polyester is notonly necessary for the company but also a social responsibility, as it is important forsaving resources, reducing pollution, and reducing carbon.
The recycling of waste polyester is divided into two ways. Chemical recycling canexpand the scope of waste polyester to fibers and fabrics, while physical recyclingis only applicable to waste bottle flakes. The industrial chain planning of wastepolyester is mainly divided into three stages: chemical depolymerization intomonomers or intermediates, preparation of various polyester materials, andpreparation of high-value-added materials.The five specific layouts for the recycling of waste polyester by the Hengyi Institute:
disassembling waste polyester into monomers or intermediates using industrialalcohol methods; processing glycol monomers to produce various polyestermaterials; using glycol monomers in existing systems to produce high-valuepolyester; preparing polyester into para-aramid, used in industries such asautomotive, communication and safety protection; gasifying waste, biomass, andurban garbage to produce high-purity hydrogen gas through high-temperatureprocessing. The Hengyi Institute will fully implement these five industry layouts tosupport the green circular economy of the Hengyi industry.
The "14th Five-Year Plan" encourages a circular economy and green design in thepolyester industry, improves the system for recycling waste textiles, regulates thedevelopment of the waste textile regeneration industry, and strengthens policysupport. The goal is to establish a preliminary circular system by 2025 andimprove it by 2030.
HENGYI
Social Responsibility
Innovation
Biobased PolyesterHengyi supports research on multiple bio-based materials, which use agricultural and forestry waste as rawmaterials to maximize resource utilization and reduce oil consumption and carbon emissions. These materials aresafer and more recyclable. Through collaboration with Zhejiang University, Hengyi has developed high-quality PEFand a series of copolyesters using an efficient polymerization catalytic system. Hengyi plans to promote thedevelopment of the emerging bio-based materials industry, realize a closed-loop cycle of carbon dioxide, andcontribute to global energy structure adjustments by reducing carbon emissions in the polyester industry.
5657
Digitalization
Hengyi follows the industry's development trends, and is committed to promotingthe digital transformation of the chemical fiber industry. From automation tocloud computing, they have been exploring and implementing various digitalsolutions. They continue to deepen the development of the industry's digitalplatform, and embrace new technologies to explore and visualize the digitalvalue of the industry.
“Hengyi Brain" is a management information center system for corporatemanagement, which can break through data isolation and realize indicatoranalysis and decision-making scenario implementation. Through a detailedindicator system, Hengyi Brain can reflect the company's operating status inreal time and visualize the collected data. This "one-stop" decision supportsystem provides timely and effective decision-making information for seniormanagement.
Digital FactoryThe digitized factory presents integrated production, supply, and sales datafrom the perspective of the factory dimension, providing data referenceservices for the production and sales coordination of the factory's generalmanager based on the enterprise brain. With the data refined to the factoryend through the Hengyi big screen, non-intrusive intelligent data acquisitiontools are deployed at the digital production monitoring level to collect coreprocess data from the factory's spinning upper computer every minute, thusachieving trend analysis of real-time production process data and providingon-site warnings and operation feedback. At the digital businessmanagement level, the system improves the factory general manager'sdecision-making and coordination abilities by presenting comprehensiveand refined data on production, sales, quality, energy consumption, andinventory, thus achieving higher efficiency.
Digital Decision Support System-Hengyi Brain
rPET (Recycled PET) is a new type of environmentally friendly recycled fabric made from discarded cola and plasticbottles, which is of great significance for environmental and resource protection. Hengyi uses physical and chemicalrecycling technologies to recycle and reuse waste plastic bottles. In 2022, Hengyi's rPET production capacity isabout 50,000 tonnes.
Cloth
Fabrictextile
Fiberseparation
Fiberregeneration
Physical recyclingThe technology mainly involves putting the wastebottle flakes into a vacuum reactor and carryingout surface dewaterting, hot melting, internaldewaterting, and wastewater dischargeprocesses in sequence to achieve the recyclingand reuse of polyester.
The technology breaks down the waste polyesterinto small-molecule polyester monomers,removes impurities and colors, and thenrepolymerizes the purified monomers intopolyester, thus achieving the purpose ofrecycling and reusing waste polyester.
Chemical recycling
rPET
HENGYI
Social Responsibility
Innovation
Hengyi BrainReal time
Market
ProductionIndex
Real time
Sales
Order benefitCore index
Gains & losseson inventory
Empiricaldynamic trend
Digital Marketing
Digital Factory
By factory
Screen
By SKU screenSales/Marketing
/Production
Real-time market
Sales teamperformance
Sales rankingPolyester core index
Factory productionand sales rate
Order benefitInventory structureanalysis
Equity inventory
Overage physicalinventory
Production index
Real-time on-machine task
Production eventProduction&Saleschange and batch analysis
Premium qualityinventory
Product qualityindicatorsRaw materialinventory
5859
In response to the company's "Chemical + Logistics" strategy, the subsidiary logisticscompany will build itself into a modern, large-scale professional logistics enterprisethat matches Hengyi's capacity and provides transportation tasks for raw materialsupply and product sales, achieving the goal of self-owned vehicles. However, formany years, the dynamic management of logistics transportation business has mainlyrelied on manual offline contact or communication through WeChat and QQ. In termsof raw material transportation, maintenance management, distribution billreconciliation, and salary calculation, it is mainly achieved through manual statisticsusing EXCEL spreadsheets. To comprehensively develop the logistics company, acomplete logistics transportation information system is urgently needed, including anintelligent scheduling module, to improve the efficiency of various aspects of work.The system will realize real-time sharing of business data and data statisticalanalysis, truly enhancing the efficiency of logistics capacity, and comprehensivelyimproving the overall efficiency of the logistics company.
AI Inspection System
Sophisticated AI algorithms are used by Hengyi and Baidu to analyzecomplex product surfaces. This technology combines traditionaloptical imaging with intelligence to solve the limitations of traditionalmachine vision recognition. The AI inspection equipment has 100%detection rate for silk cakes, with a 2.5 second inspection time perproduct, increasing efficiency by 70% compared to manual inspection.This intelligent inspection equipment will become an importantcomponent of the production line, improving product quality andefficiency, and injecting new momentum into intelligent manufacturing.
Logistics system
HENGYI
Social Responsibility
Innovation
Recognizing the importance of corporate data security under the trendof national attention to information security, Hengyi has establishedrelevant network security policies to protect confidential information andensure safe operations.We implement a graded management system for company informationand set access permissions for confidential and sensitive information.Access permissions are recorded and adjusted/removed as necessarywhen employees transfer or leave the company. We monitor networktraffic, hire third-party security organizations for regular security andprivacy checks, reinforce security tools, conduct security penetrationtesting, and train employees on network security to raise theirawareness.
Procurement System
Data Security
Date Leak 0System Breach 0
The goal of this project is to develop a procurement management informationsystem for engineering projects and daily procurement activities, includingSRM (Supplier Relationship Management) and SCM (Supply ChainManagement) systems, to help achieve comprehensive automatedprocurement management.The SRM system helps users and suppliers establish an information exchangeplatform, facilitating supplier registration, admission assessment, sourcingidentification, inquiry comparison, bidding and other business coordination, andalso providing supplier performance assessment.SCM system can automate procurement management from demand planning,requisition, purchasing strategy, supplier business collaboration, procurementcontract, receiving and acceptance, quality inspection, funding planning, andpayment request to the entire life cycle of procurement operations.The system also links project purchase orders with project investment codesand general budgets, generating an analysis table of investment projectpurchase budget amounts and completion progress. After the system isimplemented, procurement officers will save a lot of time and energy, reducingmanual data entry and statistics work, and focusing more on procurementprogress and cost analysis, actively realizing project cost optimization goalsand effectively reducing the risk of human error.
6061
HENGYI
Social Responsibility
Innovation
Key PerformanceAppendix
Economic Performance
Social Performance
IndicatorUnit2020 2021 2022
IndicatorUnit2020 2021 2022
Operating revenueTotal assetsProduction capacity- Chemicals- Refined oil- PTA- PIA- Polyester fiber- PET（including RPET）- CaprolactamQuality inspection pass rateCustomer satisfaction after sales
100 million100 million10,000 tonnes10,000 tonnes10,000 tonnes10,000 tonnes10,000 tonnes10,000 tonnes10,000 tonnes10,000 tonnes%%
1,2901,0553,847
1,900
100
Total number of employeesFemale employees ratioLabor contract signing rateSocial insurance coverageEthnic minorities employees ratioTraining time per employee per yearHealth examination coverageReported accidentsFatalities from safety accidentsSafety training time per capita
%%%%hour%
hour
18,154
25.77
6.50
16,820
26.17
6.45
15,637
26.37
100 100
7.15
98
0 0 12
Environmental Performance
IndicatorUnit2020 2021 2022
10,000 tonnes100 tonnes/million10,000 tonnes10,000c ubic meters10,000 kWh10,000 tonnes10,000 tonnes10,000 kWh10,000 tonnestonne/100 million
1.00
4,497689,966
1,3344,08147,234
0.70
4,601763,655
2,5804,14432,124
911 0.60 864 4,443 649,377 210 41 4,420 3,214 21,131
Carbon dioxide emissionsCarbon dioxide emissions intensityConsumption of crude oilConsumption of natural gasConsumption of electricityConsumption of coalConsumption of coal water slurryPhotovoltaic power generationFresh water withdrawalFresh water withdrawal intensitySo2 emissionsNOx emissionsCOD dischargeAmmonia and nitrogenSoot emissionSolid wasteSolid waste intensityMercury emissionsWeight of hazardous wasteHazardous waste intensity
tonnetonnetonnetonnetonnetonnetonne/100 millionmg/m3tonneonne/100 million
2,055 622
225,804 261
0.000004
0.13
2,638
315,422 245
0.0000076
0.18
2,337
307,058
0.000043
0.14
Notes:
Fresh water withdrawal intensity = Fresh water withdrawal/ Operating revenueSolid waste intensity = Solid waste/ Operating revenueHazardous waste intensity = Weight of hazardous waste / Operating revenue
1,5211,1203,877
1,900
100
3,150
1,300
100
HENGYI
Social Responsibility
Appendix
Report Content Indexes
GRI Content Index
6465
GRI StandardsPageGRI 2 General Disclosures2-12-22-32-42-62-72-92-102-112-122-162-262-272-29
Organizational detailsEntities included in the organization’s sustainability reportingReporting period, frequency and contact pointRestatements of informationActivities, value chain and other business relationshipsEmployeesGovernance structure and compositionNomination and selection of the highest governance bodyChair of the highest governance bodyRole of the highest governance body in overseeing the management of impactsCommunication of critical concernsMechanisms for seeking advice and raising concernsCompliance with laws and regulationsApproach to stakeholder engagementGRI 3Material Topics3-13-23-1
Process to determine material topicsList of material topicsManagement of material topicsGRI 201 Economic Performance201-1201-3
Direct economic value generated and distributedDefined benefit plan obligations and other retirement plans
GRI 203 Indirect Economic Impacts203-1203-2
Infrastructure investments and services supported Significant indirect economic impactsGRI 205 Anti-corruption
Operations assessed for risks related to corruptionCommunication and training about anti-corruption policies and proceduresConfirmed incidents of corruption and actions takenGRI 302 Energy
Energy consumption outside of the organizationEnergy intensityGRI 303 Water and Effluents
Management of water discharge related impactsWater withdrawalWater dischargeWater consumptionGRI 305 Emissions305-4305-7
GHG emissions intensityNitrogen oxides (Nox), sulfur oxides(SOx), and other significant air emissionsGRI 306 Waste306-1306-2306-3306-4306-5
Waste generation and significant waste-related impactsManagement of significant waste related impactsWaste generatedWaste diverted from disposalWaste directed to disposalGRI 401 Employment401-1 New employee hires and employee turnover
6 1 1 1 6 23 11 12 13 13 18 18 11 1819 20 2062 25
30 6214 14 1463 6341 41 41 41 63 6344 43 63 63 63
401-2
Benefits provided to full-time employees that are not provided to temporary orpart-time employees
205-1205-2205-3
303-2303-3303-4303-5
302-1302-3
HENGYI
Social Responsibility
Appendix
SASB Index
GRI 403 Occupational Health and Safety
403-1403-2403-3403-5403-6403-7403-8403-9403-10
Occupational health and safety management systemHazard identification, riskassessment, and incident investigationOccupational health servicesWorker training on occupational health and safetyPromotion of worker healthPrevention and mitigation of occupational health and safety impactsWorkers covered by an occupational health and safety management systemWork-related injuriesWork-related ill health工作相关的健康问题GRI 404 Training and Education
GRI 405 Diversity and Equal OpportunityGRI 409 Forced or Compulsory Labor
GRI 413 Local CommunitiesGRI 414 Supplier Social AssessmentGRI 416 Customer Health and Safety
404-1404-2405-1409-1413-1413-2414-1416-1
Programs for upgrading employeeskills and transition assistance programs
CodeIndicator Page
Appendix
62 30
48 48 48 48 48 48 49 48 48
Diversity of governance bodies and employees12Operations and suppliers at significant risk for incidents of forced or compulsoryOperations with local community engagement, impact assessmentsOperations with significant actual and potential negative impacts New suppliers that were screened using social criteriaAssessment of the health and safety impacts of product and service categories
RT-CH-110a.1RT-CH-120a.1RT-CH-130a.1RT-CH-140a.1RT-CH-140a.3RT-CH-150a.1RT-CH-210a.1RT-CH-320a.1RT-CH-320a.2RT-CH-410b.2RT-CH-530a.1RT-CH-540a.1
Gross global Scope 1 emissions, percentage covered underemissions-limiting regulationsAir emissions of the following pollutants: (1) NOX (excludingN2O), (2) SOX, (3) volatile organic compounds (VOCs), and
(4) hazardous air pollutants (HAPs)
(1) Total energy consumed, (2) percentage grid electricity,
(3) percentage renewable, (4) total self-generated energy 2
(1) Total water withdrawn, (2) total water consumed,
percentage of each in regions with High or Extremely HighBaseline Water StressDescription of water management risks and discussion ofstrategies and practices to mitigate those risksAmount of hazardous waste generated, percentage recycledDiscussion of engagement processes to manage risks andopportunities associated with community interests
(1) Total recordable incident rate (TRIR) and (2) fatality rate
for (a) direct employees and (b) contract employeesDescription of efforts to assess, monitor, and reduce exposureof employees and contract workers to long-term (chronic)health risksDiscussion of strategy to (1) manage chemicals of concernand (2) develop alternatives with reduced human and/orenvironmental impactDiscussion of corporate positions related to governmentregulations and/or policy proposals that address environmentaland social factors affecting the industryProcess Safety Incidents Count (PSIC), Process Safety TotalIncident Rate (PSTIR), and Process Safety Incident SeverityRate (PSISR)4
HENGYI
Social Responsibility
Hengyi Petrochemical Co.,Ltd