Topic: A Blueprint for Digital ManufacturingCreating Product Value with CraftsmanshipCreating Service Value with SincerityCreating Value in the Industry Through Cooperation
Theme: A Blueprint for the Low-carbon IndustryCreating Environmental Value with Low-carbon E?ortsCreating Ecological Value through Conservation E?orts
Content
About this reportAbout STLMessage from Our ChairmanCompany Pro?leOur 2023
Quality to Fosteran Excellent Brand
Ecological Co-building forLow-carbon Development
Theme: A Blueprint for Talent DevelopmentCreating Talent Value by EmpowermentCreating Harmony with Love and Responsibility
Theme: A Blueprint for Rural RevitalizationCreating Corporate Value through ComplianceCreating Sustainable Value with Responsibility
People-Centricity to Builda Harmonious Society
Governance to SeekLong-Term Steady Growth
AppendixOutlookHornors in 2023Index of Reporting GuidelinesESG Performance Indicators
About STL
Description of theReportInformation Sources
Con?rmation andApproval
This is the fourth annual Environmental, Social and Governance (ESG) Report of Sat-ellite Chemical Co., Ltd. (hereinafter referred to as the "Report"). The Report providesa factual and objective account of Satellite Chemical Co., Ltd.'s sustainability activi-ties in 2023, with a focus on its social, environmental, and governance performance.
Boundaries
Temporal boundaries of the Report: January 1, 2023, to December 31, 2023 (hereinaf-ter referred to as the "Reporting Period"). Some information may extend beyond theReporting Period. The Report is the annual report. Organizational boundaries of theReport: The Report covers Satellite Chemical Co., Ltd. unless otherwise speci?ed.Basis of Preparation
This report is prepared with reference to theShenzhen Stock Exchange Guide No.1 onSelf-Regulation of Listed Companies: Standardized Operation of Companies Listed onthe Main Board (December 2023 Revision), theShenzhen Stock Exchange GuidelineNo.1 on Self-Regulation of Listed Companies: Business Matters (Revised in December2023), theShenzhen Stock Exchange Guide on the Environmental, Social and Gover-nance Disclosure of Listed Companies (Consultation Paper), theGRI Standardsissuedby the Global Reporting Initiative (GRI), theIFRS Sustainability Standardsissued bythe International Sustainability Standards Board (ISSB), the United Nations Sustain-able Development Goals (UN SDGs), and the Guidance on Climate-related FinancialDisclosures released by the Task Force on Climate-related Financial Disclosures.Description ofDesignations
For ease of presentation and reading, the terms "the Company", "Satellite", "STL" and"we/us" in this report refer to "Satellite Chemical Co., Ltd." and its subsidiaries. Otherde?nitions are as follows:
STL Technology refers to Zhejiang Satellite New Material Tech-
nology Co.,Ltd.Youlian Chemistry refers to Zhejiang Youlian Chemistry Industry
Co.,Ltd.Pinghu Petro Chemical refers to Pinghu Petro Chemical Co., Ltd.Satellite Energy refers to Zhejiang Satellite Energy Co., Ltd.Hubei Satellite refers to Hubei Satellite New Materials Co., Ltd.STL USA refers to Satellite Chemical USA Corp.Lianyungang Petrochemical refers to Lianyungang Petrochemical Co., Ltd.Jiahong New Material refers to Jiangsu Jiahong New Material Co., Ltd.
The information and data disclosed in the Report are from the Company's statisticalinformation or o?cial documents. The currency amounts involved are measured bythe Renminbi (hereinafter referred to as the "RMB").The Report was prepared by STL's ESG report compilation team and approved by theBoard of Directors for release on March 25, 2024, upon con?rmation by the manage-ment.
Access and Feedback
The Report is available in both simpli?ed Chinese and English. In case of discrepan-cies between the two versions, the simpli?ed Chinese version shall prevail.Your comments are valuable to us and will help us improve our ESG performance.Please feel free to contact us.Telephone: (+86) 573-8222 9096E-mail: esg@weixing.com.cnO?cial website: https://www.stl-chem.com/Address: No. 196 Fuqiang Road, Nanhu District, Jiaxing, Zhejiang Province, China
Disclaimer
The forward-looking statements in this report are those concerning the Company'santicipated or expected business activities, events or developments that may occuror are expected to occur in the future, other than statements of historical facts. Actualresults or trends in the future may di?er materially from these forward-looking state-ments as a result of a range of variables. The Company made the forward-lookingstatements contained in this report prior to March 25, 2024 and undertakes no obli-gation or duty to update them, unless otherwise required by regulatory authorities.
About this report
About This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Message from Our Chairman
STL has remained steadfast in its mission of "Chemicals Make A Better Life" and has embraced the responsibility ofpromoting green and low-carbon development. In 2023, aligning with national industrial development strategiesand our business philosophy to "contribute STL quality products, create a better life", we achieved numerous sig-ni?cant technological and product innovations, as well as comprehensive, in-depth", and fundamental manage-ment innovations and transformations.Throughout the year, STL has advanced towards a modernized industrial system, accelerating the integrateddevelopment of industrial chains in high-end polyole?ns, electronic chemicals, new energy materials, and com-prehensive utilization of hydrogen energy, among others. We have showcased a pioneering and innovative spirit,making signi?cant breakthroughs in core technologies and bridging gaps in key ?elds in China. Concurrently, wehave established a green and low-carbon industrial model that spans the entire industrial chain, with the aim ofcontributing to the country's ambitious "dual carbon" goal to peak carbon emissions by 2030 and achieve carbonneutrality by 2060, as well as to the realization of China's modernization.With the increasing global focus on sustainable development and environmental conservation, ESG (Environmen-tal, Social, and Governance) has become a pivotal aspect of corporate growth and reputation. STL wholeheartedlyembraces this responsibility, understanding the need to proactively address ESG challenges, break away from lim-itations, and steadfastly progress towards a green, low-carbon, and sustainable future. We aim to lead by examplewithin the petroleum and chemical industry, through initiatives such as strengthening green and intelligent manu-facturing, championing low-carbon innovations, ful?lling social obligations, and enhancing corporate governance.
About STL
STL is dedicated to meticulously crafting an internal management framework, with a focus on productionquality control as its cornerstone, and product innovation and R&D as its driving force, ensuring steadfast andsuperior product quality. Guided by the customer-centric approach, we continuously enhance our customerservices to meet the diverse demands of the market. Through collaborative efforts with suppliers, we deepenmanagement practices and optimize the supply chain system, ensuring a steady supply of high-quality rawmaterials. Simultaneously, we actively foster communication and collaboration within the industry, endeav-oring to cultivate a positive and thriving industrial ecosystem that drives sustainable industry growth.
Building a robust management system, striving for exceptional quality, and spearheading inno-vation in research and development
STL upholds the core value of "the company grows together with its employees and society," fostering a platformfor common prosperity with our employees and society. We prioritize the personal development of our teammembers, providing opportunities for their growth and success within the STL community. Simultaneously, we ac-tively participate in social development, making tangible contributions to society and fostering a collective visionfor the future. Through collaborative e?orts and unwavering commitment, we join forces with our employees andcommunity partners to achieve the STL Dream and inject the STL Strength into the sustainable development ofsociety. We ?rmly believe that through the mutual growth of individuals and the organization, combined with theharmonious progress of the enterprise and society, we can collectively build a brighter future.
Working with employees and communities to make our dreams a reality
STL ?rmly upholds the belief that robust operations form the bedrock of a company's sustainable growth. As wechart our course towards further development and value creation, we continuously strengthen our corporategovernance and enhance our risk management capabilities to ensure steady progress in a dynamic market en-vironment. Upholding business ethics and transparency, we maintain integrity in all our operations and fosterunblocked communication with stakeholders. Furthermore, we integrate the ESG philosophy into our operationand governance practices, ful?lling our corporate social responsibility through tangible actions that contribute toa sustainable society. By cultivating a trustworthy corporate image, we aim to generate lasting value for sharehold-ers, employees, customers, and society at large, thereby creating a remarkable chapter in STL's journey.STL has embarked on its journey with perseverance and determination. At a new starting point in 2024, STL aimsfor qualitative changes, echoing the sentiment of a Chinese proverb: "In a boat race, those who row the hardestwill win". In 2024, we will persist in pioneering a green, low-carbon, technology-driven, and intelligent develop-ment model for China's manufacturing sector, in alignment with the nation's ambitious "dual carbon" goal. Weremain steadfast in our commitment to sustainable development, thereby making meaningful contributions to-wards addressing global climate and environmental challenges.
Laying the foundation for growth through robust operations while actively ful?lling social re-sponsibility
STL adheres to the core principle of "green and low-carbon development, and technological innovation," activelyparticipating in the country's "dual carbon" initiatives and placing environmental management at the forefrontof its corporate strategy. We have set a target to to reduce more than 2 million tonnes of carbon dioxide by 2030compared with that in 2020 and achieve carbon neutrality in our value chain by 2050. We are unwavering in ourdedication to managing greenhouse gas emissions, prioritizing research and development of low-carbon prod-ucts, and promoting green logistics practices. We shoulder our environmental responsibilities with fortitude bydiligently tackling environmental issues, strengthening pollution prevention and control measures, and playing anactive role in conserving natural resources and biodiversity. These e?orts highlight our commitment to protectingthe planet's green future through concrete actions.
Advancing green and low-carbon operations, and technological innovation for a sustainableecosystem
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Company Pro?le
Since its establishment, STL has always made new chemical materials deeply rooted in its development. Over the years, we haveremained steadfast in our commitment to the mission of "Chemicals Make A Better Life", focusing on the real economy and ourcore strengths. To ensure the security of upstream raw material supply, we have demonstrated innovative thinking and a pioneer-ing spirit by expanding into the upstream industry. Central to our development strategy is the integration of light hydrocarbons, aswe endeavor to establish ourselves as a leading low-carbon chemical new materials technology company.STL's business portfolio encompasses a diverse array of industries, including functional chemicals, new energy materials, and newpolymer materials, and areas such as hydrogen energy and comprehensive utilization of carbon dioxide. Our products are exten-sively utilized in sectors such as aerospace, rail transportation, infrastructure engineering, electronic chips, and healthcare. Mean-while, the Company focuses on the China's new energy vehicles, lithium-ion batteries, and solar batteries, to work on the researchand development of related new chemical materials. Our diverse range of products plays a vital role in shaping a brighter future forall.During the reporting period, STL achieved remarkable milestones in business development. The Company's operating incomereached RMB
41.487
billion, with net pro?t exceeding RMB
4.789
billion. This notable growth was primarily attributed toits strategic focus on lightweight raw materials and the establishment of a robust science and technology innovation frameworkacross four key domains: high-performance catalysts, new polymer materials, new energy materials, and process research anddevelopment. Notably, the successful commissioning of several pivotal installations such as (poly)styrene, ethanolamine, bat-tery-grade DMC, and electronic-grade hydrogen peroxide manufacturing facilities further enhanced our technological innovationadvantages in integrated industrial chain integration.Moreover, STL has demonstrated an unwavering commitment to environmental conservation. The Company prioritizes pollutionand emission management, with a strong sense of environmental responsibility, and steadfastly pursuing green and sustainabledevelopment. This dedication to environmental conservation is evident in both our routine operations and our investment deci-sions. For instance, we have signed the Comprehensive Alpha-ole?n Utilization of High-End New Material Industrial Park project,with the aim of utilizing self-developed high-carbon alpha-ole?n technology to expand our downstream segments into high-endareas such as high-end polyole?n, polyethylene elastomer, base oil of lubricants, ultra-high-molecular-weight polyethylene, andother new materials. This initiative is intended to achieve carbon reduction objectives and further strengthen our foundation foradvancing functional chemicals, high-end new materials, and new energy materials.Throughout its journey, STL has remained faithful to its initial aspirations, leveraging the advantages of industrial chain integrationand consistently expanding into the realm of new low-carbon chemical materials. We aim to evolve into a new chemical materialtechnological companythat consistently contributes to society through tax generation, bene?ts shareholders through pro?tability,and supports employees with sustainable incomes. Committed to our mission of "chemicals make a better life," we stand ready fora brighter future characterized by ongoing innovation and growth.
Our 2023
Milestones in 2023
On January 3
On February 5
On May 18On May 24
On June 17
On March 22
Satellite Energy's over RMB 10 billionproject kicked off, aiming to propel theintegration, upscaling, and eco-friendlyadvancement of new materials industryclusters.
On May 31
On June 17at the fourth "Spring in Nanhu" International Econom-ic and Trade Fair, STL officially signed two significantprojects: the functional polymer high-end new materialintelligent manufacturing project with an annual outputof 260,000 metric tonnes, and the new green acrylic pro-duction process for capacity expansion and carbon re-duction technical reform project with an annual outputof 90,000 metric tonnes.
the STL's Comprehensive Alpha-ole-
fin Utilization of High-End New
Material Industrial Park project was
successfully signed.
Jiahong New Material commenced fulloperations.
during the provincial conference aimedat expediting the establishment of aglobally advanced manufacturing hub,Yi Lianhong, the Party Secretary of theZhejiang Province, awarded the trophyof "National Manufacturing IndividualChampion Demonstration Enterprise" toSTL.
Fang Wei, the Vice Governor of Jiang-su Province, led a delegation from thegovernments at three levels to visit andstudy STL USA's ORBIT energy project.The visit was conducted to further deep-en collaboration between STL and Ener-gy Transfer in the realm of clean energy.
the Sino-Korea Green New Material (Ji-angSu) Limited's EAA project officiallykicked off to accelerate the integrationof the upstream and downstream seg-ments of the industrial chain and build amore complete, environmentally-friend-ly, and high value-added new materialsystem.
STL signed theMemorandum
of Understandingon Cooperation for the EAA Phase II ProjectwithSK Geo Centric. Both sides aim to leverage theirrespective strengths to develop and operate a newEAA facility project with an annual EEA productioncapacity of 50,000 metric tonnes and with a totalinvestment of RMB 2.17 billion.
About STLAbout ThisReport
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
On July 12
By the end of September
On December
the Satellite Future Research and Devel-opment Center project was successfullysigned, aimed at establishing a top-notch research and development head-quarters with signi?cant domestical andinternational in?uence.
the carbonate ester facility of the Green Chem-istry New Materials Industrial Park project com-menced full operations.
The project of "New Energy Developmentand Utilization—Battery Materials and Com-ponents" was selected as one of the majorspecial projects of Zhejiang Province's "Lead-ing Goose" R&D Program.
On August 27On September 17
On November 11On September 2
Mackie McCrea, Co-Chief Executive Officer atEnergy Transfer, visited STL with her delega-tion. Together with our distinguished guests,we were warmly received by Xu Kunlin, Gov-ernor of Jiangsu Province, and Ma Shiguang,Party Secretary of the Lianyungang City.
the STL 1-octane pilot technology developmentproject was recognized as an internationallyleading project by an expert panel consisting ofmembers of Chinese Academy of Sciences andthe Chinese Academy of Engineering, marking itthe second enterprise across the globe and thefirst in China to achieve independent researchand development of selective oligomerizationhigh-carbon alpha-ole?n technology.
STL attended the 30th Asia-Paci?c Economic Cooperation (APEC)
Economic Leaders' Meeting held in California, USA, for the ?rst
time.the "Hundred-Talent Plan in the One-Hundred-Year-Old STL" leadership initia-tive was formally initiated.
1011
About STLAbout ThisReport
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
National Green FactoryChina's Ministry of Industry and Informa-
tion Technology
China's Niche-sector Leaders with HighMarket Share and Strong Innovation CapacityChina's Ministry of Industry and
Information Technology
ESG Innovation EnterpriseForbes China
TOP 50 Sustainable Develop-ment Industrial EnterprisesForbes China
National Industrial Internet Pilot
Demonstration 5G FactoryChina's Ministry of Industry andInformation Technology
Leading Enterprise in National Energy
E?ciencyChina Petroleum and Chemical Industry
Federation
ESG Best Practices for Listed CompaniesChina Association for Public Companies
Outstanding ESG Case of Greenand Low Carbon Technology Inno-vation of Golden Orchid Cup
China Economic Information Service of
Xinhua News Agency
China's National High-tech EnterpriseNational High-tech Enterprise Rec-ognition and Management Leading
Group
Key Enterprise Research Institute
in Zhejiang ProvinceDepartment of Science and Technology
of Zhejiang Province
AONA Awards -2023Model of ResponsibleManufacturing of the YearOrganizing Committee ofthe Social Responsibility
Conference
Medal of Devotion from Red
Cross Society of ChinaRed Cross Society of China
Fortune China 500
Fortune Magazine
Most In?uential IoT Innovation List
Fortune Magazine
Pilot Entity of "Enhancing theQuality of Life of Employees andShaping a Happy Living Environ-ment" in Zhejiang Province
Zhejiang Provincial Federa-tion of Trade Unions
China HR Venus Awards - PracticeExcellence Award in Campus Re-
cruitment Top 50Yonyou and Digital HR Association
Value Creation in 2023
1213
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Quality to Foster anExcellent Brand
Creating Product Value with CraftsmanshipCreating Service Value with SincerityCreating Value in the Industry Through Cooperation
STL focuses on the establishment of its internal management system, production quality control and innova-tion in product development and research, making every e?ort to consolidate product quality. With a focus oncustomers, we constantly improve our customer service capability. Moreover, we continue to promote suppliermanagement rules. Through initiatives such as the full-life cycle supplier management, and the developmentof a strict audit process, we seek to strengthen communication and collaboration within the industry, to jointlybuild a positive and healthy ecosystem.
As information technology advances,digital transformation has become aninevitable trend across all industries.Recognizing the evolving market land-scape and industrial trends, STL hasembarked on a journey towards digitaltransformation and upgrading. With thevision of leading digital transformation inthe chemical industry, we are building aplatform for comprehensive digitizationacross our industrial chain. This initia-tive aims to provide us with access toprompt and precise operational analysisdata by integrating the flows of capital,business, and data. By leveraging this in-tegration, we drive digital transformationto support high-quality and sustainablebusiness growth, thereby enhancing ouroverall competitiveness.
Supported by a digital vision, we haveaccelerated comprehensive digitaltransformations aimed at enhancingoperational, organizational, security andinnovation capabilities. Our e?orts haveled to the development of a wide array ofdigital applications across ten key areas,including business and financial inte-gration, collaborative o?ce tools, highlyeffective processes, data capabilities,digital factories, data centers and indus-trial internet solutions.Moreover, STL has harnessed the dig-ital-twin technology, achieving plantmodeling and analysis and refining itsprocess parameters. Supported by theapplication of the industrial Internet ofThings (IoT), 5G, and chemical produc-
tion units in simulation and molecularsimulation technologies in developmentand research, we have established digitaldesign processes from initial planningstages to final product creation. Thishas resulted in increased accuracy andefficiency in process and engineeringcontrol. Additionally, we have leveragedthese technologies to establish the "Neb-ula" five-in-one safety knowledge base.This innovative platform enables re?nedand real-time monitoring and early warn-ing capabilities by leveraging AI analysisof personnel and operations in produc-tion areas, thereby bolstering employeework safety skills.
STL receives the authoritative DCMM Certi?cation for its digital intelligence upgradingTheme:
A Blueprint for Digital and Intelligent Man-ufacturing
DCMM is China's ?rst o?cially released national standard in the ?eld of data management, providing directional guidance for theconstruction and development of domestic organizations' data management capabilities. Our Satellite Energy and Pinghu PetroChemical have obtained the certi?cations of Data Management Capability Maturity Assessment Model (DCMM) Level 3 and Level 2,respectively. Notably, Satellite Energy stands as the second manufacturing (Party A) enterprise in Jiaxing City to receive this pres-tigious recognition. At a strategic level, STL has instilled a culture of data-centric thinking and awareness, and formulated a seriesof standardized processes at the organizational level to promote the standardization of data management, and to establish a teamof data management and application professionals to continuously improve data management capabilities and promote digitaltransformation. The successful evaluation of our two subsidiaries represents authoritative recognition of our data managementcapabilities.
Lianyungang Petrochemical built a 5G plant to foster competitive advantage in digital
transformationLianyungang Petrochemical carries out intelligent operation and comprehensive management of its intranet based on the plant's5G private network and equipment network transformation, realizing visualization of network operation and maintenance man-agement, intelligent network and business collaboration, timely alarm processing, and network upgrading and connection.Through the construction of the 5G plant, the company utilized digital twins, AR, machine vision, pattern recognition and othertechnologies to realize application scenarios such as remote preparation and control and accurate collaborative equipment manu-facturing, online diagnosis and prediction of equipment failures, intelligent logistics in the factory area and monitoring of logisticsacross the region, production energy e?ciency control and virtual on-site services, making production more digitized and envi-ronmentally-friendly, promoting integration across the industrial chain, and encouraging the company to move towards intensiveand high-quality development featuring "data integration, intelligent innovation, business synergy, optimization and e?ciency".Lianyungang Petrochemical's green transition is digitally empowered and has been selected as one of the typical cases of digital,green and collaborative transformation development in Jiangsu Province in 2023.Security processfor work safety
StandardizationModelingIntelligence
Monitoring and early warning ofthe biggesthazards
Personnel on dutyFull-process work safety Risk zoning control
Integrationof largescreens
At STL, we prioritize quality, creating products with craftsmanship, and steadfastly pursuing high-quality development. Our dedica-tion to long-term success remains steadfast as we continually re?ne our product quality and safety management systems. Throughinternal and external product testing, we uphold rigorous quality control throughout the entire product delivery process. Whileensuring compliance with laws and regulations and prioritizing quality and safety, we meticulously plan project schedules to op-timize delivery e?ciency and product quality. Our goal is to create healthy and safe products with craftsmanship. Additionally, weembrace the principle of "regarding science and technology as our primary productive force and innovation as our primary driverof growth". By leveraging scienti?c and technological innovation, we develop intelligent products that serve as a cornerstone forour long-term development.
Creating Product Value with Craftsmanship
This chapter responds to the United Nations Sustainable Development Goals (UN SDGs):
Quality Assurance
Adhering to the management philosophy of "putting customers and quality first,and practicing for long-term growth," STL continually enhances its product qualitymanagement system, and bolsters its overall quality management standards. Westrictly adhere to theProduct Quality Law of the People's Republic of Chinaand theStandardization Law of the People's Republic of China. We have formulated internalpolicies such as theQuality Management System, theIncident Management System,theQuality Management Regulations, and theCritical Activities and Key Quality Con-trol Points. These internal management documents specify our work assessmentstandards, fully mobilizing employees in optimizing product quality.To ensure the e?ectiveness of our quality management e?orts, we have establisheda quality management system characterized by "centralized leadership, hierarchicalmanagement, and clear division of responsibilities," outlining the managerial obli-gations of staff at all levels regarding safety and quality. Furthermore, we conductmonthly specialized inspections of our quality system to promptly address any iden-tified issues. STL not only prioritizes excellence internally but also takes proactivesteps to secure external product quality management system certi?cations, therebyenhancing its quality control standards from a forward-thinking perspective. Duringthe reporting period,100%of STL's operation sites obtained the ISO9001 qualitymanagement system certi?cate.STL's quality management system certi?cateIn terms of quality management, STL continuously enhances its internal quality control through three key perspectives: processoptimization, product marketing, and external collaboration. In terms of process optimization, we have established an unblockedcomplaint system and procedures based on theQuality Complaint Management Systemissued by the Production and SafetyEnvironment Center. This ensures swift resolution of various issues identified through complaints and feedback from internaland external quality investigations, thus minimizing losses associated with claims. In terms of product marketing, we collaborateclosely with our sales team to promote polyethylene (PE) products, successfully achieved a breakthrough with the introduction oflow-pressure membrane series products in markets such as Henan Xiping and Shanghai. expanding the presence of low-pressure?lm series products in regions such as Xiping County, Henan Province, and Shanghai. In terms of external collaboration, we workwith numerous universities for technical research and development initiatives, thereby contributing to our overall high-quality de-velopment.In addition, we continued to improve the capability to ensure the quality assurance for our facilities. During the reporting period,the Lianyungang Petrochemical's Center Laboratory was accredited by the China National Accreditation Service for ConformityAssessment (CNAS). Through comprehensive quality management initiatives, STL has obtained a number of external value certi?-cations.
Innovation serves as the catalyst behind the continual progress of the petroleum and chemical industry. By exploring and imple-menting new technologies, enterprises can enhance production e?ciency, improve product quality, reduce production costs, andultimately achieve sustainable development. In line with this vision, STL remains steadfast in fostering product innovation throughcutting-edge technology research and development (R&D) e?orts. We adhere to theManagement Measures of the Research Insti-tute for Polymer New Materialsas the overarching management rules, supplemented by a range of internal policies including theManagement Measures of the Establishment of R&D Projects, theManagement Measures of the Recognition of Project Achieve-ments, theManagement Measures of Laboratory Safety, and theManagement Measures of Environmental Protection. These pol-icies are meticulously designed to fortify our scienti?c and technological innovation system, promoting product innovation withadvanced technology research and development to continuously meet market demands. Our goal is to enhance our core compet-itiveness and drive sustainable growth.STL is continuously enhancing its key technology research capabilities, striving to improve R&D e?ciency and quality across vari-ous fronts, including personnel management and digital empowerment. In terms of personnel management, we have implement-ed a dual-channel development model for R&D personnel, focusing on both "technology" and "management" to enhance theirinnovation capabilities and cultivate an internal culture of innovation. Regarding digital empowerment management, we havedeveloped the "Nebula" industrial Internet platform, supported by 5G and industrial Internet technology. This platform integratesdigital-twin technology, Internet of Things (IoT), big data, arti?cial intelligence (AI), and other cutting-edge technologies. It trans-forms our operations into a modern factory characterized by digital design, intelligent production and management, collaborativeand green manufacturing, enhanced safety controls, and greater socio-economic bene?ts. This ensures product stability and reli-ability while driving e?ciency and innovation throughout our processes.STL places great emphasis on cultivating a talented team that drives innovation and development. We embrace the developmentphilosophy of "prioritizing innovation and focusing on three qualities, "along with a talent philosophy of "valuing ability over edu-cation background and contributions over seniority". We have devised tailored management policies and development plans forcore talents, emphasizing the principle of being specialized, professional, and international . These initiatives are designed to fullyunleash the innovation potential within our talent pool.Through our comprehensive management capabilities in R&D innovation, STL consistently pushes the boundaries of scienti?c andtechnological research, fostering momentum in our pursuit of innovation. As of the end of the reporting period, STL boasted a totalof 320 patents, including 48 dedicated to clean technologies.
Innovation-driven Research and Development
To ensure product stringent quality control standards, STL has introduced clear inspection protocols during the reporting period.All manufactured products must undergo meticulous control measures, and any reworks or subcontracting of facilities must besubject to approval from the Quality Assurance (QA) Department, ensuring adherence to quality and stability standards. Addition-ally, a dedicated team was established to handle quality incidents and conduct root cause analysis (RCA). Thus continuously en-hancing the standardization of product quality across production lines.
STL implements various initiatives to elevate product quality
To accelerate the updating of the industry architecture, in September 2023, STL's independently developed high-carbon alpha-ole-fin technology passed a rigorous evaluation by an authoritative national expert panel, showcasing superior purity indices for1-octene compared to similar products both domestically and internationally. By successfully developing this high-yield 1-octenetechnology, STL not only ?lled domestic technological gaps in this area but also became the ?rst domestic enterprise, and thesecond across the globe, to achieve independent research and development of selective high-carbon alpha-ole?n oligomers. Thisachievement underscores STL's dedication to scienti?c and technological innovation, promoting the industry's innovation andbuilding new competitive advantages.
STL's dedication to scienti?c and technological innovation for accelerated industrydevelopment
Certi?cation NameCerti?cation OrganizationCerti?ed Entities
Polycarboxylic acid water reducing agent polyether certi?edby Jiangsu Select Product
Jiangsu Excellence International Certi?-cation Union
Lianyungang PetrochemicalIndustrial re?ned acrylic acid certi?ed by Made in ZhejiangChina Quality Certi?cation CenterPinghu Petro ChemicalPolypropylene resin powder certi?ed by Made in ZhejiangChina Quality Certi?cation CenterZhejiang Satellite Energy Co., Ltd.
1819
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
STL remains steadfast in its customer-centric approach, continually re?ning its customer service system to deliver top-notch expe-riences. Through diligent e?orts in customer service management and e?ective communication, we aim to enhance service qualityand provide comprehensive support to unlock customer value.
STL rigorously adheres to relevant laws and regulations, including theLaw of the People's Republic of China on the Protection ofConsumer Rights and Interests, theCivil Code of the People's Republic of China, and theAdvertising Law of the People's Republicof China. Based on theManagement Regulations on the Applied Technology Service of the Marketing Center, the Company hasdeveloped internal protocols such as theSales Contract Management System, theCustomer Management System, and theLogisticManagement System. These documents establish comprehensive standards and guidelines for the development of our service sys-tem.STL constantly standardizes its customer service management and enhances our existing service system. This involves variousaspects, including institutional systems, product quality criteria, and service skill protocols, among others. In terms of institutionalsystem standardization, we implement regulations across customer service, contract signing, logistics, and payment settlement toensure consistent operations. In terms of product quality standardization, we adhere to international and industry standards whilealso developing our corporate standards to continually enhance product quality. In terms of service standardization, we have sum-marized service skill manuals and provide sta? training to improve the service capabilities of business personnel.We continuously adopt new initiatives to further improve service quality based on the development of existing systems. During thereporting period, STL initiated the CRM
customer management system project. This initiative aims to create standardized salesbusiness processes and management practices, thereby advancing our digitalization e?orts and enhancing the organizational ca-pabilities and mindset of our sales sta?. Through these e?orts, we are dedicated to continually enhancing our ability to serve cus-tomers.To better address the diverse needs of various customer segments, we have devised a targeted marketing strategy grounded in theprinciple of "anticipating trends, making informed decisions, and mitigating risks". This approach enables us to better meet theunique requirements of various customer groups, maximizing the value of our products, enhancing our industry in?uence, and so-lidifying our position in the market.
Creating Service Value with Sincerity
This chapter responds to the UN SDGs:
High-quality Services
CRM：Customer Relationship Management.
E?cient CommunicationSTL prioritizes customer feedback and consistently putsimproving customer satisfaction ?rst. We have established a full-processcustomer service management system that prioritizes our consumers, ensuring e?cient handling of customer complaints. Throughvarious measures, we meticulously analyze customer needs and suggestions, using them as invaluable insights to raise our servicestandards and enhance the overall customer experience.In terms of proactive communication with customers, we conduct regular customer satisfaction surveys to evaluate our servicesacross all processes. These surveys are essential for improving our problem-solving abilities and professional services, continuous-ly optimizing our internal management. Each year, we distribute aCustomer Satisfaction Surveycovering various aspects such asbrand perception, sales services, integrity, technical support, logistics services, and expectations for future cooperation. These sur-veys provide us with valuable insights into our customers' actual challenges and expectations. Additionally, we regularly assess theperformance of our sales team in customer service, allowing us to ensure targeted supervision to enhance customer satisfaction.During the reporting period, STL achieved a customer satisfaction rate of100%.In responding to customer feedback, we have formulated theManagement System for Customer Complaint Handling and estab-lished a robust mechanism to promptly address and resolve customer complaints. This enables us to make targeted improve-ments and enhancements to our customer services based on the feedback and issues received during customer communicationand exchanges. During the reporting period, we further expanded our complaint channels to include telephone, fax, letters, visits,email, and other platforms. In addition, we prioritize customer feedback, with all departments and sta? members readily availableto receive and address customer complaints, meeting their needs in a timely manner. During the reporting period, the resolutionrate of complaint incidents at STL was100%.
2021
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-
Term Steady GrowthAppendix
Creating Value in the Industry Through Co-operation
STL is deeply committed to fostering win-win cooperation and driving the high-quality development of the industry, thereby inject-ing new vitality into industry progress. We actively expand the scope and depth of industry exchanges and collaborations, aimingto facilitate the exchange of resources and leverage each other's strengths. Our goal is to cultivate win-win ecosystems and pro-mote synergistic development.
As a leading player in the domestic light hydrocarbon industry, STL remains abreast of industry trends and actively participates inindustry exchanges through seminars, associations, and forums to facilitate information sharing. Utilizing our expertise, we collab-orate with industry partners from diverse sectors to enhance our cooperative e?orts. Additionally, we consistently further collab-oration among the industry, academia, and research institutes, and spearhead the establishment of industry standards. Together,we aim to drive the petroleum and chemical industry towards high-quality and robust development.
On May 5, 2023, Mr. Idan Ofer, the actual controller of Sin-gapore-based East Pacific Shipping (EPS), along with hisdelegation, visited Satellite Group and spoke highly of STL'sremarkable achievements. This marked the ?rst face-to-faceinteraction between the core teams of both entities since theircollaboration commenced. The discussions during the visitdelved into carbon emission reduction within the shipping in-dustry. Both parties actively explored cooperation opportuni-ties to advance comprehensive decarbonization e?orts in theshipping industry, particularly through the adoption of cleanfuels. We are committed to contributing to global initiativesfor carbon peak and neutrality.
STL is steadfast in integrating into the industry's innovation ecosystem, with the goal of enhancing its scienti?c and technologicalinnovation capabilities through an open-minded approach. We collaborate with domestic and international partners, sharing ourinnovation experiences and exploring sustainable, high-quality development paths through extensive industry exchanges. As avital contributor, we actively participate in high-quality industry gatherings to facilitate knowledge sharing and foster business syn-ergies, thereby bolstering the industry's high-quality and robust development.
This chapter responds to the UN SDGs:
Industry Co-building
Industry Exchanges
Industry Cooperation and Co-buildingSTL continuously strengthens its global operation capability, steadfastly enhancing our partnerships with both domestic and inter-national collaborators to increase our STL brand's global in?uence. To bolster our global operational prowess, we are strategicallytargeting markets in Southeast Asia, the United States, Central Asia, Africa, America, and Europe. Within these regions, we activelyseek opportunities for collaboration in the clean energy sector and are dedicated to fostering a more comprehensive "ecosystem"of environmentally friendly and high-end new materials. Through these concerted e?orts, we aim to share the beauty of chemistrywith the world.
Singapore-based East Paci?c Shipping (EPS) visited Satellite Group to actively explorethe possibility of more cooperation opportunities
From October 16 to18, 2023, China Petroleum & ChemicalPrivate Economy High-Quality Development Conference wassuccessfully held in Tianjing. Chairman of STL was invitedto present and address the opportunities and challenges ofestablishing a modern petrochemical industrial system andto jointly promote the high-quality development of the pet-rochemical industry at the first High-Level Forum of ChinaPetroleum & Chemical Central, State-Owned & Private Enter-prises.
STL was invited to attend the China Petroleum & Chemical Private Economy High-QualityDevelopment Conference and work with other parties to promote the high-quality devel-opment of the petroleum and chemical industry
To advance our journey towards high-end development, onNovember 30, 2023, STL and Sino-Korea Green New Material(JiangSu) Limited entered into theSupplementary Agree-ment on the EAA Phase II Projectin Shanghai. This agreemententails a capital injection of RMB 868 million to kickstart theEAA Phase II Project. This collaboration stands as a pivotalstride in our overarching strategy of "building a low-carbonchemical sci-tech company of new materials". It holds im-mense signi?cance in expediting the establishment of a morecomprehensive green, high-end new material "ecosystem",thus fortifying the resilience of China's high-end new materialindustry chain.
STL accelerates the development of a green high-end new materials "ecosystem" and con-tributes to the development of high-end new materials
To advance industrial integration and innovation, STL held asigning ceremony for the Comprehensive Alpha-olefin Utili-zation of High-End New Material Industrial Park project withXu Wei New District on June 17, 2023. Leveraging our propri-etary high-carbon alpha-ole?n technology, the project aimsto expand to the downstream segments by producing high-end new chemical materials, and promoting the resourceutilization of the by-product hydrogen to achieve the project'scarbon reduction objectives. This project holds paramountimportance in enhancing and optimizing the core industrialstructure of the park and enhancing the resilience and com-petitiveness of the Company's integrated light hydrocarbonindustrial chain.
STL promotes the deep integration of industry chain and innovation chain, and invigoratesnew opportunities in industrial development
2223
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
In the first issue of the column "Typical Model in Green Manufacturing within the Petroleum and Chemical Industry" by ChinaChemical Industry News, an article titled "STL: Exploring a Novel Approach to Emission Reduction across the Industrial Chain" waspublished. The article summarized STL's endeavors in reducing carbon emissions across the entire industrial chain. Through ini-tiatives such as establishing a green supply chain management system and exploring measures like green power procurement andhydrogen storage. This proactive approach o?ers a new path for the industry to move towards green transition, positioning STL asa national demonstration enterprise for green supply chain management.
To propel industry advancement, STL and Jiaxing Economic Development Zone jointly held a signing ceremony for STL's FutureResearch and Development Center project on July 12, 2023. This initiative focuses on four key domains: catalysts, new energy ma-terials, new polymer materials, and functional chemicals. Through this endeavor, STL aims to develop the center into an in?uentialinnovation platform in the Yangtze River Delta region, shaping the "new dynanism" of scienti?c and technological innovation, andaccelerating the high-quality development.
Industry-leading Innovation
STL proactively shoulders corporate social responsibility, spearheading industry innovation and delving deeply into the high-qual-ity development of the integrated light hydrocarbon industry chain. Through active participation in industry associations and fos-tering collaboration among industry, academia, and research institutes, we contribute to raising industry standards and promotingthe high-quality development of the industry.
STL remains steadfast in integrating quality management throughout the production chain to ensure product quality with a re-sponsible and high-quality supply chain. Aligned with our business growth needs, we foster equitable and close partnerships withsuppliers to maintain the quality and stability of the supply chain. Moreover, prioritize the sustainable development of the supplychain, collaborating with suppliers to create long-term value for our customers.
Responsible Procurement
STL adheres strictly to the laws and regulations such as theBidding Law of the People's Republic of China, and theRegulation onthe Implementation of the Bidding Law of the People's Republic of China. We have devised comprehensive policies such as theManagement System for Supplier Performance Assessments, theManagement System for Supplier Acquirement and the Veri?ca-tion, and theManagement Measures for Supplier Field Inspections. These e?orts bolster our suppliers' management capabilitiesand standardization levels across the board.To bolster the quality of supply chain management and improve procurement e?ciency, we have developed a smart procurementplatform that enables full life cycle management of suppliers across all scenarios. Throughout the reporting period, we re?ned ourSRM
procurement system, segmenting sourcing/supplier development and price negotiation. This ensured standardization andtransparency in the procurement process through strengthened supervision and control mechanisms.
Supplier Management
In our pursuit of a high-quality supply chain, we have implemented rigorous supplier management procedures to promote trans-parency and compliance throughout the bidding, procurement, acceptance, and payment stages. We thoroughly evaluate suppli-ers' overall quality to ensure the delivery of high-quality products and services.During the supplier admission phase, we have established stringent audit and control procedures. These entail meticulous reviewsof areas such as suppliers' quality management, work safety, and environmental management. We mandate that suppliers providesystem certi?cates and other quali?cation documents within the SRM system during registration, ensuring the implementation ofthe supplier management framework.We have implemented a comprehensive supplier performance evaluation system, conducting regular assessments to bolster nor-malized supplier management. Our evaluation criteria encompass areas such as product quality, service capability, cooperation,and delivery pro?ciency. For key suppliers, we conduct routine ?eld inspections to ensure an accurate and objective understand-ing of their overall performance capabilities.
High-quality Supply Chain
STL places signi?cant emphasis on fostering integrity and compliance within its supply chain, ensuring transparency, fairness, andjustice throughout supplier management processes. We have established robust management policies such as theManagementSystem for Supplier Performance Assessments, theNotice on Integrity Responsibility, and theManagement Measures for Procure-ment Risk Prevention. Additionally, we have signed theNotice on Integrity Responsibility with suppliers and organized promotion-al meetings for suppliers' code of conduct. Through these initiatives, we aim to emphasize our commitment to integrity, anti-cor-ruption policies, and the fundamental principle of "Transparent Procurement" to all suppliers.Moreover, we focus on the environmental and social impact of our supply chain, integrating the concept of sustainable develop-ment into our supplier management. Through the formulation and enhancement of theManagement Measures for Green SupplierAssessments, we require our suppliers to strictly adhere to local laws and regulations and encourage them to adopt ESG standardsto improve their sustainability capabilities. In supplier selection processes, we give preference to those with certi?cations for envi-ronmental management systems and occupational health and safety management systems. Additionally, we have implemented aone-vote veto policy for suppliers with safety and environmental protection issues.During the reporting period, we introduced an annual assessment module within the SRM system, and incorporated ESG-relatedcriteria and providing additional recognition for suppliers with AEO
certi?cation. Furthermore, we have imposed requirementsregarding environmental protection licenses, energy conservation, and carbon reduction for suppliers, prioritizing environmentallyresponsible green suppliers in our procurement endeavors.
Sustainable Supply Chain
SRM：Supplier Relationship Management.
AEO：Authorized Economic Operator, the World Customs Organization (WCO) certi?cation for highly creditworthy companies.
STL is dedicated to embracing a future propelled by advancements in science and technol-ogy, and building an "ecosystem" in the ?eld of new materials
STL establishes an advanced model in green manufacturing and explores a new path foremission reduction of the whole industrial chain
2425
About STLAbout ThisReport
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Ecological Co-building forLow-carbon Development
Creating Environmental Value with Low-carbon E?ortsCreating Ecological Value through Conservation E?orts
STL remains dedicated to the philosophy of "green and low-carbon technological innovation," actively aligningwith China's "dual carbon" strategy. With environmental management at the forefront of our corporate devel-opment strategy, we diligently manage greenhouse gas emissions, prioritize the development of low-carbonproducts, and implement green logistics practices. We have ?rmly upheld our environmental responsibilitiesand strive to address environmental challenges by addressing pain points, enhancing pollution prevention andcontrol measures, and actively participating in the management of natural resources and biodiversity conser-vation. In doing so, we contribute to the preservation of our planet.
With a steadfast belief in "sharing the beauty of chemistry with the world," we are dedicated to creating a better future for humani-ty. We ?rmly believe that fostering a green, low-carbon, and high-end petroleum and chemical industry o?ers sustainable solutionsto global issues such as climate change and environmental degradation. We continuously develop a low-carbon chemical new ma-terial industry leveraging lightweight raw materials to produce ole?ns and strategically expand into downstream high-end chem-ical new material projects. These e?orts allow us to extend, reinforce, and complement the industrial chain and lead the industrychain to high-end and green development.Drawing on its leading e?orts in the integration of light hydrocarbons, STL has developed a "4R" green and low-carbon industrymodel that spans the entire process from raw materials.
Theme:
A Blueprint for the Low-carbon Industry
Leveraging the "4R" green and low-carbon industry model, STL continues to make e?orts to manufacture low-carbon products,transferring these attributes to customers and end-user scenarios throughout the value chain, thus empowering a clean future.Empowering Low-carbon Energy
After the light hydrocarbon cracking facilitiesare fully put into operation, they can produce400,000 tonnes of high-purity hydrogen everyyear, making STL the largest "green hydro-gen" supplier in East China. Compared with"gray hydrogen", these facilities can reduce1000 tonnes of CO
? in the preparationprocess, and high-purity hydrogen, after re-placing traditional energy, can reduce
4.6
million tonnes of CO
?.
Carbonic ester can e?ec-tively capture carbon, with1,000 tonnes of carbonicester consuming
tonnes of CO
?. Whencarbonic ester facilities arefully put into operation,they will be able to recycleabout400,000
tonnes of CO
? per year.
STL develops environmentally friendly high-performance polyethylene products,empowering low-carbon energy
Polyethylene (PE), being lightweight, corrosion-resistant, abrasion-resistant, waterproof, mildew-resistant, sound-insulating, andheat-insulating, is an environmentally friendly and recyclable green material. Based on the subsequent processing route, high-den-sity polyethylene (HDPE), low-density polyethylene (LDPE), linear low-density polyethylene (LLDPE), metallocene polyethylene (m-PE) and so on can be produced. These materials have a wide range of downstream applications and excellent performance, andcan be widely used in high-end ?lms, battery diaphragms, healthcare, aerospace and other areas.STL has worked on the develop-ment of high-performance polyethylene products and the production technology development of 1-butene to further improve theC2 industry chain. High-performance polyethylene products will e?ectively reduce production energy consumption, save raw ma-terials and consume more recycled materials, as well as improve the durability of materials. Their fast-track mass production canimprove processing performance and reduce energy consumption in production. High strength and high toughness can reduce theconsumption and increase the recycling value of the product.
Contributing to theLow-carbon Industry
STL enhances the environmentally friendly attributes oflow-carbon hydrogen peroxide for the low-carbon industry
Hydrogen peroxide (HP) is an import-ant inorganic chemical product widelyused in textile, paper, chemical, lightindustry, medicine, electronics, food,environmental protection and other?elds.STL obtains more than 200,000 tonnesof by-produced hydrogen per yearthrough propane dehydrogenation andethane cracking facilities, and the car-bon emission of the technology routeused by the Company is only
0.5
kgCO
/kgH
. According to data from theInternational Energy Agency (IEA), thecarbon emission per unit of coal-to-hy-drogen production is about 19 kgCO
/kgH
, and that per unit of naturalgas-to-hydrogen production is about10 kg CO
/kgH
.The Company uses part of the by-prod-uct hydrogen to produce hydrogen per-oxide, reaching 1.82 million tonnes per
year at present, which reduces carbonby more than
3.7 million
tonnescompared with that of other coal hydro-gen production enterprises, and reducescarbon by more than
1.9 million
tonnes compared with hydrogen per-oxide production of other natural gashydrogen production enterprises.In addition, the Company's by-produc-tion of hydrogen has diversi?ed appli-cations. In addition to a raw materialfor our downstream chemical produc-tion, the remaining portion is sold tochemical enterprises in the park andhydrogen refueling stations in the vicin-ity, to make full use of energy and helpthe park's chemical production getcleaner. In the future, with the furtherconstruction of Green and Low-carbonDevelopment Demonstration Zones inYancheng and other places, the Com-pany will further utilize the by-producthydrogen as clean energy.
4R low-carbonchemical model
Carbon Reuse
Carbon Replacement
Carbon Recycle
Carbon Reduction
Coal-to-hydrogen
Natural gas-to-hydrogen
Hydrogen by-product
Comparison of CO
emissions per kilo-gram of hydrogen produced throughdi?erent technological routes
19kgCO
/kgH
10kgCO
/kgH
0.5kgCO
/kgH
Compared with the coal chemical route, theSTL's light hydrocarbon cracking processcan reduce CO
? emissions by91,200
metric tonnes in producing 10,000 tonnes ofethylene and can reduce CO
? emissions by85,500
metric tonnes in producing10,000 tonnes of propylene.
Creating Environmental Valuewith Low-carbon E?ortsSTL actively aligns with the country's "dual carbon" strategy. We leverage "green and low-carbon development" and "scienti?c andtechnological innovation" as the two engines to propel the Company towards high-quality development. With a strong focus onmanaging greenhouse gas emissions, we have established feasible carbon reduction targets. Through initiatives such as establish-ing a low-carbon value chain and adopting clean energy, we aim to transition towards a low-carbon and technology-driven chem-ical new material enterprise. Simultaneously, we prioritize low-carbon product development and embrace green and low-carbonlogistics practices, thereby contributing to the realization of the "dual carbon" goal.So far, STL has set a target to to reduce more than
2 million
tonnes of carbon dioxide by 2030 compared with that in 2020 andachieve carbon neutrality in our value chain by 2050. Our carbon reduction strategic plan includes the following four key areas:
During the reporting period, STL saved a total of
15.08 million
kWh of energy consumption and reduced steam con-sumption by about20,000tonnes through the implementation of the above-mentioned carbon reduction strategic plan. In2024, we will further implement the carbon neutrality path, including carrying out carbon management system planning in carbon assetmanagement, carbon neutrality and other areas, providing systematic training for the management decision-making level and tech-nical execution level; identifying carbon neutrality development paths and proposals to formulate development strategies; andupgrading IT-based carbon management.
Low-carbon operation is a crucial strategy in addressing global climate change, reducing resource consumption, fostering sustain-able development, lowering operating costs for enterprises, and enhancing competitiveness. At STL, we prioritize energy man-agement in our operations, striving to establish a comprehensive energy management system centered around low-carbon oper-ations. Through various energy-saving and e?ciency-enhancing measures, coupled with the adoption of clean energy, we haveachieved signi?cant reductions in carbon emissions resulting from production and operations. Moreover, we actively engage andencourage all employees to adopt green and low-carbon practices within their workspaces. We provide comprehensive trainingand awareness campaigns, laying a strong foundation to instill a culture of low-carbon operations across the organization.
STL strictly adheres to theEnergy Conservation Law of the People's Republic ofChina, theElectric Power Law of the People's Republic of China, Measures for theStandardized Management of Energy and other pertinent national energy-relatedregulations. We have established a robust energy management system to continuallyenhance our energy management capabilities. This includes developing and re?n-ing energy management systems and ledgers, as well as formulating managementcontrol indices and requirements in accordance with relevant laws and regulations.so as to develop and continuously improve internal protocols such as theControlProcedures for Energy Management Programsand the Control Procedures for Ener-gy Evaluation and Review.These protocols are aimed at strengthening our energymanagement e?orts and facilitating comprehensive and standardized energy-savingmonitoring and management initiatives across our production and operational pro-cesses.STL ensures that all production bases and business divisions are aligned with ourenergy management goals. Through initiatives such as upgrading the energy mix,replacing obsolete equipment, enhancing energy e?ciency, and optimizing produc-tion processes, we aim to ensure more e?cient energy use, ultimately leading to en-ergy conservation and carbon reduction. During the reporting period, the ISO 50001energy management system certi?cation, STL's ISO 50001 energy management sys-tem certi?cation, GB/T23331 and RB/T114 energy management system certi?cationcovered100% of the operation sites.During the reporting period, STL signi?cantly elevated its energy utilization capabil-ities through measures such as the recovery of waste heat in processes and utilizingby-product steam in reactions. Additionally, we introduced new high-e?ciency ma-chine pumps, improving energy conversion e?ciency and energy recovery. To furtherminimize energy loss, we have installed highly efficient insulation materials for allheating equipment, refrigeration equipment, and associated pipelines.
This chapter responds to the UN SDGs:
Low-carbon Operations
Energy Saving and Con-sumption Reduction
Build an energy management plat-form to track energy consumptionand production data and analyzethem to ?nd the problematic areasand make adjustmentsOptimize production process, andorganize the technical reform ofthe hot water tank of liquid chlo-rine vaporizers and refrigerationmachines, etc.
Replace obsolete motors andchillers with energy-e?cient onesthat meet energy e?ciency ratingrequirementsProvide energy saving and low car-bon training, hold cost reduction ande?ciency promotion meetings, fol-low up projects implementation, andsolve identi?ed di?culties promptly
Conduct LDAR testing as planned,complete repair timely, reduceleakage, and promote cost reduc-tion and e?ciency initiativesReasonably arrange the produc-tion plan, adjust the schedule ofplant maintenance, and reduceunnecessary energy consumptionSTL's energy management initiatives
STL's energy management system
certi?cation
During the reporting period, the energy-saving renovation project for acrylic acid facility processes at Jiaxing Base was honored tobe selected as one of the second batch of leading projects in reducing both pollution and carbon emissions in Zhejiang Province.This project manages to maximize energy utilization e?ciency and reduce energy loss as far as practicable, thus signi?cantly con-tributing to both pollution reduction and carbon reduction e?orts. It is estimated that the project will reduce carbon emissions byabout13,000
tonnes and save over
1.1
million kWh of electricity annually.
During the reporting period, Jiaxing Base diligently collects actual daily energy consumption and production data for thoroughanalysis. Based on this analysis, the base implemented a range of energy-saving technological renovations. As a result, the annu-al energy costs of both the acrylic acid facility at Jiaxing Base and Youlian Chemistry saw remarkable year-on-year decreases by
18.5%
and
10.5%
,respectively.
Jiaxing Base implemented its energy-saving renovation project for acrylic acid facilityprocesses, taking the lead in reducing both pollution and carbon emissions
Jiaxing Base implemented routine energy consumption management, empoweringemission reduction management
Increase the use of renewable power (wind,solar, etc.), biomass, etc., and promote ener-gy transition
Actively invest in CCUS and other carbon-reducingtechnologies; and develop low-carbon productsusing recyclable and bio-based raw materials
Build a decarbonized supply chain with partnersin the value chain to create upstream and down-stream synergies
Use of Clean Energy
Enhance the efficiency of production oper-ations through procedure optimization andprocess improvementsProduction equipment and process optimization
Low carbon technology innovation
Decarbonization supply chain establishment
3031
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Clean Energy
STL always adheres to the concept of green development and actively responds to theCleaner Production Promotion Law of thePeople's Republic of China, making cleaner production one of its key requirements and committing to become a leader in this area.Through ongoing adjustments to our energy mix, we actively facilitate the transition towards low-carbon energy and continuouslyexplore opportunities in clean energy development, all aimed at fostering a better ecological environment.STL continually explores the applicability of renewable energy sources for its operations. We are dedicated to fostering an energymix led by renewable resources. Throughout the reporting period, both the Lianyungang Petrochemical Base, the Pinghu Base,and the Jiaxing Base initiated green electricity purchasing initiatives, collectively procuring a total of
million kWh of greenelectricity. Furthermore, our production bases and business divisions are ramping up e?orts in the planning and development ofphotovoltaic (PV) systems. Among them, the Jiaxing Base is spearheading the rooftop PV project for Youlian Chemistry, diligentlycoordinating e?orts to ?nalize the project's details and aiming to conclude construction by 2024.
As a key area of clean energy development, hydrogen energy is regarded as the optimal choice for realizing large-scale and furtherdecarbonization in sectors such as transportation, industry and construction. STL, as a leading light hydrocarbon industry playerin China, leverages an integrated light hydrocarbon industry platform and uses a large amount of high-purity by-product hydrogen(99.999%) generated by the ethane cracking and propane dehydrogenation (PDH) process directly as hydrogen energy. Comparedwith traditional coal-to-hydrogen process, this process can reduce carbon emissions by about 5.4 million tonnes per year, trulyrealizing low-carbon hydrogen energy production. STL has combined with its own business advantages, actively laid out the ?eldof hydrogen energy, grasped the trend of new energy industry, and formulated a detailed plan for the comprehensive utilization ofhydrogen energy based on the trends in new energy industry,to contribute to the downstream segments of the industrial chain.
To champion comprehensive energycontrol, conservation, and consumptionreduction efforts, Zhejiang Technologyhas embraced photovoltaic power gen-eration, harnessing this green energysource to achieve self-su?ciency in elec-tricity production and consumption. Thisstrategic move ensures the continuity ofenterprise operations, particularly amidconstraints in power resources. Duringthe reporting period, Zhejiang Technolo-gy made comprehensive use of the roofspace of its building structures at thefactory for the installation of photovoltaicpower stations. These installations coveran area of 20,000 square meters, and areexpected to generate an annual poweroutput of
1.55
million kWh.
At the Pinghu Base, the propane dehy-drogenation facilities generate hydro-gen resources as a by-product, drivingan active expansion into the hydrogenresource industry. In recent years, thebase has been dedicated to hydrogenpuri?cation and utilization initiatives,with a keen focus on the utilization oflocal renewable energy sources andexploring green power trading oppor-
tunities.During the reporting period, the basecompleted its capacity expansion andtransformations for its PSA facilities,culminating in the puri?cation of17,353,800 Nm? of high-purity hydro-gen (99.999%) for external use, 1.46times that before the renovation in2021. Importantly, this enhancement
has equipped the facilities with thecapability to produce ultra-pure hydro-gen.Simultaneously, the Hydrogen PeroxidePhase II project at the base has beenput into use in downstream hydro-gen-consuming industries, includingbiomedicine and chip semiconductorindustries.
To bolster employee awareness and understanding of the country's "dual carbon" strategy, we have promoted the knowledge ofcarbon emission management based on the concept of low-carbon and green development. During the reporting period, the Com-pany has conducted various educational campaigns and training sessions aimed at inspiring every employee to actively contributeto carbon reduction targets.Utilizing various opportunities such as shift handover periods and the World Environment Day, STL has organized activities such assymposiums, team meetings, and general assemblies to educate employees on the "dual carbon" strategy. These training sessionsemphasize the importance of emission reduction initiatives such as green production, transportation, and o?ce practices, encour-aging sta? to take practical steps to mitigate global warming.
During the reporting period, Pinghu Base dispatched personnel to participate in enterprise training sessions on the potential im-pact of trade barriers resulting from Europe's Carbon Border Adjustment Mechanism (CBAM) carbon tari?s, organized at the Zheji-ang province- and Jiaxing city-level. The training sessions covered topics such as the CBAM's intentions, countermeasures, domes-tic and international carbon emission accounting methodologies, etc.
Plan hydrogen energy utiliza-tion demonstration projects inthe park, including hydrogenenergy shuttles for employeecommuting and hydrogenenergy storage projects
Work to implement the circulareconomy and renewable energyutilization in the park, providinggreen hydrogen supply for en-terprises, and reducing carbonemissions caused by hydrogenproduction
Plan the development of chem-icals with hydrogen as a rawmaterial to form the industrialchain synergy and create agreen and low-carbon produc-tion demonstration base
STL's green hydrogen energy utilization planning
Raising Low-carbon Awareness
| 01 | 02 | 03 | ||||
Zhejiang Technology actively develops and builds photovoltaic facilities, responding to thecall for clean energy
Pinghu Base started its hydrogen utilization project to boost the development of cleanenergy
Pinghu Base held EU carbon tari?-themed seminar to popularize low carbon knowledge
During the reporting period, Jahong New Material optimized the commissioning process of its propylene oxide (PO) facilities. InMay 2023, a special team was set up to optimize production modes through several schemes and program tests, supported by thesimulation system. The team made all-out e?orts to solve problems such as identifying the optimal ratio of methanol and propyl-ene in PO facilities, and mapped out the optimal process conditions of each segment. Compared with the large-system distillationprocess adopted by excellent counterparts, this improvement managed to save about
24,000
tonnes of steam and 12 daysof feeding time, ensuring the technical and economic indicators of hydrogen-peroxide-to-propylene-oxide (HPPO) facilities to leadthe industry, taking the lead in the industry.
During the reporting period, Pinghu Base regarded green design and en-ergy conservation and consumption reduction as primary considerationsfor the approval of new projects, ensuring energy and resource conserva-tion at the outset. In August 2023, the second phase of the PPAE facilitiescommenced full operation, remarkably reducing energy consumption byapproximately
13.4%
per tonne compared to the ?rst phase, and byabout
10.2%
in energy consumption compared to its original de-sign speci?cations. Simultaneously, the annual operational expenses ofall facilities witnessed a signi?cant reduction of over RMB 100 million.
Jahong New Material improved its pre-process technology for propylene oxide productsand implementated green and low-carbon operation modes
Pinghu Base upgraded the energy e?ciency of its PPAE facilities, practicing the conceptof green design
3233
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Low-carbon Value Chain
STL actively builds a low-carbon value chain, adopts advanced low-carbon processes, explores carbon capture, utilization andstorage (CCUS) technologies, and devotes itself to the research, development and production of low-carbon products, thereby pro-moting the low-carbon development of the downstream segments of the industrial chain. In addition, we optimize the utilizationof raw materials, implement green logistics, and reduce our carbon footprints across the board to achieve sustainable develop-ment and "carbon neutrality".
Low-carbon raw materials can reduce the need for energy consumption in the production stage at the source, reduce greenhousegas emissions, and promote a circular economy, thereby establishing a low-carbon economy and propelling low-carbon devel-opment. In terms of raw material selection, STL adopts lightweight raw materials with lower production energy consumption toproduce ole?ns. Each tonne of ethylene produced consumes only 342 kilograms of standard oil on average, far lower than the 590kilograms of standard oil stipulated by the state. Compared with coal-to-ole?n production process, the Company's two units ofcracking of ethane to ethyleneequipment with an annual capacity of 1.25 million tonnes can reduce carbon emissions by about
22.8 million tonnes per year, compared with 7.7 million tonnes per year from other two propane dehydrogenation to propylene
units with an annual capacity of 450,000 tonnes. In total, the annual CO
emissions can be reduced by more than
milliontonnes, which is equivalent to planting more than
million mu of trees
.
Low-carbon Procurement
Reduced carbon emissions throughout the year with light ole?n as raw materials
Reduction of 30 million tCO
e per year= 20 million mu of trees planted
Coal-to-ole?n production Light ole?n production
Encourage double-sided
printing to make full useof paper resources Strengthen water and elec-
tricity conservation e?ortsand promotion, raise ouremployees' awareness,and incorporate water andelectricity conservationinto their daily behaviorassessment
Air conditioners should
not be kept lower than26 degrees Celsius,and be shut down at arequired time Implement waste classi-
?cation and recycle andsell all kinds of paperproducts for secondaryuse
Promote the paper-
less o?ce initiative byadopting the OA approv-al system and OUTLOOKe-mail for daily commu-nication in the o?ceUsing the Anyshare
software for ?le shar-ing and dissemination,reducing servers' energyconsumption
Improve the electricity
management system,such as the time to turnon the lights and ACs, andthe time to turn on ando? the equipmentInstall solar-powered
street lights in non-explo-sion-proof areas acrossselect production basesSTL's green o?ce initiatives
The caliber of this data was adjusted during the reporting period and is hereby corrected.
Comparison of per tonne ethylene CO
emissions produced through di?erent technical routes:
Naphtha
3.7
tCO
e/metric tonne of ole?nCoal
11.0
tCO
e/metric tonne of ole?n
Ethane
1.1
tCO
e/metric tonne of ole?n
As a responsible enterprise, STL actively integrates the concept of green sustainability with its routine operations and strives to cre-ate a sustainable green o?ce scenarios. We have formulated policies such as theImplementation Rules for Seven Basic EmployeeBehaviors, and continuously improve the relevant systems and strengthen the green o?ce management in our daily o?ce life, andadvocate all sta? to practice green and low-carbon o?ce practices.
Green O?ce
The calculation is based on that each mu of forests can reduce 1.336 metric tonnes of carbon dioxide.
Greenhouse gas emissionstCO
e
Greenhouse gas emissionstCO
e /metric tonne of productsMajor direct energy consumption
Major indirect energy consumption
Total greenhouse gas (CO
)emissions
Greenhouse gas (CO
) emission intensity
3,817,3875,417,8750.940.6240.58
20222023202220212023
Natural gas
Purchased electricity
291million m
3,137million kWh
3435
About STLAbout ThisReport
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build aHarmonious Society
Governance to Seek Long-
Term Steady GrowthAppendix
To further reduce the impact of the production and operation process on the en-vironment, STL has implemented a series of initiatives to promote green logistics.Through the pallet sharing initiative, we have reduced the consumption of resourcesand carbon emissions generated in the logistics process, and improved the utilizationrate of resources. During the reporting period, Lianyungang Petrochemical Base tookthe lead in the pallet sharing business and signed an annual framework agreementon pallet sharing with suppliers. By the end of the reporting period, the shared pal-lets had been cycled over30,000times, contributing to green and zero-carbonpackaging initiatives. To further promote the application of low-carbon and green lo-gistics, we plan to further expand the coverage of the pallet sharing initiative in 2024,thus maximizing carbon reduction in green logistics.
Low-carbon Logistics
The recovery and recycling of package sharing through cooperation within the industry chain
Convenient pallet in-ventory managementsystem, clearly pre-senting pallet status
Cloud-based sharingpallet service work?ow
The system faithful-ly presents the coststatus after the rent-free periodDelivered with pallets to getout of the warehouseRecycled intothe ware-house
Handheld identi?-cation/door iden-ti?cation
Circulated with palletsFirst-level dealersInitiate recovery｜Delivered out of thefactory with palletsDownstreamcustomersSigned by the cus-tomer｜Deliveredwith pallets to getout of the factoryFactoryCustomer registration｜Order generationService providerfor sharing pallets
Entrepot storage
In-transit vehicletracking and play-back
Circulatedwith palletsSecond-leveldealersInitiate recoveryEnd customer
First-levelcirculation
Multi-levelcirculation
During the reporting period, Hubei Satellite successfully implemented strict recovery and reuseprocedures. Its products and services meet the requirements of the Global Recycling Standard(GRS) in the textile industry and have obtained GRS certi?cate. The Company recycled a totalof7,130
tonnes of waste mineral water bottles, waste ?lms and waste particles during theyear, reducing environmental pollution and waste of resources, and generating economic bene-?ts and competitive advantages for its sustainable development. Meanwhile, it re?ects our com-mitment and contribution to social responsibility and environmental protection.
Hubei Satellite launched the recovery program to drive raw material recycling
GRS Certi?cate
Each year, Pinghu Base sets KPI assessment indexes for raw material input-output ratios, which are included in the monthly andannual assessment plan of the facilities. Moreover, the base continuously seeks for measures to reduce the ratio. During the report-ing period, the base launched the catalyst collector blowing away gas emission optimization project to optimize relevant process,avoiding waste gases from re-entering the reactor, reducing fuel consumption, further improving the e?ciency of the catalytic re-action system, and enhancing the utilization e?ciency of raw materials. In addition, the butyl acrylate wastewater recycling projectwas also put into operation to provide special treatment for the concentrated water with high salt content, to increase the recoveryrate of acrylic acid and recycle sodium hydroxide to reduce procurement. The base renovated and expanded the hydrogen perox-ide phase II project based on the ?rst phase of the wastewater treatment facility, with reduced investment and land area, improvingwastewater treatment capacity.
Pinghu Base improved the catalytic reaction e?ciency in the reaction system to reducethe consumption of raw materials
STL prioritizes the comprehensive utilization of raw materials, continually advancing the recycling of industrial materials throughtechnological upgrades to enhance e?ciency in raw material utilization. We integrate raw material input-output ratios into depart-mental performance assessments and employ a cost control incentive mechanism to encourage key personnel in relevant produc-tion departments to minimize raw material input-output ratios and promote e?cient raw material utilization. Moreover, we haverevised raw material acceptance standards, replacing suppliers delivering unstable product and servce quality, and ensuring thepurity of main reactive monomers exceeds
99.5%
to optimize raw material utilization e?ciency and curtail unnecessary con-sumption and waste.
Jiaxing Base conducted in-depth research and improvement of the cracking process of acrylic acid heavy constituents throughdata collection and analysis of recovery rate of heavy constituents in previous years. In accordance with the principles of productand process design, we carried out pilot production after passing the small-scale, pilot and large-scale tests and process safety as-sessment. After process optimization, the recovery rate of acrylic acid heavy constituents increased from 31.1% in previous years to48%
, a
16.9%
increase.
Jiaxing Base promoted the optimization of cracking process of acrylic acid heavy constit-uents to boost the reuse of raw materials
STL actively advocates green commuting among its employees, with the goal of reducing the reliance on private cars and conse-quently lowering greenhouse gas emissions for low-carbon travel. During the reporting period, we introduced shuttle bus servicesat our Pinghu, Jiaxing, and Lianyungang bases, facilitating employees' commuting needs and promoting green transportationpractices. Simultaneously, we added an extra shuttle bus route at both Pinghu and Jiaxing bases to improve accessibility, while op-timizing the shuttle bus routes by optimizing and reducing bus services at Lianyungang Base to increase both cost e?ciency andservice quality.
Green Commuting
By the end of the reportingperiod, the sharedpallets hadbeen cycled over30,000times
3637
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
To e?ectively respond to climate change risks and opportunities, STL has developeda comprehensive climate change-related governance system. At the governance lev-el, the Board of Directors assumes collective and overarching responsibility for ourclimate change strategy. It delegates authority to the Strategy and ESG Committee toidentify, assess, and manage climate-related risks while guiding the formulation ofstrategies and management protocols to tackle climate change. Additionally, it over-sees the execution of climate-related risk and opportunity assessments.
Governance
STL actively responds to the national call for carbon peak and neutrality, steadfastly implementing the concept of green andlow-carbon development, and advancing economic development without compromising the environment. During the reportingperiod, we consistently re?ned our internal management policies, standardized the management of greenhouse gas emissions,and engaged in various actions to mitigate and adapt to climate change. Referring to theRecommendations of the Task Force onClimate-related Financial Disclosure (TCFD), we systematically identi?ed risks and opportunities associated with climate changeand devised response initiatives accordingly.
Response to Climate Change
STL employs a meticulous three-step process—identification, assessment, andmonitoring—to identify various physical and transition risks, factoring in differentclimate change scenarios and the speci?c features of our business operations. Wealso conduct in-depth analyses of the associated impacts on our business. In orderto improve the efficiency of climate change risk management, we have incorpo-rated climate change risk management into our overall risk management systemand integrated the climate change risk management process with our overall riskmanagement process, actively assessed and managed the identi?ed climate changerisks, and quanti?ed the risks by tracking the relevant performance indicators, so asto promote the e?ective control of climate change risks. Based on the identi?ed risksand opportunities related to climate change, we have developed a range of responseinitiatives tailored to foster green transition across multiple perspectives, positioningourselves as proactive contributors to mitigating climate change.
Strategy
As a key means to reduce carbon emissions, the carbon capture, utilization and stor-age (CCUS) technology is of great signi?cance in addressing global climate changeand promoting sustainable development. To further reduce greenhouse gas emis-sions, STL has been exploring the possibility of applying the CCUS technology in itsproduction and operations based on its industrial characteristics.During the reporting period, Lianyungang Petrochemical successfully commissionedits CO
puri?cation facilities, enabling the capture and recovery of CO
. This initiativeallows for the recovery of 300,000 tonnes of CO
annually. Additionally, LianyungangPetrochemical utilizes the captured CO
as a raw material in its dimethyl carbonate(DMC) facilities with an annual DMC output of 150,000 tonnes, with 90,000 tonnes ofCO
being utilized annually. Furthermore, Lianyungang Petrochemical is equippedwith food-grade CO
production facilities, utilizing recycled CO
from upstreamby-products to reduce greenhouse gas emissions.As an industry leader, STL is dedicated to spearheading the entire industry towardslow-carbon development. To this end, we are actively exploring additional produc-tion processes that can facilitate CO
utilization. We have initiated laboratory devel-opment of a new solidi?cation catalyst for vinyl carbonate. The synthesis of vinyl car-bonate from CO
and ethylene oxide epitomizes a "green chemistry" reaction processwith remarkable "atom economy" attributes. This method boasts advantages suchas low production costs, high conversion rates, and exceptional selectivity, renderingit suitable for large-scale industrial production. The successful implementation ofthis technology would make significant contributions to CO
utilization within thepetroleum and chemical industry.
Carbon Capture
of CO
can be utilized every year.
90,000metric tonnes
300,000metric tonnes
Climate-related Risk Identi?cation
CategoryRiskDescriptionResponse
Physical risks
Acute risks
Increased severityand frequency ofextreme weath-er events (e.g.,typhoons, and?oods)
Extreme weather events such as rainstorms,typhoons and ?oods may have a signi?cantimpact on the Company's production andoperations, such as damage to productionequipment, transportation and supply chaindisruption, and work safety accidents, whichmay result in a decrease in the Company'sproduction capacity and overall pro?tability, anincrease in operating costs, and even a negativeimpact on the ecological environment.
We guide our employees in re-sponding to extreme weather andminimize its impact on the safety ofour assets and personnel.Additionally, we develop contingen-cy measures for logistics supplies toavoid delay in logistics transporta-tion under such weather conditions.Chronic risks
Impacts suchas changes intemperature andrainfall
Changes in temperature and rainfall may leadto prolonged construction period, acceleratedwear and tear of equipment, and increaseddemand for cooling water for projects underconstruction, resulting in higher costs for theCompany's infrastructure, equipment mainte-nance, production, and operations.
We conduct weather forecastingand report, and adjust on-siteoperational sta?ng, employeecommuting policies, and logisticscontingency measures in responseto weather changes.
Carbon tax/pric-ing
China's national carbon emissions trading mar-ket has been launched, with the carbon quotasystem being strictly enforced. Key carbon-in-tensive industries, such as petrochemicals, maybe mandatorily included, which means thatthe carbon emissions compliance pressure onthe Company will rise sharply. To meet the newemission standards, the Company may needto make large-scale investments in emission re-duction technologies, purchase huge amountsof carbon allowances, and may even facedi?culties such as production restrictions. Thisshift will greatly increase the cost of our carbonemissions compliance, and may also havefar-reaching impacts on our strategic planning,operation mode and market competitiveness.
We launch energy saving andemission reduction initiativesacross the board, and are com-mitted to significantly reducingour Scope I, Scope II and Scope IIIemissions.
Requirementsand regulationimposed on exist-ing products andservices
Against the backdrop of the "dual carbon"goals, the government is considering the intro-duction of more rigorous laws and regulationsto limit or even reduce companies' carbonemissions. This initiative poses compliancerisks for carbon-intensive and energy-intensiveindustries, leading to investment in energy-sav-ing and emission reduction technologicaltransformations. This will signi?cantly increaseour operational compliance costs.
Relying on our integrated light hy-drocarbon industry platform, wehave established a "4R" green andlow-carbon industrial model thatspans the entire industrial chain,and are committed to promotingthe green and low-carbon devel-opment of the olefin industry.
Market risks
Changes in cus-tomer behavior
As society focuses more on climate change andsustainable development, a growing numberof consumers show a preference for green andlow-carbon products and services, making itimperative for the Company to increase its invest-ment in the research, development and applica-tion of green and low-carbon technologies.
Leveraging the low-carbon indus-trial model, we insist on promotingthe R&D and production of low-car-bon products, and transferringlow-carbon attributes to customersand end-use scenarios in the valuechain.
Technologyrisks
Costs resultingfrom transition to-wards low-carbontechnologies
To adapt to the transition towards low-carboneconomy, the Company need to continuouslyramp up its research and development e?ortsand investment in key areas such as renewableenergy, energy-saving and emission reductiontechnologies, which means higher technologi-cal research and development costs.
We have established a soundmechanism for the application oflow-carbon technologies and as-sessed such technologies throughfeasibility studies and cost analysisto reduce the transition costs.
Reputationrisks
Growing stake-holder concernsand negativefeedback
Stakeholders increasingly focus on the Compa-ny's actions to address climate change, makingit imperative for us to take relevant initiatives,otherwise our reputation will be a?ected.
We regularly summarize the re-quests and inquiries from variousstakeholders, and actively addresstheir concerns through channelssuch as our o?cial website, an-nouncements, visits and research.
Policy andlegal risks
Transition
risks
of CO
can be recovered every year.
3839
About STLAbout ThisReport
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
STL rigorously adheres to national environmental laws and regulations, including theEnvironmental Protection Law of the People's Re-public of China, theLaw of People's Republic of China on Environmental Impact Appraisal, theLaw of the People's Republic of China onthe Prevention and Control of Atmospheric Pollution, theLaw of the People's Republic of China on the Prevention and Control of WaterPollution, theLaw of the People's Republic of China on Prevention and Control of Environmental Pollution by Solid Waste, and theSoilPollution Prevention and Control Law of the People's Republic of China. Moreover, we diligently uphold industry-speci?c standardssuch as theEmission Standard of Pollutants for Petroleum Chemistry Industryand theEmission Standard of Pollutants for SyntheticResin Industry. Our daily production and operational activities are conducted in strict accordance with the stipulated standards applica-ble to our operating locations, including theUltra-low Emission Transformation (In-depth Treatment) Work Plan for Key Industries andFacilities in Lianyungang City, theNotice on Leakage Detection and Repair (LDAR), theEmission Standards for Major Water Pollutants inthe Chemical Industry, the Emission Standards for Volatile Organic Compounds the Chemical Industry in Jiangsu Province, and othercontrol requirements that are much more demanding than national standards. To ensure continual compliance, the Company con-ducts comprehensive evaluations of existing production and operational processes annually in alignment with relevant environmentalprotection laws and regulations. Additionally, we have established robust Health, Safety, and Environmental (HSE) systems, such astheEnvironmental Protection Responsibility System and the Safety and Environmental Protection Facilities Management System. Thesepolicies delineate the environmental protection responsibilities of personnel and organizations at all levels, facilitating standardizedmanagement across the entire spectrum of production and operations.Furthermore, STL remains proactive in monitoring the development and issuance of new environmental policies. We consistently col-lect and analyze relevant environmental laws and regulations, ensuring our operations remain compliant over the long term. During thereporting period, we identi?ed updates to regulations such as theTechnical Speci?cation for Setting Identi?cation Signs of HazardousWaste, theStandard for Pollution Control on Hazardous Waste Storage, and theTechnical Speci?cation for Two-dimensional Code Iden-ti?cation of Pollutant Discharge Outlet of Pollutant Discharge Unit. Subsequently, we organized our bases to promptly launch compre-hensive upgrades and transformations, aligning with the latest regulations and our current operational needs.STL is dedicated to harmonizing its development with environmental conservation, striving to achieve harmony between corporategrowth and ecological conservation. We have progressively intensi?ed our environmental management e?orts and consistently forti?edour environmental management system. The Strategy and ESG Committee, operating under the Company's Board of Directors, man-ages and guides matters related to environmental management such as strategic planning, environmental target setting, environmen-tal policy formulation and implementation management, climate change-related risk assessment, environmental performance, andenvironmental information disclosure, and reporting to the Board of Directors. Furthermore, all the Company's production bases andbusiness units have strengthened the mode in which everyone engages in management. They have both built an environmental man-agement structure with the general manager ful?lling the overall responsibility under the management of the Safety and EnvironmentalCommittee through inter-departmental collaboration, and formed a thorough environmental management system with a clear divisionof labor and responsibility among all departments.
Environmental Management System
STL's environmental management inputsTotal investment in environmental treatmentTime invested in environmental treatmentEnvironmental protection training hoursNumber of environmental protection training sessionsNumber of environmental protection training participantsEnvironmental punishment accidentsEnvironmental punishment payments
1,704.65
74,4006,504
45,548
1,428.57
62,1304,8211,82631,255
RMB milion
hourhoursectionperson time
timeRMB
Indicators20222023Unit
Environmental ManagementSystem Certi?cation
During the reporting period, STL rigorously mandated allproduction bases and business units to obtain the Pol-lutant Discharge Permit and Sewage Drainage Permit instrict accordance with legal requirements. Upholding theprinciples of "economic bene?ts, legal compliance, and en-vironmental improvement," we continuously bolstered ourenvironmental management capabilities. During the re-porting period, the Company and all subsidiaries involvedin manufacturing, including Youlian Chemistry, PinghuPetro Chemical, Satellite Energy, Satellite Science & Tech-nology, Hubei Satellite, Lianyungang Petrochemical andJiahong New Material
, have now obtained the ISO 14001Environmental Management System Certi?cation covering100%
of their operating locations. Furthermore, weactively promote and conduct external third-party sys-tem certification and review. Our production bases andbusiness units conduct internal audit and external reviewcovering all operations annually, and a thorough externalaudit to renew the system certi?cation every three years,ensuring the sustained effectiveness of our certificationthroughout operations. In addition, during the reportingperiod, we conducted several environmental audits cover-ing100%
of the operating sites, implemented correc-tive actions to address all ?ndings that did not comply withSTL's internal management standards, and organized in-ternal tracking and review to ensure that the managementimprovement work was e?ectively completed.
To ensure the orderly implementation of environmental management practices, STL has developed speci?c initiatives aligned withenvironmental management requirements in our operations. Through strict adherence to environmental monitoring protocols,establishment of pollutant discharge standards, tracking of pollution sources, intensi?ed inspections, and formulation of pollutionprevention and control measures, we aim to mitigate the environmental impact of our operations, enhance our environmentalmanagement capabilities and contribute to our commitment to green development.
Environmental Management Initiatives
STL's environmental management system certi?cation
Jahong New Material is a new subsidiary added in the reporting period. According to the regulations, it is still in the process of obtaining ISO 14001 EnvironmentalManagement System Certification. Please check the results on the company's official website.
Creating Ecological Value throughConservation E?ortsSTL maintains a steadfast commitment to environmental conservation, regarding pollution emission management as a paramountconcern. We recognize the integral connection between the sustainable development of enterprises, social prosperity, and environmen-tal harmony. With a dedicated focus on addressing environmental challenges, we invest continually in pollution prevention and controlmeasures, enhancing the e?ectiveness of pollutant treatment processes. Moreover, we actively engage in natural resource managementand biodiversity conservation e?orts, thereby contributing to the preservation of our planet.
Environmental management serves as both a re?ection of corporate social responsibility and a crucialelement in advancing sustainable development. Through the establishment of a comprehensive environ-mental management system, STL diligently oversees wastewater and waste gases, handles solid and haz-ardous wastes responsibly, and e?ectively addresses soil and noise pollution. Our commitment to con-serving the ecological environment underscores our dedication to fostering a future where humanity andnature coexist harmoniously. In recognition of our e?orts, STL, Lianyungang Petrochemical, and PinghuPetro Chemical were honored as national green factories during the reporting period. Moving forward, weremain steadfast in our commitment to environmental conservation.
This chapter responds to the UN SDGs
Environmental Management
STLLianyungangPetrochemicalPinghu Petro
Chemical
Title of the National Green Factory
4041
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-
Term Steady GrowthAppendix
Adhering to the "zero and direct discharge of sewage" goal, STL continues to enhance its risk prevention and control measuresagainst water pollution, thus reducing the environmental impact of wastewater discharge from its operations. During the reportingperiod, the Company comprehensively monitored wastewater discharge, implemented separation of rainwater and sewage, up-graded sewage treatment equipment, and installed reclaimed water recycling facilities to manage the entire wastewater produc-tion process, including generation, collection, reuse, and discharge. We work to reduce sewage discharge while ensuring minimaladverse e?ects on surrounding surface water and groundwater. With the sophisticated wastewater discharge management initia-tives, we have achieve well beyond the total wastewater and pollutant reduction targets for 2023: exceeding the planned reduc-tion of wastewater emissions by400,000 tonnes, with actual reduction amounting to414,900 tonnes.
Implementenvironmental monitoring
Commission third-party institutionsto conduct monthly emission datamonitoring of environmentally friend-ly facilities
Strengthenspecial inspectionsConduct daily environ-mental inspections andmonthly special envi-ronmental inspectionsto implement correctivemeasures
Regulate pollution emissionsImplement the relevant require-ments in the emission permit,meet pollutants emissionstandards and control the totalemissions in 2023
Enhance control capabilitiesEnhance the control capabilities ofpollutant treatment processes, trans-fer and treat wastewater promptly,and implement compliant transferand disposal of hazardous wasteIdentify pollutionsourcesConduct in-depth investigationsand recti?cation of VOCs andodor sources, and LDAR testing
STL's environmental management initiativesWastewater Discharge Management
Control atthe Source
Classi?edcollection
Enhancedtreatment
CompliancedischargeConduct real-time moni-toring of water pollutantdischarge through onlineenvironmental moni-toring devices to ensurereal-time monitoring ofall water quality dataOptimize productionprocess, strengthen pro-cess control, and reducewastewater generation
Collect wastewater,including productionwastewater, cleanwastewater, and rain-water, according to theprinciple of "separationof rain and sewage"Wastewater, after beinge?ectively collected,is sent to the sewagestation for centralizedtreatment
Adopt the "combination+ blending + anaerobic+ aerobic" biologicalprocess to treat acrylicacid wastewaterTreat the wastewaterthrough devices andthen reuse it to reducewastewater
Improve the wastewatertreatment capacity andclosely monitor waterquality indicators suchas chemical oxygendemand, ammonianitrogen, and totalnitrogen of the treatedwastewater to ensurethe discharge up tostandards
Reduced wastewater discharge0.1112
million metric tonnes0.4149IndicatorsUnit2022年2023年
Lianyungang Base employs a systematic approach to manage its wastewater generated in production, directing it to the park'scentralized sewage treatment system for collective treatment, with70%of it being recycled after treatment. The rainwater thatmeets the required standards as recognized by the online monitoring system is continuously and reliably discharged.Jiaxing Base has introduced reclaimed water reuse facilities to e?ectively address wastewater management. These facilities boasthigh desalination rates, exceptional anti-pollution capabilities, and substantial water production capacity. It enables the recyclingof over70%
of evaporative, cooling, and circulating water sewage, signi?cantly reducing sewage discharge.
During the reporting period, Hubei Satellite implemented highly e?cient and top-quality wastewater treatment process. This com-prehensive process encompasses three steps, namely, esteri?cation wastewater treatment, comprehensive wastewater treatment,and sludge treatment, ensuring that the e?uent quality surpasses national standards. The closed structure of the system incursneither odors nor secondary pollution. Moreover, the highly automatic process harnesses microbial performance to tackle pollut-ants, reducing energy consumption and operational costs. It can also accommodate various site and scale requirements, with vari-ous ?exible equipment options available.With this wastewater treatment process, Hubei Satellite e?ectively manages production-generated wastewater, ensuring compli-ance with environmental standards before discharge. As technology and environmental demands evolve, the Company will remaincommitted to optimizing its wastewater treatment processes to enhance e?ciency and promote sustainable development.
The air pollutants generated from STL's production and operations mainly include volatile organic compounds (VOCs), sulfur diox-ide (SO
), nitrogen oxides (NO
X), and particulate matters. We are committed to reducing the emissions generated during our ownoperations, strictly enforcing air pollution prevention and enhancement e?orts at all our operating sites. Through accurate mon-itoring, and e?cient exhaust gas treatment devices, we take targeted initiatives to e?ciently control the exhaust gases generatedduring the entire production process, to continuously reduce emissions and ensure complete compliance. During the reportingperiod, none of our production bases and business divisions had incidence of exhaust gas emissions not meeting the requiredstandards.
Exhaust Gas Emission Management
Adopt the "water-
spraying +hon-eycomb carbonadsorption" col-lection andtreat-ment process
Collect and treat ex-
haust gases throughhoneycomb carbonadsorption devices
Treat the gas with
SCR denitri?ca-tion and removedust with trap
Adopt water
spraying to emis-sion standards
Treat the gas with the "SNCR
denitri?cation + heat wasterecovery + cyclone dust remov-al + compound rapid coolingabsorption + electrostatic dustremoval"
Fill exhaust gas toabsorbent products
Exhaust gas from theoperational space ofgrease washing andpacking positions
Crack furnace?ue gas
Exhaust gas fromthe operationalspace of the drumwashing room
Exhaust gas after incineration of
waste liquid
Incinerate the gas through
RTO furnaces
Adopt "bio?lter + acid
spray + alkali spray + acti-vated carbon adsorption(emergency)" treatment
Exhaust gas from organicstorage tanks and process
Odor and exhaust gas fromwastewater treatment stations
STL's main exhaust gas treatment initiatives
Production Base introduced reclaimed water reuse facilities to reduce wastewater discharge
Hubei Satellite upgraded wastewater treatment process to improve e?ciency
The caliber of this data was adjusted during the reporting period and is hereby corrected.4243
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
During the reporting period, Petro Chemical's acrylic acid and ester production facilities and hydrogen peroxide production facili-ties were put into operation one after another. The exhaust gases produced in the process of acrylic acid and ester production fa-cilities mainly include pollutants such as acrylic acid, acrolein, butyl acrylate, formaldehyde, and acetone. Supported by two setsof catalytic incineration equipment, more than97%of emission factors are treated and removed through secondary catalyticincineration to meet GB31571-2015 requirements as stipulated in theEmission Standard of Pollutants for Petroleum Chemistry In-dustry. The exhaust gases produced in the process of hydrogen peroxide facilities include pollutants such as non-methane hydro-carbons. There are two emission outlets: hydrogenation emission outlet using "condensation + activated carbon ?ber adsorption"process for treatment, and oxidation emission outlet using "condensation + expansion condensation + resin adsorption" processfor treatment. After the treatment of the two outlets, emission factors can meet the requirements of theIntegrated Emission Stan-dard of Air Pollutants GB16297-1996, ensuring e?cient management of pollutant emissions.
During the Hangzhou Asian Games, the HSE Management Department and the Production Management Department at JiaxingBase established a special team to eliminate "leakage" and "unorganized VOCs leakage", aiming to reduce "leakage" in all facilitiesand improve the e?ciency at Jiaxing Base. Team members actively conducted such inspections in each workshop and depart-ment, made inspection records, incorporated the results into appraisals, and evaluated and compared all teams' results. Theestablishment of the special team has enhanced the participation of all departments at the base in rectifying the incidents of "leak-age" and "unorganized VOCs leakage".
To actively ful?ll its commitment to ultra-low emissions, Lianyungang Petrochemical has continuously promoted air pollutant emis-sion reduction and leakage prevention management through initiatives such as technology optimization and enhanced manage-ment, focusing on emission sources, strengthening the control across the production process, and monitoring exhaust gas emissionsin real time. In terms of project design, the Company has selected mature and advanced process technologies at home and abroad,which are in line with cleaner production and can achieve the goal of high-value, clean, and intelligent plant development.Use ethane with little sulfur as
raw material which is clean andhas a high recovery rate in crack-ing units, simple process flow,and low comprehensive energyconsumption. Ethane crackershave lower sulfur emissions andless environmental impact andare more advanced compared toother similar pollutant emissionprojects
The cracking furnace and boiler fa-
cility have implemented a low-NOxcombustion + SCR decommissioningprocess, utilizing imported catalyststo ensure that the NOx emissions inthe ?ue gas are maintained below 40mg/Nm? (compared to the nationalstandard of 100 mg/Nm?). This ad-justment ensures compliance withpetrochemical pollutant emissionstandards and achieves ultra-lowemission concentration levels. Addi-tionally, volatile gases generated bythe facility are collected via pipelinesand directed to the RTO regenerativeincinerator for treatment, ensuringthey meet required standards beforebeing discharged
Clean raw materialsProcess optimizationReal-time monitoring
The Company actively responds to the national emission reduction requirements for VOCs
, and continuously strengthens thecontrol of unorganized VOCs emissions. Through measures such as upgrading LDAR
testing, carrying out special inspections on aregular basis, and optimizing processes, we ensure that the emissions from our operations meet the required standards.
Pinghu Base disposed exhaust gases in compliance to ensure e?cient management of pollutants
Lianyungang Petrochemical enforces full process control of production-generated exhaustgases to promote high-quality and cleaner production
Jiaxing Base carried out special actions to eliminate "leakage" and "unorganized VOCs leakage"
Actively use LDAR testing and repairtools for production facilities, andcomplete leak testing for opera-tional facilities on a quarterly basis.A total of over 140,000 points havebeen registered and a total of fourLDAR tests and retests have beenconducted throughout the year
In addition to commissioning a third party to conduct quarterly comprehensive external LDAR testing of the base's dynamic andstatic sealing points involving VOCs in accordance with national norms, Pinghu Base implemented LDAR encrypted testing of 15%of the total points in areas prone to VOC leakage (such as tank areas and loading platforms) between September and October. Thisinitiative aims to ensure rigorous control and management over VOCs.Furthermore, Pinghu Base organized self-testing in the production area, tank area, and loading platform area using its LDAR testingdevices. Special personnel were assigned to conduct special inspections of tank roof breather valves to ensure their normal opera-tion.
Adhering to the principle of "Reduce, Reuse and Recycle" in solid waste management, STL has formulated theManagement Regu-lations on Solid Wasteto strengthen the management of solid waste. We are committed to the standardized solid waste disposal,and continuously promote the reduction and recycling of solid waste. We strictly insist on the full process solid waste control fromgeneration, collection, storage, transportation to disposal and utilization. We have established an IT-based solid waste platform toconduct real-time monitoring and management of hazardous waste, and carried out regular and rigorous on-site audits on haz-ardous waste disposal entities, resolutely eliminating non-compliant ones, to ensure the compliant waste disposal. In addition, wecontinue to improve the recycling e?ciency of solid waste and are committed to reducing the amount of solid waste dischargedinto the environment by more than 50,000 tonnes by 2030 through the comprehensive utilization of solid waste. During the report-ing period, the Company managed solid waste according to the Pollutant Discharge Permit's management requirements, and therewere no solid waste disposal violations.
Solid Waste Discharge Management
Pinghu Base conducted LDAR encrypted detection to reduce unorganized VOCs emissions
Set up special warehouses to collect solid
wastes, and conduct anti-corrosion and an-ti-permeation treatment on the warehouse ?oorto prevent waste leaks from contaminating soiland groundwaterActively reduce solid waste, dry the sludge, and
reduce the water content of the sludgeUniformly arrange special vehicles to transport
waste to land?lls or hand it over to quali?ed en-
tities for disposal on a regular basis
Set up temporary storage warehouses for hazard-
ous waste to ensure that the hazardous waste iscollected by type and source according to the re-quirements of hazardous waste management Contact quali?ed professional waste disposal enti-
ties for waste transfer in accordance with relevantnational solid waste transfer regulationsInstall waste liquid incinerators to dispose of heavy
alcohols, tar, and other hazardous wastes, andWAO devices to dispose of wastelve
General solid wasteHazardous waste
IndicatorsUnit
Rate of pollutant process treatment meeting standards%100
2023
Volatile organic compound
Leak detection and repair4445
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Take appropriatemeasures to preventand reduce pollutantleakage in the process,pipelines, equipment,sewage storage, andtreatment structures;and lay pipelines as vi-sually as possible. Thismeans that pipelinesshould be installed onthe ground as far aspossible so that pollut-ants can be detectedand addressed as earlyas possible
Implement a ground-
water pollution moni-toring system coveringthe production area,including establish-ing a comprehensivemonitoring system,installing advanceddetection instrumentsand equipment, andbuilding scienti?cal-ly and reasonablydesigned groundwaterpollution monitoringwells to ensure timelypollution detectionand control
Implement imperme-
able treatment on theground in the pollutedarea to prevent spilledpollutants from seepinginto the ground, andcollect the pollutantsleft on the ground andtransfer them to thesewage treatment sta-tion for treatment; im-permeable treatment isconducted by area typein exercising control atthe end
Once the groundwater
pollution accident oc-curs, immediately startthe emergency plan,and take emergencymeasures to controlgroundwater pollutionso that pollution canbe treated well
Every year, STL prepares an annual environmental monitoring program in accordance with the requirements of the Pollutant Dis-charge and project environmental assessment, and pertinent technical speci?cations such asthe Guidelines on the Identi?cationof Potential Soil Pollution Hazards in Key Supervision Entities (for Trial Implementation)and theTechnical Guidelines of Soil andGroundwater Self-monitoring for Industrial Enterprises.We have also hired quali?ed third-party environmental testing companiesto keep an eye on the soil and groundwater. Moreover, we implement full-stage control of pollutants from the generation, in?l-tration, di?usion and emergency response, to avoid soil and groundwater pollution caused by leaks. During the reporting period,100% of STL's tested characteristic pollutants in soil and groundwater met the required standards.
Soil and Noise Management
Control at the sourcePollution monitoringControl at the endEmergency response
STL's soil and groundwater pollution prevention and control measuresAdditionally, STL strictly adheres tothe Law of the People's Republic of China on the Prevention and Control of Pollution fromEnvironmental Noise, focuses on the identi?cation, analysis and evaluation of noise hazards, and enforces noise pollution controlfrom noise sources, transmission channels, and noise receptors in all aspects. During the reporting period, the Company conduct-ed regular noise monitoring at the plant boundary, and its bases and business units meet the standard limit value of a third-classzone in the Emission Standard for Industrial Enterprises Noise at Boundary(GB 12348-2008), and the sound environment qualitycan also meet the requirements of the daytime and night time standards of a third-class zone ofthe Environment Quality Standardfor Noise (GB 3096-2008), with no impact on the surrounding environment.The Company has considered noise control during its plant planning and design, and arranged production devices in zones ac-cording to their noise intensity if the process allows, with noisier devices placed built as far as possible on the side away from noisesensitive areas outside the plant or buildings without sound sources (such as auxiliary plants, warehouses, large facilities such astowers, tanks and containers that do not produce noise, and green belts) as barriers to separate them from noise sensitive areas.Noise-intensive machinery and equipment, such as large machine pumps and molding and packaging machinery, are installedwithin the plant workshops and the machine base is damped to reduce the noise impact on the environment inside and outsidethe plant.
Waste
Indicator
Total solid wasteSolid waste generated per unit of product
Unit
10,000 metric tonnesmetric ton/metric ton
9.42
0.02
14.02
0.01
metric tonne/10,000metric tonne productsmetric tonne/10,000metric tonne productsmetric tonne /10,000metric tonne productsmetric tonne /10,000metric tonne productsmetric tonne/10,000metric tonne productsmetric tonne/10,000metric tonne productsmetric tonne/10,000metric tonne products
0.76
0.10
0.25
0.06
2.02
0.01
0.12
0.55
0.11
0.26
0.05
2.08
0.02
0.10
Emissiongases
Wastewaterdischarge
Emissions of nitrogen oxides (NOx)Emissions of sulfur dioxide (SO
)Emissions of volatile organic compounds (VOCs)Emissions of particulate matter (PM)
Chemical oxygen demand (COD) emissionsAmmonia nitrogen emissionsTotal organic carbon (TOC) emissions
2022 2023
Jiaxing Base adopts suitable methods by type for solid waste disposal. General solid waste is prioritized for self-cycling within theCompany, and the rest is recovered by quali?ed organizations for comprehensive utilization; hazardous waste is safely disposedof by quali?ed organizations. The Company's disposal safety rate of industrial solid waste is100%, and the recycling rate ofrecyclable industrial waste is also100%.
Jiaxing Base established its solid waste disposal model to realize resource recycling
Ecological co-building is a necessary way to safeguard our planet's natural habitat. STL strengthens the management andconservation of water resources through targeted measures, ensures that every drop of water is fully and reasonably utilized,and devotes itself to reducing the consumption of water sources. Additionally, we are engaging in the preservation and resto-ration of biodiversity, fostering the harmonious coexistence of ecosystems.As water is a fundamental natural resource and a strategic economic asset for corporate development, STL places great emphasison the management of water resources, strictly complies with theWater Law of the People's Republic of Chinaand other pertinentlaws and regulations. On these basis, we have formulated internal policies such as theEnergy Management Systemand theWaterQuality Management System. During the reporting period, our production bases and business units primarily relied on third-partywater supply, reclaimed water reuse, and process condensate water. We installed water metering instruments that exceed nationalstandards and conducted regular water balance tests to assess consumption status and identify potential leaks in water facilities.By implementing measures like equipment maintenance, upgrades, and technological innovations, we have e?ectively conservedthis vital resource. During the reporting period, STL saved a total of
7.907
milliontonnes of water resources by adoptingthe following water resources management measures.STL adopts light hydrocarbon cracking to produce ethylene. Its water consumption is only 1.7 tonnes of water per tonne of eth-ylene, compared with 22 metric tonnes of water consumption per tonne of ethylene and 3.5-4.5 tonnes of water consumption pertonne of ethylene in coal chemical and naphtha cracking processes respectively. The reduction of water consumption of light hy-drocarbon cracking is more than90%
.At present, the Company's ethylene production capacity is 2.5 million tonnes. It saves
50.75 million
tonnes and
4.5-7
million tonnes of water compared with coal chemical process and naphtha cracking process.
Ecological Co-building
Water Resources Management
The calibre of the data in this category was adjusted during the reporting period and is hereby corrected.
The caliber of data in this category was adjusted during during the reporing period and is hereby corrected.
The source of the relevant data is the research report of Huaan Securities, "Analysis of the Path of Green and Low Carbon Development of the Petroleum and ChemicalIndustry under the Carbon Neutrality Goal".4647
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
All operations of Jiaxing Base rigorously abide by the requirements of the project environmental assessment in their new projects.During the construction period, they require the construction entities to act in compliance and reduce unnecessary soil erosion.The bases set up safety noti?cation and dust control signs in front of the gates of the construction projects. During the constructionperiod, two fog cannons are con?gured at each intersection to be used on-demand, and dust monitors, fences, barriers, sprinklers,car washing pools in front of the gates are also installed, and bare soil is covered in place. Moreover, the base implemented harden-ing and greening initiatives at factories' production sites and roads near the gates, to reduce the impact of dust generated by roadtransport on the surrounding vegetation.
Lianyungang Base rigorously upholds biodiversity conservation, comprehen-sively engaging in soil and water conservation e?orts in its construction proj-ects while participating in marine environmental protection. The base takes anactive role in marine ecological environmental protection initiatives, with aninvestment of over RMB
million. This initiative focuses on enhancingthe coastline environment, fostering breeding and release programs, and build-ing ecological monitoring systems to track marine environmental dynamics inreal-time, thereby providing technical support for ecological conservation ef-forts.During the reporting period, Lianyungang Base organized dedicated personnelto conduct public welfare beach cleaning activities along the coastline in Xu WeiNew District. The cleaning and disposal of coastal waste contributed to signif-icant improvements in local marine ecological environment and biodiversity.Concurrently, the base conducted diverse public education campaigns on ma-rine ecological civilization, intensifying e?orts to raise awareness. Furthermore,the base also carried out arti?cial breeding and release activities to bolster ma-rine organism populations in surrounding waters and facilitate the restorationof ?shery resources. Over
million?sh fries and more than16,000
million Chinese shrimps were released as part of these initiatives.
As a leading company in the petroleum and chemical industry, STL pays attention to the impact of its operations on natural re-sources and biodiversity, keeps the relevant impact as minimal as possible, and actively carries out public welfare activities forbiodiversity conservation to ful?ll its corporate social responsibility. We strictly adhere to national ecological protection relatedrequirements, consider ecological protection during the initial project construction assessment, production, and operations, res-olutely reject projects in ecologically vulnerable areas. Additionally, the Company continuously improves the monitoring mech-anism of ecological protection and restoration protection, implements e?ective measures to mitigate the impact on biodiversitythroughout the entire process of production to conserve biodiversity. As of the end of the reporting period, the projects of our pro-duction bases and business units had adhered to the ecological environment control programs, the main functional area plan andthe general land use plan, and had not crossed the ecological protection red line. The Company had no signi?cant incidents thatharmed biodiversity during the reporting period.
Enhance the recovery of
steam condensate and con-ductive heat ?ow to achieverecyclingCollect rainwater aroundthe ?re ?ghting pool, pumpit to the water treatmentstation, and then use it forreplenishing the ?re ?ght-ing pool
Strengthen the pelletization
process control and reducethe frequency of pelletizingwater replacementUse of surface evaporative
air cooler and circulatingcooling water air for coolingdevice in the circulatingcooling technology
Replace outdated bypass
?lters with energy-savingonesStrengthen the inspection
of various water supplypipelines in plants, andconduct prompt mainte-nance to avoid leakage
Use backwash water for
pharmaceutical dilutionto improve the water re-cycling rate Use phosphorus-free/
low phosphorus watertreatment chemicals forcirculating cooling watertreatment technology,which can make the circu-lating water system reach a7-timeconcentrationand achieve a water-savingrate of
12.5%
Biodiversity Conservation
Water recyclingProcess upgradeEquipment optimizationImprove water e?ciency
Make active soil and water
conservation e?orts in con-struction projects, preparesoil and water conservationreports, and report for therecord
Use APEOS-free auxiliaries
to ensure that the productsare non-biotoxic and meetenvironmental requirements
Develop aldehyde-free
products with formaldehydecontent lower than 16mg/kgto meet the requirements ofClass A textile applications
STL's biodiversity conservation initiatives
Jiaxing Base adopts centrifugal extraction technology, signi?cantly reducing water con-sumption in the process
Jiaxing Base implemented dust control at construction sites to reduce impact on vegetation
Lianyungang Base works to conserve biodiversity and maintain the beauty of ecological balance
During the reporting period, the Jiaxing Base introduced centrifugal extractant technology at its 2B oil workshop to replace theprevious intermittent rinsing method. This technology enables continuous and stable operations while reducing water consump-tion in the process by up to50%. Additionally, the base introduced advanced reclaimed water reuse facilities, which enhancesthe industrial water reuse rate to70% through pre-treatment, one-stage reverse osmosis system, and system operation control.
Indicator
Waterconsumption
Total water consumptionWater consumption per unit of product
Unit2022million tonnesmetric tonne/metric tonne
32.12
5.24
33.12
3.49
2023
Reduction of more than 90%
22.0
3.5-4.5
1.7
Ethylene from coal chemical industryNaphtha cacking to ethyleneLight hydrocarbon cracking to ethyleneWater consumption of light hydrocarbon cracking compared to other processes for ethylene production (metric tonne of water/
metric tonne of ethylene)
4849
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build aHarmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
People-Centricity to Builda Harmonious SocietyCreating Talent Value by EmpowermentCreating Harmony with Love and Responsibility
STL adheres to the guiding principle that "the company grows together with its employees and society". Firmlycommitted to creating a platform for mutual advancement with employees and the community, we endeavorto nurture employee growth while contributing to community welfare, uniting e?orts to engage in practical ac-tions and realize the collective "STL Dream".
Theme:
A Blueprint for Talent Development
Guided by the culture of "harmony,"STL enthusiastically champions theethos of "sincerely caring for the enter-prise and working hard," realizing thecollective "STL Dream" through col-lective efforts. Aligned with our devel-opment strategy, we have instituted aholistic talent development frameworkcovering four perspectives: "selection,""utilization," "retention," and "cultiva-tion". Through talent acquisition andincentive mechanisms, we ensure asteady talent pipeline, while leveragingappointment and development strat-egies to enhance talent capabilitiesacross the board. This ensures a robustsupply of talent, both in quantity andquality, necessary for our high-qualitydevelopment.
STL's human resources system blueprint
STL provides a zigzag-shaped develop-ment path for managerial roles. Fromnew hires to senior management, wehave formulated personal trainingprograms for employees at all stages oftheir careers from three perspectives:
leadership skills, time management,and work philosophy. We have encour-aged employees to improve their man-agement and leadership capabilitiesthrough a comprehensive promotionsystem, providing a steady stream ofhigh-quality strategic talent reserve forthe Company's development.
Paths for Managerial Roles
STL has offered development pathsfor professional roles which provides"vertical and horizontal" opportunitiesto establish an e?ective talent mobilitymechanism. This involves the flexiblecombination of vertical promotion andhorizontal job rotation opportunitiesfor employees, improve professionalskills, enhance professional compe-tence, and full mobilize employees'work enthusiasm. To motivate techni-cal sta? in improving their professionalabilities, we have organized a range ofskills competitions for warehousing,instrumentation and other operationalpositions. These competitions assessemployees' skills, fostering vitalityand encouraging continuous progressamong the sta?.
Paths for Professional Roles
Corporate
Strategy
Zigzag-shaped development path for
managerial roles
"Vertical" and "horizontal" development
paths for professional roles
Verticaldevelopment path
(promotion)
Talentsupply(quantity)
Capabilityenhancement(quality)HRSSele-ctionRete-ntion
Utiliz-ationCultiv-ation
Attraction&ac-quisition
Retain&moti-vate
Appoint-ment&transfer
Training&de-velopment
STL attaches importance to talenttraining, creating "management" and"professional" career developmentpaths that both provide vertical andhorizontal career opportunities, so thatemployees can give full play to theirstrengths and abilities, to achieve theirpersonal career goals through variousdevelopment paths, and to maximizethe value of themselves and the Com-pany.
STL's two career development paths
"Management" and "professional" career
development paths
Horizontal
Path for Mana-
gerial Roles
Employeelevel Ju-nior level
Path for Professional RolesExecu-tive-level
Chief expertManager-
level
SeniorDirector-level
ExpertSupervi-sor-level
Intermediate
Vertical
(Business philosophy/man-
agement philosophy)
(Leadership skills + time management + work philosophy)
(Bene?t gains/long-term thinking)(Front-line managers selection)(Individual's high
performance)
(Motivating/support-ing subordinates to
succeed)(Superior communi-cation skills)(Focusing on manage-ment work)
President (managing thewhole group)Executives (managing abusiness group)
Deputy general manager(managing a department)Supervisor/Shift Supervi-sor (managing others)
General manager (man-aging a business unit)Manager (managing supervisors)Individual contributor(self-management)
Stage
Six
StageFiveStageFour
StageThreeStageTwo
StageOne
Growth within a
position
(job enrichment)
Horizontal development(intra-department mini-cycle)
Horizontal development(inter-department cycle at middle
and senior levels)
Creating Talent Value by Empowerment
STL views talent as the most valuable asset of an enterprise. We uphold a people-oriented development philosophy, and respectand protect the legitimate rights and interests of all employees. We are committed to creating a diverse and equitable working en-vironment, stimulating employees' creativity and potential, and collaborating with them to achieve both personal growth and theCompany's development goals.
STL upholds a talent concept centered on ability and contribution rather than education and seniority. We continuously increaseinvestment in talent attraction, strengthen talent development planning, optimize talent management modes, and enhance thee?ciency of talent resource management. Our goal is to gather diverse and outstanding talents, fostering sustainable developmentwith our employees.
This chapter responds to the UN SDGs:
Talent Attraction
STL strictly adheres to relevant laws and regulations such as theLabor Law of the People's Republic of China, theLabor ContractLaw of the People's Republic of China, theSocial Insurance Law of the People's Republic of China, and theProvisions on the Prohi-bition of Using Child Labor. We vehemently oppose discrimination, forced labor, illegal labor, harassment, and abuse. We prohibitthe use of child labor, and fully safeguard employees' legitimate rights and interests. During the reporting period, we revised andimproved the Attendance and Vacation Management System, re?ning regulations regarding employees' working hours, nationalstatutory holidays, paid vacations, and overtime wage payment to further safeguard their basic rights and interests.We actively ful?ll our corporate social responsibility by advocating employee diversity and treating them on on an equal footing,regardless of their nationalities, ethnicity, genders, religious beliefs and cultural backgrounds. During the reporting period, wehad 137 employees of different ethnic minorities and countries, including 18 ethnic minorities such as Manchus and Mongols,and di?erent nationalities such as Americans and Koreans. In addition, we e?ectively safeguard the rights and interests of femaleemployees, ensuring that they are entitled to marriage leave, maternity leave, and special protection initiatives during pregnancy,childbirth and breastfeeding in accordance with the law.
Compliance Employment
STL's employee rights and interests protection measures
Prohibitchild labor
Fair salarydistributionbased on con-tributions
Ensure ahealthy andsafe workingenvironment
Opposeagainst forcedlabor
Opposeagainst anyform of harass-ment
Respect diversity,promote anti-dis-crimination, andfoster a bias-freeworkplace
Prioritizing ability ratherthan education
Prioritizing contributionrather than seniority
Employee Recruitment
With corporate operations and developmental strategy in mind, STL actively expands its talent acquisition channels and enrich-es its selection methods to continuously strengthen talent acquisition. This aims to provide the necessary talent strategy for theGroup's business development, establishing a long-term competitive edge and a robust foundation for talent reserves.While education and quali?cations are important considerations in talent assessment, they are not the sole criteria. STL emphasiz-es the importance of integrity and skills in its recruits, assessing candidates based on their capabilities. In the recruitment process,we endeavor to create a fair, equitable, and diverse environment, attracting outstanding talents and ensuring a strong match be-tween job requirements and candidate skills. Through diversi?ed recruitment channels, we work to promote strategic talent devel-opment initiatives.
Actively expand talent attraction channels: Establish channels for the introduction of overseas experts and continuously recruithigh-level talents from abroad.Establish dedicated recruitment positions for high-end talent: Focus on industry-leading talents and top-tier management profes-sionals from leading enterprises, to meet our needs for talent at various development stages, and create strategic talent reserves.
Strengthen collaboration with various platforms: Participate in on-site talent exchange events and leverage online recruitmentplatforms for live broadcasting, to disseminate recruitment information to more candidates, and intensify talent introduction ef-forts. The Company has created its WeChat o?cial recruitment account and released the "Satellite Recruitment" mini-application.We encourage external and internal talent recommendation through rewards to revitalize the talent pool and the willingness ofPeople O?cers to recommend talent.
Establish unlocked internal talent recommendation channels: Create internal talent recommendation platforms and other chan-nel-based operational mechanisms, establishing a shared internal talent pool, and ensuring e?cient and sustainable recruitment.
Recruitment for experiencedcandidates
Implement a di?erentiated recruitment strategy: Analyzing recruitment strategies, salary structures, and bene?ts o?ered by peercompanies domestically and internationally, STL has developed a di?erentiated approach to campus recruitment. This strategyfocuses on 10 "Project-985" universities, 14 leading universities in petrochemistry, and general universities in regions where theCompany operates, ensuring e?ective campus recruitment e?orts.Enhance recruitment team's capabilities: Conduct training on interviewer empowerment and campus recruitment team process,and provide standardized interview manuals and toolkits to ensure orderly campus recruitment practices.
Strengthen collaboration with universities and enterprises: Boost partnerships with key universities and enterprises, and establishcollaborative engagement frameworks with them to lay a solid foundation for subsequent targeted talent development.
Campus Recruitment
Indicators
Rate of labor contract signingSocial insurance coverage
Unit2023%%
5455
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Builda Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Guided by the culture of "harmony", STL seeks to enhance its competitiveness by building an excellent team of employees.We insist on providing training in an orderly manner, promoting the standardization of our training efforts, and implementingthe management mode of unified planning and execution by type. To support employees' career development, we alwaysadhere to the principle of putting our employees first, providing targeted training programs for various groups. We developtailored training plans, management strategies and incentive programs to empower individual growth across the board.
Talent Development
STL's digital and intelligent recruitment model
Combine traditional face-to-face interviews with digital intelligence interviewsWe have implemented a cloud-based recruitment system, facilitating one-click noti?cations to candidatesand interviewers. This streamlined approach reduces the costs associated with o?ine phone calls andSMS noti?cations while enhancing information dissemination e?ciency. Additionally, we leverage onlineplatforms such as WeChat Channels and Tencent Meeting for livestreaming recruitment, laying a solidfoundation for our talent introduction.
Introduce video job description functionWe piloted video job description for six types of positions in campus recruitment. These videos featurecharacter introduction and work scenes, providing candidates with insights into the job roles and enhanc-ing the e?ectiveness of recruitment e?orts.
Optimize and upgrade the recruitment system
With the assistance of third-party recruitment systems, we have signi?cantly elevated our recruitment oper-ations. These systems enables comprehensive data recording throughout the recruitment process, allowingus to adjust our recruitment strategy promptly in response to changing operating conditions. By e?ectivelydeploying talent resources, we have established an internal talent sharing resource base.
Expand external and internal recommendation channelsSTL continues to bolster cooperation with multiple platforms, expanding recruitment information dissem-ination channels to support talent acquisition initiatives.
In terms of the innovation awards in China's digital intelligence re-cruitment and talent management, STL was honored to be on theTop 50 list for the 2023 China HR Venus Awards - Practice ExcellenceAward in Campus Recruitment. This accolade reflects the wide-spread recognition of our recruitment e?orts across various sectors.
STL has introduced the core talent training concept of the "One Hundred Talent Development Plan for Future STL". We have estab-lished a comprehensive training mechanism aimed at empowering every employee to acquire essential knowledge and skills fortheir careers while gaining valuable experience in tandem with the Company's growth. We prioritize multi-level, highly e?cient,and tailored training initiatives, with each employee bene?ting from targeted training plans. Our training programs, including StarClass, Sailing Class, and Marketing Elite Training, cater to di?erent employee groups, fostering a high-level talent pipeline withinthe organization.During the reporting period, we revised and improved theTraining Management Systemand theManagement Measures for Inter-nal Lecturers. Additionally, we have optimized support systems to facilitate employees' self-improvement through participation intraining activities. We have meticulously curated the Group's internal training instructor pool and internal course resource library,comprising 77 internal training lectures and 101 internal course resources. This initiative aims to bolster our internal employeetraining and knowledge management system.
Employee Training
Develop annual trainingplans for all departmentsat the beginning of eachyear and issue them to thedepartments for imple-mentation after beingapproved by the Presidentof the Company
The HR Center places train-ing attendance, disciplines,and ?les under centralizedmanagement. It makesan overview of training inthe Company's based onmonthly training informa-tion provided by depart-ments
Training sessions are deliv-ered as per to the annualtraining plan. In the pro-cess of implementation,the plan may be revisedaccording to actual needs
Training e?ects are evaluat-ed at the levels of reaction,learning, behaviors, andresults
STL's employee training management model
TrainingPlanning
TrainingManagement
TrainingImplementation
TrainingEvaluation
During the reporting period, STL advanced its transition towards digital intelligence recruitment by integrating a third-party digitalintelligence talent management platform. This platform combines digital technologies with recruitment management, harnessingtools such as arti?cial intelligence and big data to expedite talent acquisition, enhance operational e?ciency, and improve candi-dates' experience. This initiative aims to achieve the Company's objectives for strategic talent reserves.
5657
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build
a Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
To enact the core talent development concept, STL has launched a workshop to identifyand raise senior management's role awareness. Additionally, we have devised and pro-moted our leadership empowerment program at all management levels in 2024, laying thegroundwork for the "One Hundred Talent Development Plan".To systematize its HSE (Health, Safety, and Environment) professional knowledge andprovide systematic empowerment, STL has launched HSE special competence enhance-ment programs at all its bases and business units. These initiatives comprise 9 professionalcourses, bene?ting over1,300 employees across the Group. We also conducted knowl-edge and skill assessments, and issued certi?cates of completion.To elevate production-speci?c skills, STL's bases and business units organized skill compe-titions, embracing the ethos of "promoting practice by and learning through competition".These events, including special training projects for key frontline technical sta?, equipmentskills competition, and the "Shining Star River" Chanllenge Competition, were attended byover 1,700 participants.
LeadershipdevelopmentempowermentHSE specializedcapabilityenhancement projectsSkill competitionsfor employees inoperational roles
To facilitate the seamless integration of new employees, STL conducted various activitiessuch as "Star Class" intensive training, integration plan tracking, evaluations for new hiresto be accepted as regular sta?, and thematic events on Teachers' Day. These endeavors aimto foster role transition and cultural assimilation among new graduate hires in line with theprinciples of "Satelliteization, professionalization, and internationalization".Standardized trainingsystem for new
employees
Indicators
Coverage of employee trainingTotal attendance to employee trainingTotal hours of employee training
Unit2023%person time
hour
198,518456,659
Meanwhile, we actively carry out the work of integration of industry and education. Through exploring the new mode of universi-ty-enterprise cooperation, we cultivate innovative, complex and high-quality technical and skilled talents for petrochemical enter-prises, and contribute to the development of the industry's talent pool.
STL recognizes all employees' contributions and creation, actively harnessing their enthusiasm through a comprehensive salarysystem and incentives. This approach fosters mutual development and benefits for both the Company and its employees. Wehave devised an employee incentive framework encompassing three perspectives, namely, short-term rewards (such as premiumincentives and overselling rewards), medium-term incentives (virtual equity), and long-term incentives (shareholding as businesspartners). These measures are designed to stimulate continuous employee development through targeted value incentive plans.To further galvanize employee motivation and initiative, we re?ned theRemuneration Management Measuresduring the reportingperiod. This involved enhancing the management of overtime wage payments, ensuring that employees' personal value is maxi-mized, and leveraging the motivating power of the remuneration system on talent.
At the same time, we actively carry out the work of integration of industry and education, through exploring a new school-enter-prise cooperation model, to train innovative, compound high-quality technical talents for petrochemical enterprises, for the con-struction industry to make contributions to the talent echelon.
Employee Incentives and Promotion
To support our employees in achieving their personal career aspirations, we o?er ample development opportunities and promo-tion clear paths, complemented by various promotion initiatives aimed at motivating and supporting their long-term growth. Wehave established diverse career development paths for management, professional, and operational sta?, ensuring each employeehas the opportunity to carve out their own trajectory within the Company. During the reporting period, we re?ned the manage-ment and professional career development frameworks, ?ne-tuned promotion paths and assessment methods, and embracedadvanced management approaches to identify and nurture talented individuals within the organization.
STL's compensation systemCompensation is given play to as incentives and guidance. More pay for more work is advocated. No cap is put oncompensation incentives.
The rank is aligned with the compensation level based on position value, ability, competency, performance, and results.The principles of distribution according to work, e?ciency ?rst, and fair and sustainable development are upheldand a sound compensation broadband system is in place.
Compensation surveys on the market, the industry, the region, and competitors are regularly conducted to en-sure that the Company's compensation is competitive and in the leading position in the industry.
A di?erentiated compensation system is in place, with the range determined by position value and the level de-termined by personal value.
STL is deeply committed to a people-centric philosophy, prioritizing work safety and employee health as paramount for its sustain-able development. Upholding the principle that "safety is more important than pro?t", we place a strong emphasis on safeguard-ing the well-being of our employees and continually enhance our safety assurance systems. As a leading chemical company, wealso place importance on chemical safety management, proactively mitigating potential risks in our production and operationalprocesses.
Talent GuaranteeOn February 9, 2023, the Signing and Unveiling Ceremony of Lianyungang Technical College and Lianyungang Petrochemical forthe Co-establishment of Lianyungang Petrochemical Industry College was held. Zhu Xiaodong, General Manager of LianyungangPetrochemical, attended the event and pointed out that Lianyungang Petro Chemical, as a domestic leader in comprehensiveutilization of light hydrocarbons, believe that we can't develop without knowledge and talents in the future, and the cooperationbetween the two sides can o?er more wisdom and talents and help high-quality development in the region's economy. The forma-tion of this community of industry-education integration strongly promotes the in-depth integration of universites and enterprises,which is of great signi?cance in highlighting the function of vocational education, promoting regional integration, and accuratelycultivating talents. Through this project, both parties will explore a new mode of university-enterprise cooperation and cultivateinnovative, complex and high-quality technical and skilled talents for petrochemical enterprises.
Lianyungang Petrochemical builds a community of industry-education integration tocultivate future industry talents
5859
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build
a Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Health and Safety
Prevention of Occupational Diseases
STL prioritizes the health and safety of our employees above all else. We strictly ad-here to national laws such as theWork Safety Law of the People's Republic of China
and theLaw of the People's Republic of China on the Prevention and Control ofOccupational Diseases. We have created and improved internal occupational healthand safety policies and systems, employing science-based and advanced methods toassess and mitigate the risks of occupational diseases. During the reporting period,STL's ISO 45001 Occupational Health and Safety Management System Certi?cationcovered100% of its operating sites.We organize health check-ups and specialized occupational health assessmentsregularly for all employees, and establish comprehensive occupational health moni-toring ?les to proactively prevent occupational diseases and related ailments. Duringthe reporting period, we bolstered management in human resources and employeerelations and promoted electronic personal health files to safeguard employees'health and safety.
Work SafetyIn terms of work safety, STL upholds the principles of "putting safety ?rst, and focusing on prevention, integrated control, and allengaged". We strictly adhere to laws and regulations such as theWork Safety Law of the People's Republic of Chinaand theIn-terim Measures for the Screening, Identi?cation, and Control of Work Safety Accident Hazards. We have developed aWork SafetyAccountability System for all employees, established reputable organizations and institutions for safety management, and consis-tently implemented various national laws and regulations on work safety, continuously promoting the implementation of safetycontrol measures. At the end of the reporting period, all of our production bases and business units held the Level 2 ProvincialCerti?cate of Work Safety Standardization for Enterprises.In terms of safety management, we have ?rmly instilled the concept of safety-based development, enhancing employees' safetyawareness, and enforcing "zero-tolerance management" for safety issues. We enforce comprehensive, multi-disciplinary, and thor-ough work safety management.
STL has established its Work Safety Committee, with the Chairperson of the Board serving as the director, to coordinate and
promote various work safety initiatives. We have engaged all employees to sign the Safety Objective Responsibility Letter, strictlyimplementing the work safety responsibility system across the board. We have also established and improved various work safe-ty management systems, continuously promoting standardization in this area. Additionally, we have compiled and issued theSafety Culture Manual to instill safety consciousness throughout the Company.
Establish a sound governance structure
In strict accordance with relevant management methods, we have established and improved the internal management system
for work safety expenses. This ensures the allocation of funds for safety equipment and facilities, incentives for hazard investiga-tion, and funds for other work safety measures, providing a solid ?nancial foundation for our safety management.E?ective investment in safety
STL's ISO 45001 OccupationalHealth and Safety ManagementSystem Certi?cationIndicators
Percentage of occupational physicalexaminations
Unit2023
%100
We regularly conduct risk identification across all production aspects, rigorously standardizing safety risk management and
hazard investigation. This proactive approach e?ectively prevents and reduces the occurrence of work safety accidents, with a99% completion rate for risk recti?cation since 2021.Risk identi?cation and hidden hazard investigation
We monitor information on areas such as personnel presence, major hazard sources, ?ammable and toxic gases, integrated en-ergy consumption, and the entire production process on the "Five-in-One" platform, leveraging technologies to achieve closed-loop management of hazards and the IT-based risk management and control, and empowering our modern work safety manage-ment.
Empower work safety with digital technology
To enhance employee safety, we establish training bases and provide specialized training sessions led by internal and external
experts. We also organize regular emergency drills to improve the team's emergency response capabilities e?ectively.Establish a sound system
STL recognizes that human life is of paramount importance. We prioritize both devel-opment and safety, and uphold the principles of "putting safety ?rst, and focusing onprevention, integrated control, and all engaged". With the red-line safety awarenessdeeply ingrained in mind, we promote the implementation of the responsibility ofwork safety, e?ectively improve the quality of risk and hidden hazard investigationand recti?cation, and e?ectively incentive the strong willingness and ability to identi-fy and solve problems.HSE culture training: We vigorously promote safety across the organization.Through a three-dimensional mode combining visual, acoustical and physical expe-rience,we provide physical safety education that can be felt and operated, and a se-ries of activities such as various online and o?ine competitions on safety knowledge,work safety video ?lming competitions, and safety culture essay competitions;Safety accident analogous inspection: We focus on special investigation and rec-ti?cation, requiring those in responsible to take the lead in ?ve areas and diligentlyimplement work safety initiatives with a strong sense of responsibility;Emergency drills: We organize regular emergency drills covering all positions, toenhance their capabilities for disaster and risk prevention, self-rescue and mutualrescue, build a ?rm line of defense for work safety, and promote all stu? "to stay safe,understand how to stay safe, have a comprehensive understanding of safety".
STL organized National Work Safety Month activities to strengthen work safety manage-ment capability
6061
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build
a Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
IndicatorsNumber of safety emergency drills conductedCumulative number of participants in emergency drillsEmployees participating in emergency skills trainingNumber of environmental monitoring activities rganized
Unit2023
timepersonperson time
time
17,41217,528
We strictly adhere to relevant laws and regulations, including the Work Safety Law of the People's Republic of China, theRegula-tions on the Safety Management of Hazardous Chemicals,theRegulation on the Administration of Precursor Chemicals,theMea-sures for the Public Security Management of Explosives Precursors,the REACH
Regulation, the POPs
Regulation, and the CLP
Regulation.We have established a long-term objective for chemical management: ensuring that all chemicals utilized are100%compliant.To this end, we have implemented a comprehensive chemical management system. Grounded in external regulatory mandatesand industry benchmarks, this system involves thorough compliance assessment and risk management for all chemicals procured,stored, transported, and utilized throughout our operations.STL remains steadfast in its commitment to enhancing the compliance, safety, and sustainability of its products. We strive to min-imize chemical hazards to manageable levels and mitigate their impact on health and the environment. Our approach includesconducting comprehensive chemical hazard assessments covering all products, collecting the Material Safety Data Sheets (MSDS)for all chemicals and summarizing essential information on their physical and chemical properties, toxicity, environmental hazards,and potential health risks to users. This ensures a thorough identi?cation of both existing and potential compliance and health andsafety risks associated with each chemical. We only conduct risk assessments for existing products but also integrate this processinto all stages of new products' research and development, project creation, and production, fully safeguarding product health andwork safety.Based on our risk assessment results, we have created theList of Restricted and Banned Substances to rigorously control the selec-tion of chemicals and substances in both new product development and the manufacturing of existing products. Furthermore, wehave implemented a transparent mechanism to publicly disclose the registration and usage of all chemicals involved in our busi-ness operations. We provide information on these chemicals, includingSafety Data Sheets (SDS)and labels, to stakeholders suchas end users, ensuring compliance with external regulatory requirements.To e?ectively implement these measures, we are dedicated to reducing chemical safety risks to manageable levels and conductingtotal lifecycle management. This includes organizing regular learning sessions on hazardous properties of chemicals, emergencyresponse measures, and other related knowledge.
REACH：Registration，Evaluation，Authorisation and Restriction of Chemicals. REACH is also know as Regulation (EC) No. 1907/2006.
POPs：Persistent Organic Pollutants. POPs are also know as Regulation (EC) No.2019/1021.
CLP：Classi?cation, Labeling and Packaging of substances and mixtures. CLP Regulation is also know as Regulation (EC) No. 1272/2008.
Chemical Regulation
STL is dedicated to identifying, managing, and minimizing environmental, health, and safety impacts throughout the chemical'slifecycle, to safeguard the health and safety of our employees.Chemical Safety
To bolster the management of hazardous chemicals, Lianyungang Petrochemical has compiled a contraindication table for thematerial reaction matrix of the liquid loading and unloading station, updated checklists for vehicle loading and unloading haz-ardous chemicals, and instituted a comprehensive log and signature system for all products. Furthermore, it has standardized thetemporary storage of chemicals on-site by conducting nightly inspections and implementing the "86" operation method for liquidloading and unloading.We have mobilized internal professionals to re?ne inspection indices covering various aspects such as process safety, hazardouschemical storage, anti-leakage measures, safety instrumentation, equipment integrity, education and training, operational safety,operating procedures, change management, and emergency response. We have also formulated pecialized checklists and guide-books for the investigation of hidden hazards.
In September 2023, Jiahong New Material conducted a thorough risk identi?cation and assessment of their production and stor-age facilities. This initiative, conducted under the framework of dual prevention (risk identi?cation + hidden danger investigation),addressed potential hazards such as hazardous chemical leakage accidents during operational activities and equipment mal-functions. Speci?c control measures have been devised across four key areas: engineering and technical measures, maintenanceprotocols, personnel operation guidelines, and emergency responses. These measures have e?ectively mitigated the occurrence ofhazardous chemical leakage accidents.STL prioritizes control at the source in chemical management, implementing proactive measures to phase out and replace chem-icals from a forward-looking perspective. Our chemical phase-out list aligns with national and local compliance requirementssuch as theCatalog of Backward Work Safety Production Processes, Technologies, and Equipment of Hazardous Chemicals to BePhased Out (First Batch) and theCatalog of Toxic Chemicals Prohibited or Strictly Restricted in Chinaand incorporates hazard as-sessments conducted by STL itself. Chemicals on this list were expected to be phased out within one year to minimize complianceand safety risks. Currently, we have successfully phased out all chemicals on our phase-out list. Moving forward, we will regularlyupdate the list in line with regulatory requirements and developments to enhance chemical safety oversight. Furthermore, we areactively working on chemical replacement processes, considering safe chemical alternatives and exploring the adoption of bio-logics or green raw materials. We are compiling aPositive List of Chemicalsfollowing the U.S. Environmental Protection Agency'sSafer Chemical Ingredient Listand promoting its integration into our business processes.
Chemical Phase-out and Replacement
Ensure stable product
quality and ban haz-ardous or restrictedsubstances during theprocurement processby rigorously auditingsupplier quali?cationsWhen introducing new
raw materials or consid-ering new suppliers, weadhere to the certi?cationstandards outlined in the
Chemical ManagementSystemand the Man-agement Measures forHazardous and RestrictedSubstances
For precursor chemicals,
explosives precursors,highly toxic chemicals, wehave upgraded storagefacilities in accordancewith theGB15603 GeneralRules for the HazardousChemical WarehouseStorage, and adoptedface recognition technol-ogy to enhance storageby category and emer-gency responses
Ensure proper product
management, controland labeling during trans-portation according tothe guidelines outlined intheRecommendations onthe Transport of Danger-ous GoodsUtilize appropriate
transportation vehiclesthat comply with relevantsafety regulations to guar-antee chemical safetyduring transit
Enforce stringent pro-
cess requirements in theproduction process andavoid procedures thatpose safety risks Enhance control mea-
sures and implementrobust management for?re and explosion preven-tion, anti-static precau-tions, and anti-poisoningmanagement
ProcurementWarehousingTransportationUse
Lianyungang Petrochemical strengthened hazardous chemical management to fullyensure chemical safety and security
Jiahong New Material made chemical risk identi?cation and assessment e?orts to reducethe risk of hazardous chemicals
6263
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build
a Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Communication with Employees
STL places great emphasis on communication and exchanges with employees, valuing their opinions and suggestions, and strivingto cultivate an environment featuring equality, harmony, and e?ective communication. We actively listen to our employees' voicesand provide platforms such as employee symposiums, the Chairperson's Mailbox, and the employee supervision and suggestionhotline to address their concerns and resolve their work and life-related issues.During the reporting period, we organized the Employee Representatives' Conference to set up sub-trade unions at the headquar-ters and all bases. These e?orts aim to further enhance our mechanisms for employee care and empowerment. We are committedto improving grid-based management of employee relations, both online and o?ine, to better understand employee needs andsentiments, and to alleviate their pressures in work and life.
To reduce the use of toxic and hazardous chemicals and minimize occupational health and safety risks, STL is implementing pro-cess modi?cations using the new green DEP
technique for four sets of acrylic acid equipment in the workshop.Upon completion of the process modi?cations, DEP will fully replace toluene, a known occupational disease hazard. DEP, the newmaterial, poses no occupational disease hazards, e?ectively reducing the types of hazards employees are exposed to and loweringpotential risks to occupational health.
DEP：Diethyl phthalate.
STL replaced toxic solvents to minimize the potential risk of hazardous chemicals
Hold regular employee representatives' conferences to listen to employeesThe organizational function of the trade union is given full play. Employee representatives' conferences are held regularly
to let employee representatives' opinions be heard and to deliberate major decisions such as adjustments to the Compa-ny's compensation, bene?ts and labor discipline system.
We continue to advance our tracking and follow-up mechanism for new hires, ensuring their swift integration through culturalinterpretation, tailored solutions for their needs in the working and living environments, and access to psychological counselingwhen needed. Moreover, we prioritize heeding the concerns of those facing di?culties, o?ering support initiatives and organizingfundraising e?orts for those who are seriously ill.
Collect employees' needs in employee interviews Executives communicate with employees to enhance their sense of integration and belonging. A regular communication mechanism between executives and employees is in place. Employees' needs at work are col-
lected at new employees' probationary interviews and monthly and annual performance interviews, where assistanceand counseling are provided.
STL adopts new technology route to produce hydrogen peroxide and propylene oxide toenhance safety and environmental attributesThe mainstream hydrogen peroxide production process in China is the acid-base alternating ?xed-bed method, which was listedin theCatalog for Elimination of Outdated Hazardous Chemical Safety Production Technology and Equipment (Second Batch)as aprohibited category by the Ministry of Emergency Management of the People's Republic of China on March 12, 2024 due to safetyissues. It is banned for new (expansion) projects and is required to be transformed within ?ve years for existing projects. Chlorohy-drin method is the traditional technology route for producing propylene oxide in China. Due to intense pollution from this technol-ogy route, it has been listed as a prohibited category ofGuidance Catalog for Industrial Structure Adjustment in the past, and noapproval will be given to new projects.At present, STL adopts the world's leading hydrogen - hydrogen peroxide - propylene oxide production process, with a total productioncapacity of
1.82
millionmetric tonnes of hydrogen peroxide and
0.4 million
metric tonnes of propylene oxide, which issafer and less polluting while fully utilizing the raw materials, and is in line with the concept of green and low-carbon development.
6465
About STL
About This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build
a Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
We deliver considerate humanistic care to our employees by regularly organizing employee activities to enrich their spare time, sothat they can feel the warmth and care at STL, and enhance their sense of happiness and belonging. Meanwhile, from enhancingthe quality of dishes and service in the canteen to conducting heartfelt care delivering activities, we are dedicated to improvingtheir happiness through tangible actions.
To cultivate a positive corporate cul-ture, STL's US subsidiary hosted severalgroup activities for employees in 2023,including the Houston Livestock Showand Rodeo and the Houston Mayor'sFamily Day. Additionally, during holi-days, we provided an array of gifts andorganized festive activities.
At STL, we deeply value the contributions made by every employee and strive to provide them with attractive bene?ts and care toenhance their work-life balance, happiness, and sense of belonging. Understanding the diverse needs of our workforce, we havedeveloped a comprehensive employee welfare system covering health, housing, commuting, medical support, and other aspectsof life.
Safety and health benefits: Employees areprovided with physical examinations for oc-cupational diseases, health checkups safetyallowances, health care allowances, andhigh temperature allowances.
Housing benefits: Employees are providedwith rental subsidies, interest-free housingloans, and free employee apartments.
Travel bene?ts: All employees enjoy paid travel.
Work-related benefits: Employees are pro-vided with free bus services, night shift andduty allowances, food subsidies , and fullattendance bonus.
Holidays and care benefits: Employees enjoythe national festival benefits, various specialbene?ts and bonus, and birthday gifts.
Family visit bene?ts: Employees enjoy fami-ly visits after working for a year.
Tuition subsidy bene?ts: After working for oneyear, employees can get various kinds of edu-cation upgrading and training subsidies.
Medical insurance benefits for all employees :
Employees enjoy contributions to the ?ve stat-utory insurances and one housing fund, andadditional commercial insurance according todi?erent occupational categories.
Employee Welfare and Activities
Creating Harmony with Love andResponsibilityWith its mission and responsibilities deeply in mind, STL has maintained a steadfast dedication to the welfare of society, working tocontribute to the well-being of the people with gratitude. Over decades, we have fervently engaged in public welfare endeavors, le-veraging our unique strengths and corporate features to actively assume social responsibility, practicing the mission of "chemicalsmake a better life" with practical actions, delivering the warmth and hope to the people in need, and conveying the "STL Tempera-ture".
STL has remained steadfast in its commitment to giving back to society, continuously exploring new paths for public welfare initia-tives. Through endeavors such as aiding the vulnerable, supporting education, and disaster relief e?orts, we have made a signi?-cant impact on society. As of December 31, 2023, we have donated over RMB40 million and organized more than 500 pub-lic welfare activities, bene?ting nearly 50,000 individuals. We have been honored with prestigious accolades such as the the "ModelEntity in Zhejiang Province" and "Medal of Dedication from the Red Cross Society of China" .
This chapter responds to the UN SDGs:
Social Welfare
STL "Yang mother public welfare line" carried out a series of public welfare activities,spreading our warmth and careSTL's Mother Yang Charity initiated var-ious charity activities in Kashgar, Xin-jiang. It donated
sets of brand-new desks, chairs, and desk lamps tolocal students, aiming to improve localteaching facilities and create a betterlearning environment.
6667
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build
a Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
-On December 21, 2023, 53 students in need from the SecondMiddle School of Shaya County, Xinjiang, received donationsfrom the Satellite Public Welfare Fund. These donations, in-cluding schoolbags, winter clothing, thermal cups and note-books, were exactly what students needed, making them feelthe care from thousands of miles away. This also contributedto national unity.
During the reporting period, the STL Group Common WealthPublic Welfare Fund, the first fund with our name in title,was o?cially launched to make donations for ?ood relief inZhuozhou City and to the Lianyungang Charity Federation. Italso implemented programs like the "Granting of Fishing" (lit-erally meaning Skills Teaching) initiative for students in needin Xinjiang and Sichuan Province and built multi-functionallibraries for key high schools.
Looking ahead, STL remains dedicated to social welfare initiatives, aiming to provide continued support and assistance to stu-dents in need, enabling them to realize their aspirations.
The earthquake in Jieshishan County, Linxia Prefecture, Gansu Province raised the concerns among people across the country.STL, as a listed enterprise located in Jiaxing City, the origin of China's revolution, immediately extended a helping hand to theearthquake-stricken area. We donated RMB
0.2 million
to the Charity Federation of Nanhu District, Jiaxing City on Decem-ber 22, 2023. Together with donations from the rest of the district, our support was delivered to Jieshishan, Gansu, to aid the areain overcoming this challenge.In the wake of the "Typhoon Doksuri", Zhuozhou City in Hebei Province faced severe ?ooding and signi?cant losses to lives andproperties. In times of trouble, solidarity emerges. The Satellite Public Welfare Fund donated RMB
0.2 million
on August 9,2023 to assist the a?ected people in rebuilding their homes and navigating through the di?culties. Together with compassionateindividuals and groups nationwide.
STL provided support for the disaster area to overcome the di?culties
Bringing HeartsTogether
At STL, we believe that our commitment to volunteer activities stems from our origi-nal aspirations and is demonstrated through tangible actions. It may not make us theSaviour, but will deliver warmth and light to others. We actively embrace our socialresponsibility, encouraging our employees to engage in charity activities and cham-pioning the spirit of compassion inherent in "Satellite People" through the exemplaryactions among our employees.
During the reporting period, Ms. Yang Yuying, Secretary of the Party Committee and Vice Chairperson of STL, led various groups in-cluding our Party Committee, Labor Union, the Youth League, and Women's Union, in over
voluntary service initiatives. Thesee?orts spanned assistance to students, the elderly, the disabled, and other marginalized groups, aiming to spread positive energyand inspire more individuals to engage in mutual help through practical deeds.These STL's groups provided advocacy volunteer services in the South Lake Scenic Area and Yuehe Street to promote the develop-ment of civilized cities. Volunteers demonstrated unwavering commitment, working tirelessly to improve environmental hygiene inthe area. While enhancing the environment, they also promoted the spirit of volunteerism and ecological progress, fostering publicenthusiasm for environmental protection and contributing to the city's image. This aligns with our commitment as a provincial civ-ilized entity to make Jiaxing a more beautiful place.
STL is dedicated to the concept of green and low-carbon development. Based on our strength in light hydrocarbon production, weadvocate for eco-friendly lifestyles by promoting the "Brisk Walking " initiative. In this activity, we used walking steps in exchangefor public welfare funds to assist families in need and contribute to the building of green homeland and the happiness of familiesin our community.
STL carried out voluntary service activities to spread positive energy
STL promoted the "Brisk Walking" thematic activity, contributing to the building of green homeland
IndicatorsThe number of people donating blood since 2012Cumulative blood donated since 2012
Unit2023person time
ml
1,304412,300
STL supports education and social welfare initiativesDuring the reporting period, the Satellite Public Welfare Fundextended support to students in financial difficulties at XiuzhouMiddle School in Jiaxing City, offering scholarships, stationery,daily necessities and other assistance, and encouragement. Ad-ditionally, we built a book bar at the school, serving as a space forreading, learning and activities such as Red Pomegranate Partybranch activities. Up to now, nearly
students at XiuzhouMiddle School (including the Xinjiang Campus) have benefitedfrom the Satellite Public Welfare Fund's initiatives, showcasing ourdedication to and determination in educational causes.
6869
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Builda Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Governance to Seek Long-Term Steady GrowthCreating Corporate Value through ComplianceCreating Sustainable Value with Responsibility
STL recognizes that robust operations are fundamental to its sustainable growth. As we advance our develop-ment and strive to generate value, we are committed to enhancing our corporate governance standards andrisk management and control capabilities, upholding ethical business conduct, and enhancing operationaltransparency. Additionally, we are integrating ESG concept into our operational governance, continually ful?ll-ing our corporate social responsibilities, and cultivating a trustworthy corporate image.
Theme:
A Blueprint for Rural Revitalization
There were
By the end of reporting period
The Common Prosperity Plant Work-shop and Common Prosperity Work-shop provided
The average monthly salary per personwas more thanRMB7,000
in 2023
STL will continue to advance its rural revitalization e?orts, leveraging community-level governance e?ectiveness to en-hance rural governance modernization. We remain dedicated to meeting the diverse needs of rural communities and inte-grating Party leadership with community-level self-governance to modernize agriculture and rural areas, thus contributingto rural revitalization.
Pinghu Base created the Village-Enterprise Party Building Alliance, leading the way towardsrural revitalizationTo further enhance the synergy of party building and accelerate the establishment of anew model of village-enterprise party building partnership, STL is committed to forginga path of rural revitalization guided by Party building featuring "accelerated corporatedevelopment, greater individuals' gains, and rural transformation." In this pursuit, thePinghu Base donated RMB 1 million to jointly implement the "Delivering Warmth To-gether" program in the Gongting and Xinghua communities in Pinghu City. This initiativeaims to expand public spaces for community activities.
Donated RMB
million
Gongting and Xinghua com-munities in Pinghu City
In pursuit of building a modern socialist nation across the board and achieving thegreat rejuvenation of the Chinese nation, we acknowledge that the most formidableand critical challenges lie in rural areas, so does the strongest foundation in this en-deavor. Therefore, STL steadfastly aligns with the rural revitalization strategy outlinedby the CPC Central Committee. We work to strengthen and enhance the leadership ofthe Party, leveraging high-quality Party building to spearhead the rural revitalizationinitiatives. Through these e?orts, we aim to contribute to the ongoing historical jour-ney towards socialist modernization and the revitalization of the Chinese nation.STL remains steadfast in advancing rural revitalization through Party building, witha focus on strengthening community-level organizational systems. The Party Com-mittee of STL has two general party branches and nine party branches, continuouslybolstering the talent pool and reinforcing the community-level Party building foun-dation. This e?ort aims to cultivate a robust, targeted, and outstanding talent poolfor rural revitalization, e?ectively leveraging the political leadership role of commu-nity-level party organizations. As of the end of the reporting period, we had a total of493 party members, with 78 individuals submitting applications for party member-ship, 93 party activists, and 23 reserve members.Embracing the initiative of "targeted assistance", STL seeks to facilitate prosperitythrough Party building, leverage skills to create wealth, and provide assistance forcommon prosperity, promoting rural revitalization e?orts across the board. ZhejiangTechnology provides 920 employment opportunities through its Common ProsperityPlant Workshop and Common Prosperity Workshop, including 174 for employees inSichuan and Gansu provinces, with over 100 surplus laborers from neighboring areas?nding employment. Similarly, the establishment of the Common Prosperity PlantWorkshop and Common Wealth Workshop has benefited various stakeholders asvillages have increased their incomes, enterprises enhanced e?ciency, and villiagesgained greater wealth. As a result, the average per capita monthly salary reachedover RMB 7,000 in 2023, thereby contributing to common wealth.
CPC members in total
employment opportunities
STL is unwavering in its commitment to enhancing its corporate governance structure and combating corruption. Through theestablishment of robust compliance management, risk management, and business ethics governance systems, we endeavor tobolster compliance awareness and risk prevention capabilities, continuously enhancing our development quality and e?ciency.
STL places a strong emphasis on the effectiveness and transparency of corporategovernance. We adhere strictly to theCompany Law of the People's Republic of Chi-na, theCode of Corporate Governance of Listed Companies, and other pertinent lawsand regulations. We continuously re?ne our governance structure, which consists ofthe General Meeting of Shareholders, the Board of Directors and its special commit-tees, the Board of Supervisors, and the senior management, to ensure stable opera-tions and robust protection of shareholders' rights and interests.Under the Board of Directors, there are four special committees: the Audit Commit-tee, the Remuneration and Appraisal Committee, the Nomination Committee, andthe Strategy Committee. Each committee's duties and workflow have been clearlydelineated to e?ectively oversee the management of the Company's a?airs, facilitateinformed decision-making, and maximize shareholders' interests. Throughout the re-porting period, the Company convened a total of eight Board of Directors meetings,with a 100% attendance rate among directors.The Company has fully considered factors such as gender, age, professional knowl-edge and industry experience of the Board members to ensure a diversi?ed compo-sition while meeting its business needs. By the end of the reporting period, the Boardof Directors comprised a total of seven members, including two executive directorsand three independent non-executive directors. Our independent directors, hailingfrom diverse professional backgrounds encompassing ?nance, law, and the chemicalindustry, boast extensive industry experience and bringing diverse experience andexpertise. Moreover, the Board of Directors has appointed two female independentnon-executive directors, underscoring our emphasis on female leadership and theongoing pursuit of Board independence and diversity.Furthermore, while steadfastly safeguarding shareholder interests and ensuring sus-tainable returns, we meticulously adhere to the provisions outlined in theMeasuresfor the Administration of Information Disclosure by Listed Companies to ensure com-prehensive disclosure. We conduct regular training sessions for our directors, super-visors, and senior management to e?ectively enhance the quality of our informationdisclosures. Throughout the reporting period, emails, phone calls, Shenzhen StockExchange's IRM platform, the WeChat o?cial account, annual performance roadshowand on-site surveys were all ways we communicate with institutional and individualinvestors. Additionally, we consistently disseminated our latest updates promptlythrough our WeChat o?cial account and have established an investor relations col-umn on our o?cial website to further enrich the channels through which investorscan access information.
Creating Corporate Value through Compliance
This chapter responds to the UN SDGs:
CorporateGovernance
The Company held
times
100%
Compliance Guarantee
Robust corporate governance based on integrity remains deeply ingrained in STL's DNA. We uphold a steadfast commitment tointegrity, continuously enhancing our risk management system and fortifying information security management. Our dedication tomaintaining high-standard corporate governance underscores our commitment to compliant development.
STL has established a risk management and internal control system with clear authority and responsibility and well-designedfunctions. The Board of Directors, the leading and decision-making body of our risk management, is responsible for coordinatingthe development of our risk management and internal control system. For functional departments, the Business Departments,Corporate Management Department, and the Audit and Supervision Department are responsible for implementing measures toguard against major risks. To ensure the e?ectiveness of the risk management and internal control system, we have established the"three lines of defense" for risk management, e?ectively preventing business risks and improving risk management capabilities.
The Company has developed comprehensive risk prevention and response strategies that encompass its entire business, bolster-ing its ability to prevent and address risks across the board. Throughout the reporting period, we devised the checklists for riskidenti?cation and recti?cation that span areas such as information security, work safety, raw material procurement, product sales,and foreign investments. This approach ensures ongoing enhancement of our risk management e?orts and reinforces the e?ec-tiveness of our risk management practices.
Risk Management
The three "lines of defense" for internal control
Audit Committee
Monitoring the prog-ress of internal controland risk management
Audit and SupervisionDepartmentMonitoring the implementa-tion of internal control systemdocuments and submittingquarterly written reports tothe Audit CommitteeThe internal control management system
Coordinating andmanaging the overallrisk controlBoard of Directors
Evaluate and identify key points
and di?culties in businessOptimize operational and
process standards and prepare
management regulation drafts
or raise system construction
needsReport to the Corporate
Management Department to
prepare and review documents
Business Departments
Prepare and review system textssubmitted by business unitsRequest business departmentsto prepare relevant system doc-uments according to meet thesystem development needsCollect data on KPIs every six
months to analyze and evaluatethe e?ectiveness of the system
Corporate ManagementDepartment
Audit business activities whose
results do not meet expecta-tionsAssess the implementation of
existing systems and their de?-cienciesAppraise the performance of
business operators and makerational suggestions for theCompany to modify the systemprocess
Audit and SupervisionDepartment
attendance rate
Meetings of the Board of Directors
7475
About STLAbout ThisReport
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
InformationSecurity Risk
All system admin-istrators must login to the systemthrough the bas-tion host and ?lesare encrypted withsoftware to ensureinformation safety
Work Safety RiskIn the productionarea, monitoringhardware and soft-ware are installed,and security thresh-olds are set in thesoftware system,with the automaticalarm mode on.Regular inspectionsare carried out bydedicated person-nel to timely screenand identify safetyhazards
Risk of Raw Material
Price Fluctuations
Collective deci-sion-making isadopted to reducethe risk of misjudg-ing market trends.Hedging futurestrading is conduct-ed for major bulkraw materials
Risk of MarketPrice FluctuationsThe marketingmanagement teamconducts weeklycollective discus-sions based on mar-ket conditions andsets weekly stan-dard sales prices forproducts
Outward In-vestment RiskA tiered deci-sion-making systemis implemented.Investments aretracked after beingmade and theresults are sentto the Company'smanagement on aregular basis
Checklist for Risk Identi?cation and Recti?cation
STL is steadfast in upholding its code of conduct characterized by principles of "integrity, transparency, fairness, and honesty." Wehave developed the Management System for Anti-Corruption and Anti-Commercial Bribery, and theManagement Measures forReports and Complaints, underscoring our unwavering stance of "zero-tolerance" towards corruption. The Audit Committee at theBoard level, serving as the highest authority on matters related to business ethics, conducts regular supervision and reviews, andleads our business ethics audits every three years. Currently, our business ethics audits cover all operational locations.We have established the Working Group of the Corruption Punishment and Prevention System (CPPS Group), which is in charge ofthe Company's anti-corruption and integrity promotion e?orts. This group assesses the management practices and strengthenssupervision. We conduct anti-corruption audits annually across major business segments such as procurement, sales, logistics,warehousing, quality inspection, and engineering construction. In the reporting period, we conducted 26 anti-corruption auditprojects, covering construction project audits, sales, accounts receivable, logistics, and procurement, and we had no instances ofanti-corruption-related litigation.All of our suppliers must sign theNotice on Integrity Responsibility, with relevant clauses integrated into contracts mandating strictcompliance with anti-corruption standards. Additionally, an annual integrity survey questionnaire was administered to all suppli-ers, with 30% signing theNotice on Integrity Responsibility during the reporting period.To raise awareness of anti-corruption and foster a culture of integrity, the Company organizes various forms of business ethics trainingand publicity activities for members of the Board of Directors and all employees (including outsourced employees, part-time employ-ees, and interns) to ensure that all members reach a common understanding of the Company's business ethics standards.
Business Ethics
STL conducted integrity training sessions forits engineering managers, wherein partici-pants viewed short ?lms on integrity educa-tion and promotion. The sessions delved intothe Company's integrity culture and speci?cpolicies, featuring discussions on past cor-ruption cases to underscore the impact onindividuals, families, and the organization.The training was aimed at highlighting impor-tance of adhering to integrity standards.
STL organizes integrity training to build a strong ideological defense among employees
In September 2023, nearly 200 marketing person-nel participated in integrity training organizedby STL. The training focused on managementrequirements concerning conflict of interest,transfer of bene?ts, commercial bribery, job mis-appropriation, unfair competition, con?dentialityof information, and professional ethics, as well asthe Company's real-life cases. This training wasaimed to continuously standardize the profes-sional ethics of marketing personnel, and activelycreate a fair competition, corruption-free andself-disciplined practice environment.
STL strictly enforces penalties for any behavior that violates the code of business ethics. We have developed and rigorous-ly adhere to theManagement Measures for Reports and Complaints to standardize the channels and procedures for whis-tleblowing, ensuring that complaints and whistleblowing incidents are addressed promptly and e?ectively. We activelyencourage employees, suppliers, users, and other stakeholders to report any improper behavior that breaches businessethics. To facilitate this, we have established open and diversi?ed anti-corruption reporting channels, including email,mailbox, and telephone. Upon receiving a report, we promptly formulate an investigation plan, conduct thorough investi-gations, and, upon con?rming the facts of the violation, take serious action.
STL has provided integrity system re-quirements training for all new hires,and introduced on-line STL businessschool platform to ensure that employ-ees to commit to integrity.
STL provided integrity training for marketing sta? to raise their awareness
STL conducts onboarding training for new hires to help consciously abide by professional ethics
Audit projects related to anti-corruption
Anti-corruption related litigation theCompany involved in
Proportion of suppliers who signed theNoticeon Integrity Responsibility100%
7677
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
To safeguard the fundamental rights and interests of whistle-blowers, the Company adheres to the relevant provisions of theManagement Measures for Reports and Complaint within the framework permitted by laws and regulations. We ensure strict con-?dentiality of the whistle-blowers personal information and the content of the report, prohibiting any form of retaliation againstwhistleblowers. During the reporting period, STL had no corruption litigation.
0573-82058220Reporting Telephone NumberReporting E-mailCompliance@weixing.com.cnReporting mails should be sent to the CPPS Group; the address is
No. 196 Fuqiang Road, Nanhu District, Jiaxing, Zhejiang Province,China.In the headquarter building and the o?ce buildings of subsidiaries,
production bases, and business units, there are reporting mailboxes,which is managed by the CPPS Group.The Company's internal network work platform has a Chairperson's
Mailbox and a supervision and reporting mailbox.Reporting Mailbox
The Company mustreply to a reportwithin 48 hours afterreceiving it
After receiving a report, theAudit and Inspection Depart-ment shall conduct an in-depth investigation of theincident after a preliminaryassessment. External audi-tors or other institutions andfunctional departments maybe engaged to assist in theinvestigation as necessary
In the course of the investi-gation, the investigator hasthe right to review relevantinformation of the entity ordepartment under inves-tigation on the site and torequest the departmentsand people involved inthe investigation to makeexplanations and clari?ca-tions on matters coveredby the investigation
After the investiga-tion is concluded, theAudit and SupervisionDepartment compilesa written report andtreatment opinionsand submit them to theChairperson, the headof the CPPS Group, andrelevant managers
After the investigationreport is approved bythe Chairperson, theCorporate ManagementDepartment will draftthe punishment opin-ionaccording to theinvestigation report andapplicable systems ofthe Company, and pub-licize it in the Compa-ny's work platform afterapproval
The report
handling
mechanism
STL's reporting channels
Furthermore, we have established a monitoring and accountability system to address behaviors that neglect duties or result ineconomic losses to the Company. We adhere to a hierarchical accountability mechanism, with the President's O?ce overseeingthe entire process to enforce accountability to implement it authority to hold management departments accountable. Upholdingthe principles of fairness, justice, equality, and openness, we ensure that every employee has the right to supervise and report tosuperior leadership, corporate leadership, the Disciplinary Committee, and the Audit and Supervision department.STL strictly complies with theCybersecurity Law of the People's Republic of Chinaand other laws and regulations, formulates inter-nal documents such as theManagement Measures for Cyber and System Security, theManagement Measures for Media and DataSecurity, and theManagement Measures for Security Incident and Emergency Response. During the reporting period, we releasedthe Information Security Management System, theInformation System Emergency Response Plan, and theManagement Measuresfor Portable Computers and Removable Media, to strengthen the management of internal commercial information and data secu-rity and avoid the occurrence of information security incidents.Regarding information security management, we have continuously enhanced our network security system and introduced a rangeof technical and human defense mechanisms to bolster information security operations. In the reporting period, STL successfullycompleted the ?ling of classi?ed protection of information system security.
Information Security
The reporting website and hotline do not mandate whistleblowers to provide identity-related information; During the investigation of reported incidents, all exchanges and communications between the Company and the whis-
tleblower are conducted privately. The whistleblower's personal information and the information reported are strictly con-?dential. Without necessary reasons related to the investigation, the investigator is prohibited from divulging the report toany other unrelated personnel; After completing the investigation, the Company checks whether the whistleblower has been subjected to any form of retalia-
tion. If it is veri?ed that the whistleblower faced retaliation, the Company will take legal action against the individuals involved.
Retaliation prevention and corrective measures:
The certi?cate of STL's classi?ed protectionof information system security
To continuously enhance the information security awareness among our staff,we conduct simulated cyber attack and defense drills in collaboration with pro-fessional third-party companies. These drills simulate real-world scenarios fromthe perspective of potential attackers, helping us fortify our defenses and preventdata breaches. Additionally, we organize various information security training ses-sions covering topics such as behavior management on the internet, cloud desk-top, data encryption, document watermarking, and personal information securityprecautions. These training sessions are provided to all employees, as well as ourcontractors and part-time staff, ensuring that the entire workforce is equippedwith enhanced information security awareness and fostering a security-consciousculture where every individual takes responsibility for information security.
Servers and backend management can only be logged in to via thebastion host, and the login log is regularly reviewedEvery important password is divided and kept by two people. Thetwo people must enter the password simultaneously to enter thesystem backend Sign con?dentiality agreements with external third parties, encrypt-
ing and recording information through VPNs and bastion machines
Introduce online situational awareness
and firewalls, and complete annual rou-tine cyber attack and defense drills toenhance the awareness of informationsecurity prevention among all employees Minimize all employees' access to the sys-
tem
Human InitiativesTechnical Initiatives
In addition, STL has strengthened data convergence and integration by developing and introducing a series of digitalized produc-tion, operation and management systems, continuously improving the management capabilities and work e?ciency, and activelyexploring new modes of data governance. During the reporting period, with excellent digital transformation results and integrationof digitalization and intelligence, STL was awarded the honors of Chief Data O?cer Pilot Enterprise in Zhejiang Province, DCMMData Management Capability Maturity Pilot Enterprise, and Digitalization Leader Enterprise; Hubei Satellite was awarded the hon-ors of National-level Excellent Scenario of Intelligent Manufacturing, and the honor of Grade A of the Standardization Certi?cationof Integration of Two-Chemicals Management System; Lianyungang Petrochemicals was awarded the honor of Grade AA of theNational Integration of Digitalization and Intelligence Management System; Lianyungang Petrochemical was awarded AA level ofthe National Digitalization and Intelligence Integration Management System Certi?cation, marking that the company's data gover-nance work was recognized by authoritative institutions.7879
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Creating Sustainable Value with Responsibility
STL is deeply committed to integrating the concept of sustainable development into its daily management and business opera-tions. We consistently advance the development of our ESG management system, leveraging our in?uence to foster the healthy de-velopment of both the industry and society. We place signi?cant emphasis on communication and engagement with stakeholders,conducting materiality analysis and responding to stakeholder demands in alignment with our business growth and stakeholderpriorities.
To ensure the e?ective formulation and implementation of its sustainable development strategy, STL has established a compre-hensive top-down ESG governance structure, led by the Board of Directors. This structure comprises the Board of Directors, theStrategy and ESG Committee, and the ESG Working Group. The Board of Directors, serving as the highest decision-making bodyin ESG governance matters, is responsible for comprehensively reviewing and supervising the Company's ESG-related matters. Itauthorizes the Strategy and ESG Committee to guide and supervise ESG governance, identify and assess signi?cant ESG risks andopportunities, identify and approve major investments and expense budgets for ESG matters, and participate in recommendingESG strategies to ensure the balance and e?ectiveness of the Company's ESG decision-making.The ESG Working Group, comprisedof various departments across the headquarters, subsidiaries, production bases, and business units, acts as an executive body tocomprehensively follow up and implement the ESG work of the company.
Deciding on and examining the
Company's sustainable develop-ment strategies and goalsMonitoring and reviewing the
progress of ESG related policiesand objectives Approving ESG reports and rele-
vant information disclosureDeliberating and con?rming the
risks and signi?cance of ESG-re-
lated risks of the Company
Involved in advising on the
Company's ESG strategy Identifying and assessing sub-
stantial ESG risks and opportu-
nitiesApproving budgets for major
investments and expenses in
ESG matters. Developing ESG target evalua-
tion systemReviewing and advising on the
Company's ESG reports
Coordinating and pro-
gressing ESG work acrossthe CompanyManaging ESG risks in
day-to-day operations Preparing ESG reports Completing other ESG-re-
lated matters
ESG Governance Structure
This chapter responds to the UN SDGs:
STL's ESG governance structure
Board of Directors
Autho-rizing
Report-
ing toReport-ing to
Superv-
ising
Strategy and ESG CommitteeESG Working Group
Coordinating, overseeing, anddeciding on ESG matters:
Managing, supervising, andprogressing ESG matters:
Coordinating and imple-menting ESG matters:
To ensure the effectiveness of its ESG governance, STL has integrated ESG indicators into the performance appraisal of seniormanagement. These indicators encompass various aspects such as work safety (including safety penalties and the number ofsafety accidents), energy conservation environmental protection (covering greenhouse gas emissions, pollutant emissions, energye?ciency management, and environmental penalties), and labor rights and interests. We set the weighting for each key indicator,then determine the appropriate grade based on the performance appraisal score, and ultimately calculate the appropriate per-formance-based remuneration based on the score and grade. The results of the ESG performance appraisal directly impact theremuneration of senior management directly responsible for ESG work. For those failing to complete the assessment objectives,the Company will deduct points in the corresponding assessment items, up to a maximum of 35% of the performance appraisalpoints; in addition, if there is any occurrence of "zero-tolerance accidents" "one-vote veto" system will be implemented, therebyfostering a comprehensive awareness of ESG management from top to bottom within the organization.
The Company consistently prioritizes and heeds the demands of its internal andexternal stakeholders. We continually enhance our regularized and multi-channelcommunication mechanism, promptly and efficiently addressing stakeholders' ex-pectations and opinions. By striving to meet the diverse needs of stakeholders, weendeavor to achieve mutually bene?cial outcomes for all parties involved.Communicationwith Stakeholders
StakeholdersKey TopicsCommunication
Shareholders and investors
Corporate governanceRisk managementBusiness ethicsCircular economy
General Meeting of Shareholders?Company announcements?Investor surveys?Earnings communication conferences
?Hotline?E-mailCustomers
Product safety and qualityInnovation and R&DCustomer relationship managementPrivacy and information securityDigital transformation
?Hotline?Email?WeChat o?cial account?Company's o?cial website?Visits to customers?Satisfaction surveys?Customers' complaintsGovernments and regulators
Corporate governanceBoosting industry developmentEnergy managementClean technology developmentResponding to climate change
?Information disclosure?Press releases?Company's o?cial website?Regular communication
Employees
Employee rights and bene?tsEmployee training and developmentOccupational health and safety
?Employees' Conference?Chairperson's Mailbox?Employees' events?Talks with employees?Employee engagement surveys?Employees' seminars?Hotline for employees' supervision and suggestions
?Bulletin boards?Employees' Suggestion BoxSuppliers
Business ethicsSupply chain managementBoosting industry developmentProtection of intellectual property rights
?Suppliers' conferences?Company's o?cial website
?Hotline
?WeChat o?cial account?Regular visits?Integrity reportsThe public
Public welfareResponding to climate changeEnergy management
?Public welfare campaigns?News coverage?Open days8081
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Meanwhile, the Company understands that feedback and suggestions from diverse stakeholders can have a signi?cant impact onits development. During the reporting period, we systematically sorted out and adjusted the materiality topics and then mappedout the materiality matrix for 2023. The steps of materiality assessment are as follows:
Process of the material topic analysis
Identifying potential topicsThrough peer benchmarking analyses, external policy research, and industry trend surveys, and based on our ownbusiness development strategy and corporate characteristics, we identify potentially material topics that re?ectthe impact of our business on the internal and external environment.
Assessing priority topics Taking into account of factors such as peer practices, stakeholders' concerns, and the Company's business devel-
opment direction, we comprehensively analyze the key areas of the Company's ESG undertakings, assess prioritytopics, and draw up a materiality matrix.
Reporting material topicsWe verify and con?rm the materiality matrix based on the Company's strategic plan and submit it to the Board of
Directors for review and approval. In addition, we disclose the Company's performance on the topics in our re-ports.
Importance to STL's operations
STL's materiality matrix
Important
Extremely Important
相关
Safety manage-ment of chemi-calsResponding toclimate change
Corporate gov-ernance
Customer relation-ship managementBusiness ethics
Employee trainingand development
Waste manage-ment
Innovation and R&D
Water managementClean energydevelopmentEnergy management
Sustainableoperations
Product safetyand qualityDigital transformation
Promoting the
industryProtection ofintellectualproperty rights
Privacy and information
security
Risk management
Circular economy
Occupationalhealth and safety
Public welfare
Supply chainmanagement
Employees rightsand interests
Environmental topicsSocial topicsGovernance topics
Important
ExtremelyImportant
Relevant
Importance to stakeholders
8283
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build aHarmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Hornors in 2023OutlookWhen we look back at our development journey, it is evident that each step we made has been marked by resilience and deter-mination. At a new starting point in 2023, STL will work to achieve qualitative changes, just as a Chinese proverb goes, "In a boatrace, those who row the hardest will win." In 2024, we will continue to pioneer a green, low-carbon, and technology-driven de-velopment model for China's manufacturing sector, aligning with the nation's ambitious "dual carbon" goal of peaking carbonemissions by 2030 and realizing carbon neutrality by 2060. We are committed to fostering our own sustainable growth and alsoactively contributing to global climate and environmental initiatives. We will continue to make innovations and changes, andstrive to become a leader in the industry, contributing more wisdom and strength to global sustainable development.
Appendix
Awards and HonorsLevelAwarded by
General
China's Top 500 EnterprisesListChina Enterprise Confederation, etc.China's Top 500 Petroleum and Chemical EnterprisesListChina Petroleum and Chemical Industry Federation
China's Top 500 List CompaniesListFortune MagazineChina's Top 500 Private EnterprisesListAll-China Federation of Industry and CommerceTop 500 New Economy Enterprises in ChinaListChina Enterprise Evaluation AssociationScienti?c and Technological InnovationPilot Demonstration 5G Factory of Industrial InternetNational
Ministry of Industry and Information Technology of
ChinaZhejiang Province Science and Technology Little Giant
Enterprise
Provincial
Department of Science and Technology of Zhejiang
Province"Leading Goose" R&D Program of Zhejiang ProvinceProvincial
Department of Science and Technology of Zhejiang
ProvinceEnterprise Technology Center of Jiangsu ProvinceProvincial
Jiangsu Provincial Department of Industry and Informa-
tion Technology, etc.First Prize of Jiangsu Province Enterprise Management
Modernization Innovation Achievement
Provincial
Jiangsu Province Enterprise Management Moderniza-
tion Innovation Achievement Nan Ding CommitteeThe second batch of Cloud-based Enterprises in Zheji-
ang Province
ProvincialZhejiang Province Economy Information DepartmentESGThe Second Batch of Pollution and Carbon ReductionSynergy Benchmarks in Zhejiang Province
List
Zhejiang Provincial Joint Conference O?ce for Re-sponding to Climate Change and Energy Conservation
and Emission Reduction WorkGolden Bee CSR·China Honor RollList
GoldenBee Think Tank and Sustainable Development
Economy MagazineImpact·Leadership EnterpriseListBritish Chamber of Commerce ShanghaiESG China Green Supply Chain Outstanding FinalistListCSR China Education List Organizing Committee
Best Responsible Corporate BrandListWall Street JournalEnvironmental Protection Innovation Cases of "0 Car-bon Future·ESG Innovation Experiment List"
ListGeneral O?ce of All-China Federation of Trade UnionsAll-China Federation of Trade Unions (ACFTU) LeadingComrades' Community-level Contact Points
National
Publicity Department of Zhejiang Provincial Committee
of the CPC, etc.The First Batch of "Enterprise Culture Centers" in Zhe-
jiang Province
Provincial
Social Construction Committee of Zhejiang Provincial
Party CommitteeList of Common Wealth Practice Observation PointsProvincial
Zhejiang Provincial Joint Conference O?ce for Re-sponding to Climate Change and Energy Conservation
and Emission Reduction Work8485
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
8485
Index of Reporting GuidelinesIndex of TCFD Recommendations
Relevant SDGsCorresponding ChapterRelevant SDGsCorresponding Chapter
Creating Harmony withLove and ResponsibilityCreating Corporate Valuethrough Compliance
Creating Value in the Industry Through Coop-erationCreating Talent Value by EmpowermentCreating Harmony with Love and Responsi-bilityCreating Harmony withLove and Responsibility
Creating Product Value withCraftsmanshipCreating Service Value with SincerityCreating Talent Value byEmpowermentCreating Harmony withLove and Responsibility
Creating Product Value with CraftsmanshipCreating Service Value with SincerityCreating Environmental Value with Low-car-bon E?ortsCreating Ecological Value throughConservation E?ortsCreating Talent Value byEmpowermentCreating Harmony withLove and Responsibility
Creating Environmental Value with Low-car-bon E?ortsCreating Talent Value byEmpowerment
Creating Ecological Value throughConservation E?ortsCreating Ecological Valuethrough ConservationE?orts
Creating Ecological Value through Conservation E?ortsCreating Environmental Val-ue with Low-carbon E?orts
Creating Corporate Value throughComplianceCreating Sustainable Value withResponsibilityCreating Talent Value byEmpowerment
Creating Service Value with SincerityCreating Value in the Industry Through Coop-erationCreating Harmony with Love and Responsi-bilityCreating Product Valuewith CraftsmanshipCreating Value in theIndustry Through Cooper-ation
Index of UN SDGs
TCFD Core ElementsDisclosure RecommendationChapter
Governance
a) Describe the Board's oversight of climate-re-lated risks and opportunities
Creating Environmental Value with Low-carbon E?orts:
Addressing Climate Changeb) Describe management's role in assessing andmanaging climate-related risks and opportuni-ties
Creating Environmental Value with Low-carbon E?orts:
Addressing Climate Change
Strategy
a) Describe the climate-related risks and oppor-tunities the organization has identi?ed over theshort, medium, and long term
Creating Environmental Value with Low-carbon E?orts:
Addressing Climate Changeb) Describe the impact of the climate-relatedrisks and opportunities on the organization'sbusinesses, strategy, and ?nancial planning
Creating Environmental Value with Low-carbon E?orts:
Addressing Climate Changec) Describe the resilience of the organization'sstrategy, taking into consideration di?erent cli-mate-related scenarios, including a 2?℃ or lowerscenario
Creating Environmental Value with Low-carbon E?orts:
Addressing Climate Change
Risk Management
a) Describe the organization's processes foridentifying and assessing climate-related risks
Creating Environmental Value with Low-carbon E?orts:
Addressing Climate Changeb) Describe the organization's processes formanaging climate-related risks
Creating Environmental Value with Low-carbon E?orts:
Addressing Climate Changec) Describe how processes for identifying,assessing, and managing climate-related risksare integrated into the organization's overall riskmanagement
Creating Environmental Value with Low-carbon E?orts:
Addressing Climate Change
Creating Corporate Value through Compliance: Com-
pliance Guarantee
Metrics and targets
a) Disclose the metrics used by the organizationto assess climate-related risks and opportunitiesin line with its strategy and risk managementprocess
Creating Environmental Value with Low-carbon E?orts:
Low-carbon Value Chain
Creating Environmental Value with Low-carbon E?orts:
Addressing Climate Changeb) Disclose Scope 1, Scope 2, and, if appropriate,Scope 3 GHG emissions, and the related risks
Creating Environmental Value with Low-carbon E?orts:
Addressing Climate Change
Creating Environmental Value with Low-carbon E?orts:
Low-carbon Operationsc) Describe the targets used by the organizationto manage climate-related risks and opportuni-ties and performance against targets
Creating Environmental Value with Low-carbon E?orts
Creating Environmental Value with Low-carbon E?orts:
Low-carbon Operations
Creating Environmental Value with Low-carbon E?orts:
Low-carbon Value Chain
Creating Environmental Value with Low-carbon E?orts:
Addressing Climate Change8687
About STLAbout ThisReport
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build aHarmonious Society
Governance to Seek Long-
Term Steady GrowthAppendix
Index of GRI Indicators
Disclosure issue/itemTitle of Disclosure ItemChapter Index
General standardsGRI 1: Foudation 2021GRI 2: General Disclosures 2021The organization and its reporting practices2-1Organizational detailsAbout STL2-2
Entities included in the organization'ssustainability reporting
Message from Our Chairman2-3
Reporting period, frequency and contactpoint
Message from Our Chairman2-5External assuranceNAActivities and workers2-6
Activities, value chain and other businessrelationships
Communication with Stakeholders2-7Employees
People-Centricity to Build a Harmoni-
ous SocietyGovernance2-9Governance structure and compositionCorporate Governance2-12
Role of the highest governance body inoverseeing the management of impacts
Corporate Governance2-13
Delegation of responsibility for managingimpacts
Corporate Governance2-14
Role of the highest governance body insustainability reporting
ESG Governance Structure2-15Con?icts of interestCommunication with Stakeholders2-16Communication of critical concernsCommunication with Stakeholders2-17
Collective knowledge of the highest gover-nance body
ESG Governance StructureStrategy, policies and practices2-22
Statement on sustainable developmentstrategy
ESG Governance StructureStakeholder engagement2-29Approach to stakeholder engagementCommunication with StakeholdersGRI3: General Disclosures 20213-1Process to determine material topicsCommunication with Stakeholders
Disclosure issue/itemTitle of Disclosure ItemChapter Index
3-2List of material topicsCommunication with Stakeholders3-3Management of material topicsCommunication with StakeholdersGRI 201: Economic Performance 2016201-1
Direct economic value generated anddistributed
Corporate Pro?leGRI 205: Anti-corruption 2016205-1
Operations assessed for risks related tocorruption
Corporate Governance205-2
Communication and training about an-ti-corruption policies and procedures
Corporate Governance205-3
Con?rmed incidents of corruption andactions taken
Corporate GovernanceEnvironmentalGRI 302: Energy 2016302-1
Energy consumption within the organiza-tion
Low-carbon Operations302-3Energy intensityLow-carbon Operations302-4Reduction of energy consumptionLow-carbon OperationsGRI 303: Water and E?uents 2018303-1
Interactions with water as a shared re-source
Ecological Co-building303-2
Management of water discharge-relatedimpacts
Ecological Co-building303-3Water withdrawalEcological Co-building303-4Water dischargeEcological Co-building303-5Water consumptionEcological Co-buildingGRI 305: Emissions 2016305-1Direct (Scope 1) GHG emissionsLow-carbon Operations305-2Energy indirect (Scope 2) GHG emissionsLow-carbon Operations305-4Other indirect (Scope 3) GHG emissionsLow-carbon Operations305-5Reduction of GHG emissionsLow-carbon Operations
8889
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-
Term Steady GrowthAppendix
Disclosure issue/itemTitle of Disclosure ItemChapter Index305-7
Nitrogen oxides (NOx), sulfur oxides (SOx),and other signi?cant air emissions
Environmental ManagementGRI 306: Waste 2020306-1
Waste generation and signi?cant waste-re-lated impacts
Environmental Management306-2
Management of signi?cant waste-relatedimpacts
Environmental Management306-3Waste diverted from disposalEnvironmental Management306-5Waste directed to disposalEnvironmental Management
Social
GRI 401: Employment 2016401-1
New employee hires and employee turn-over
Talent Attraction401-2
Bene?ts provided to full-time employeesthat are not provided to temporary orpart-time employees
Talent GuaranteeGRI 403: Occupational Health and Safety 2018403-1
Occupational health and safety manage-ment system
Talent Guarantee403-2
Hazard identi?cation, risk assessment,and incident investigation
Talent Guarantee403-3Occupational health servicesTalent Guarantee403-5
Worker training on occupational healthand safety
Talent Guarantee403-6Promotion of worker healthTalent Guarantee403-7
Prevention and mitigation of occupationalhealth and safety impacts directly linkedby business relationships
Talent Guarantee403-8
Workers covered by an occupationalhealth and safety
Talent Guarantee403-9Work-related injuriesTalent Guarantee403-10Work-related ill healthTalent GuaranteeGRI 404: Training and Education 2016404-1
Average hours of training per year peremployee
Talent Development404-2
Programs for upgrading employee skillsand transition assistance programs
Talent Development
Disclosure issue/itemTitle of Disclosure ItemChapter IndexGRI 405: Diversity and Equal Opportunity405-1
Diversity of governance bodies and em-ployees
Talent AttractionGRI 406: Non-discrimination 2016406-1
Incidents of discrimination and correctiveactions taken
Talent AttractionGRI 408: Child Labor 2016408-1
Operations and suppliers at signi?cantrisk for incidents of child labor
Talent AttractionGRI 409: Forced or Compulsory Labor 2016409-1
Operations and suppliers at signi?cantrisk for incidents of forced or compulsorylabor
Talent AttractionGRI 414: Supplier Social Assessment 2016414-1
New suppliers that were screened usingsocial criteria
Responsible ProcurementGRI 418: Customer Privacy 2016418-1
Substantiated complaints concerningbreaches of customer privacy and lossesof customer data
Compliance Guarantee
9091
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix
Social Performance
ESG Performance Indicators
Governance Performance
Disclosure IndicatorUnit2023
Operating incomeRMB billion41.487Year-on-year growth in operating income%12.00
Total pro?tRMB billion5.368Net pro?t attributable to listed company shareholdersRMB billion4.789
Total assetsRMB billion64.582Net assets attributable to the parent companyRMB billion25.465
Number of R&D personnelperson1271Percentage of R&D personnel%25.05
R&D investmentRMB billion1.626Year-on-year growth of R&D investment%31.05Percentage of R&D investment to operating income%3.92
General Meeting of Shareholderstime5Meetings of the Board of Directorstime8Meetings of the Board of Supervisorstime7
Special auditssection26
Disclosure IndicatorUnit2023Coverage of employee training%100Total attendance to employee trainingperson time198,518Total hours of employee traininghour456,659Percentage of occupational physical examinations%100
Patents ?ledsection75Patents grantedsection97Customer satisfaction%100The number of people donating blood since 2012person time1,304Cumulative amount of blood donated since 2012ml412,300
Environmental Performance
Disclosure IndicatorUnit2023
Total investment in environmental treatmentRMB million1,704.65Time spent in environmental treatmenthour74,400Attendance to environmental trainingperson time45,548
Total solid wastemillion tonnes0.14Emissions of nitrogen oxides (NOx) metric tonne/10,000 metric tonne products0.55Emissions of sulfur dioxide (SO
) metric tonne/10,000 metric tonne products0.11Emissions of volatile organic compounds (VOCs) metric tonne /10,000 metric tonne products0.26Emissions of particulate matter (PM) metric tonne /10,000 metric tonne products0.05Chemical oxygen demand (COD) emissions metric tonne/10,000 metric tonne products2.08
Ammonia nitrogen emissions metric tonne/10,000 metric tonne products0.02Total organic carbon (TOC) emissionsmetric tonne/10,000 metric tonne products0.10Total greenhouse gas (CO
) emissionstCO
e5,417,875Greenhouse gas (CO
) emission intensitytCO
e /tonne of products0.58Natural Gasmillion m
Purchased electricitymillion kWh313,700Total Water Consumptionmillion tonne33.12Water saved through reuse of reclaimed watermillion tonne7.91Wastewater discharge reducedmillion tonne0.41Cumulative number of participants in emergency drillsperson17,412
Environmental monitoringtime116
9293
About STLAbout This
Report
Quality to Fosteran Excellent Brand
Ecological Co-Building ForLow-Carbon Development
2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
People-Centricity to Build a
Harmonious Society
Governance to Seek Long-Term Steady GrowthAppendix