Address: 31F, Block B, Victo Plaza, No. 52 Xingang Road, Renmin Road Subdistrict,Zhongshan District, Dalian, Liaoning Province, ChinaTel: +86 411 3986 5111Hengli Petrochemical Co., Ltd.
Website: https://www.hengli.com/invest/hlsh
Sustainability Repo
2024
Annual
Hengli Petrochemical Co., Ltd.
Table of Contents
About the RepoMessage from the ChairmanAbout Hengli Petrochemical2024 at a GlanceSustainability Management
Steady Operations &Sound Governance
Corporate Governance StructureCompliance Risk ManagementAdhering to Business EthicsCommunication withStakeholders
People Orientation &Social ContributionHuman Resource ManagementEmployee Training and DevelopmentRural RevitalizationSocial Value Contribution
Annex
Annex I: Index of GRI StandardsAnnex II: Sustainability Repoing IndexAnnex III: Summa of Key PeormanceIndicatorsFeedback
Insightful Innovation &Digital IntelligenceSafeguard
Optimizing R&D SystemsEmpowering Innovative AchievementsAdvancing Digital and IntelligentDevelopmentIntellectual Propey Protection
Energy Conseation &Sustainable GreenDevelopmentClimate Change ResponseEnvironmental Compliance ManagementPollutant Emissions ControlWater Resource ManagementClean Technological OppounitiesEcosystem and Biodiversity Protection
Safe Operations &Sustainable Growth
Product Quality and SafetyCustomer Seice ManagementSustainable Supply ChainsWork Safety ManagementChemical SafetyData Security and Protection
Table of Contents
Hengli Petrochemical, the Company, we, or usHengli GroupHengli Chemical FiberKanghui New MaterialHengke Advanced MaterialsHengli Petrochemical ChemicalHengli Petrochemical ReningHengli Petrochemical (Dalian)Deli Chemical FiberSusheng ermal PowerJiangsu XuandaHengli Petrochemical (Huizhou)Hengli Petrochemical (Dalian) New Material
is repo is published in electronic format. You may access and download the digitalversion from the Sustainable Development section of the Company’s ocial website(https://www.hengli.com/invest/hlsh?index=4) or the Shanghai Stock Exchangewebsite (www.sse.com.cn).
Data Description
Data sources used in this repo include public data from government agencies, theactual operational data, annual nancial data, as well as internal statistical repos ofthe Company. e nancial data in this repo is expressed in RMB. For any discrepan-cy between this repo and the nancial statements, the nancial statements shallprevail. is repo is prepared in both Chinese and English. In case of any discrepan-cy, the Chinese version should prevail.
Abbreviations
Conrmation and Approval
e Board pledges to exercise oversight over the contents of this repo, ensuring itsabsence of any false records or misleading representations, and assuming responsi-bility for its truthfulness, accuracy and completeness.Access to the Repo
About the Repo
Repo Preparation Statements
is repo is the Sustainability Repo issued by Hengli Petrochemical Co., Ltd. to thepublic. Prepared in accordance with the principles of objectivity, standardization,transparency, and comprehensiveness, it provides a detailed disclosure of theCompany’s environmental, social, and governance (ESG) practices and peormancein 2024. rough this repo, Hengli Petrochemical aims to fuher strengthenengagement with all sectors of society, enhance public and investor understandingand suppo, and advance the Company’s sustainability initiatives.Scope of Repo
is repo focuses on “Hengli Petrochemical Co., Ltd.” and includes its branches andsubsidiaries. Unless otherwise specied, the scope of this repo aligns with the scopeof the Company’s annual repo.Period of Time
is repo covers the period from Janua 1, 2024 to December 31, 2024 (the“Repoing Period”). To improve comparability and forward-looking insights, ceainsections include appropriate historical data or forward-looking statements. isrepo is released on an annual basis, consistent with the nancial year.Basis of Preparation
AbbreviationsReference
In this repo, for the convenience of presentation and readability, the following termshave the meanings set foh below (unless the context otherwise requires):
hengli.com 01 I 02
Hengli Petrochemical Co., Ltd.Hengli Petrochemical Co., Ltd.Jiangsu Hengli Chemical Fiber Co., Ltd.Kanghui New Material Technology Co., Ltd.Jiangsu Hengke Advanced Materials Co., Ltd.Hengli Petrochemical (Dalian) Chemical Co., Ltd.Hengli Petrochemical (Dalian) Rening Co., Ltd.Hengli Petrochemical (Dalian) Co., Ltd.Jiangsu Deli Chemical Fiber Co., Ltd.Suzhou Susheng ermal Power Co., Ltd.Jiangsu Xuanda Polymer Materials Co., Ltd.Hengli Petrochemical (Huizhou) Co., Ltd.Hengli Petrochemical (Dalian) New MaterialTechnology Co., Ltd.Shanghai Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 14 -Sustainable Development Report (for Trial Implementation)Shanghai Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 4 -Preparation of Sustainable Development ReportsCorporate Sustainable Development Disclosure Standards—Basic Standards (forTrial Implementation)Guide to Corporate Social Responsibility Reporting in China (CASS-ESG 6.0
Sustainable Development Reporting Standards (GRI Standards) of the Global Sustain-able Development Standards BoardSustainable Development Goals (SDGs) of the United Nations
Guidelines for Climate-related Financial Disclosures issued by Task Force onClimate-related Financial Disclosures (TCFD)
published by the Chinese Academy of Social Sciences
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Message fromthe Chairman
e year 2024 marks the 75th anniversa of the People’s Republicof China and the 30th founding year of Hengli. Hengli Petrochemi-cal has fully implemented the new development philosophy,steadfastly advanced industrial synergy to new heights, accelerat-ed progress on the “green track”, and taken multiple measures tosteadily pursue the “carbon peaking and carbon neutrality” goals,injecting strong momentum into the stable operation of nationalindust and economy. ese achievements would not have beenpossible without the suppo of eve colleague who cares aboutand contributes to the Company’s development. On behalf ofHengli Petrochemical, I extend our sincerest gratitude to all!Adhering to Compliance as the Bottom Line and Deepening ESGDevelopment. e Company continuously improves its gover-nance mechanisms and internal control systems, strengtheningthe foundation of standardized governance. We enhancestandardized operations and investor relations management toeectively communicate company value and increase marketrecognition. Committed to shareholder returns, we reinforce valuemanagement and maintain stable dividend distributions. Bystrictly adhering to business ethics, strengthening risk control andaudit supeision, we strive to create a clean, ecient, and compli-ant operational environment, providing robust suppo forhigh-quality development.Innovation as the Engine to Inject Vitality into Development. “Weeither don’t do it, or we do it the best.” In 2024, the Companyachieved breakthroughs in multiple technologies and productsacross the entire industrial chain, addressing indust bottlenecksand lling market gaps. As of December 31, 2024, HengliPetrochemical has obtained a total of 1,676 patent authorizations.Hengli Petrochemical Chemical’s high-density polyethylene pipematerial 23050 obtained PE100 grade ceication, marking itsdomestic leading level. Hengli Chemical Fiber achieved massproduction of ultra-ne ber 27D/144f, with a single lamentweight of only 0.18 g per 9,000 m. Hengke Advanced Materials’project on “Industrialization of New Disperse Dyeable Polyesterand Its Fiber at Normal Pressure” passed the scientic and techno-logical achievement appraisal by the China National Textile andApparel Council, with overall technology reaching internationaladvanced levels and its 10,000-ton continuous polymerization
Hengli Petrochemical Co., Ltd.Fan Hongwei, the Chairwoman
production technology achieving international leadership.Focusing on core industrial chain technologies, the Companyactively collaborates with the Dalian Institute of ChemicalPhysics, Chinese Academy of Sciences. e establishment ofthe “Hengli-DICP Research Institute” provides strong suppofor rapid commercialization of research outcomes and injectspoweul momentum for future innovation.Strengthening Safety Defenses to Consolidate the Foundationof Development. Safety is the cornerstone of company develop-ment and fundamental to high-quality growth. We consistentlyuphold the principle of “life rst, safety foremost”, strictly imple-ment production safety responsibilities, and advance the HSEsystem to build a comprehensive, multi-layered safety manage-ment framework. By strengthening risk source control, continu-ously improving intrinsic safety standards, and implementingrigorous safety measures, we deepen hazard identication andrectication to prevent accidents. Regular re drills and safetytraining enhance employee awareness and emergencyresponse capabilities, foify the production safety line, andsafeguard the Company’s high-quality development. isallows employees to work with peace of mind and society totrust us with condence, laying a solid foundation for achievinglong-term stability and sustainable development.Upholding Green Principles to Promote Circular Development.
Green is the eternal foundation of enterprise development andour responsibility in ecological civilization construction. Weconsistently implement the philosophy that “clear waters andlush mountains are invaluable assets”, integrating green andlow-carbon practices throughout company strategy and opera-tions. Driven by technological innovation, we optimize industrialstructure, develop circular economy, and build resource-e-cient, environmentally friendly models. By creating green supplychains through process optimization, technological upgrades,sma energy management, and clean energy adoption, weestablish ecient resource utilization systems, making green adistinctive feature of high-quality development. In 2024, threecompanies in Hengli (Dalian Changxing Island) Industrial Parkwere consecutively awarded the national energy eciency
“Leader” title for four years, with outstanding water eciencypeormance. Hengli Chemical Fiber was recognized as a“Green Development Leader in the Yangtze River Delta Ecologi-cal Green Integration Demonstration Zone”. Following HengliPetrochemical (Dalian), Hengli Petrochemical Rening, HengkeAdvanced Materials, Hengli Chemical Fiber, and HengliPetrochemical Chemical, Kanghui New Material was designatedas a national “Green Facto”. So far, six subsidiaries of theCompany have been recognized as national-level “Green Facto-ries”.Putting People First and Embracing Social Responsibility.
“Talents drive enterprise success; a strong workforce builds astrong company”. Talent is the prima resource for anenterprise’s development. We strengthen team building, uniteemployee eos, optimize talent development, and stimulateinnovation. By improving recruitment mechanisms, we attractoutstanding talents to the Hengli family and enhance trainingincentives to build a high-quality workforce. Simultaneously, weactively contribute to communities, foster harmonious coexis-tence, and suppo local prosperity. We rmly believe that onlyby putting people rst can we unite heas and achieve sharedprogress between enterprise and society.Advancing with a Sense of Mission and Reaping the Rewards ofPerseverance. Looking ahead to 2025, Hengli Petrochemical will
continue to steadfastly pursue the path of high-quality develop-ment, comprehensively enhance ESG management, consoli-date the “Heng” spirit, and gather the “Li” strength, continuous-ly writing new chapters for Hengli Petrochemical and contribut-ing Hengli’s wisdom and strength to building a beautiful China!
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Fundamentals of Hengli Petrochemical
Headquaered in Dalian, China, Hengli Petrochemicaloperates upstream with 20 million tons of rening, 1.5million tons of ethylene, and 5 million tons of coal chemicalcapacity. It is the world’s largest PTA producer and iscommitted to building the world’s largest productioncapacity for functional bers, lms, and plastic newmaterials, with seven major production bases acrossChina.
MTPA Rening Capacity
RMB
7.04
billionRegistered Capital
1.5
MTPA Ethylene Capacity
MTPA Coal Chemical Capacity
Hengli (Suqian) Industrial Park
Hengli (Dalian ChangxingIsland) Industrial Park
Hengli (Nantong) Industrial Park
Hengli (Huizhou) Industrial Park
Hengli (Suzhou) Industrial ParkHengli (Yangtze River Delta) Industrial Park
Established in November 2002 with aregistered capital of RMB 7.04 billion,Hengli Petrochemical Co., Ltd. operatesin a wide range of elds including oilrening, petrochemicals, aromatics,olens, PTA, ethylene glycol, civilian andindustrial bers, engineering plastics,polyester lms, and biodegradableplastics, covering both production andconsumer needs for high-end chemicalraw materials and various new chemicalmaterials. e Company is the rst in theindust to achieve a fully integratedindustrial chain from “crude oil-aromat-ics, olens-PTA, ethylene glycol-polyes-ter new materials” as a listed company.e Company currently boasts fourglobal benchmark-level productioncapacity clusters: a 20 million tons perannum (MTPA) integrated rening andchemical project, a 5 MTPA modern coalchemical plant, a 1.5 MTPA ethyleneproject, and seven indust-leading PTAplants with a combined capacity of 16.6MTPA. ese assets have successfullyaddressed upstream “chokepoint”operational challenges, breaking throughraw material supply bottlenecks andestablishing a modern industrial systemintegrating “world-class petrochemicalrene + modern coal chemicalfacilities”. is system sees as a strate-gic platform suppoing the“oil-coal-chemical integration” strategy,while the Company maintains compre-hensive production capacity layouts indownstream advanced chemical materi-als sectors such as dierentiated bers,functional lms, engineering plastics, andbiodegradable materials. is dual-trackstructure creates a systematic industrialframework featuring both a “large-scalechemical platform” and “new materialextension” capabilities. With over 30,000employees and a “National CeiedEnterprise Technology Center”, theCompany’s competitiveness and productbrand value rank among the top in theglobal indust.Headquaered in Dalian, China, HengliPetrochemical operates seven produc-tion bases across Suzhou, Dalian
Changxing Island, Nantong, Suqian,Yingkou, Huizhou, and the Yangtze RiverDelta Integrated Demonstration Zone,aspiring to become a world-class full-in-dust-chain supplier of new chemicalmaterials. Hengli Petrochemical hasdeployed high-quality, ecient produc-tion capacities and suppoing utilitiescharacterized by “large-scale installa-tions, massive production capacity,integrated structure, advanced technol-ogy, environmental sustainable develop-ment, and comprehensive facilities”across the entire polyester and newchemical materials industrial chain.Whether in terms of single-unit scale,total capacity, or production processes,the Company leads the indust. Pursu-ing a development path that balancesmarket dierentiation, high-endtechnology, large-scale installations, andintegrated operations, HengliPetrochemical possesses a long-estab-lished market and technology innovationmechanism. Its R&D capabilities and newproduct innovation lead the indust,with four subsidiaries - Hengli ChemicalFiber, Deli Chemical Fiber, HengkeAdvanced Materials, and Kanghui NewMaterial - ceied as “NationalHigh-Tech Enterprises”.“Building a world-class enterprise andcreating an internationally renownedbrand”. Hengli Petrochemical continuesto uphold the spirit of “craftsmenbuilding the nation”, driving innovationas its core engine. Focusing on its mainbusiness and leveraging upstreamresources and downstream marketexperience, the Company veicallyextends its industrial chain layout in newchemical materials, seing nationaladvanced manufacturing and consump-tion upgrades. rough breakthroughs incore technology, manufacturing process-es, and scale advantages, HengliPetrochemical promotes high-qualitydevelopment in the real economy,advancing new industrialization andsteadfastly pursuing the “Hengli Dream”of industrial patriotism.
Company Prole
RMB
236.273 billion
RMB
7.053
billion
Revenue
Net Prot
Hengli (Yingkou) Industrial Park
Business Layout
16.6
MTPA PTA Capacity
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Industrial Layout
From “a drop of oil” to “a strand of ber”, we have achieved full industrial chain developmentwith a “platform + new materials” approach. Remaining rmly rooted in our core businessand committed to real economy development, we began in the polyester ber indust andprogressively addressed indust “chokepoint” challenges. We continue to expand in ber,lm, plastic, and other new chemical materials while advancing toward an integratedupstream petrochemical, rening, and coal-chemical platform. is has established oursystematic industrial structure featuring a “large-scale chemical platform” and “new materi-als extension”.
HeavyNaphtha
ReformateAromatics
EthyleneCracking
LightNaphtha
EthaneCrude Oil
ChemicalCoal
Coal-to-HydrogenAirSeparation
n-Butane
PropaneIsobutane
Dehydro-genationChemicalsMethanolHydrogenOxygenLiquid ArgonNitrogen
Acetic Acid
PX
Isopropanol
PCPOM
Ethylenediamine
BDOSuccinic Acid
PTMEG
DPCDMC
Petroleum Benzene
StyreneEthylene Glycol
HDPEPolypropylene
ButadienePropylenePolypropylene
MTBEIso-octane
Adipic AcidAcetonePhenolFormaldehyde
Rened Oil Products (Gasoline, Diesel, Jet Fuel)
Lithium Batte Separator Films, Process Protection Films
Modied Biodegradable Plastics
Modied PBT
PSABS
"High-end Polyester" Industrial Chain
"Functional Films" Industrial Chain"New Energy Materials" Industrial Chain
"Biodegradable Materials" Industrial Chain
"High-end Fiber" Industrial Chain"Engineering Plastics" Industrial Chain
"New Energy Materials" Industrial Chain"High-end Fine Chemical Intermediates"
Industrial Chain
Ethylene OxideSyntheticAmmonia
Nitric Acid
Ethanolamine
Bisphenol A
PTA
Civil and Industrial Filament
BOPET FilmsPBS, PBAT Biodegradable Plastics
PBT Resin
Functional Films (e.g., MLCC lms)
ReningSegment
Coal ChemicalSegment
PTA Segment
Polyester New
MaterialsSegment
Maleic Anhydride
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Peormance HighlightsSteady Operations & SoundGovernance
Energy Conseation & SustainableGreen DevelopmentOver 100 research visits received
Carbon emission targets set:
3 earnings brieng sessions held
Carbon emission intensity
228.21 tons CO? equivalent/million RMB
0 information security and privacy protection violation3,779 R&D personnel
RMB715 million spent on employee benets1,555 employee volunteers paicipating
in community activitiesOccupational health checkup rate
100%Total employee training hours 424,600 hours
RMB
1.703 billion in R&D investment
(24.20% year-on-year growth)2 postdoctoral research stations1,676 cumulative patents held
RMB530 million invested in workplace safety
3,776 chemical safety drills conducted100% customer complaints resolved
Product qualication rate
99.63%
Water consumption intensity
3,727.37 tons/million RMB
Annual water savings from reclaimed water reuseequipment
34.2737 million tons
Reclaimed water reuse rate
75.3%
General waste disposal rate
99.99%
Total environmental protection investment
375 million RMB
Renewable energy consumption
324,023.02 tons of standard coal
100% employee coverage in business
ethics training100% business ethics audits across all
operational locations
Safe Operations & Sustainable GrowthInsightful Innovation &
Digital Intelligence Safeguard
People Orientation & SocialContribution
2024 at a Glance
By 2026, energy-saving projects are expected toreduce emissions by no less than 1 million tons ofCO? cumulatively
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Honors and achievements in 2024Honor TimeHonor WinnerHonor NameJanua 2024Hengke Advanced MaterialsJiangsu Provincial Labor Brand
Jiangsu Provincial Depament of Human Resourcesand Social Security
Awarding Authority
April 2024Kanghui New Material
ree products obtained carbonfootprint ceication, and obtained theProduct Carbon Footprint Ceicates
Green Product Seice Volunta Ceication CenterJune 2024Hengli Chemical Fiber
Green Development Leader in theYangtze River Delta Ecological GreenIntegration Demonstration Zone
Jointly issued by Jiangsu Ecology and Environment
Depament, Shanghai Ecology and Environment Bureau,
Zhejiang Ecology and Environment Depament, and
Demonstration Zone Executive Committee
August 2024
Jiangsu Kanghui, JiangsuXuanda
Jiangsu Provincial IntelligentManufacturing Workshop
Jiangsu Provincial Depament of Indust and
Information TechnologyAugust 2024Jiangsu Xuanda
Obtained the “GRS (Global RecycledStandard)” Ceication
Textile Exchange
September 2024
Hengke Advanced Materials,Jiangsu Kanghui NewMaterial
Jiangsu Provincial Five-Star CloudEnterprise
Jiangsu Provincial Depament of Indust and
Information TechnologySeptember 2024Hengli Petrochemical
Five-Star Gold Award for SocialResponsibility of China’s ManufacturingListed Companies
Times Responsibility 40 Forum ink TankOctober 2024Deli Chemical Fiber
“Contract-Honoring & Creditwohy”Enterprise
Suqian Enterprise Credit Management AssociationOctober 2024Kanghui New Material
Liaoning Provincial Single ChampionManufacturing Enterprise
Liaoning Provincial Depament of Indust and
Information TechnologyNovember 2024Hengli Chemical FiberJiangsu High-Reputation TrademarkJiangsu Trademark AssociationNovember 2024Jiangsu KanghuiHigh-tech Enterprise
Oce of the Leading Group for National High-Tech
Enterprise Ceication ManagementNovember 2024Jiangsu Kanghui, Nantong Kanghui
National AAA-Level Ceication forIntegrated Industrialization andInformatization Management System
Zhongguancun IT and Real Economy Integration
Development AllianceNovember 2024Hengli Petrochemical
Best Practice Case for Listed CompanyBoard of Directors
China Association for Public CompaniesDecember 2024Kanghui New MaterialNational Green FactoMinist of Indust and Information TechnologyNovember 2024Hengli Petrochemical
Best Practice Case for Listed CompanySustainable Development
China Association for Public Companies
December 2024Deli Chemical Fiber“Jiangsu Premium” Brand Ceication
Jiangsu Quality Development Committee Oce and
other depamentsDecember 2024Hengke Advanced Materials
Jiangsu Provincial AAA-Level QualityCredit Enterprise
Jiangsu Provincial Market Supeision Administra-
tion and Development & Reform Commission
December 2024Hengli Petrochemical Rening
Listed in the 2024 Key Water-UsingEnterprises & Industrial Parks WaterEfficiency Leader List
Minist of Indust and Information Technology,
Minist of Water Resources, National Development
and Reform Commission, and State Administration
for Market RegulationDecember 2024Jiangsu Kanghui
Jiangsu Provincial PostdoctoralInnovation Practice Base
Jiangsu Provincial Depament of Human Resources
and Social Security
July 2024
Hengli PetrochemicalChemical, HengliPetrochemical Rening, andHengli Petrochemical(Dalian)
Listed in the Energy Efficiency LeaderEnterprises in Key Industries
Minist of Indust and Information Technology, National
Development and Reform Commission, and State
Administration for Market Regulation
“GRS Global Recycled Standard”
Ceication
Best Sustainable Develop-ment Practice Ceicate for
Listed CompaniesNational AAA-Level Ceication for
Integrated Industrialization and
Informatization Management
System
Five-Star Gold Award forSocial Responsibility ofChina’s Manufacturing
Listed Companies
Jiangsu High-Reputation
Trademark Ceicate
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
hengli.com 13 I 14
Sustainability Management
Hengli Petrochemical actively practices sustainability concepts, continuously improves sustainability governance frameworksand management systems, and is committed to deeply integrating sustainability into company strategy, decision-making,and daily operations. e Company consistently addresses and responds to stakeholder expectations, strengthens commu-nication and collaboration with value chain paners and society, and jointly promotes the achievement of sustainabilitygoals.
Hengli Petrochemical has established a three-tier ESG governance structure covering decision-making, management, andexecution layers. e Board of Directors sees as the highest decision-making body, with the Strategy and SustainabilityCommittee implementing coordinated ESG management mechanisms. is framework develops sustainability plans,conducts regular evaluations, reviews progress, and ensures alignment with internal sustainability principles and objectives.
Sustainability Governance Framework
Hengli Petrochemical SustainabilityGovernance Framework
Decision-Making Level
Implementation
Level
Board of Directors
Oce of Board of Directors,Functional Depament Heads ofSubsidiaries
Approve ESG strategies, plans, and goalsproposed by the ESG Task ForceSupeise the Company’s ESG peormancecomprehensively and assume its accountabilityReview annual ESG repos and other majorESG-related matters
Lead and execute ESG initiatives Propose ESG strategies, plans, and goals Identify and manage ESG risks and oppounities Monitor ESG peormance and goal implementa-tion
Communicate with stakeholders, identify materi-al ESG topics, and organize ESG training programsOrganize the preparation of annual ESG reposand other ESG disclosures Oversee topic-specic managementOrganize the development of specialized ESGwork plans Coordinate and implement ESG initiatives Monitor and repo ESG indicators regularly
To realize Hengli Petrochemical’s long-term development objectives, the Company deeply embeds sustainability acrosseve segment of its value chain. By aligning its operations with the UN Sustainable Development Goals (SDGs), it activelydrives coordinated economic, environmental, and social progress, making lasting contributions to a green, sustainablefuture. e Company focuses its sustainability eos on ve key areas: Steady Operations & Sound Governance; EnergyConseation & Sustainable Green Development; Safe Operations & Sustainable Growth; Insightful Innovation & DigitalIntelligence Safeguard; People Orientation & Social Contribution
Sustainability Strategy
Management
Level
Strategy and SustainabilityCommitteeESG Task Force
Sustainability
Strategy
CEO, Secreta of Board ofDirectors, and Industrial Park Heads
ESG Executive Task Force
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Steady Operations & Sound Governanc
Energy Conseation &Sustainable GreenDevelopmentPeople Orientation &Social Contribution
Safe Operations &Sustainable GrowthInsightful Innovation &Digital Intelligence Safeguard
e Company places high impoance on communication and engagement with stakeholders. We continuously expand andimprove communication channels and frequency with stakeholders, rening internal sustainability management throughfeedback to gain their suppo and trust, thereby driving continuous improvement in social responsibility management.
Communication with Stakeholders
Materiality Assessment
Hengli Petrochemical continuously improves the process of identifying and assessing material sustainable development topics.By regularly aligning with the Company’s development goals and business direction, we understand stakeholder demandsthrough diversied channels, analyze and evaluate sustainable development topics, and respond promptly and eectively tostakeholder expectations and opinions, striving to meet their needs and achieve mutual benets.
Material topics see as focal points for the Company’s sustainable development management, aiming to better and fullyunderstand the concerns of internal and external stakeholders, thereby integrating the Company’s sustainable developmentmanagement practices with stakeholder demands and expectations.In 2024, we followed the material topic assessment process of “stakeholder communication - identifying a list of sustainabledevelopment topics - stakeholders’ engagement in evaluation - establishing a material topic matrix - topic conrmation andrepoing” to conduct stakeholder research in an orderly manner. We systematically identied key ESG topics and futuredevelopment directions for the Company, continuously using a “dual materiality” approach to assess topics from both “nan-cial impoance” and “impact impoance” perspectives, and mapped an ESG material topic matrix:
Management of Materiality
StakeholdersTopics of ConcernCommunication Channels and Methods
Improvement of corporate governanceTimely information disclosureSustainable development capabilitiesPeormance growth and returns
Shareholders andInvestors
Company announcementsCompliance information disclosureCompany website disclosuresAnnual ESG repo releaseImprove sustainable development
Compliant operationPay taxes in accordance with the lawRisk managementBusiness ethicsAnti-monopoly measures
Government andRegulato Agencies
Complying with laws and regulationsProactive tax paymentStrengthen internal controlsGovernment supeisionRegular disclosuresAnti-bribe measuresAnti-monopoly measuresIntegrity and cooperationMutual benet
Suppliers and Paners
Uphold business ethicsTransparent procurementJointly fulll social responsibilitiesEnvironmental complianceSuppo public welfare and charityContributing to community developmentEnergy conseation and emission reduction
Communities
Public benet activitiesProvide employment oppounitiesStrengthen pollution prevention
e Company aligns its development philosophy with the UN 2030 Sustainable Development Goals (SDGs), establishing acomprehensive ESG management framework to advance its sustainability strategy and contribute to ESG progress throughconcrete actions.
SDGs Initiatives of the Enterprise
Low-carbonMission (E)
Energy Conseation &Sustainable GreenDevelopment
ChaptersDimensionSDGs
SocialResponsibility(S)
People Orientation &Social Contribution
CorporateGovernance(G)
Steady Operations &Sound Governance
SafetyManagement(S)
Safe Operations &Sustainable Growth
S&TInnovation(S)
Insightful Innovation &Digital IntelligenceSafeguard
Analyze climate risks and oppounities,implementing mitigation and adaptationmeasures Enhance carbon emission management Standardize water resource management Strengthen pollution prevention and control Develop clean technologies Optimize energy management systems
Hengli Petrochemical’s SDG-aligned measures
Car out public welfare volunteeractivitiesFocus on developing industrial assistanceprogramsImprove employee health and safetysystems Conduct skills enhancement training Pay attention to female employee rights Enhance talent recruitment systemsEstablish open employee feedbackchannels Strengthen compliance risk managementAdhere to standardized governancethrough the General Meeting of Shareholders,Board of Directors, and Board of Supeisors Improve ESG governance structure Conduct regular business ethics auditsEnhance anti-corruption compliancemanagement
Strengthen chemical safety management Improve safety production management Building sustainable supply chains Promote digital and intelligent transfor-mation Contributing to indust developmentStrengthen indust-academia-researchcollaboration
hengli.com 15 I 16
Diversity and anti-discriminationUpholding the rights and interests of employeesBroaden career development pathwaysComprehensive compensation and benetsOccupational health and safety
Employees
Employee feedback collection and responseEmployee welfare distributionRegular health checkupsEmergency response drillsInnovation and R&DHigh-quality productsAfter-sales suppo
Customers
Satisfaction sueysCustomer complaint channelsSupplying high-quality seiceIndust exchange meetings
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
hengli.com 17 I 18
2. Product Carbon Footprint
3. Environmentally Impactful Financing
28. Due Diligence16. Responsible Investment
17. Communications with Stakeholders
19. Contribution to Society
21. Equal Treatment of Small and
Medium-Sized Enterprises
22. Financing Availability
High-materiality Issues
Medium-materiality Issues
6. Toxic Emissions and Waste
8. Energy Utilization
4. Pollutant Emissions
5. Water Resource Utilization
7. Environmental Compliance Management
9. Circular Economy
1. Carbon Emission
10. Clean Technological Oppounities
29. Anti-Bribe and Anti-Corruption
26. Compensation
27. Tax Transparency
30. Anti-Unfair Competition
23. Ownership and Control Rights
24. Board of Directors
25. Accounting
11. Supply Chain Security
14. Chemical Safety
13. Safety and Quality of Products and
Seices
15. Data Security and Customer Privacy
Protection
20. Innovation-Driven Development
12. Employees
Maintain regular communication with investors, customers, government agencies, and otherstakeholders, recording their concerns and specic content, and responding to their demands.Communications
withstakeholders
Based on the Company’s business development strategy and indust characteristics, andconsidering domestic and international regulato policies, global and local ESG standards,mainstream ESG rating requirements, peer benchmarking, and stakeholder feedback, weidentied 30 potential ESG topics with nancial or impact impoance through systematicevaluation and analysis, providing a scientic basis for formulating the Company’s ESG strate-gy.
dentifying alist ofsustainabilitytopics
e Company prepared stakeholder questionnaires based on the list of potential material topics,targeting: Shareholders and investors, employees, customers, government and regulatoagencies, suppliers and paners, communities, etc. rough stakeholder sueys and expescoring results, the Company assesses the impact signicance and nancial materiality of eachissue. In 2024, the Company collected a total of 1,519 questionnaires.
Stakeholders’engagementin evaluation
Establishing
a materialtopic matrix
e Company’s management level reviews the annual material topic assessment results,incorporates internal and external feedback to conrm the signicance and impact of identiedissues, and will truthfully reect the Company’s peormance on relevant topics in repos.
Topicconrmationand repoing
Based on suey results, combined with regulato disclosure requirements, sustainabledevelopment practices of the Company, indust characteristics, etc., the Company conductsquantitative analysis on the assessment results of impact signicance and nancial materiality,presenting the overall priority of each issue through a matrix format. We have identied a totalof 21 topics with dual high signicance and 8 topics with dual medium signicance.
High MaterialityModerate Materiality
Low Materiality
Financial Materiality
Impact Materiality
EnvironmentSocialGovernance
Hengli Petrochemical ESG Material Topic Matrix
1619
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Steady Operations &
Sound Governance
Corporate Governance StructureCompliance Risk ManagementAdhering to Business EthicsCommunication with Stakeholders
Corporate Governance Structure
Hengli Petrochemical actively practices the concept of sustainable development by continuously improving its sustainability gover-nance framework and management system. e Company is committed to deeply integrating the principles of sustainability into itscorporate strategy, business decision-making, and daily operations. Hengli Petrochemical remains attentive to the expectations anddemands of all stakeholders, continuously strengthening communication and collaboration with value chain paners and broadersociety to jointly advance the achievement of sustainable development goals.Governance Model
Note: For detailed information on Hengli Petrochemical’s “ree-Meeting, One-Level” governance structure, please refer to the 2024 Annual Report.
Honored with the “2024 Best Practice Casefor Listed Company Board of Directors”
Board Diversity
e Company fully recognizes the impoant role of board diversity in promoting sustainability and enhancing overall companystrength. Adhering to the principle of diversity, the Company selects board members by comprehensively considering factorssuch as gender, age, professional knowledge, and indust experience, resulting in a professional structure that brings diversi-ed experience and expeise to contribute positively to the Company’s comprehensive decision-making.At the level of the Board of Directors, Liu Jun sees as the Company’s Risk Management Expe. With deep expeise in riskmanagement and extensive indust experience, the Expe supeises the Company’s comprehensive risk managementsystem to ensure the establishment and operation of appropriate risk oversight, management, and internal control mecha-nisms, promoting the Company’s long-term strategic goals.
Risk Management Expe
e Company’s Board of Directors and management level have always prioritized companygovernance and internal control, strictly complying with laws, regulations, and induststandards, continuously improving governance levels, and committing to standardizedoperations and ethical management. ese eos have laid a solid foundation for sustain-able high-quality development and empowered the Company’s pursuit of excellence. Withinnovative measures and outstanding peormance in board operations, HengliPetrochemical was honored with the “2024 Best Practice Case for Listed Company Boardof Directors”.
Key Peormance
with rich professional experience and backgrounds in petrochemicals, nancial auditing, law, and risk manage-ment
Hengli Petrochemical Wins “Best Practice Case for Listed Company Board of Directors”Case
During the repoing period, the Company organized training sessions for all directors, supeisors, and senior management on topicssuch as nancial fraud risk prevention, warning cases of illegal shareholding reductions, interpretation of M&A and restructuringpolicies, market value management, and public opinion management, organized by the Dalian Listed Companies Association. Simul-taneously, independent directors paicipated in specialized training sessions organized by the Shanghai Stock Exchange, including“Follow-up Training for Independent Directors” and “Key Points and Suggestions for Anti-Fraud Duties of Independent Directors ofListed Companies”. ese training sessions eectively enhanced the governance team's understanding of the latest regulatorequirements in the capital market, improved their awareness of standardized operations and competency in peorming their duties,and laid a governance foundation for the Company’s high-quality development.
Remuneration Management
e Remuneration and Appraisal Committee under the Board of Directors continuously improves the remuneration manage-ment for the Board of Directors, Board of Supeisors, and management team, establishing a scientic and eective incentiveand restraint mechanism. e Remuneration and Appraisal Committee reviews the directors’ remuneration plan and seniormanagement’s remuneration allocation scheme, which are then submitted to the Board of Directors for approval. Directors’remuneration is subject to approval by the General Meeting of Shareholders. Information on relevant senior managementremuneration is publicly disclosed.To promote the implementation of sustainable development initiatives, the Company sets scientic peormance indicators inkey areas of focus, including but not limited to carbon emissions, water resource management, quality management, andbusiness ethics, and links ESG peormance indicators with the remuneration of relevant directors and senior management tofacilitate normalized ESG management. e Company evaluates directors, supeisors, and senior management in accor-dance with the Remuneration Management System of Hengli Petrochemical Co., Ltd., and determines remuneration allocationbased on evaluation results.
Note: Variable remuneration is determined based on the completion of sustainable development assessment indicators, including but not limited to carbonemissions, water resource management, quality management, and business ethics.
NamePosition
Fixed Remunera-
tion Before Tax(RMB 10,000)
Variable RemunerationBefore Tax(RMB 10,000)
Total Remuneration
Before Tax(RMB 10,000)
2024 Remuneration of Hengli Petrochemical Senior Management Personnel:
Director, Deputy General Manager, Secreta ofBoard of DirectorsWang ZhiqingLi Feng
Director, General Manager108.00
92.66
72.00
26.13
180.00
118.79
Director, Deputy General ManagerLiu Dunlei
104.15
44.64
148.79
Liu Xuefen
115.3842.68158.06
Deputy General ManagerLiu Qianhan
79.7629.50109.26
Deputy General ManagerZhang Wenyu
52.2919.3471.63
e Company has established a “ree-Meeting, One-Level” governance structure, strictly adhering to the Company Law ofthe People’s Republic of China (hereinafter referred to as the “Company Law”), the Securities Law of the People’s Republic ofChina, and the Shanghai Stock Exchange Listing Rules and other laws and regulations. It continuously improves managementsystems for the general meeting of shareholders, the Board of Directors, and the board of supeisors, forming a companygovernance mechanism with clear powers and responsibilities, eective checks and balances, scientic decision-making, andcoordinated operations among power, decision-making, supeiso, and management bodies. Sound company governanceprovides a strong guarantee for the Company’s steady development and eectively protects the legitimate rights and interestsof the Company and its shareholders.During the repoing period, the Company’s governance status complied with relevant laws, regulations, and normativedocuments for listed companies.
Board members:
8 directors, including 1 female director and 3 independent directors
CommitteeComposition of Directors
Percentage of Indepen-dent Directors (%)
Audit CommitteeNomination CommitteeRemuneration and AssessmentCommitteeStrategy and Sustainable DevelopmentCommittee
Wu Yongdong (Chairperson), Liu Jun, Gong TaoLiu Jun (Chairperson), Xue Wenliang, Liu DunleiXue Wenliang (Chairperson), Wu Yongdong, Li FengFan Hongwei (Chairperson), Xue Wenliang, Li Xiaoming
66.67%
66.67%
66.67%
33.33%
Note: For details on the operations of the board’s specialized committees, please refer to the 2024 Annual Repo.
Director, Deputy General Manager
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Compliance Risk ManagementDeepening Risk Managemente Company continuously improves its institutional system, enhances internal control and risk management capabilities,strengthens standardized management, rmly adheres to institutional red lines and risk baselines, ensures alignment betweenbusiness development and risk control capabilities, and guarantees sustained, stable, and healthy company development. eCompany has established a relatively sound and comprehensive accounting system, nancial management and risk control,and major decision-making internal control management systems, which are eectively implemented and meet the Compa-ny’s current development needs. Simultaneously, the Company will continuously update and improve relevant systems basedon development conditions to ensure healthy and stable operations.Internal Control System ConstructionDuring the repoing period, theCompany strictly complied withvarious laws and regulationssuch as the Company Law,Basic Norms for EnterpriseInternal Control, Shanghai StockExchange Listing Rules, andSelf-regulatory Guidelines ofShanghai Stock Exchange forthe Companies Listed on theSTAR Market of the ShanghaiStock Exchange No.1 –Standardized Operation, as wellas the Company’s internalcontrol systems, to regulateoperations and manage risks.e Company has established arigorous internal controlmanagement system, continu-ously optimizing and improvinginternal control systems basedon indust characteristics andactual business operations. isprovides reasonable assurancefor the legality and complianceof the Company’s operations,asset security, and the authen-ticity and completeness ofnancial repos and relatedinformation, promoting overallimprovements in operationaleciency and eectiveness, andsafeguarding the interests of theCompany and all shareholders.e Company regularly engages external auditors to conduct annual audits of internal controls, resulting in an Internal ControlAudit Report.e Company’s internal control system is sound, reasonable, and eectively implemented, without any materialdeciencies. For more information on the Company’s internal control and internal control audit, please refer to the 2024Annual Report of Hengli Petrochemical Co., Ltd. or company announcements.
In daily tax-related matters, tax management personnel at all levels conduct reviews, and external tax andnancial intermedia agencies are hired to provide consulting and guidance, eectively reducing tax-relatedrisks. To ensure tax compliance, reduce tax risks, and optimize tax management, in 2024, the Company hiredexternal tax and nancial intermedia agencies to conduct tax health checks for the past three years.Tax RiskPreven-tion
Tax Transparency
e Company strictly abides by the Law of the People’s Republic of China on Enterprise Income Tax and theLaw of the People’s Republic of China on Tax Collection and Administration and other relevant laws andregulations, as well as applicable laws in overseas operating locations, conscientiously fullls its tax obliga-tions, and establishes sound tax management systems and processes, clarifying the responsibilities andauthorities of each depament in tax management to ensure standardized and standardized tax manage-ment. e Board of Directors sees as the highest management level to review the Company’s tax strategy.Pay Taxesin Accordancewith theLaw
Hengli Petrochemical continuously enhances internal control and risk management capabilities, regularly study-ing and deploying key oversight tasks to achieve full coverage of oversight over directors, supeisors, seniormanagement, and all employees. e Company’s internal audit is divided into three phases: “year-sta planning- mid-year implementation and repoing - year-end feedback and review”.
Management of Related Pay Transactionse audit evaluation results will be incorporated into the annual assessment of each subsidia. In order to regulate relatedpay transactions (RPTs) and avoid conicts of interest, the Company has formulated the Related Party Transaction Manage-ment System (Revised in 2022), which clearly stipulates that RPTs should not harm the legitimate interests of the Companyand non-connected shareholders, and ensures that transaction behaviors follow the principles of fairness, impaiality,openness, and equal and paid, with fair and reasonable pricing. When the Board of Directors/General Meeting of Shareholdersdeliberates on RPT matters, the connected directors/connected shareholders must withdraw from voting and may notexercise voting rights on behalf of other directors/shareholders, reducing the impact of conicts of interest on judgment orindependence. At the same time, the Board of Supeisors, the Audit Committee of the Board of Directors, and independentdirectors strengthen supeision and review of RPTs to ensure their compliance and fairness.During the repoing period, there were no instances of the Company’s directors, supeisors, or senior management usingRPTs to harm the interests of the Company or its shareholders.Note: For details on related paies and RPTs, please refer to the 2024 Annual Report.
StrengtheningInternal Audit
Processes
Year-staplanning
At the beginning of each year, the Internal Audit Depament is responsible for formulatingthe annual audit work plan and submitting it to the Chairman for review. e scope of internalaudit covers 100% of Hengli Petrochemical’s operating sites, including procurement, sales,production, safety and environmental protection, and business ethics in various industrialparks, ensuring that each subsidia of Hengli Petrochemical receives internal audit at leastonce a year.
Mid-yearimplementation
and repoing
e Internal Audit Depament audits each industrial park according to the annual audit workplan and promptly issues audit repos and targeted management optimization suggestionsbased on the audit results. e work plan of the Internal Audit Depament can be adjusted ina timely manner based on actual conditions. For key projects in the actual operations of HengliPetrochemical, as well as in the event of repoed issues, the Internal Audit Depamentorganizes special audits and continuously follows up on rectication work.
Year-endfeedback andreview
e Internal Audit Depament continuously follows up on the progress of implementingrectication measures by the audited work hours, and summarizes the annual audit resultsand repos them to the Chairman at the end of each year.
Hengli Petrochemical Internal Control System
Responsible for establishing and eectivelyimplementing the internal control systemin accordance with the provisions of theenterprise internal control standard systemand evaluating its eectiveness.
Board of DirectorsBoard of Supeisors
Responsible for supeising and evaluatingthe Company’s internal audit system and itsimplementation and control management.
Responsible for supeising theinternal control system established andimplemented by the Board ofDirectors.
Audit Committee
General Meeting ofShareholders
Internal Control System
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
hengli.com 25 I 26
Tax risk self-inspections are carried out on a regular basis to timely identify and correct potential tax risk issues. Tax supeision isembedded in daily management, making tax management an impoant pa of the Company’s daily operations. e director incharge of the nance and tax line and the person in charge of accounting will manage and supeise tax-related matters before,during, and after the events.e Company continues to strengthen the construction of its tax team, including depamental tax-themed learning, organizingexternal on-site training, and online training, promoting a good learning atmosphere internally, enhancing the compliance awarenessof relevant personnel in paying taxes in accordance with the law, and enhancing the compliance ability of tax management.
e event was jointly organized by the Daya Bay District TaxationBureau and Hengli Petrochemical (Huizhou) and other companies.During the event, tax youth provided targeted guidance on tax incen-tives that encourage technological innovation and suppo enterprisedevelopment based on the actual situation of the enterprises, andanswered tax-related questions raised by the youth representatives ofthe enterprises in detail. is event built a tax-enterprise youthexchange platform in the form of team building, proactively deliveringprecise seices to enterprises, and contributing youth wisdom tofostering the development of new quality productivity.
Case
Adherence to Business EthicsBusiness Ethics System Construction
Hengli Petrochemical has always attached great impoance to integri-ty building and anti-corruption, strictly abides by relevant laws andregulations, issued the Business Ethics and Anti-Corruption SystemStatement, and formulated the Anti-Corruption and Anti-CommercialBribery Management System and other regulations, adhering to a “zerotolerance” policy towards corruption. As the highest management levelfor business ethics matters, the Audit Committee supeises andregularly reviews the Company’s business ethics and anti-corruptionrelated matters, and leads the Company to conduct a business ethicsaudit once a year.
Company-wide Business Ethics Training
Hengli Petrochemical attaches great impoance to the creation of a clean culture and the building of compliance capabilities,and is committed to ensuring fair competition. Key positions and key links personnel sign the Letter of Responsibility for CleanBusiness Management with the Company to demonstrate their understanding and compliance with the Company’s businessethics standards. All senior management personnel and all employees (including interns) are required to paicipate inbusiness ethics and anti-corruption related training eve year.
During the repoing period, Hengli Petrochemical conducted business ethics education and training for all senior manage-ment personnel and all employees (including interns) of its subsidiaries.For the Company’s directors, the Company conducts anti-corruption policy promotion and training through annual summa-ries; for management, key positions, and ordina employees (including interns), the Company conducts targeted specialtraining activities such as clean business practices themed training, nancial training, and management training, andpromotes anti-corruption policies on job-related corruption, bribe acceptance, and other behaviors.
e Internal Audit Depament formulates a detailed annual internalaudit plan eve year, and carries out anti-corruption related auditactivities for major business links such as procurement, sales, logistics,warehousing, quality inspection, and engineering construction. Duringthe repoing period, we conducted audit projects related to businessethics such as audits of construction projects under construction,accounts receivable, and procurement activities in various industrialparks, with a rectication rate of 89% for identied issues, and willcontinue to promote rectication work. During the repoing period,the Company was not involved in any anti-corruption relatedlitigation.e Company requires all suppliers to sign the Letter of Responsibilityfor Clean Business Practices and sets relevant clauses in the contract,requiring suppliers to strictly adhere to the bottom line of anti-corrup-tion and maintaining integrity.
In December 2024, Hengli (Dalian Changxing Island) Industrial Park carried out a one-month clean compliance educa-tion. Enterprise leaders, nance, procurement, main production equipment, and ordina employees (including interns)all received clean compliance education, watched the anti-corruption themed documenta Continuous Efforts, In-depthPromotion, and consciously accepted ideological education on pay discipline and national laws, profoundly warningcadres and employees to be awe-inspiring, cautious, and abide by the bottom line. All employees of Hengli Petrochemi-cal (including interns) paicipated in the training online throughout the process.
Hengli (Dalian Changxing Island) Industrial Park Carried out Clean Compliance EducationCase
In October 2024, Hengli (Huizhou) Industrial Park held an impoant meeting onrened management and anti-corruption, which was attended by managers atthe level of team leader and above. e lecture focused on the two themes ofhow to prevent duty crimes of enterprise employees and strengthen internalinformation security management, aiming to fuher consolidate the manage-ment foundation, accelerate the process of rened management, strengtheninternal anti-corruption, and ensure the sustainable and healthy developmentof the Company.
Hengli (Huizhou) Industrial Park Carried out Internal Anti-CorruptionCase
Tax and Enterprise Youth Exchange Tax Incentives
Clean Business Practices ematic Education and Training
Internal Anti-Corruption MeetingNote: For more information on business ethics, please refer to the “Sustainable Development Column” at https://www.hengli.com/invest/hlsh?index=4
Key Peormance
ere were0 major tax-related litigation and arbitration matter.Hengli (Huizhou) Industrial Park Held “Talking about New Quality Productivity” ematic Activity forTax and Enterprise Youth
Key Peormance
Key Peormance
100% business ethics auditsacross all operational locations
100% of suppliers have signedthe Letter of Responsibility for CleanBusiness Practices.
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Whistleblower Protection Mechanism
e Company’s Internal Audit Depament is responsible for the overall work of clean repoing. After receiving a repo, theInternal Audit Depament conducts a prelimina assessment and classies and handles it according to the depament’sjurisdiction, the nature of the repoed matter, the degree of violation, and whether it meets the verication conditions. Afterprelimina verication by the investigation team, a handling opinion is formed. Meanwhile, the Company ensures that therelevant handling results are promptly communicated to the whistleblower and continuously followed up.
e Company encourages employees at all levels and companies with business dealings to repo various corrupt behaviorsto the Company through telephone, email, letters, and other channels. During the process of accepting and investigatingvarious whistleblowing repos, the Company strictly keeps condential the whistleblower’s name, depament, companyname, and other information, and strictly prohibits disclosing it to the repoed person or their unit. In cases of illegal disclo-sure of whistleblower information or retaliation against whistleblowers, serious handling of any retaliato behavior in accor-dance with relevant regulations is implemented to provide maximum protection to whistleblowers.
Communication with StakeholdersInformation Disclosure Channels
Whistleblowing Channels
Key Nodes of the Whistleblowing Process (Strict Condentiality ofWhistleblower Information roughout the Process)
Hotline0512-63838399Whistleblowing emailjubao@hengli.com
Repoing Address
e Company has formulated the Information Disclosure Management System, the Accountability System of Major Errors inAnnual Report Information Disclosure, and other systems. In accordance with the information disclosure process, it carries outvarious information disclosure with high quality, follows the principles of truthfulness, accuracy, completeness, timeliness, andfairness, guarantees the timeliness and eectiveness of announcement disclosure, and safeguards the legitimate rights andinterests of all shareholders. During the repoing period, the Company achieved zero errors in information disclosure.
During the repoing period, Hengli Petrochemical received a total ofmore than 100 visits for research, paicipated in 56 brokerage rmstrategy meeting roadshows, and held 3 peormance briengs, compre-hensively strengthening shareholder condence and ensuring that theCompany’s market capitalization remained at the forefront of the indus-t in 2024.
InvestorCommunication
Channels
Company OcialWebsite, OcialWechat Public
Account
SSEE-InteractivePlatformInvestorHotline andEmail
On-siteResearches
PeriodicRepos
PeormanceBriengs
Communication with Investors
e Company attaches great impoance to investor relations management, revises and improves the Investor RelationsManagement System (Revised in 2023), continuously carries out investor relations management, strengthens continuous,positive, and eective communication mechanisms with investors, institutions, analysts, news media, and other market forces,actively responds to reasonable demands of shareholders, continuously promotes the establishment of a long-term, stable,and mutually trusting relationship between the Company and investors, builds an ecient and transparent communicationplatform, enhances investors’ understanding and recognition of the Company, and builds consensus.
In 2024, the Company held6 investoropen exchange meetings andinteracted87 times on the SSEe-interaction platform.
Whistleblowingoccurrence
Whistleblowingreceipt
Preliminaassessmente whistleblowerrepos the matterthrough whistleblow-ing channels
e InternalAudit Depa-ment promptlyreceives andregisterswhistleblowingmatters
After receiving a whistleblowing repo, the InternalAudit Depament classies and handles it based onthe depament’s jurisdiction, the nature of therepoed matter, the degree of violation, and whetherit meets the verication conditions. After preliminaverication, a prelimina handling opinion is formed
Upon completion of theinvestigation, the InternalAudit Depamentcompiles a written repoand handling opinions,and repos them to theCompany’s Chairman andrelevant management
e Internal Audit Depamentconducts in-depth investigations intowhistleblowing matters throughmethods such as visits and sueys,reviewing materials from theinvestigated units and depaments,and materials provided by whistleblow-ers and other relevant sources
In-depthinvestigation
e Internal Audit Depament has theright to require depaments and personnelinvolved in the investigation to provideexplanations and clarications on mattersrelated to the investigation. Meanwhile,external audit institutions or otherinstitutions and functional depamentsmay be hired to assist in the investigationas needed
Assistance ininvestigationRepoformation
Victoria Plaza Building B, Floor 31, Gangx-ing Road, Gangxing Community, Renmin Road Subdistrict,Zhongshan District, Dalian, Liaoning Province
Key Peormance
Key Peormance
During the repoing period, the Company disclosed 68 interim announcements and 4 periodic repos.e Company’s information disclosure for 2023-2024 received the highest rating ofA from the Shanghai Stock
Exchange.
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
hengli.com 29 I 30
In May 2024, the general manager, secreta of Board of Directors,chief nancial ocer, and independent director of Hengli Petrochemi-cal actively paicipated in the live broadcast event of the “2023Annual Repo Shanghai Stock Exchange Main Board High Dividendand Heavy Return Collective Peormance Brieng” organized by theShanghai Stock Exchange. ey interacted and communicated withinvestors on the Company’s operating peormance, developmentstrategy, and nancial indicators for 2023 and the rst quaer of2024, as well as cash dividend plans.
Onsite Peormance BriengCase
In June 2024, Hengli Petrochemical paicipated in the live broadcast event Let’s Investigate Together jointly organizedby the Shanghai Stock Exchange and CCTV Finance. rough on-site visits, investors experienced up close aworld-class petrochemical park that is “excellent internally and beautiful externally”. In the investor exchange session,the Company’s general manager, secreta of Board of Directors, chief nancial ocer, and deputy general manager incharge of production engaged in face-to-face and frank communication with investors on operating conditions,nancial indicators, project progress, ESG, dividend plans, and other aspects, providing sucient answers and achiev-ing good communication eects.
Live Broadcast Event Let’s Investigate Together
Case
Shanghai Stock Exchange Main Board High Dividend andHeavy Return Collective Peormance Brieng
e event Let’s Investigate TogetherInvestor Investigation Activities
Protection of Shareholders’ Rights and Interestse Company attaches great impoance to providing reasonable investment returns to investors, strictly implements share-holder dividend return plans and prot distribution policies in accordance with relevant laws and regulations and other require-ments, actively rewards investors, and continuously improves investor satisfaction and sense of gain. While taking into accountsustainable development, the Company has always maintained a relatively high propoion of cash dividends, and protdistribution has always been continuous and stable. Since its reorganization and listing in 2016, the Company has distributeda total of RMB 25.539 billion in dividends (including planned dividend amounts for 2024), accounting for 41.52% of cumulativenet prots attributable to shareholders, signicantly exceeding the suppoing funds raised by the Company from the capitalmarket.In addition, to enhance the transparency of the Company’s cash dividends and form a stable shareholder return mechanism,its Board of Directors has actively introduced the Five-Year Shareholder Return Plan (2020-2024), which provides a detailedplan for its cash dividend policy over the next ve years based on factors such as the protability and business developmentplans, sharing the Company's growth dividends with investors.
In the future, as projects under construction are successively completed and put into operation, the Company will combineactual operating conditions and development plans, coordinate the dynamic balance between business development, peor-mance growth, and shareholder returns, continuously improve the “long-term, stable, and sustainable” shareholder valuereturn mechanism, allow shareholders to truly experience the Company’s development achievements, and enhance the senseof gain of investors.
Note: e amount of cash dividends distributed in 2022 includes the amount of cash used to repurchase shares, which is included in cash dividends.
Company Cash Dividend Situation
Key PeormanceCash Dividend Per Share (RMB)Total Cash Dividends Distributed (Tax Included)(RMB 10,000)Propoion to Net Prot Attributable to Shareholders of theListed Company in Consolidated Financial Statements (%)
2022/200,023.95
86.27
2023
0.550.45
387,150.49316,759.49
44.97
56.07
2024
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Energy Conseation &
Sustainable Green
Development
Climate Change ResponseEnvironmental Compliance ManagementPollutant Emissions ControlWater Resource ManagementClean Technological OppounitiesEcosystem and Biodiversity Protection
hengli.com 33 I 34
Climate Change ResponseAs a benchmark enterprise in the petrochemical indust, Hengli Petrochemical is fully aware of the vital signicance of responding toclimate change for protecting the global environment, promoting economic stability, and achieving social equity, and activelyresponds to the global call to address climate change. Adhering to the concept of green development, the Company is committed toreducing greenhouse gas emissions, improving energy eciency, and promoting the application of clean energy through technologi-cal innovation. We have adopted a series of emission reduction measures to actively respond to the challenges brought by climatechange and contribute to the global low-carbon economic transformation.
Climate Risk Management
In terms of governance, Hengli Petrochemical has always adhered to high-end, intelligent, and green development, andcontinuously carried out climate change governance, regarding climate change-related governance as one of the core issuesof sustainable development strategies. During the repoing period, we have established a scientic governance structure andclaried the division of responsibilities at all levels.e Company has established a climate change governance system led by the Board of Directors. e Board members havedeep indust experience, are able to accurately identify and manage risks, ensure the eectiveness of climate risk manage-ment, and formulate climate action strategies suitable for its long-term development.
Governance
Risk Management
Hengli Petrochemical actively responds to the national “dual carbon strategy” and integrates the green and low-carbondevelopment concept into its development strategy. When formulating overall development strategies and making majordecisions, the Company attaches great impoance to the goals of the Paris Agreement, the 2030 Agenda for SustainableDevelopment, and other international conventions and relevant dual carbon policies of the Chinese government, conductsresearch and analysis on the impact of relevant policies, and helps the Company better grasp development oppounities andavoid risks.In the industrial production process, the Company strictly adheres to laws and regulations such as the Measures for theManagement of Carbon Emission Trading (Trial) and the Guidelines for the Accounting and Reporting of Greenhouse GasEmissions from China's Petrochemical Enterprises (Trial), and has formulated the Carbon Emission Management System, theGreenhouse Gas Management Procedures, and other systems to standardize greenhouse gas emission management, activelyexplore alternative paths for fossil energy sources such as coal, oil, and natural gas, and is committed to reducing greenhousegas emissions.
Strategy
Based on the characteristics of the petrochemical indust, Hengli Petrochemical is mainly committed to the chemical utilization ofCO2. It plans to achieve the recycling and utilization of 480,000 tons of CO2 by 2030 through a series of new projects. e specicimplementation plan is as follows:
CCUS/CCU Strategy and Implementation Plan
Hengli Petrochemical attaches great impoance to the risks posed by climate change and has established a comprehensive climatechange risk assessment and management system. We regularly conduct climate change scenario analysis and stress tests to identifyand evaluate potential impacts of climate change on our operations, nancial conditions, supply chain and other aspects, while formu-lating corresponding response measures.
Adoption of CO2 to Produce Raw Materials for New Energy Batte Electrolytes
A CO? ash evaporation system was added to the coal-to-hydrogen low-temperature methanol washing process,delivering high-purity CO? gas with over 98% concentration to the DMC production unit as feedstock for manufac-turing electronic-grade DMC, PC and other chemical products. e system was put into operation in April 2024and has cumulatively achieved resource utilization of over 80,000 tons of CO? for chemical production.
Risk CategoRisk DescriptionCountermeasuresClimate Change Risk Identication
Extreme weather events such as typhoons, heavy rainfalland oods may signicantly impact our productionoperations, including risks like equipment damage,transpoation disruptions and supply chain interruptionsthat could reduce output and increase operational costs,thereby compressing prot margins. Moreover, extremeweather may trigger seconda disasters or productionaccidents, threatening personnel safety and ecologicalenvironment while causing economic losses that fuherincrease operational expenditures.
e Company closely monitors extreme weatherwarnings, develops scientic and eective emergencyplans, enhances emergency drills, regularly inspectsproduction facilities, promptly upgrades equipment toeliminate potential hazards, and maintains adequatedisaster prevention supplies.
Chronic risks from global warming such as rising averagetemperatures, sea level increases and precipitation patternchanges may lead to higher operational costs, increasedequipment maintenance expenses, and additionalinvestments required for energy structure adjustments.
e Company encourages subsidiaries to identify regionalclimate risks and vulnerabilities while incorporatingclimate response measures into infrastructure develop-ment. Fuhermore, we intensify R&D and application ofgreen low-carbon technologies, improve resourceutilization eciency, gradually reduce dependence onnatural resources, and regularly conduct climate changeawareness education for stakeholders to promotelow-carbon environmental concepts.
Acute Risks
Chronic Risks
Under the “Carbon Peaking and Carbon Neutrality” policybackground, increasingly stringent government carbonemission requirements for the petrochemical indust areleading to higher corporate investments in energy-savingtechnological upgrades and compliance managementcosts.
We vigorously implement various energy-saving measuresand have developed a CCU strategy and implementationplan, proposing a series of new projects to reducegreenhouse gas emissions and promote green low-carbondevelopment.
Policy and Legal Risks
Market Risks
With global heightened focus on climate change andsustainability, consumer preferences are gradually shiftingtoward green low-carbon products and seices. is trendmay impact enterprise operational costs and revenues.
We persistently drive R&D and production of low-carbonproducts while continuously enhancing clean energyproduct and seice capabilities.
Reputation Risks
As stakeholders increasingly focus on corporate climateactions, companies must take relevant measures to avoidreputational impacts.
We emphasize cooperation and communication withstakeholders, actively addressing their concerns throughmultiple channels.
Technology Risks
To meet technological requirements for low-carboneconomic transition, the Company needs to continuouslystrengthen energy conseation and renewable energyutilization, implying higher R&D costs.
We actively develop carbon management trainingprograms, focusing on cultivating internal carbonmanagement professionals to establish talent foundationsfor green low-carbon development.
Transformational Risks
Physical Risks
As the highest leadership, the Board of Directors hasultimate responsibility for climate change-related risks
and oppounities.e Board of Directors has established a Strategy
and Sustainable Development Committee, which isresponsible for overseeing ESG management,including climate risk identication, assessment,and management, and regularly repos to the
Board of Directors on climate change topics.e main responsible persons(general managers) of each subsid-ia and the leaders of eachdepament internally form acarbon management leadinggroup, which is responsiblefor supeising andguiding the Company’sdaily carbon emissionmanagement.
Management Level
Composed of personnel from the
Safety and Environmental Protection
Depament and other relevantdepaments, responsible fororganizing and caring out carbonemission monitoring, carbon
emission data managementand verication, as well astraining and publicity.
Decision-making
Level
Implementation Level
Climate Risk Governance Framework
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Hengli Petrochemical proactively fullls climate change responsibilities, commits to promoting low-carbon transition, andsuppos national carbon peaking and carbon neutrality targets. In 2024, referencing international climate action target-set-ting methods and climate-related initiatives, Hengli Petrochemical established climate-related indicators and targets basedon operational conditions. Moving forward, we will continue to take green development as our foundation and responsibilityas our duty, working with all paies toward a harmonious future between humanity and nature.
Actions in Climate Risk
In compliance with national energy laws and regulations including the Energy Conservation Law of the People’s Republic ofChina, the Electric Power Law of the People’s Republic of China and the Energy Standardization Management Measures, theCompany has established internal management systems such as the Energy Management System and Energy Targets, Indica-tors and Management Plan System to strengthen energy management and continuously improve energy conseation.We have established a scientic energy management system where subsidiaries form energy management committees(energy conseation leadership groups) led by general managers/management representatives, with technical optimizationdepaments (management oces) seing as energy conseation authorities, and all depaments caring out relevantwork according to energy management system requirements.An annual energy conseation target management system was built, decomposing and setting annual energy consumptionquota targets for production units/facilities, evaluating monthly energy consumption target completion, supeising imple-mentation of energy optimization improvements to ensure ecient system operation, and conducting regular energy peor-mance assessments to ensure depamental accountability and continuous improvement of energy peormance goals.During the repoing period, Hengli Petrochemical’s ISO50001 energy management system ceication and GB/T23331energy management system ceication had covered six major subsidiaries including Hengke Advanced Materials andKanghui New Material.In July 2024, the Minist of Indust and Information Technology, National Development and Reform Commission and StateAdministration for Market Regulation announced the 2023 List of Energy Efficiency “Frontrunner” Enterprises in Key Industries,with Hengli Petrochemical Chemical, Hengli Petrochemical Rening and Hengli Petrochemical (Dalian) consecutively makingthe list for four years, winning energy eciency championships in ethylene, paraxylene and puried terephthalic acid indus-tries, while ethylene glycol also led indust energy eciency.
Energy Management System
Indicator and Objective
Hengli Petrochemical Climate Targets
Considering2024 asbaseline year
Target TypeCarbon management objectivesCarbon Peaking2030Carbon Neutrality2060
Hengli Petrochemical (Dalian) EnergyEciency Frontrunner
Hengli Petrochemical ReningEnergy Eciency Frontrunner
Hengke Advanced MaterialsKanghui New MaterialHengli Petrochemical ChemicalHengli Petrochemical
Rening (Dalian)Hengli Petrochemical (Huizhou)
Hengli Petrochemical ChemicalEnergy Eciency Frontrunner
No.1 in ethylene indust (using naphtha as feedstock)Unit product energy consumption
544.27 kgoe/t
No.2 in ethylene glycol indust (using
ethylene as feedstock)Unit product energy consumption
321.40 kgoe/t
No.1 in paraxylene indust
Unit product energy consumption
200.14 kgoe/t
No.1 in puried terephthalic acid indust
Unit product energy consumption
25.99 kgce/t
CO2 Emission Reduction
By 2026, energy-saving projects are expected to reduce emissions by no less than 1 million tons ofCO? cumulatively.Carbon Emission Intensity ReductionProjected 1 percentage point decrease in carbon emission intensity per unit output value by 2026.
Cumulative additional CO? recove and utilization of 160,000 tons by end-2026, projected480,000 tons by 2030.CO2 Recove and Utilization
Projected cumulative additional green electricity usage of 2 million MWh annually (wind power) by2028.Green Electricity Usage ScaleGreen Energy Coverage Rate
Projected achievement of 100% renewable energy coverage across all major production andoperational units by 2030.
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Energy Management Initiatives
Energy Conseation and Emission Reduction
GHG EmissionsGreenhouse Gas Emissions Scope 1 (tCO2e)
20232024
Greenhouse Gas Emissions Scope 2 (tCO2e)Greenhouse Gas Emission Intensity (tCO2e/RMB million)
31,167,270.461,677,849.77
139.89
47,201,832.476,718,552.07
228.21
Note 1: Based on operational characteristics, the Company's greenhouse gas emissions mainly come from direct emissions (Scope 1) including fossil fuel combustion andindustrial processes, and indirect emissions (Scope 2) from net purchased electricity and heat.Note 2: e above statistical data covers Hengli Petrochemical (Dalian), Hengli Petrochemical Rening, Hengli Chemical, Hengli Petrochemical (Dalian) New Material, KanghuiNew Material, Susheng ermal Power, Hengke Advanced Materials, Jiangsu Xuanda, Deli Chemical Fiber, and Hengli Petrochemical (Huizhou).Note 3: Carbon emission intensity = Greenhouse gas emissions/Operating revenue
Energystructureadjustment
Energy-Savingtechnologicalupgrades
EnergyinformationmanagementGradually reduce reliance ontraditional fossil fuels such as coalby optimizing energy consump-tion structures through the use ofbiomass, natural gas, and otheralternatives.
e Company plans to achieveenergy conseation andconsumption reduction goals byoptimizing process operatingparameters, paially retrottingequipment, and implementingwaste heat recove projects.
Continuously enhance the energymanagement system by develop-ing an intelligent energy seiceplatform for real-time monitoringand analysis of energy consump-tion data, optimizing energymanagement measures, andimproving energy eciency.
Kanghui New Material installed new electric chillers to replace some of the original lithium bromide chillers, reducingenergy costs. After implementation, the project saves approximately RMB 11 million annually in steam and electricitycosts, with an estimated reduction of 3,500 tons of standard coal equivalent in comprehensive energy consumption peryear.
Esterication Steam Waste Heat Recove
Case
Hengli Petrochemical (Huizhou) modied its tail gas ding system by discontinuing E1/2-920B and switching tolow-pressure steam for heating, reducing medium- and high-pressure steam usage. is adjustment allows one heatexchanger to be shut down while maintaining original peormance, cutting CO? emissions by 3,435.72 tons annually.M-921 Eciency Optimization
Case
To maximize energy utilization and lower operational costs, Hengli (Nantong) Industrial Park upgraded its residentialboiler heating system, replacing biomass pellet combustion with waste heat from industrial compressors. Uponmeasurement, the project saves 2,970 tons of biomass pellets annually, equivalent to 1,871 tons of standard coal.Compressor Waste Heat Heating RetrotCase
Hengli Petrochemical (Huizhou) optimized two tail gas scrubbing systems by introducing a chemical agent to absorb CO?from emissions, conveing it into sodium carbonate for reuse in production. is reduces annual CO? emissions by about1,600 tons while lowering costs.Tail Gas Scrubbing System Optimization
Case
e NH1949 high-temperature alloy furnace tubes with anti-coking propeies were put into operation in the No. 10cracker of Hengli Petrochemical Chemical’s 1.5 million-ton/year ethylene unit, marking its ethylene cracker furnacetubes as globally leading. is domestically produced furnace tube will signicantly reduce carbon emissions and opera-tional costs. Applied to the 64 W furnace type, Hengli Petrochemical Chemical was selected by the National Develop-ment and Reform Commission as one of China’s rst pilot units for this technology, with expected annual benetsexceeding RMB 7.437 million and annual CO? reduction of 869 tons.
Novel Ethylene Cracker Furnace Tube UpgradeCase
Energy Conseation Awareness Enhancement CampaignCase
Energy Conseation and Emission Reduction Education
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
hengli.com 39 I 40
Environmental Compliance Management
Hengli Petrochemical recognizes that environmental management is not only a reection of enterprise social responsibility butalso a core pillar of sustainability. We understand that eve eo to protect the environment is a commitment to the future,and eve act of ecological respect is a gift to future generations. Adhering to the development philosophy of “Green Hengli,Ecological Hengli, Harmonious Hengli”, we drive innovation-led green growth to fulll our environmental mission, contributingto clear skies and a beautiful homeland.We strictly comply with laws and regulations such as the Environmental Protection Law of the People’s Republic of China, WaterPollution Prevention and Control Law of the People’s Republic of China, Air Pollution Prevention and Control Law of the People’sRepublic of China, and Environmental Impact Assessment Law of the People’s Republic of China. Subsidiaries formulate HSEsystems like the Environmental Protection Management System, Environmental Protection Management Assessment System,and Environmental Monitoring Management System tailored to their operations, ensuring rigorous environmental manage-ment. Meanwhile, the Company has established an environmental protection organizational structure, promoted environmen-tal protection management, fuher enhanced the construction of the environmental management system, and is committedto building a modern enterprise that saves resources and is environmentally friendly.
Hengli Petrochemical prioritizes the prevention and response toenvironmental emergencies, establishing a comprehensive contin-gency system with regular specialized training. rough simulationsand case studies, we enhance employees’ risk identication andemergency response capabilities, ensuring swift and eective controlduring incidents. e Company is also equipped with advancedmonitoring equipment and emergency supplies, and cooperates withexternal professional institutions to optimize the scienticity andoperability of emergency response plans.
Emergency Plan Training for Sudden Environmental IncidentsCase
Environmental Management System CeicationDuring the repoing period, the Company and its manufacturing subsidiaries involved have 6 companies that have passed theISO 14001 Environmental Management System Ceication.
Environmental Ceication of Some Subsidiaries
Environmental Management System
HonorsSix factories under the Company have been awarded the national “Green Facto” title, including HengliPetrochemical (Dalian), Hengli Petrochemical Rening, Hengli Chemical Fiber, Hengke Advanced Materials,Hengli Petrochemical Chemical, and Kanghui New Material; Deli Chemical Fiber was awarded the “JiangsuGreen Facto” title.
Site of Emergency Drill for Sudden Environmental Incidents
Environmental
ManagementStructure
Inspection Center
Car out environmental monitoringand statistically analyze monitor data
Various Workshops
Implement related clean production inthe workshop
Safety and EnvironmentalProtection DepamentOrganize the implementation ofenvironmental protection policiesand guidelines and supeiseenvironmental monitoringVarious Depaments
Publicize and implement environmen-tal protection policies and car outenvironmental protection
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Environmental Impact Assessment and Audite Company has always regarded environmental protection as one of the core strategies for sustainability. To ensure compli-ance with environmental protection laws and regulations during production and operation and continuously improve environ-mental management, the Company regularly conducts comprehensive environmental audits on all operational sites.During the repoing period, we conducted multiple environmental audits, covering 100% of operational sites, cooperatingwith professional auditors to conduct investigations in terms of environmental regulations and compliance, pollutantemissions, and resource utilization, and implemented rectications for all identied issues, with a rectication rate of 100%.In addition, the Company attaches impoance to environmental management system ceication, hiring external third-payceication bodies to conduct annual sueillance audits of the Company’s ISO 14001 Environmental Management System,and also conducted expansion audits during the repoing period. At present, the Company and its manufacturing subsidiar-ies involved have 6 companies that have obtained ISO 14001 Environmental Management System Ceication, covering100% of operational sites.
Environmental Targets
e Company has established a comprehensive and ecient pollution prevention and control management system. rough regularmonitoring and supeision mechanisms, it ensures that pollutants such as waste gas, wastewater, and waste generated duringproduction and operation meet the requirements of national laws and regulations and local laws and regulations where the factoriesare located.To promote green transformation and sustainable development of the enterprise and meet the expectations of investors andstakeholders, the Company has formulated environmental protection goals and action measures for 2030 based on pollutantemissions and environmental management in 2024, combined with indust standards and policy requirements.
Pollutant Emissions Control
IndicatorUnit2024Total Environmental InvestmentEnvironmental IncidentsIncidents of Violation of Laws and Regulations in the Environmental FieldCompliance Rate Obseed in Pollutant MonitoringOperation Rate of Environmental Protection FacilitiesCompliance Rate of “ree Simultaneities” in Environmental Protection for Construction Projects
RMB 100 millionCaseCase%%%
3.75
Actions in Pollutant Reduction
For CODOptimize wastewater treatment processes to improve treatment eciency; strengthen wastewater reuse toreduce discharge.For ammonia nitrogenEnhance wastewater pretreatment to remove pollutants such as ammonia nitrogen; improve ammonia nitrogenremoval eciency of wastewater treatment facilities.
For sulfur dioxide and nitrogen oxides
Optimize combustion processes to reduce generation of sulfur dioxide and nitrogen oxides; strengthen operationmanagement of ue gas desulfurization and denitrication facilities.For toxic and hazardous air pollutants
Strengthen raw material management to reduce use of toxic and hazardous substances; enhance waste gaspurication treatment.For water emissionsOptimize production processes to reduce water consumption; strengthen wastewater reuse and recycling.
Annual reductionin chemicaloxygen demand(COD) emissionsby no less than1%
Annual reductionin ammonianitrogenemissions by noless than 1%
Annual reductionin sulfur dioxideemissions by noless than 1%
Annual reductionin nitrogen oxideemissions by noless than 1%
Annual reductionin emissions oftoxic and harmfulair pollutantssuch as mercu,arsenic, and leadby no less than1%
Zero environmen-tal negativeincidentsmaintained
| 1 | 2 | 3 | 4 | 5 | 6 |
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Management of WastewaterHengli Petrochemical places high impoance on whole-process control of wastewater management. rough advancedwastewater treatment technologies and rened management methods, we ensure full compliance of wastewater dischargestandards. e Company strictly complies with laws and regulations such as the Law of the People‘s Republic of China on thePrevention and Control of Water Pollution. All subsidiaries have formulated the Wastewater Pollutant Management Measures(Implementation Rules) to strengthen wastewater management.
Relying on intelligent monitoring platforms and high-standard treatment processes, we optimize resource utilization fromproduction sources and achieve wastewater reduction through closed-loop water circulation systems. For treatment, weadopt internationally leading pretreatment, biological treatment and advanced purication technologies to ensure wastewa-ter discharge fully exceeds national standards. e Company has established a dynamic monitoring mechanism, conductingregular internal water quality testing and third-pay compliance audits. rough data transparency and problem traceabilitymanagement, we continuously improve governance eciency.During the repoing period, wastewater discharge from the Company and its subsidiaries all met national treatmentstandards. We have fuher increased our wastewater reuse rate to indust-leading levels, demonstrating our commitment to“cherishing eve drop of water” through concrete actions.
Management of Waste GasIn terms of waste gas management, we strictly follow laws and regulations such as the Law of the People’s Republic of Chinaon the Prevention and Control of Atmospheric Pollution, formulate relevant management systems such as the Waste GasEmission Management System and the Pollutant Emission Management System, and build ecient waste gas collection andtreatment devices. Advanced technologies such as low-nitrogen combustion, catalytic oxidation, and adsorption puricationare adopted to ensure that pollutants are discharged up to standard. Meanwhile, we continue to optimize the technologicalprocess, promote the replacement of clean energy, and improve the green level of the production process. In addition, theCompany has established a real-time online monitoring system to dynamically analyze emission data and relies on an intelli-gent management platform to achieve continuous improvement in environmental peormance.e waste gas emissions during the production and operation of the Company mainly come from organized emissions in thefacto production process. e main pollutants include volatile organic compounds (VOCs) in process waste gas, as well assulfur dioxide (SO2) and nitrogen oxides (NOx) in ue gas from gas-red boilers. During the repoing period, the waste gasgenerated by the Company was discharged up to standard after treatment by environmental protection facilities.
Note: For discharge status of subsidiaries listed as key environmental supeision units by environmental protection authorities, please refer to Hengli Petrochemi-cal’s 2024 Annual Repo.
Note: For discharge status of subsidiaries listed as key environmental supeision units by environmental protection authorities, please refer to HengliPetrochemical’s 2024 Annual Repo.
IndicatorUnit2024Wastewater EmissionsWastewater Emissions IntensityCOD EmissionsAmmonia Nitrogen EmissionsTotal Phosphorus EmissionsTotal Nitrogen Emissions
TonTon/RMB 1 millionTonTonTonTon
26,303,994.81
111.33
663.33
3.29
3.54
152.96
IndicatorUnit2024
Sulfur Dioxide (SO2) EmissionsNitrogen Oxides (NOx) EmissionsPaiculate Matter EmissionsVolatile Organic Compounds (VOCs) Emissions
TonTonTonTon
1,877.624,466.01
440.46
695.34
e sewage treatment plant in Hengli (Dalian Changxing Island) Industrial Park applies embedded integratedsewage treatment technology. e COD of the treated sewage is below 15mg/L, which is far better than thenational standard. e reclaimed water reuse rate exceeds 80%. e industrial production water in the plantundergoes multiple purication processes and is tested for water quality treatment eects through aquatic plantsand ornamental sh bioindicators to achieve safe wastewater discharge.
Ecological Monitoring
Case
Kanghui New Material upgraded the spray tower tail gas technology in the PET-X and PET-Y workshops, adding aset of activated carbon tail gas purication equipment. e original single washing tower treatment process wasupgraded to advanced technology with three-stage demisting and two-stage activated carbon adsorptiondevices, eectively adsorbing and removing harmful gases, volatile organic compounds (VOCs), and other pollut-ants in the tail gas, and conveing them into harmless substances before discharge.
Activated Carbon Tail Gas Purication Equipment RenovationCase
Hengli Chemical Fiber has completed the liquid phase heat medium regeneration treatment of the EFG zone heatmedium system. is heat medium regeneration adopts a new process, using vacuum distillation methods tosimultaneously separate and remove light and heavy components. A simple cooling and collection device is addedto the wastewater generated by the regeneration equipment to enable wastewater recycling and signicantlyreduce wastewater generation.
Heat Medium Regeneration Wastewater TreatmentCase
e RTO waste gas treatment device in the Sewage TreatmentPlant of Hengli Petrochemical Rening has completed optimi-zation and transformation work and was successfully put intooperation. As a pa of energy conseation, environmentalprotection, and green development of the Sewage TreatmentPlant, this device plays an impoant role in the treatment oflow-concentration and high-volume organic waste gas. With apurication eciency exceeding 99%, it can treat 18,000 m3/hof waste gas. Over the past two years of operation, it hasreduced VOCs emissions by nearly 500 tons.
RTO Waste Gas Treatment Device in Sewage Treatment PlantCase
Sewage Treatment Plant of Hengli Petrochemical Rening
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Management of Solid Waste
Hengli Petrochemical consistently attaches great impoance to the management of solid waste and has formulated the SolidWaste Management System to continuously optimize its management processes. Adhering to the principles of “reduction,resource utilization, and harmless treatment,” we have established rigorous procedures for classied collection, standardizedstorage, and scientic disposal of solid waste. We actively introduce advanced resource recycling technologies to promote thecircular utilization of waste.We have successfully built and operated multiple ecient and intelligent systems for energy and waste recycling. esesystems have signicantly advanced the reduction, recycling, and harmless treatment of solid waste, thereby enhancingresource utilization eciency and substantially reducing environmental pollution. In addition, we regularly conduct trainingsessions on waste reduction and emergency drills to ensure full compliance with waste management regulations and tostrengthen employees’ environmental awareness and sense of responsibility.
Circular EconomyHengli Petrochemical upholds the core philosophy of green recycling and sustainable development, continuously exploringand putting into practice innovative approaches. By adopting indust-leading green product design technologies, we striveto reduce environmental impact at the source and promote the transformation of our products toward greener and morecircular models.
e waste liquid incinerator at Hengli Petrochemical ChemicalFacto adopts a high-temperature thermal oxidation processthat eectively decomposes organic compounds in waste gasand liquid, while minimizing the formation of NOx. NOx isfuher conveed into nitrogen through SNCR and SCRreactions. e heat generated from incineration is recoveredby a waste heat boiler, which produces high-pressure super-heated steam at 440°C and 3.6 MPa for use in the high-pres-sure steam pipeline network.
Waste Liquid Incinerator Accelerating the Harmless Disposal of Solid Waste
Case
Hengli Chemical Fiber's waste heat cooling project eciently utilizes waste heat from the overhead vapor of theesterication column in the polyester unit. rough heat exchangers, the waste vapor is conveed into hot water,which sees as the heat source for chillers. is project makes eective and rational use of existing energyresources and achieves signicant energy savings. Currently, 6 sets of waste heat cooling systems have been putinto operation in the polyester depament.
Overhead O-Gas Waste Heat Cooling Project
Case
Hengli Petrochemical successfully launched the world’s rstresidue recove system in the PTA indust—known as theR2R unit—which enables in-depth recove and treatment ofoxidation residues. Since the implementation of this project,the amount of solid waste generated during the PTA produc-tion process has been signicantly reduced. e R2R unit canrecover approximately 14,000 tons of benzoic acid and around3,000 tons of CMB (catalyst) annually, eectively minimizingsolid waste generation while maximizing resource utilization.
Innovative R2R Process Leading the Green Circular Economy for PTA ResidueCase
To enhance employees' awareness and skills in hazardous wastemanagement and ensure the safe disposal of hazardous waste,Hengli (Dalian Changxing Island) Industrial Park organized ahazardous waste safety training session. e training focused onthe fundamentals of solid waste and hazardous waste manage-ment, with several internal and external expes invited to deliverlectures. e training covered key aspects such as the classica-tion, labeling, collection, storage, transpoation, and disposal ofhazardous waste. It also incorporated real-world case studies toexplain relevant laws, regulations, and standards peaining tohazardous waste management.
Hazardous Waste Safety Training
Case
Hazardous Waste Safety Training Session in Progress
PTA Residue Recove and Recycling Project
Waste Liquid Incinerator Unit
General solid waste generated3,343,982.76 tons
general solid waste disposed3,343,923.46 tons
hazardous waste generated148,360.38 tons
hazardous waste disposed147,167.31 tons
Key Peormance
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
hengli.com 47 I 48
Technological Water-Saving Measures
Water Resource ManagementWe strictly comply with the Water Law of the People's Republic of China and other relevant laws and regulations, and have formulatedwater resource management systems such as the Water Conservation Management System, the Water Usage Statistics ManagementSystem, and the Water Metering Management System based on applicable legal and regulato requirements. ese measures aim tocontinuously strengthen water management, optimize water usage structure, and minimize water consumption at the source, therebyreducing operational risks associated with water scarcity.
e Company places great emphasis on enhancing water-saving awareness and standardizing water management, integrat-ing it as a key component of its sustainability management system. To raise awareness among all employees, the Companyregularly conducts water-saving awareness campaigns and training sessions. ese eos include the use of internal publica-tions, promotional posters, and themed activities to disseminate water conseation knowledge, promote the concept ofgreen water usage, and foster a culture of active paicipation in water-saving initiatives. Fuhermore, the Company incorpo-rates water conseation targets into depamental peormance evaluations. A clear incentive and accountability system forwater management has been established, linking peormance assessments to water-saving responsibilities to ensureeective implementation.
Water Conseation and Management
Management Structure of Water ResourceTo ensure the orderly and standardized implementation of water conseation eos, the Company has actively establishedand continuously improved its water resource management structure. e Chairman oversees the overall management ofwater resources, while the General Manager and Deputy General Manager are responsible for the strategic direction andpeormance supeision of water resource management.Water usage indicators are also incorporated into the peormance evaluations of the heads of each subsidia, reinforcing theimplementation of water resource management across all aspects of production and daily operations.At the beginning of each year, subsidiaries formulate corresponding annual water intake plans and monthly allocation sched-ules. A dedicated water conseation management depament monitors water usage, conducts regular benchmarking andanalysis, and repos the analysis results to the Company's senior management.Actions in Water Conseation
e Company actively implements water-saving initiatives, with technological eos focused on process and equipmentoptimization, water recycling, water balance testing, and intelligent management.
Note 1: Reclaimed Water Reuse Rate = (Wastewater Treated – Wastewater Discharged) / Wastewater Treated × 100%.Note 2: Data covers Hengli Petrochemical (Dalian), Hengli Petrochemical Rening, Hengli Petrochemical Chemical, Hengli Petrochemical (Dalian) New Material,Kanghui New Material, Susheng ermal Power, Hengke Advanced Materials, Jiangsu Xuanda, Deli Chemical Fiber, and Hengli Petrochemical (Huizhou).
IndicatorUnit2024Total Freshwater ConsumptionQuantity of Municipal Water PurchasedSuace Water WithdrawalGround Water WithdrawalTotal Water ConsumptionWater Consumption IntensityRecycled Water ConsumptionAnnual Water Saved via Reclaimed Water FacilitiesReclaimed Water Reuse Rate
10,000 tons10,000 tons10,000 tons10,000 tons10,000 tonstons/RMB 1 million10,000 tons10,000 tons%
13,331.88
298.63
12,969.43
63.81
88,067.753,727.37125,468.643,427.37
75.30
Ranked No. 1in modern coal chemical indust
Unit water withdrawal per product
(primarily seawater
1.12 m3/t
Water recycling rate
99.96%
Hengli Petrochemical Rening – Indust Leader in Water Eciency
Ranked No.
in petroleum rening indust
Unit water withdrawal per product
0.174 m3/t
Water recycling rate
98.69%
In response to the national call for water conseation, Hengli Chemical Fiber launched the “Water Saving Staswith Me” employee awareness program. A series of training and educational activities—including water consea-tion lectures and micro-education initiatives—were organized. More than 6,000 employees paicipated, coveringover 80% of the workforce.
Water Conseation Awareness TrainingCase
Process andEquipmentOptimization
rough a series of technological innovations, optimizations, and equipment upgrades, the Companyachieves water savings at the source.
Water Recycling
Reclaimed Water Treatment Unit in the Water Treatment System: e sewage treatment plant is equipped with a specialized ROconcentrate treatment line composed of “ozone + denitrication biolter + aerated biolter + post-ozone + V-shaped lter + activatedcarbon lter,” ensuring that all treated wastewater can be directed into the reclaimed water unit.
Reclaimed Water Reuse: Wastewater from cooling systems, air conditioning systems, and desalination units is collected,categorized, and treated for reuse. e overall reuse rate exceeds 75%, signicantly reducing the consumption of fresh water.
Water BalanceTesting
Regular Water Balance Assessments: e Company regularly conducts water balance testing, including inspections for leaks in thewater supply network, to promptly detect and control anomalies.
Optimization Plans: Based on the results of water balance testing, targeted water-saving rectication and optimization plans aredeveloped.
IntelligentManagement
Installation of Flow Meters and Online Analyzers: Real-time monitoring of water ow and quality helps quickly identify and resolveissues, ensuring the ecient use of water resources.Extensive Use of Data Analysis Tools: Water usage data is analyzed to identify potential areas for water savings, providing a scienticbasis for decision-making and fuher optimizing water resource recycling and utilization.
Seawater Closed-Circuit Cooling System: Replacing traditional open cooling towers, the system in Hengli (Dalian Changxing Island)Industrial Park saves 9,900 tons of industrial water per hour.
Low-Temperature Waste Heat Seawater Desalination Technology: Hengli (Dalian Changxing Island) Industrial Park produces 35million tons of freshwater annually using this technology.
Optimized Heat Exchange Network: Recovering low-grade heat for use in by-product steam production or desalinated waterheating, thereby reducing the demand for cooling water.
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Clean Technological OppounitiesAmid the sweeping transformation of industrial structures driven by China’s “dual carbon” goals, Hengli Petrochemical has proactivelyembraced the clean energy transition with a forward-looking perspective. e Company regards green technological innovation as acore engine for driving high-quality development.
Ecosystem and Biodiversity Protection
Ecosystem Protectione Company strictly adheres to national laws and indust regulations related to land management, such as the Law of thePeople's Republic of China on the Prevention and Control of Soil Pollution. An annual environmental monitoring plan isdeveloped, and qualied third-pay environmental monitoring agencies are commissioned to conduct groundwatersampling and testing eve six months, and soil sampling and testing annually. In addition, to strengthen the identicationand assessment of potential soil and groundwater risks, the Company has internally established the Soil Risk Identificationand Remediation Responsibility System and formed an Environmental Hazard Identication and Remediation Task Force toregularly car out internal risk assessments. During the repoing period, the compliance rate of characteristic pollutantmonitoring in soil and groundwater at all Hengli Petrochemical operating sites reached 100%.
Biodiversity Conseation
Hengli Petrochemical places great impoance on biodiversity conseation by adopting green production processes andecient resource utilization to minimize damage to natural habitats. e Company regularly conducts ecological assess-ments to identify and protect biodiversity hotspots, and actively paicipates in ecological restoration projects, such aswetland conseation and vegetation restoration, to promote ecological balance. Hengli Petrochemical remains committedto fullling its environmental responsibilities and contributing to the protection of global biodiversity and the health of ecosys-tems.
PV Power Generation Project at Hengli (Nantong) Industrial Park
Kanghui New Material has utilized the existing plant rooftops andparking areas to collaborate with State Power Investment Corpora-tion in constructing the largest PV power generation project inLiaoning Province. In 2024, the project generated a total of 45.4554million kWh of electricity, equivalent to 5,586.47 tons of standardcoal, and reduced CO? emissions by approximately 15,363 tons.
PV Power Generation
Case
At the Hengli (Nantong) Industrial Park, the total installed PV capacityhas reached 106.5 MW, with over 100 million kWh of green electricitygenerated annually, resulting in a reduction of 60,000 tons of carbonemissions. To eciently absorb green power and ensure grid stabilityduring peak periods, Hengke Advanced Materials has commissionedthe second phase of its 20 MW/40 MWh energy storage project. etotal storage capacity now stands at 40 MW/80 MWh. e systemcan discharge up to 40,000 kW of load during two peak periods perday, and charge once during o-peak and at-rate periods. Duringsummer peak electricity pricing, it can achieve up to three charge/-discharge cycles daily, eectively meeting pa of the productionpower demand, alleviating peak load pressure, and reducingelectricity costs.
Integrated PV-Storage-Charging FacilityCase
IndicatorUnit2024
PV GenerationWind PowerBiogas Power GenerationBiomass FuelTotal Renewable Energy Consumption
kWhkWhkWhtcetce
167,314,264.2849,555,000.00149,663.00297,351.85324,023.02
Hengli Chemical Fiber has actively implemented coal-to-gas conversion and biomass boiler construction projects toreplace coal-based fuels. As of August 2024, the use of coal fuels has been fully discontinued, replaced by biomass andnatural gas, resulting in a reduction of fossil energy consumption by over 80,000 tce.Energy Structure ImprovementCase
e ecological buer zone project for treated euent in theHengli (Nantong) Industrial Park Environmental ProtectionProject was designed with full consideration of ecologicalbalance and environmental protection principles, focusing onthe preseation and restoration of natural ecosystems. esystem adopts the “three lows and two highs” approach:
utilizing the height dierences among ve pools to createowing water that increases dissolved oxygen levels; using anautomatic irrigation system to spray treated euent ontoterrestrial plants; and improving water quality through plantroot ltration, as well as the decomposition of ammonia,
Ecological Buer Zone for Treated Euent in the Hengli (Nantong) Industrial Park Environ-mental Protection Project Ocially Commissioned
Case
PV Power Generation System Installed on the Rooftop of
Kanghui New Material Plant
Ecological Buer Zone for Treated Euent in the
Environmental Protection Project
On June 19, 2024, in an eo to fuher protect marine biolog-ical resources, improve the marine ecological environment,and promote biodiversity, Hengli Petrochemical (Huizhou)organized a joint pay-labor-youth ecological compensationand stock enhancement release activity under the theme“Protecting Marine Resources and Creating a Better Environ-ment.” is initiative also aimed to raise employees’ awarenessof aquatic ecological protection.
Case
Marine Stock Enhancement and Ecological Compensation Release
“Protecting Marine Resources and Creating a Better Environment”—Marine StockEnhancement and Ecological Compensation Release Program
nitrogen, and other substances by aquatic plants and microbial communities. Additionally, aquatic plants andornamental sh see as bioindicators to evaluate the eectiveness of water treatment. e commissioning of thisproject marks a solid step forward in the ecological development of the Nantong Industrial Park.
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Safe Operations &
Sustainable Growth
Product Quality and SafetyCustomer Seice ManagementSustainable Supply ChainsWork Safety ManagementChemical SafetyData Security and Protection
SUSTAINABILITYREPORT 2024Hengli inc
Annual Repo
hengli.com 53 I 54
Product Quality and SafetyQuality Management System
Hengli Petrochemical adheres to the quality management philosophy of “Pursuing Excellent Quality, Continuously ImprovingManagement.” By implementing a total quality management strategy, the Company is committed to delivering outstandingproducts and seices. We strictly comply with the Law of the People's Republic of China on Product Quality and other relevantlaws and regulations, and have established a sound quality management system. is includes the formulation of variousproduct quality management policies, such as the Product Standardization Management Policy, to ensure that eve stage—from R&D and production to after-sales seice—meets the highest standards.Upholding a spirit of craftsmanship and a pursuit of excellence, the Company has developed a comprehensive quality manage-ment system that covers the entire product lifecycle. We have formulated control procedures such as the Advanced ProductQuality Planning and Control Procedure, Production Operation Control Procedure, Nonconforming Product Control Procedure,Customer Satisfaction Management Procedure, and Continuous Improvement Management Procedure, ensuring the eective-ness of quality management. In addition, we actively adopt external product quality management systems and maintain highstandards to drive high-quality development. During the repoing period, 7 subsidiaries including Kanghui New Material andHengli Petrochemical Chemical passed the ISO 9001 Quality Management System ceication.
Digitalization of Product Quality Control
e Company continues to explore digital quality management to more accurately and eciently identify and resolve productquality issues, thereby enhancing both product quality and production eciency.
We focus on the core principles of “Prioritizing Quality and Promoting Continuous Improvement” and have established acomprehensive lifecycle quality management system covering product R&D, production, sales, and after-sales seices. issystem ensures that eve stage meets high-quality standards. In production quality risk management, we follow a rigorousrisk management process that includes risk identication, risk assessment, risk control, risk communication, and risk auditing,ensuring that each step is eectively executed. In the sales and after-sales seice stages, we continuously optimize productpeormance and seice quality through customer feedback mechanisms and regular quality follow-ups.
Whole-Life-Cycle Quality Management
Empowering Employees rough Quality TrainingHengli Petrochemical places great impoance on quality training and has established a three-tier training system at theCompany, depament, and team levels. rough a variety of formats—such as online courses, on-site workshops, andhands-on drills—the Company eectively enhances employees' quality awareness and professional skills. Additionally, HengliPetrochemical organizes quality-focused initiatives such as Quality Month and quality competitions to encourage employeeinnovation and the sharing of quality management ideas. ese activities have engaged nearly 500 employees, fosteringcollective eos to elevate the Company’s product quality standards.
Kanghui New Material has implemented a fully digital MESsystem throughout the workshop production process. Fromproduction to the nal packaging of polyester lm rolls, allstages are traceable, and relevant production information isaccessible. e system provides a visual display of key datasuch as inspection results, length, width, thickness, and weightof nished and semi-nished products. In the event of a qualityissue with a lm roll, relevant data from each production stagecan be retrieved for root cause analysis, enabling traceablemanagement and timely identication of problem points totake appropriate corrective measures.
Kanghui New Material Establishes a Digital Quality Management System for Polyester FilmCase
In 2024, Hengli Chemical Fiber organized specialized trainingsessions focused on quality tools such as QC and FMEA. esetargeted trainings signicantly enhanced employees' qualityawareness and professional capabilities. As a result of theinitiative, the product nonconformity rate saw a markeddecline, while customer satisfaction continued to rise.
Hengli Chemical Fiber Product Quality TrainingCase
e Company strictly follows internal policies such as the Nonconforming Product Control Management Policy to identify andhandle nonconforming products. We also conduct regular product recall simulations to evaluate and verify the eectiveness ofour recall procedures, ensuring product quality is protected. During the repoing period, no large-scale product recall eventsoccurred.
Product Recall Management
Hengke Advanced Materials places great emphasis on the leading role of quality credit and has developed a “reeComprehensive, ree Focused” dual-direction quality control model throughout the entire process. is modelensures comprehensive coverage of quality across all stages, involving all employees, and enabling full traceability.Hengke Advanced Materials has obtained ceications for nine related systems, including ISO 9001 for qualitymanagement, ISO 14001 for environmental management, OEKO-TEX for eco-friendly textiles, and the integrationof information technology with manufacturing management (two-in-one AAA management system), amongothers. In 2024, Hengke Advanced Materials was recognized as a “Jiangsu Province Quality Credit AAA Enter-prise.”
Hengke Advanced Materials Awarded “Jiangsu Province Quality Credit AAA Enterprise”Case
Product Quality Training Session in Progress
Polyester Film Digital Quality Management System
Quality Management System Ceicates of Selected Subsidiaries
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Customer Seice Management
e Company continu-ously improves itscustomer complainthandling mechanism byestablishing a qualitycomplaint resolutionprocess to ensure thatcustomer concerns areaddressed in anorganized and ecientmanner, thereby bettersafeguarding customerrights and interests.
e Company attaches great impoance to customer satisfactionand actively promotes its management. It has developed the Custom-er Satisfaction Management Procedure and conducts satisfactionevaluations by distributing Customer Satisfaction Survey. e collect-ed feedback is analyzed and assessed, followed by the preparation ofsatisfaction repos to guide systematic improvements. Additionally,the Company regularly organizes training for the Sales Depament,covering sales procedures and business etiquette, in order to enhanceemployees' professional competence and seice quality frommultiple dimensions, continuously boosting customer satisfaction.
Customer Complaints Resolution Mechanism
During the repoing period, the overallcustomer satisfaction score was approximately
96.71%
Customer Satisfaction Management
hengli.com 55 I 56
Sustainable Supply Chains
Supply Chain Management SystemHengli Petrochemical places great impoance on supply chain security. We continuously optimize our supply chain manage-ment system and enhance supplier management by establishing internal policies such as the Supplier Management Systemand Bidding and Procurement Management System. ese eos strengthen risk control throughout the procurement processand provide strong suppo for the Company’s stable operations.e Company has also issued policies such as the Supplier Management Measures and Supply Chain Risk ManagementMeasures, clearly dening supply chain management procedures and risk control measures. In addition, we have developed asupply chain management platform to enable real-time information sharing and dynamic monitoring of supplier data,procurement plans, and logistics, thereby improving supply chain management eciency.To prevent integrity risks at the source, the Company signs Anti-Bribery Agreements with suppliers and conducts integritytraining for internal procurement personnel. Together, these measures foster a clean and transparent procurement environ-ment. During the Repoing Period, the signing rate of supplier integrity agreements was 100%.
Implementing Transparent Procurement
Hengli Petrochemical is committed to building a mutually benecial and win–win supply chain ecosystem that suppos thegrowth of small and medium-sized enterprises (SMEs) and jointly promotes high-quality indust development. We consis-tently uphold the principles of equality and fairness in cooperation and place great impoance on collaborative developmentwith SMEs. We have established transparent procurement and cooperation mechanisms to ensure that SMEs enjoy equaloppounities in bidding, contract signing, and peormance execution. In addition, we provide technical suppo and trainingto help SMEs enhance their competitiveness. Regular supplier evaluations are carried out to promote their sustainabledevelopment. We have also optimized payment processes to ease nancial pressure on SMEs.
Equal Treatment of Small and Medium-Sized Enterprises
Hengli Petrochemical Bidding Principles
Principle ofchecks and
balances
Principle ofopenness andtransparency
Principle ofintegrityanddiscipline
Each evaluation committeemember must paicipateindependently in the biddingprocess. Technical and commer-cial evaluations are conducted inseparate stages.
Evaluation criteria for biddingand procurement must be fairand consistent, and conclu-sions must be objective andimpaial.
All personnel involved inprocurement must peormtheir duties with integrity anduphold self-discipline.
Principle ofreputationsafeguarding
Principle of
commercialcondentiality
Principle of
traceableproceduresAll paies involved in thebidding process must actdiligently, professionally, and withintegrity to protect the Compa-ny’s reputation.
All technical details,patents, and commercialquotations involved in theevaluation must remainstrictly condential.
Eve step of the bidding andprocurement process musthave standardized documen-tation and outcome recordsfor audit and review purposes.
Systematic Assurance of Product and Seice Quality
●Applies to the monitoring and measurement of
external customer satisfaction.
●Customer satisfaction sueys help assess
whether the Company correctly understands andmeets current and future customer needs andexpectations. Based on the results, the QHSEmanagement system is improved to continuouslyenhance customer satisfaction.
CustomerSatisfactionSuey Control
Procedure
Customer Complaint Handling Process Diagram
If necessa
Customer complaintSalesperson receives the complaintManagement approvalPre-sales Technical Suppo DepamentYes
Yes
Yes
No
No
Analyze and clarifyresponsibility
On-sitevericationFormulate ahandling planImplement planClose the issue and
archive the case
Handling planImplement plan
Continuous improvementSummarize and archive
On-siteinvestigation
On-siteinvestigationSuggestedmeasuresOn-site investigation repoird-pay monitoring
Quality Complaint Resolution Process
Receive complaint
Conrm delive status(check if within contract scope)
Non-quality related measurement anomalies
Quality-relatedmeasurement anomaliesQuality-relatedmeasurement anomaliesTranspoation anomalies
(third-pay issues)
Customer factors(usage/storage)
Customeracknowledgment
Management approval
Customer Complaint Handling Request Form
Supplier issues(product/logistics)
Analyze
Customer acknowledgment
Managementapproval
Upholding the management philosophy of “market-oriented and customer-centered,” the Company continuously optimizes itscustomer seice system. It has established a comprehensive sales process and after-sales seice mechanism guided by the Custom-er Service Control Procedure, enabling prompt response to and resolution of customer complaints and feedback. At the same time,the Company strictly protects consumer information security, strives to enhance customer satisfaction, and reasonably meetsconsumer needs.
Key Peormance
●Applies to the control of contract review
processes.
●To ensure eective contract quality control, all
product-related requirements must be clearly,adequately, and reasonably dened. roughcontract review, the Company conrms its ability tomeet these requirements, ultimately ensuringcustomer satisfaction.
ContractReviewProcedure
● Covers the entire product sales and seice
process.
● Implements the Company’s quality policy,
assists customers in properly using products,promptly addresses issues encountered duringuse, and provides high-quality products andseices to build a positive company image.
CustomerSeice Control
Procedure
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
hengli.com 57 I 58
Suppoing Supplier Development
Digitalized Supply Chain
Hengli Petrochemical leverages intelligent technologies to empower supplier management, enhancing the overall eciency ofthe supply chain while fuher strengthening collaboration with suppliers. is digitalization suppos the creation of a green,sustainable supply chain ecosystem, laying a solid foundation for future growth.
Full-Life-Cycle Management
e Company places great impoance on full lifecycle management of the supply chain and has developed the SupplierManagement Control Procedure, aiming to build a green and sustainable supply chain system. rough a stringent supplieradmission mechanism, we ensure that our paners meet company standards in areas such as production management,quality control, product peormance, and HSE management capabilities. We also conduct regular ESG evaluations of thesupply chain to drive continuous improvement among suppliers, enhance eciency, and ensure transparency and account-ability throughout the supply chain.
Suppliers are scored and assessed based on production management, quality control, productpeormance, and HSE capabilities. Ceication in quality, environmental, and safetymanagement systems is a key criterion for admission.AdmissionofSuppliers
Relevant credit materials submitted by dierent types of suppliers are reviewed, and on-siteinspections are conducted when necessa, followed by the issuance of the Supplier Investiga-tion Report and Supplier Score Sheet.Supplier
audit
e Company’s AWMS (Advanced Warehouse Management System)utilizes IoT technology to build a real-time platform for the statustracking and timely sharing of material circulation at eve stage. Byintegrating various modules within the system, Hengli Petrochemicalhas achieved control and tracking of the procurement process,enabling visual and systematic management of materials.
Intelligent Empowerment of Supplier ManagementCase
In November 2024, Hengli (Nantong) Industrial Park held a grandceremony for the delive of the “Hengke 420 Oerlikon Barmag DTYMachines Project.” Mr. Tang Hui, Executive Assistant of NantongHengke DTY Division, engaged in a dialogue with supplier Barmagon the themes of “innovation, sustainability, eciency, and energyconseation.” Both paies committed to jointly advancing techno-logical innovation and improving product quality.
Regular ESG Training for Suppliers
Case
Hengli Petrochemical places great emphasis on the sustainable development of its supply chain and integrates ESGprinciples into eve aspect of supplier management. By regularly organizing ESG training and awareness programs, theCompany suppos suppliers in strengthening their capabilities in environmental, social, and governance peormance.Tailored training sessions are designed based on the specic needs of suppliers, covering key areas such as greenproduction, energy conseation and emission reduction, compliant operations, and social responsibility. ese eoshelp suppliers enhance their ESG awareness and practical competencies. In addition, the Company promotes collabora-tive progress among suppliers through case studies, experience sharing, and other interactive formats, working togetherto build a sustainable and resilient supply chain ecosystem.
Sharing the Vision of “Innovation, Sustainability, Eciency,and Energy Conseation” with Suppliers
Ongoing and periodic evaluations are carried out, and results are recorded in the supplierinformation database.Supplierevaluation
Suppliercategorization
A supplier exit mechanism is in place. Suppliers with serious issues in contract peormance orlegal disputes are removed from the conforming supplier list and disqualied from fuhercooperation.Supplier
Exit
Suppliers are assessed on aspects such as strength, quality, and delive peormance. Basedon the scores, suppliers are graded as follows: Grade A: Increased procurement volumeencouraged; Grade B: Regular procurement; Grade C: Requires coaching, reduced procure-ment or tempora suspension; Grade D: Nonconforming supplier, to be eliminated.
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Work Safety ManagementWork Safety Management SystemHengli Petrochemical adheres to the principle of “safety rst, prevention foremost, and comprehensive governance” andstrictly complies with laws and regulations such as the Law of the People's Republic of China on Work Safety and the Law ofthe People's Republic of China on Prevention and Control of Occupational Diseases. e Company has established a compre-hensive safety management system by implementing internal safety regulations, such as the Work Safety Reward and Punish-ment System, Fire Safety Management System, Construction Project '“Three Simultaneities” Management System, and HSEEvaluation Management System. ese measures have driven the standardization of work safety across all industrial parks andestablished an eective work safety management system. During the repoing period, the Company and its subsidiaries didnot experience any fatal workplace accidents.e Company has set up a Work Safety Committee and work safety management organization, clearly dening occupationalhealth and safety production goals. It has also signed Safety Responsibility Agreement with employees to strengthen the worksafety accountability system and awareness across all levels. Fuhermore, safety peormance evaluations are tied to thecompensation of senior executives, ensuring comprehensive protection of employee health and safety.Each year, the Company holds a senior management work conference, during which the heads of subsidiaries sign and submitthe General Manager’s Work Safety and Environmental Protection Responsibility Statement.During the repoing period, all subsidiaries successfully achieved their work safety targets. Subsidiaries such as HengliPetrochemical Chemical, Hengli Petrochemical Rening, Hengli Petrochemical (Dalian), and Kanghui New Material haveobtained ISO 45001 Occupational Health and Safety Management System ceication.
Establishment of Work Safety Culture
In accordance with the Law of the People's Republic of China on Work Safety, the Emergency Response Law of the People'sRepublic of China, and the Management Measures for Work Safety Accident and Emergency Plan, the Company has formulat-ed a comprehensive Work Safety Accident and Emergency Plan. rough this, the Company continues to improve itsemergency drill system, regularly organizing drills and training sessions to enhance emergency management capabilities andstrengthen the foundation for work safety.June 2024 marked the 23rd National “Work Safety Month,” themed “Eveone Talks Safety, Eveone Knows EmergencyResponse — Keeping Life Channels Clear.” Hengli Petrochemical's industrial parks responded actively by organizing a widerange of educational campaigns, drills, and safety rectication activities. ese initiatives aimed to comprehensively improveemployees’ safety awareness and their ability to respond to emergencies.
Work Safety Month Campaign
Work Safety Management in 2024
IndicatorUnitValueInvestment in Work SafetyMajor Hazard Rectication RateCoverage Rate of Safety Education and TrainingCoverage Rate of Safety Risk Protection Traininge Number of Security Emergency DrillsNumber of Fatal Accidents Concerning Work SafetyInspection Rate of Special EquipmentCeication Rate for Special Operations and Equipment Operators
RMB 100 million%%%TimesTimes%%
5.30
1920
Hengli (Yingkou) Industrial Park invited senior safetyexpes to train over 240 mid- and senior-levelmanagers and safety personnel. It also held evacuationdrills in oce buildings, and conducted emergencyresponse exercises for tetrahydrofuran and biogas leaks,fuher reinforcing the Company’s work safety manage-ment system.
Hengli (Dalian Changxing Island) IndustrialPark conducted a comprehensiveemergency drill for major hazard sources,aiming to test the scientic design andpractical operability of its emergencyresponse plans and to continuouslyenhance emergency handling capabilitiesfor major hazards.
Hengli (Nantong) IndustrialPark carried out an integratedemergency drill simulating aradiant coil leak in the furnacechamber of the thermal oilheater, testing reghters’emergency response speedand improving early-stageincident handling capabilities.Hengli (Suqian) Industrial Parkorganized “Work Safety Month”activities through variousformats, including summersafety training, re evacuationdrills, reghting skills competi-tions, special safety recticationactions, and safety awarenessvideo check-ins during pre-shiftmeetings.
Hengli (Yangtze RiverDelta) Industrial Parkorganized safetyeducation sessions andknowledge competitionsto spark employees’interest in learning aboutwork safety.Hengli (Huizhou) Industrial Parkkicked o the 2024 “WorkSafety Month” by anchoringkey activities to designatedtheme weeks. e entiremonth featured safetycampaigns, hazard inspec-tions, emergency drills, andtraining programs to ensurethe concept of safety takesroot across the enterprise.
Hengli (Suzhou) Industrial Park: Work
Safety Skills Competition
Hengli (Dalian Changxing Island) Industrial
Park: Safety Drill in Progress
Hengli (Suqian) Industrial Park
Active Paicipation of Industrial Parks in Work Safety MonthCase
Hengli (Suzhou) Industrial Parkconducted theoretical training,practical drills, and safety hazardinspections, eectively improvingemployees' re safety awarenessand self-rescue skills duringemergencies.
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
hengli.com 61 I 62
Work safety is of paramount impoance. Adhering to the principleof “safety rst, prevention foremost, and comprehensive gover-nance,” the Company has strengthened its safety managementsystem, deepened safety oversight, enhanced safety training, andactively responded to emergency drills, establishing a safety-ori-ented team characterized by zero violations, zero hazards, and zeroaccidents.
Active Paicipation in Emergency Drills
Digital Safety Managemente Company actively promotes the deep integration of information technology with work safety management. Centeredaround key elements of enterprise safety, it has built a digital safety management platform aimed at enhancing the eciencyand eectiveness of safety management through digital means.
Hazard Identication and Managemente Company continuously improves its safety and health management system by formulating the Management System forAccident Hazard Identification and Rectification and the Dual Prevention Mechanism Management System for Safety RiskGrading and Control and Hazard Identification and Rectification. Risk identication is conducted regularly at the workshop leveleach year, with risk sources categorized by signicance and corresponding tiered control measures developed, therebyeectively enhancing risk prevention and control capabilities.
Fire Safety Management
e Company places great emphasis on re safety and the management of special equipment. It has established severalinternal regulations, including the Fire Safety Management System, Special Equipment Safety Management Measures, andSafety Management System for Special Equipment and Operators, to ensure compliance with legal responsibilities for the safeuse of special equipment. ese systems eectively prevent safety incidents and ensure rigorous control of work safetymanagement processes. During the repoing period, the Company had a team of 569 safety management personnel in place.Fire SafetyManagement
Formation of a dedicated re brigadeEstablishment of a comprehensive re equipment ledger, with each piece of reghting equipmentassigned to a designated manager Implementation of re safety education, including annual re drills for all employees
SpecialEquipmentManagement
All special equipment operators are required to be ceied and must strictly adhere to operatingproceduresRegular inspections are strictly enforced, including annual, monthly, and daily checks, suppoed bya complete and detailed equipment ledger
Hengli New Material organized a “Major Hazard SourceProduction Safety Accident Emergency Drill” to comprehen-sively evaluate the emergency response capabilities of itsvarious teams. is marked Hengli New Material’s rst-evercompany-level emergency drill, conducted in a “script-free”simulation format. e exercise simulated a combustible gasleak at the base of propylene storage tank TK108-01 in thetank farm area.
Hengli New Material Successfully Conducts Its First Company-Level Emergency DrillCase
Hengli (Dalian Changxing Island) Industrial Park is vigorouslyadvancing the integration of information technology withhazardous chemical work safety management by developing adigital safety management platform. is platform featuresextensive applications, comprising 109 functional modulesand over 360 specic functions, seamlessly embedded into allstages of production. It provides real-time monitoring of morethan 60 sets of equipment, 124 major hazard sources, and1,964 control points. Additionally, it enables real-time trackingof 6 re stations and 40 re trucks, while connecting 6,842sueillance cameras to ensure comprehensive plant-wide
Integrated Work Safety Supeision rough Information Systems to Drive Safety EnhancementCase
e electrical and instrumentation team in the Polyester G Zone of Hengli Chemical Fiber carried out a comprehen-sive inspection of electrical equipment throughout the workshop in accordance with indust standards and theCompany’s work safety management system, ensuring safe, stable, and ecient production. During the inspection,the team focused on key aspects such as the operational status of equipment, insulation peormance of wiring,sensitivity of switches, and reliability of grounding systems—ensuring all indicators met work safety standards.Upon identifying problems or potential hazards, the team immediately formulated corrective actions, designatedresponsible personnel, and set rectication deadlines to ensure that all hazards were addressed promptly andeectively.
Electrical Safety Hazard Inspection in the Polyester G Zone of Hengli Chemical Fiber
Case
Emergency Drill in Progress
Central Control Room
During the repoing period, theCompany conducted a total of
1,920 emergency drills
e Company conducted529 company-level hazard inspections, identifying 4,477 company-level hazards;
and46,850 workshop-level inspections, identifying 30,599 workshop-level hazards. e hazard
rectication rate reached100%.
Key Peormance
Key Peormance
safety coverage. By adopting an intelligent management model, the park achieves rapid on-site sensing, precisemonitoring, and ecient emergency response, thereby establishing an integrated work safety information supei-sion system that empowers enterprise-level work safety management.
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Chemical SafetyChemical Management Policies
e Company strictly complies with the Regulations on the Safe Management of Dangerous Chemicals and other relevantregulations. It promotes the development of internal systems at its subsidiaries, including the Hazardous Chemicals SafetyManagement System and the Hazardous Chemicals Loading and Unloading Safety Management System. ese systems setclear management requirements for the procurement, storage, use, and disposal of chemicals. Additionally, each workshopmaintains a hazardous chemicals management ledger, implements hazard communication measures, and conductsemergency drills related to hazardous chemicals, thereby safeguarding the safety and well-being of all employees.We focus on the core principles of “Prioritizing Quality and Promoting Continuous Improvement” and have established acomprehensive lifecycle quality management system covering product R&D, production, sales, and after-sales seices. issystem ensures that eve stage meets high-quality standards. In production quality risk management, we follow a rigorousrisk management process that includes risk identication, risk assessment, risk control, risk communication, and risk auditing,ensuring that each step is eectively executed. In the sales and after-sales seice stages, we continuously optimize productpeormance and seice quality through customer feedback mechanisms and regular quality follow-ups.Hazardous Chemicals Management System
November 9, 2024, marked National Fire Safety Day. In response to the theme “Fire Safety for All, Life First,” DeliChemical Fiber conducted a re extinguisher training drill. During the activity, the re brigade provided a specialbrieng on the proper use of re extinguishers and related precautions. e entire group of paicipating employ-ees then engaged in hands-on re extinguisher operations, eectively enhancing their re safety skills.
Fire Extinguisher Training DrillCase
National Fire Safety Day Fire Extinguisher Drill in Progress
e Procurement Depament conducts strictevaluations of suppliers and prioritizes thepurchase of environmentally friendly chemicals.Chemicals are procured based on productionprocess requirements, and only conformingchemicals are selected. Suppliers are required toprovide Material Safety Data Sheets (MSDS) andchemical safety labels, or such documentationmust be obtained from relevant sources.
ProcurementChemicals are categorized andmanaged by zone according to theirpropeies, with clear warning signs inplace. Hazardous chemicals must bestored in dedicated warehouses, tankfarms, or storage rooms under thesupeision of designated personnel.Highly toxic and drug precursorchemicals are managed under the“Five Duals” system—dual personneldelivering and receipt, dual personnelmanagement, etc.
Storage
In adherence to the principle of “those who use areaccountable,” the Company has establishedcomprehensive safety operating procedures andemergency response plans for precursor chemicalsand explosive-prone substances. Employees areinformed of potential hazards, preventionmeasures, and emergency response protocols.
Usage
Chemicals and chemical wastemust be classied, stored, anddisposed of in accordance withnational and local environmentalregulations.
Transpoation
e Company has developed emergencyresponse plans for chemical leaks, res, andother critical incidents, and regularly organizesdrills for relevant personnel to ensure prepared-ness.
Emergency
response
e Company conducts regular riskassessments for both existing andnewly introduced chemicals, imple-menting appropriate hazard controlmeasures.
Riskassessment
Internal audits are conducted regularly to assessthe compliance and eectiveness of chemicalmanagement practices. Based on audit ndingsand external feedback, the Company continu-ously improves its chemical managementprocesses and policies.
Peormance
assessment
In 2024, the Company’s re safety team was equipped with 57 retrucks and staed by336 professional reghters.
Key Peormance
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Data Security and ProtectionEstablishment of Information Security Management Systeme Company has established an Information Security Management System and related protocols to ensure strict control overthe devices, facilities, and software systems connected to the Company's information systems. is system is designed toguarantee the protection of corporate data security. Additionally, each subsidia of the Company has set up an informationsecurity management depament that is fully responsible for overseeing and managing information security, ensuring thatinformation security is reliable, controllable, and manageable.
Information Security Risk Identication and AssessmentWe have established a comprehensive information security risk assessment system. rough regular scanning and vulnerabili-ty detection, potential threats are identied, and targeted protective measures are implemented. e Company strictlyenforces a data classication management system, encpting sensitive information during both storage and transmission.Advanced technologies such as rewalls and intrusion detection systems are deployed to create a multi-layered securityprotection network.Additionally, the Company has developed protocols such as the Cybersecurity Emergency Response Plan to standardize theprocedures for handling security incidents within the Company's information systems. Regular drills and employee informationsecurity training are conducted to enhance our ability to prevent and control information security emergencies.
Chemical Spill Incident Response and Prevention
Hengli Petrochemical has established a comprehensive chemical spillprevention and emergency response system. rough stringent risk assess-ments and hazard identication protocols, the Company ensures safetyacross all stages—production, storage, and transpoation. Regular employ-ee training sessions and emergency drills are conducted to strengthenoverall safety awareness and enhance incident response capabilities amongall sta members. In addition, Hengli Petrochemical has implemented astructured accident repoing and review mechanism, allowing for continualrenement of its safety management practices. With a rm commitment toachieving a “zero leakage” target, Hengli Petrochemical works diligently toprotect its employees, the surrounding community, and the environment,upholding its corporate social responsibility.Information Security Management Strategiese Company has developed a series of management measures focusing on physical security, network security, and otheraspects to continuously enhance the level of network and data security protection.
During the repoing period, theCompany conducted3,776 chemical safety
drills.
Information Security
Leading Group
Responsible for managing informationsecurity and privacy protection during
data entHandles and analyzesinformation security incidents
Information Security
Working Group
Emergency Response
Group
PhysicalsecuritycontrolStrengthen thesecuritymanagement ofphysicalenvironments,including datacenters,hardwareequipment, anduninterruptiblepower supplies(UPS).
Personnel
accesscontrolStrengthenpersonnel accessmanagement,ensuring securitymeasures foremployees'access rightsduring onboard-ing andooardingprocesses.
NetworksecuritycontrolStrengthen networksecurity manage-ment, including thesecurity of networkarchitecture,rewalls, intrusiondetection systems,etc.
Information
securitycontrol
Enhance thesecuritymanagement ofinformation,including theencption,backup, andrecove of data.
ApplicationsecuritycontrolStrengthen thesecurity of applica-tion systems,including the secureconguration ofoperating systemsand the securitymanagement ofdatabases.
Installation of Hazard Warning Boards and “One MSDS, One Label” System
Case
In March 2024, Hengli (Nantong) Industrial Park organized a chemical spill emergency drill to enhance employees’awareness of risk prevention and their ability to peorm self-rescue and mutual aid. All employees actively paici-pated in the drill. e exercise fuher reinforced the Company’s work safety baseline and signicantly improved itsemergency response capabilities.
Chemical Spill Emergency Drill at Hengli (Nantong) Industrial ParkCase
Harzardous Chemical Warning Boards
Chemical Spill Emergency Drill in Progress
“One MSDS, One Label” System for Harzardous Chemicals
Key Peormance
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Insightful Innovation &
Digital Intelligence
Safeguard
Optimizing R&D SystemsEmpowering Innovative AchievementsAdvancing Digital and Intelligent DevelopmentIntellectual Propey Protection
Optimizing R&D Systems
R&D System GuaranteeHengli Petrochemical adheres to the “innovation-driven development” strategy and places great emphasis on innovation. eCompany continues to strengthen the management of the R&D system and has formulated relevant management policiessuch as the New Product Development Management Procedures, New Material R&D Center Laboratory Management System,and Independent Innovation Reward Management Measures. ese ensure the standardization of new product developmentprocesses and the scientic management of laboratories, enhancing the work eciency and innovative capabilities of the R&Dteam, and providing a solid institutional guarantee for the development, testing, and promotion of new products.To encourage R&D and innovation, Hengli Petrochemical has implemented a series of incentive measures that have motivatedall employees, accelerating the pace of new product launches. In 2024, several of the Company's technologies reached indus-t-leading levels.
Empowering Innovative AchievementsHighlight Products OveiewDuring the repoing period, Hengli Petrochemical continued to overcome technological challenges, leading to the emergenceof many outstanding products.
RMB 1.703 billion in total in R&D investment(
24.20% year-on-year growth)
Under 30 (exclusive) years old30 (inclusive) to 40 (exclusive) years old40 (inclusive) to 50 (exclusive) years old50 (inclusive) to 60 (exclusive) years old60 years old or above
R&D Team Building
Hengli Chemical Fiber developed a new member of ultra-ne ber with a single lament density of only 0.18 denierfor the 27D/144f yarn. e weight of a 9,000-meter-long lament is only 0.18 g. is ultra-ne polyester lamentis a benchmark variety that represents the international standard of ber technology and competitiveness.
Hengli Chemical Fiber Develops Ultra-Fine FiberCase
Hengli Research Institute successfully independently developed phosphorus-based copolymer ame-retardantpolyester chips. Using environmentally friendly and non-toxic ame retardants, terephthalic acid, and ethyleneglycol as the main raw materials, the copolymerization technique was used to produce the polyester. eame-retardant ber made from these chips achieves permanent ame resistance, while also featuring low fuzz,high strength, ease of dyeing, and excellent dye stability. is innovation delivers both production eciency andproduct quality.
Hengli Research Institute Launches Phosphorus-Based Copolymer Flame-Retardant Polyester Fiber
Case
Deli Chemical Fiber's High Uniformity Ultra-Fine Denier Polyester Fiber, Micro-Fine Polyester Fiber, and HydrophilicQuick-Drying Polyester Fiber were recognized as patent-intensive products. e Deli Chemical Fiber technicalteam has overcome multiple technological bottlenecks in the ne denier lament production eld, achieving stablemass production of ne denier laments. e team has developed several new ultra-low denier and ultra-nedenier products, including 20D/72f, 15D/12f, and 5D/6f, lling the domestic gap in ultra-ne denier production.
Deli Chemical Fiber's ree Products Recognized as Patent-Intensive ProductsCase
Hengli Chemical Fiber optimized the spinning and ber stretching stages, successfully increasing the 5% elonga-tion strength by more than 30% compared to the original variety. is has allowed Hengli to surpass its competi-tors in physical peormance indicators within the geotextile eld.Hengli Chemical Fiber Optimizes Polyester Filament Geotextile MaterialsCase
Hengli Chemical Fiber produced a stable-peorming high-strength ame-retardant black industrial yarn. Usingthe new FZ/T50016-2023 twist rope method, the ame-retardant oxygen index is greater than 28% (measured byASTM D2863-2017 fabric method, the oxygen index exceeds 32%). is yarn oers excellent ame-retardantpropeies, high strength, and resistance to abrasion.
Hengli Chemical Fiber Produces High-Strength Flame-Retardant Black Industrial Yarn SeriesCase
2.99%
Below Bachelor’s DegreeBachelor’s DegreeMaster’s DegreeDoctoral Degree
38.71%
57.87%
0.42%
5%
42.95%
38%
13.5%
0.56%
Incentive systemEstablish a comprehensive innovation reward mechanism to recognize and reward individuals who have madeoutstanding contributions in technological innovation, standard publication, and professional title evaluation.New product (technology) development project rewards
Encourage relevant personnel to paicipate in provincial-level (and below) new product development projects, aswell as national-level new product identication, with rewards given.
Patent and copyright rewards
Provide one-time rewards to personnel who apply for and obtain patents, motivating their contributions totechnological innovation.Paicipation in standard formulation and revisionReward and encourage relevant personnel who paicipate in the formulation and revision of national, indust,group, local, and enterprise standards, as well as those who take the lead in these activities.
Government funded project rewardsEncourage related personnel in the Company to paicipate in government-funded projects and contribute toregional economic development.
Key Peormance
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
e Company currently holds 6 national high-tech enterprises, 1 nationallyaccredited enterprise technology center, and2 postdoctoral workstations
Driving Indust Development
e Company actively paicipates in the formulation of national, indust, and group standards, working closely with industpeers to promote technological advancement across the sector. At the same time, the Company engages in various exhibi-tions, indust forums, and technical seminars to exchange ideas with indust leaders, share best practices, and continuouslyabsorb new knowledge and technologies, thereby maintaining its innovative vitality.
Indust-Academia-Research Collaboration
Hengli Petrochemical places strong emphasis on university-indust collaborative research, striving to drive technologicalinnovation and sustainability through the deep integration of indust, academia, and research. e Company has establishedlong-term panerships with several renowned universities and research institutions to conduct joint research in areas such asgreen chemist, energy conseation and emission reduction, and new material development.Kanghui New Material, in collaboration with Dalian University of Technology, Shenyang University of Chemical Technology,Dalian University, the Liaoning Academy of Agricultural Sciences, and a total of 10 enterprises, jointly established the LiaoningKanghui Petrochemical New Material Indust-Academia-Research Alliance. In 2022, the alliance was recognized by theDepament of Science & Technology of Liaoning province as one of the “First Batch of Exempla and Substantive Indus-t-Academia-Research Alliances in 2022”. In addition, Jiangsu Kanghui New Material Technology Co., Ltd. was successfullysholisted for the “2024 Jiangsu Province Postdoctoral Innovation Practice Base” program, marking a signicant step forwardin the Company’s eos in advanced materials R&D and talent development.
In 2024, Kanghui New Material collaborated with Shenyang Agricultural University on a joint research project titledApplication Effect and Ecological Impact Assessment of Biodegradable Mulch Film. e study focused on evaluat-ing the application peormance and ecological impact of biodegradable mulch lms, including assessments oftheir eectiveness in cultivating typical crops and the ecological impact of lm residues on soil biological systems.
Biodegradable Mulch FilmCase
Hengke Advanced Materials’ project, titled “R&D and Industrialization of Functional Ultra-Warm Fibers for -35°CExtreme Cold Protection”, was successfully selected for the “Nantong Major Scientic and Technological AchievementsTransformation Program”. e project addresses the issues of low hollowness and poor mechanical peormance inconventional thermal insulation bers, and has made breakthroughs in key technologies such as low-swelling high-bulkber spinning, stable continuous forming, and drawing.
Hengke Advanced Materials Project Selected for “Nantong Major Scientic and TechnologicalAchievements Transformation Program”Case
Hengli Chemical Fiber plays an active role in driving indust progress, having paicipated in the formulation of 41standards to date, including 19 national standards, 21 indust standards, and 1 group standard. During the repoingperiod, the General Manager of Hengli Chemical Fiber was selected as a member of the rst National TechnicalCommittee for Standardization of Industrial Textiles. Additionally, the Hengli Chemical Fiber was honored to see asthe chairing unit of the Polyester Filament Yarn Branch of the China Chemical Fibers Association.
Hengli Chemical Fiber Injects New Momentum into High-Quality Indust Development
Case
Active Paicipation in Indust SeminarsCase
e project “Industrialization of New Disperse Dye Normal-Pressure Dyeable Polyester and Its Fiber” developed byHengke Advanced Materials has passed the scientic and technological achievement appraisal by the China NationalTextile and Apparel Council. e project has established a production capacity of 35,000 tons per year for continuousesterication and polymerization. Covering the full industrial chain from NEDDP chips production to spinning, texturing,and dyeing/nishing, the project demonstrates signicant energy-saving and emission-reduction eects. Comparedwith high-temperature dyeing, normal-pressure dyeing saves 45–50% steam, 14% water, and 25% electricity, whileimproving labor productivity by 22–23%. e project yields notable economic, social, and environmental benets,possesses independent intellectual propey rights, and has led to the development of four group standards.
Hengke Advanced Materials Project Ceied by the China National Textile and Apparel Council
Case
Also in 2024, Kanghui New Material and Shenyang University of Chemical Technology jointly undeook a projectunder Yingkou’s Dual-Innovation Program for PhD Talent, titled Development of High-Strength, High-RigidityBiodegradable Polyester for Injection Molding and Film Blowing. e research targeted the copolymer modicationof PBAT (poly(butylene adipate-co-terephthalate)) to impa higher rigidity and strength, aiming to meet industrialapplication needs for dual-use in injection molding and lm blowing.
High-Strength, High-Rigidity Biodegradable PolyesterCase
In another 2024 initiative, Kanghui New Material cooperated with Dalian University of Technology to undeake akey project under Yingkou's “Reveal the List” R&D program. e project, titled Study on Low Precipitation, Refriger-ant-Resistant Modified PBT, explored how dierent viscosities and terminal carboxyl group contents of PBT—produced by SSP process—aect precipitation behavior. By optimizing extrusion process parameters to reduce thecontent of small molecules in modied PBT materials, the project successfully developed an optimal formula andprocessing technique for refrigerant-resistant PBT.
Low Precipitation, Refrigerant-Resistant Modied PBT
Case
ematic Forum on the Explosive Development ofComposite Current Collectors for Lithium BatteriesAdvanced Functional Materials & Equipment Indust Conference
Key Peormance
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Advancing Digital and IntelligentDevelopmentHengli Petrochemical remains committed to the deep integration of industrialization and informatization, striving to build a fullyintegrated intelligent ecosystem across the entire indust chain. By positioning “intelligent connectivity” as a key ent point forindustrial upgrading and transformation, the Company independently develops sma systems to continuously enhance intelligentmanufacturing throughout all stages of its operations. During the repoing period, multiple subsidiaries of the Company receivedvarious intelligent manufacturing awards, highlighting Hengli’s outstanding capabilities in this eld and providing strong momentumfor future development.
e Company has established a series of procedural documents and management systems, including the Intellectual Property Manual,Intellectual Property Acquisition Control Procedure, Intellectual Property Maintenance Control Procedure, and Intellectual Property RiskManagement Control Procedure. ese eos are pa of building a comprehensive intellectual propey (IP) management system,which includes well-dened IP policies and employee training materials.e Company’s intellectual propey management is directly led by the general managers of each industrial park, with close collabora-tion across depaments. Adhering to the management principles of “prevention rst, full-process involvement, rapid response, andcontinuous improvement,” the Company integrates IP protection into the entire product development cycle. It also collaborates withrenowned domestic IP agencies to ensure full-process involvement—from project initiation to post-launch maintenance—ensuringthat IP applications are submitted promptly and systematically.
Intellectual Propey Protection
A cumulative total of 1,676 authorized patents and
37 software copyrights.
Hengli Chemical Fiber Intelligent Workshop for Industrial Yarn
Jiangsu Kanghui BOPET Intelligent Workshop
Trademark and Brand Management Empowerment CampIntellectual Propey Training in Progress
In 2024, Hengli Chemical Fiber’s “intelligent production project foran annual output of 400,000 tons of high-peormance specialindustrial yarn” reached full production. e project features interna-tionally advanced equipment, including solid-state polymerizationunits, multi-position spinning equipment for industrial yarn, intelli-gent suace inspection systems, automated packaging, and smawarehousing systems. ese elements together form a fullyintegrated intelligent facto.
Intelligent Production Project for 400,000 Tons of High-Peormance Special Industrial Yarn AchievesFull-Scale ProductionCase
e BOPET intelligent workshop of Jiangsu Kanghui New Materialwas selected for the “2024 Jiangsu Provincial Intelligent Manufac-turing Workshop” list. With its advanced intelligent productionequipment and highly ecient information management system,Jiangsu Kanghui New Material has been recognized with two provin-cial-level intelligent workshops, one municipal-level intelligentworkshop, and the title of a provincial Five-Star Cloud-EnabledEnterprise. rough the construction of intelligent workshops, theCompany has achieved fully automated and intelligent processesacross the entire production chain—including order processing,production scheduling, product inspection, packaging and storage,and delive—leading to steadily improving economic benets.
BOPET Intelligent Workshop Selected as a “2024 Jiangsu Provincial Intelligent Manufacturing Workshop”Case
Hengke Advanced Materials was successfully selected for Nantong City’s “Digital and Intelligent” Microgrid PilotProgram. e Company has established an intelligent microgrid featuring integrated PV and energy storage systems.By incorporating solar power into the park’s grid and leveraging energy storage along with auxilia grid seices, thesystem enables ecient clean energy allocation while delivering economic benets and suppoing the Company’sgreen and low-carbon transition. In 2024, the Company saved nearly RMB 30 million in electricity costs by utilizingsolar power generation and peak-valley electricity pricing. Currently, the Hengli (Nantong) Industrial Park has complet-ed construction of a 106 MW distributed PV system and a 40 MW/80 MWh behind-the-meter energy storage project.Multiple energy management platforms have been established, covering energy consumption monitoring, electricitymanagement, PV power generation, and energy storage control.
Hengke Advanced Materials Selected for Nantong’s “Digital and Intelligent” Microgrid Pilot Program
Case
Hengli Chemical Fiber focuses its IP work on the layout of key core technology areas. It has organized a series of techni-cal exchange meetings and IP seminars by inviting expes and senior agents from university-indust collaborationpaners such as Donghua University and Soochow University, as well as from patent agencies and IP authorities. eseinitiatives have eectively enhanced the Company’s internal capacity for patent creation and improved overall IPmanagement.
Hengli Chemical Fiber Achieves Both Quantity and Quality in IP DevelopmentCase
Intellectual Propey Training
Case
Key Peormance
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
People Orientation &
Social Contribution
Human Resource ManagementEmployee Training and DevelopmentRural RevitalizationSocial Value Contribution
Human Resource Management
Employment Management
Employee Structure
Compensation and Benets
Hengli Petrochemical adheres to a people-oriented philosophy in talent development. In accordance with the Labor Law of thePeople's Republic of China (hereinafter referred to as the Labor Law), the Labor Contract Law of the People's Republic of China,and other relevant laws and regulations, the Company has formulated its Human Resources Management System. Hengli iscommitted to lawful employment practices, signs Collective Contracts with employees, and strives to create a healthy and safeworking environment. e Company ensures fair and equitable employment practices and compensation, and strictly prohib-its discrimination based on nationality, gender, age, disability, race, religion, or other factors. During the repoing period, noviolations related to child labor or forced labor were identied.
Adhering to the principles of external competitiveness and internal fairness, the Company strictly complies with the LaborLaw, the Social Insurance Law of the People's Republic of China, and other relevant laws and regulations. It has established theDetailed Rules for Compensation Management System and the Employee Performance Appraisal Management Measures, andupholds the principle of equal pay for equal work. A compensation system has been developed that combines a base salawith variable and indirect components to provide employees with a fair and competitive compensation structure.
e Company has established a four-tier peormance management system, continuously standardizing peormancemanagement procedures and regularly conducting peormance evaluations. e results of these evaluations are extensivelyapplied in the distribution of peormance bonuses and the selection of outstanding employees, fully leveraging the motiva-tional function of the compensation system. Hengli Petrochemical places great emphasis on communication and feedback inpeormance management. A “two-way communication” mechanism between managers and employees has been imple-mented to ensure fairness and transparency in evaluation results.
Recruitment and Dismissal
e Company standardizes employee onboarding and ooarding procedures, signs labor contracts with all employees inaccordance with the law, ensures equal employment, and safeguards employees’ lawful rights and interests.Equal Oppounity
Hengli rmly opposes employment discrimination and ensures that employee recruitment and career development are notinuenced by gender, nationality, age, religion, marital status, or other unrelated factors.Diversity and Inclusion
e Company provides fair and equal employment oppounities and career development paths for women, ethnic minorities,and candidates from diverse backgrounds.Reasonable Working Hours
In accordance with the Attendance Management Policy, the Company reasonably arranges employees’ working and rest hours toprotect their legal rights to rest.
Elimination of Forced Labor
All work is arranged based on the principle of free will, and the personal freedom of all employees is fully respected and protected.
Prohibition of Child Labor
“Two-Way Communication” in Peormance Appraisals
A strict age verication process is implemented during recruitment to ensure that no individuals under the age of 16 are hired.
Attracting TalentsHengli Petrochemical places great emphasis on talent development and is committed to expanding its recruitment channels toattract professionals from diverse backgrounds. e Company has formulated the Personnel Appointment Management Measuresand the Newly-Recruited Personnel Appointment Management Measures (Interim), and oers employment and development oppor-tunities through various channels such as social recruitment, campus recruitment, university-enterprise cooperation, internalreferrals, and job rotation, with the goal of building a diverse and dynamic workforce.
In 2024, the Company had a total of 38,300 employees, with a social insurance coverage rate of
94.87% and a labor contract signing rate of 99.14%.
PeormanceFeedback andOne-on-OneReview Sessions
PeormancePlanning and KPIDevelopmentProcessControl inPeormanceManagement
ApplicationofPeormanceEvaluationResultsPeormanceEvaluationandAppraisal
Employee
BenetsAllowancesPeormance BonusesBasic Sala
Each depament publiclydiscloses monthlypeormance appraisal results,recognizing outstandingemployees and communicat-ing with those who fall sho todiscuss corrective measuresand improvement plans.
Employees who questiontheir appraisal results mayinitiate discussions with theirdepament heads.
If disagreements remain afterthis communication,employees may escalate theissue by submitting feedbackor a written appeal to the HRDepamentvia email, suggestion boxes,the ocial WeChat account,or the labor union.
HR will then consult withdepament heads, gather input,and repo the matter tocompany management todetermine whether a correctionto the assessment is warranted.
Hengli Petrochemical Oine Recruitment Event in ProgressCase
Demonstrating a strong sense of social responsibility, Kanghui NewMaterial cooperated with the Yingkou Veterans Aairs Oce duringthe repoing period to organize two dedicated recruitment fairs forretired milita personnel, attracting over 300 attendees in totalthrough on-site visits and presentations.
Kanghui New Material Held Two Job Fairs for VeteransCase
Job Fair for Veterans
Key Peormance
Note: For detailed information on employee composition, please refer to the Hengli Petrochemical 2024 Annual Repo.
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
hengli.com 79 I 80
Employee Incentivese Company emphasizes the multi-channel professional development of employees, and has established relevant systemssuch as the Frontline Employee Promotion Management Measures, Selection Management Measures for Positions Above ShiftLeader, and Specific Training Plans for Reserve Cadres. e Company has a comprehensive promotion system and incentivemechanism in place. rough a series of talent development programs, various special incentives, suggestions rewardprograms, outstanding employee awards, and promotion rating systems, the Company creates oppounities and platformsfor talent, thereby eectively attracting, nuuring, retaining, and utilizing talent.
In 2024, the total employee compensation paid: RMB 5.404 billion; the totalemployee benets expenditure: RMB715 million.
Conducting Skills Enhancement Training
Employee Training and DevelopmentEstablishing Career Development PathwaysHengli Petrochemical adheres to a “people-oriented” approach to talent development, placing great emphasis on talentcultivation. e Company has established a comprehensive talent development system that fosters the mutual growth ofemployees and the enterprise. Backed by multiple R&D teams with strong technical capabilities, the Company actively createsplatforms for employee growth and advancement. In terms of talent selection, the Company has built a well-structureddevelopment pathway, providing strong suppo for employees’ smooth career progression.e Company emphasizes talent cultivation and has formulated the Personnel Training Management Measures. Relying onplatforms such as Hengli Business School and the online LINK Classroom, and suppoed by the in-plant trainer system andtraining resource pool, the Company has established a comprehensive talent development system that covers all employees,enabling joint growth of employees and the enterprise. During the repoing period, the Company conducted extensiveemployee training based on the annual training plan, categorized by level, type, and position, to promote mutual development.e training primarily consists of: onboarding training for new employees, internal training under the annual training plan, andmonthly depament-level ceied skills training.e Company also actively suppos employees in enhancing their skills and educational qualications, promoting thedevelopment of a learning-oriented enterprise. Hengli (Huizhou) Industrial Park, in collaboration with the Huizhou Petrochemi-cal Association and the Sun Yat-sen University Huizhou Institute, has launched an “In-seice Employee Education Enhance-ment Program,” oering customized end-to-end seices to suppo employees in pursuing fuher education and degreeadvancement. At the same time, the Company actively promotes professional title policies, encourages employees to applyfor job-related title evaluations, assists in the preparation of application materials, and provides full-process tracking to ensurea smooth application process.
Total employee training hours424,600 hours
Professional
TechnicalFramework
Production Framework
Administrative
Framework
ManagementFramework
SalesFramework
?Chief Expe?Expe?Senior Technical Expe?Intermediate Technical
Expe?Junior Technical Expe?Technical Assistant?Technician?Intern Technician
?Vice President of
Production?Production Director?Workshop Director?Engineer?Shift Leader?Senior Production Sta?Star-level Production Sta?General Production Sta?Intern
?Deputy General Manager?Director?Manager?Deputy Manager?Head?Sta?Intern Sta
?Deputy General Manager?Director?Deputy Director?Manager?Deputy Manager?Head
?Vice President of
Marketing?Director?Senior Manager?Sales Manager?Senior Salesperson?Salesman?Intern Salesperson
e HAZOP professional training program at Hengli (Dalian Changx-ing Island) Industrial Park was successfully concluded, with over 300paicipants from various specialties including process engineering,instrumentation, equipment, electrical, and safety. e programachieved a 100% conforming rate. e training course featuredlectures by instructors from the China Chemical Safety Association.As an essential analytical method for identifying design aws,process hazards, and operational issues, the HAZOP training aimedto systematically and professionally enhance the risk managementcapabilities of the industrial park.
HAZOP Professional Training ProgramCase
e “Spider-Man Program” is a distinctive training initiative forfrontline managers launched in 2017. Since its inception, theprogram has continuously evolved in terms of training content andoperation model, successfully developing a cyclical trainingapproach characterized by “1 year of classroom learning and 2 yearsof post-training follow-up.” Adhering to its original intention ofbuilding a high-caliber team of shift leaders and improving theeectiveness of frontline management, the “Spider-Man Program”has successfully completed nine training camps, cultivating 390 shiftleaders and achieving full coverage of shift-level managementpositions within the Company.
Hengke Advanced Materials “Spider-Man Program”Case
e newly inaugurated Training Center at Hengli (Dalian ChangxingIsland) Industrial Park highlights a professional, distinctive, intelli-gent, and scenario-based approach. It integrates ve core trainingfunctions—cognition, experience, simulation, hands-on practice,and discussion—by eectively combining various training methodssuch as classroom instruction, experiential learning, and onlineeducation. With the ocial unveiling of the Training Center, opera-tions will gradually commence, providing relevant training programsto accelerate the development of high-quality technical talent forthe new era, empower new productive forces, and establish a talentdevelopment system with distinctive Hengli characteristics.
Inauguration of the Hengli (Dalian Changxing Island) Industrial Park Training CenterCase
Session of the HAZOP Professional Training Course in Progress
Spider-Man Program – Featured Training Initiative
Unveiling of the Hengli (Dalian Changxing Island) Industrial
Park Training Center
Key Peormance
Key Peormance
annual training expenditureRMB
10.1933 million
total training paicipants
159,008
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Hengli Petrochemical is rmly committed to the principle of gender equality and places great impoance on safeguarding therights and interests of female employees. e Company is dedicated to creating a fair and inclusive working environment forwomen. rough a well-established talent selection mechanism, we ensure equal oppounities for women in recruitment,promotion, and compensation, while actively suppoing their career development. We oer exible work arrangements andmother-and-child care facilities to help female employees balance their professional and family responsibilities. In addition,regular women's health care initiatives are carried out to suppo their physical and mental well-being. Hengli Petrochemicalwill continue to promote the protection of women’s rights and foster a diverse and sustainable development environment,contributing to the building of a harmonious society.
Women's Rights and Interests
100%
During the repoing period, return-to-work rate after maternity leave
100% return-to-work rate after parental leave
Employee Care and Well-being
Hengli Petrochemical is committed to providing all employees with comprehensive and competitive welfare benets, includingbut not limited to social insurance and housing fund contributions, paid leave, cultural and spos activities, and an employeestock ownership plan. e Company actively enriches employees’ cultural lives, consistently pays attention to the needs ofemployees in diculty, and strives to enhance overall employee happiness and satisfaction.
Social insuranceand house fund
Statuto leavesuch asparental leaveand caregiving
leave
Holidaybenets
Oveimeallowances
Annual healthcheckups
Conducting Satisfaction SueysCase
Hengli (Huizhou) Industrial Park places strong emphasis on caring forfemale employees and organized a legal awareness campaignfocused on women's rights. At the event, educational materials weredistributed covering the Law of the People's Republic of China on theProtection of Rights and Interests of Women and the Special Regula-tions on the Labor Protection of Female Employees. Paicipants alsoviewed public seice videos on the protection of female employees’rights. e campaign emphasized the promotion and disseminationof laws and regulations related to employment rights, labor rights,and the special protections aorded to female workers.
“Caring for Female Workers, Law by Your Side” Legal Awareness Campaign at Hengli (Huizhou) Industrial Park
Case
Diverse Employee Activities
Employee Communication and Engagemente Company places great impoance on listening to employee opinions and suggestions.Annual satisfaction sueys are conducted through questionnaires to identify key factors inuencing employee satisfaction.Based on suey results, the Company promptly implements targeted improvements to address identied issues, striving tocreate a positive and fullling workplace environment that fosters a strong sense of belonging and well-being among employ-ees.A Labor Dispute Mediation Committee has been established to reinforce harmonious and stable labor relations. e Companyhas also implemented an early warning and resolution mechanism for labor issues, with clearly dened procedures for handlinglabor and personnel disputes, ensuring eective conict prevention and resolution.
Hengke Advanced Materials places strong emphasis on corporateculture development by adopting a dual approach of health care andcultural enrichment. Comprehensive health check-ups provide asafety net for employee well-being, while red-themed educationfosters ideological grounding. Competitive recreational activitieshelp relieve stress and enhance team cohesion, and public welfareinitiatives promote compassion and social responsibility, compre-hensively enhancing employees' lives.
Dual Approach of Health Care and Cultural Enrichmentto Enhance Employee SatisfactionCase
Hengli (Suqian) Industrial Park held a grand Chinese New Year Galaunder the theme “A Prosperous Hengli, One Big Family,” aiming toenhance employees’ sense of paicipation and belonging. e galablended traditional and modern elements, with four rounds of prizedraws creating an engaging and festive atmosphere. e eventfeatured a variety of peormances with high aistic expression. esuccessful hosting of the gala brought joy to the employees,conveyed the Company’s care, and injected new vitality into thecultural development of the industrial park.
Chinese New Year Gala
Case
Legal Awareness Campaign on Women’s Rights
Employee Health Check-up
Chinese New Year Gala Peormance
Employees Completing Satisfaction Suey Questionnaires
Employee Activity in Progress
Key Peormance
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Employeeactivity centerandrecreational
events
Mutual assistancefund andemployee suppoprograms
Free shuttlebus seice
Employeestockownershipprogram
RMB 1.08 million Donations and public welfare investments
RMB 1.841 millionrural revitalization investment
hengli.com 83 I 84
Occupational Health and SafetyTo proactively prevent work-related injuries and minimize employees’ risk of occupational diseases, the Company hasdeveloped a set of policies in accordance with the Law of the People's Republic of China on Prevention and Control of Occupa-tional Diseases and other relevant regulations. ese include the Occupational Disease Hazard Prevention ResponsibilitySystem, the Occupational Health Surveillance and Records Management System, and the Occupational Hazard Warning andNotification System. e Company sets clear occupational disease prevention objectives and safeguards employee health andsafety in the workplace through various measures. ese include posting warning signs in areas with hazardous factors,conducting regular occupational hazard testing, distributing appropriate personal protective equipment (PPE), and organizingannual health check-ups for employees.
To inspire a sense of ownership among employees and encour-age the sharing of valuable insights and work experiences, DeliChemical Fiber launched an employee rationalization proposalcampaign in Janua 2024. e initiative invited employees tocontribute suggestions focused on areas such as technologicalinnovation and management optimization, based on their dailyresponsibilities. e campaign successfully transformedemployees’ “golden ideas” into “golden fruits” of productivity,strengthening labor-management relations and signicantlyenhancing employee engagement. is initiative fosteredproactive paicipation in the Company’s high-quality develop-ment journey.
Employee Rationalization Proposal CampaignCase
Establishing a Legal Consultation Oce
Case
Hengli (Dalian Changxing Island) Industrial Park held a themed campaign titled “Prevention First, SafeguardingOccupational Health” during the Occupational Disease Prevention Awareness Week. e campaign included thedistribution of printed brochures, posting of awareness posters, the setup of an occupational health bulletin board,and assistance activities for occupational disease prevention. ese eos were aimed at enhancing employees’awareness of occupational health and improving their self-protection capabilities, thereby eectively safeguardingtheir occupational health rights and interests.
Occupational Disease Prevention Awareness Week at Hengli (Dalian Changxing Island) Industrial ParkCase
Employee Rationalization Proposal Campaign in Progress
Rural Revitalization
Hengli Petrochemical regards suppoing rural revitalization and consolidating the achievements of povey alleviation as an unshirk-able corporate social responsibility, deeply integrating it into the Company’s development strategy. With indust as the brush andresponsibility as the ink, Hengli Petrochemical paints magnicent landscapes across vast rural areas. While ensuring the Company’shealthy growth and sustained returns to investors, Hengli actively undeakes social responsibilities, suppos rural revitalization andpublic welfare causes, and promotes sustainable economic and social development.
Indicator2024Incidence Rate of Occupational DiseasesCoverage rate of occupational inju insurance for employeesOccupational Health Examination CoverageOccupational Hazard Factor Testing RateInvestment in Occupational Inju Insurance for Employees (RMB 10,000)
100%100%100%1,918.75
Occupational Disease Prevention Peormance in 2024
Kanghui New Material, in response to the national rural revitalizationstrategy, leveraged its technical expeise in the chemical indust topromote biodegradable mulch lm in agricultural production. isnot only addresses the white pollution caused by traditional plasticmulch but also enhances the quality and yield of agriculturalproducts, driving local agricultural industrial upgrading.
Focusing on Industrial Assistance
Case
Hengli Petrochemical (Huizhou) Co., Ltd. actively paicipates in public welfare initiatives. During the 2024 “6·30” RuralRevitalization Campaign in Daya Bay Development Zone, Hengli Petrochemical (Huizhou) pledged an idle land parcel inthe zone for the construction of R&D and production facilities. is contributed to revitalizing unused land and suppo-ing comprehensive rural development in the region.
Active Paicipation in Philanthropy
Case
Occupational Disease Prevention Awareness Week Activities
Promoting Biodegradable Mulch Film to Suppo Industrial
Development
Key Peormance
Key Peormance
Key Peormance Indicator for 2024:
During the repoing period, the overall employeesatisfaction rate reached
85.05%
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Social Value ContributionHengli Petrochemical remains committed to its mission as a corporate citizen, upholding the philosophy of “people-oriented, creatinga better future together,” and earnestly fullling its duty to see society. e Company actively paicipates in community activities,suppos community development, engages enthusiastically in social welfare initiatives, shares the fruits of development with thesociety, and contributes to social harmony, stability, and sustainable progress by taking practical actions.
On March 12, 2024, in celebration of the 46th National Tree PlantingDay, employees of Hengli (Huizhou) Industrial Park paicipated in avolunta tree planting event. e activity embodied the principlethat “lucid waters and lush mountains are invaluable assets,”strengthening employees’ sense of responsibility and mission toprotect the ecological environment. It also reected the Company’scommitment to integrating green development into all aspects ofeconomic and social growth and suppoing the ecological advance-ment of Guangdong Province.
Volunta Tree Planting ActivityCase
Over the years, Hengli Petrochemical has embedded social respon-sibility into the fabric of its corporate development by continuouslyorganizing volunta blood donation campaigns to spread thewarmth of life. Hengli Petrochemical (Dalian) has repeatedly receivedhonors such as the “Dalian Volunta Blood Donation PromotionAward” and the “National Volunta Blood Donation PromotionAward.” Likewise, Hengli (Nantong) Industrial Park has for manyconsecutive years been recognized as a “Model Group for VoluntaBlood Donation” in Tongzhou District.On May 10, 2024, in response to a critical shoage of type O blood in Dalian, Hengli (Dalian Changxing Island) IndustrialPark urgently mobilized employees with type O blood to donate, helping to restore the city’s blood invento to safelevels. In October of the same year, Hengli (Nantong) Industrial Park launched a series of themed blood donation drivesunder the banner “Flowing Warm Blood, Lighting Up the Light of Life.” e campaign drew paicipation from over 200employees, resulting in a total blood donation volume of 66,200 milliliters—demonstrating the commitment of privateenterprises in the new era to fullling their social responsibilities through concrete action.
Volunta Blood Donation Campaign
Case
Volunta Tree Planting Activity in Progress
Altruistic Blood Donation Drive
While fullling its internal re prevention duties, the dedicated rebrigade of Hengke Advanced Materials also actively paicipates inmajor public safety eos organized by the local government, suchas ood control and river patrols. e team regularly visits villages,schools, and businesses to inspect for safety hazards and promotere safety awareness. ese red-themed volunteer activities seeas vital logistical suppo for emergency rescue eos in Nantongand signicantly contribute to the safety and security of the islandregion.
Volunteer Activities by the Dedicated Fire BrigadeCase
Jiangsu Kanghui launched the themed campaign “Bidding Farewell to the Old and Welcoming the New with Warmthbetween Villages and Enterprises,” delivering care and suppo to underprivileged Pay members and villagers inMeidun Village. During the event, the Company provided RMB 45,000 in relief funds to 36 disadvantaged individuals.is initiative reects Jiangsu Kanghui’s active fulllment of social responsibilities and continued concern for ruraldevelopment.Looking ahead, Hengli Petrochemical will remain committed to its mission of “Seing the Count through Indust and Giving Backto Society,” and will fuher devote itself to public welfare undeakings with greater enthusiasm and stronger action.
Jiangsu Kanghui Brings Warmth to Meidun VillageCase
Number of volunteer activities paicipated in by employees
number of volunteers engaged
1,555 total volunteer seice hours
6,934 hours
Volunteer Work by the Dedicated Fire Brigade
Key Peormance
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Annex I: Index of GRI StandardsAnnex II: Sustainability Repoing IndexTable of ContentsGRI Standard Index
2024 at a Glance
GRI2/GRI201/GRI205/GRI302/GRI303/GRI305/GRI306/GRI403/GRI404/GRI413
Repo Preparation StatementsGRI2About the RepoGRI2Message from the ChairmanGRI2About Hengli PetrochemicalGRI2/GRI201Sustainability ManagementGRI2/GRI3Corporate Governance StructureCompliance Risk ManagementAdhering to Business EthicsCommunication with Stakeholders
GRI2GRI2GRI2/GRI205/GRI206GRI2/GRI207
Steady Operations &Sound Governance
Climate Change ResponseEnvironmental Compliance ManagementPollutant Emissions ControlWater Resource ManagementClean Technological OppounitiesEcosystem and Biodiversity Protection
GRI302/GRI305GRI307GRI302/GRI305/GRI306/GRI307GRI303GRI2/GRI301/GRI302/GRI303/GRI305GRI304
Energy Conseation& Sustainable GreenDevelopment
Quality and Safety of ProductCustomer Seice ManagementSustainable Supply ChainsWork Safety ManagementChemical SafetyData Security and Protection
GRI416/GRI417GRI416/GRI417/GRI418GRI2/GRI204/GRI205/GRI308/GRI409/GRI414GRI403/GRI410GRI203/GRI403GRI418
Safe Operations &Sustainable Growth
Optimizing R&D SystemsEmpowering Innovative AchievementsAdvancing Digital and Intelligent DevelopmentIntellectual Propey Protection
////
Insightful Innovation &Digital Intelligence Safeguard
Human Resource ManagementEmployee Training and DevelopmentEmployee Rights and BenetsRural RevitalizationSocial Value Contribution
GRI2/GRI201/GRI401/GRI402/GRI405/GRI406/GRI408/GRI409GRI203/GRI404GRI2/GRI201/GRI202/GRI401/GRI405/GRI406/GRI408/GRI409GRI203/GRI413GRI203/GRI413
People Orientation & SocialContribution
GRI2//
Disclosure RequirementsCorresponding Sections of is RepoResponse to Climate ChangePollutant EmissionsWaste DisposalEcosystem and Biodiversity ProtectionEnvironmental Compliance ManagementEnergy UtilizationWater Resource UtilizationCircular EconomyRural RevitalizationContribution to Society
Climate Change ResponsePollutant Emissions ControlPollutant Emissions ControlEcosystem and Biodiversity ProtectionEnvironmental Compliance ManagementClimate Change ResponseWater Resource ManagementPollutant Emissions ControlsRural RevitalizationSocial Value Contribution
Note: As a company in the chemical indust, Hengli Petrochemical considers the topic of “Technology Ethics” to be neither nancially material nor of signicant impact toits operations.
Index of GRI StandardsSustainability Repoing IndexSumma of Key PeormanceIndicators
Supply Chain SecurityEqual Treatment of Small and Medium-Sized EnterprisesSafety and Quality of Products and SeicesData Security and Customer Privacy ProtectionEmployeesDue DiligenceCommunication with StakeholdersAnti-Bribe and Anti-CorruptionAnti-Unfair CompetitionChemical SafetyClean Technological Oppounities
Sustainable Supply ChainsSustainable Supply ChainsProduct Quality and Safety, Customer Seice ManagementData Security and ProtectionHuman Resource Management, Employee Training and Development, Employee Rights and BenetsSustainability ManagementCommunication with StakeholdersCompliance Risk Management, Adhering to Business EthicsCompliance Risk ManagementChemical SafetyClean Technological Oppounities
Innovation-Driven Development
Optimizing R&D Systems, Empowering Innovative Achievements, Advancing Digital and IntelligentDevelopment, Protection of Intellectual Propey Rights
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Annex III: Summa of Key PeormanceIndicators
TopicIndicatorUnit2024Waste Gases
Sulfur Dioxide (SO2) EmissionsNitrogen Oxides (NOx) EmissionsPaiculate Matter EmissionsVOCs Emissions
TonTonTonTon
1,877.624,466.01
440.46
695.34
Solid Wastes
Quantity of General Waste GeneratedQuantity of General Waste Disposed ofQuantity of Hazardous Waste GeneratedQuantity of Hazardous Waste Disposed of
TonTonTonTon
3,343,982.763,343,923.46148,360.38147,167.31
CarbonEmission
Greenhouse Gas Emissions Scope 1Greenhouse Gas Emissions Scope 2Total GHG EmissionsGreenhouse Gas Emission Intensity
tCO2etCO2etCO2etCO2e/RMB 1 million
47,201,832.476,718,552.0753,920,384.54
228.21
Adoption ofCleanEnergy
PV GenerationWind PowerBiogas Power GenerationBiomass FuelTotal Renewable Energy Consumption
kWhkWhkWhtcetce
167,314,264.2849,555,000.00149,663.00297,351.85324,023.02
EnergyConsumption
Coal (Power Generation)Natural GasPurchased Electricity
Ton10,000 m3MWh
9,896,975.5835,596.465,456,209.20
Wastewater
Total Wastewater EmissionsWastewater Emissions IntensityCOD EmissionsAmmonia Nitrogen EmissionsTotal Phosphorus EmissionsTotal Nitrogen Emissions
TonTon/RMB 1 millionTonTonTonTon
26,303,994.81
111.33
663.33
3.29
3.54
152.96
WaterResources
Total Freshwater ConsumptionQuantity of Municipal Water PurchasedSuace Water WithdrawalGround Water WithdrawalTotal Water ConsumptionWater Consumption IntensityRecycled Water ConsumptionAnnual Water Saved via Reclaimed Water FacilitiesReclaimed Water Reuse Rate
10,000 tons10,000 tons10,000 tons10,000 tons10,000 tons10,000 tons/RMB 1 million10,000 tons10,000 tons%
13,331.88
298.63
12,969.43
63.81
88,067.753,727.37125,468.643,427.37
75.30
EnvironmentalProtectionEvaluation
Total Environmental InvestmentEnvironmental IncidentsIncidents of Violation of Laws and Regulations in the Environmental FieldCompliance Rate Obseed in Pollutant MonitoringOperation Rate of environmental Protection FacilitiesCompliance Rate of “ree Simultaneities” in Environmental Protectionfor Construction Projects
RMB 100 millionCaseCase%%%
3.75
Summa of Environmental Peormance
Summa of Social Peormance
TopicIndicatorUnit2024
Work Safety
Investment in Work SafetyCoverage Rate of Safety Education and TrainingCoverage Rate of Safety Risk Protection Traininge Number of Security Emergency DrillsNumber of Fatal Accidents Concerning Work SafetyCeication Rate for Special Operations and Equipment OperatorsIdentication of Company-Level Hidden HazardsCompany-Level Hidden Hazards IdentiedIdentication of Workshop-Level Hidden HazardsWorkshop-Level Hidden Hazards IdentiedHidden-Hazard Rectication Rate
RMB 100 million%%TimesTimes%TimesItemTimesItem%
5.30
1,920
4,47746,85030,599
Employees
Total Number of EmployeesProduction StaSales StaTechnical StaFinancial StaAdministrative StaOther StaDoctoral DegreeMaster’s DegreeBachelor’s DegreeCollege DegreeCollege Degree or BelowEmployee SatisfactionSocial Insurance Coverage RatePercentage of Contract WorkersEmployee Compensation PayableEmployee Welfare Fund
PersonPersonPersonPersonPersonPersonPersonPersonPersonPersonPerson%%%RMB 100 millionRMB 100 million
38,30028,381
5,821
1,4412,026
6,10311,84420,027
60.03
94.87
99.14
54.04
7.15
Fire Safety
Professional FireghtersFire Trucks
PersonUnits
Information Security
Number of Violations of Information Security and Privacy ProtectionTotal Investment in Data Security
CaseRMB 10,000
664.17
Quality and Safety
Customer Complaint Resolution RateProduct Percent of Pass
%%
99.63
Innovation and R&D
Investment in R&DCumulative Patents HeldCumulative Number of Software Copyrights
RMB 100 millionCaseCase
17.03
1,676
Employee Training
Total Hours of Employee TrainingTotal Number of Persons TrainedPer Capita Training HoursAnnual Training Expenditure
HourPersonHourRMB 10,000
424,600159,008
2.67
1,019.33
Volunteer Activities
Donations and Public Welfare ContributionsInvestment in Rural RevitalizationNumber of Volunteer Activities PaicipatedNumber of Volunteers PaicipatingVolunteer Activity Hours
RMB 10,000RMB 10,000TimesPersonHour
108.00
184.10
1,5556,934
Occupational Health
Incidence Rate of Occupational DiseasesCoverage Rate of Occupational Inju Insurance for EmployeesOccupational Health Examination CoverageOccupational Hazard Factor Testing RateInvestment in Occupational Inju Insurance for Employees
%%%%RMB 10,000
1,918.74
Chemical Safety Drills ConductedTimes3,776Chemical Safety
SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo
Summa of Governance Peormance
Feedback
1. Your overall assessment of Hengli Petrochemical’s 2024 sustainability repo
TopicIndicatorUnit2024
Corporate Governance
Independent Directors in the Board of DirectorsFemale Directors in the Board of DirectorsRisk Management ExpePercentage of Female Directors in the Board of Directors
PersonPersonPerson%
12.5
Business Ethics
Coverage Rate of Business Ethics Audits in OperationsSupplier Signing Rate of Integrity AgreementsEmployee Coverage in Business Ethics Training
%%%
Communication with StakeholdersNumber of Investor Open Communication MeetingsNumber of Interactions on the SSE E-Interactive Platform
TimesTimes
Information Disclosure
Interim Announcements DisclosedPeriodic Repos Disclosed
CopyCopy
Tax ManagementMajor Tax-Related Litigation and Arbitration MattersCase0
2. How do you think Hengli Petrochemical has peormed in terms of customer seice?
3. How do you think Hengli Petrochemical has peormed in terms of technological innovation?
4. How do you think Hengli Petrochemical has peormed in terms of indust development?
5. How do you think Hengli Petrochemical has peormed in terms of team building?
6. How do you think Hengli Petrochemical has peormed in terms of volunteer and public welfare activities?
7. How do you think Hengli Petrochemical has peormed in terms of environmental protection?
8. Do you have any comments on Hengli Petrochemical’s peormance in sustainability eos?
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ank you for reading the Hengli Petrochemical Co., Ltd. 2024 Environmental, Social, and Governance Repo. To improve HengliPetrochemical's peormance in environment, society, and governance, fuher enhance our sustainability capabilities and levels, andstrengthen communication with all sectors of society, we sincerely hope that you will provide valuable feedback and suggestions onour work and repo at your convenience.
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SUSTAINABILITYREPORT 2024HENGLI PETROCHEMICAL
Annual Repo